DCIT(Exemptions), Chennai V. Council for Leather Exports, Chennai

ITA 1400/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1139 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 06-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Benefit of exemption
• Section: 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN , ACCOUNTANT MEMBER ITA NO S . 1399, 1400 & 1401 /CHNY/ 20 19 ASSESSMENT YEAR S : 20 13 - 14, 2014 - 15 & 2015 - 16 DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHENNAI CIRCLE, AAYAKAR BHAVAN, ANNEXE BUILDING, III FLORR, 121, M.G. ROAD, CHENNAI 600 034. VS. M/S. COUNCIL FOR LEATHER EXPORTS, CMDA TOWER - II, 3 RD FLOOR GANDHI IRWIN BRIDGE ROAD, EGMORE, CHENNAI 600 008. [PAN: A AACC 4697G ] ( /APPELLANT) ( /R ESPONDENT) REVENUE BY : M R . S. BHARAT H , CIT ASSESSEE BY : MR. VIKRAM VIJAYARAGHAVAN, ADVOCATE / DATE OF HEARING : 2 8 .05. 2020 / DATE OF PRONOUNCEMENT : 2 8 .05. 2020 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMB ER : TH ESE ARE APPEAL S FILED BY THE REVENUE AGAINST THE CONSOLIDATED ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 9, CHENNAI IN I . T . A TR NO.28 & 131/CIT(A) - 9/2016 - 17; 88/CIT(A) - 9/2017 - 18 DATED 25.02.2019 FOR THE ASSESSMENT YEAR S 2013 - 14, 2014 - 15 & 2015 - 16 . ITA NO S . 1399, 1400 & 1401 /CHNY/20 19 : - 2 - : 2 . MR. S. BHARATH, CIT REPRESENTED ON BEHALF OF THE REVENUE AND MR. VIKRAM VIJAYARAGHAVAN, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE . 3 . IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. THE ORDER OF THE LEARNED C IT(A) IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S.10(23C)(IV) OF THE ACT AND THE ASSESSEE IS NOT HIT BY THE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT UNDER THE OBJE CT OF GENERAL PUBLIC UTILITY. 2.1 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT INCOME DERIVED OUT OF MEMBERSHIP SUBSCRIPTION, RENEWAL MEMBERSHIP SUBSCRIPTION, CERTIFICATION FEE, ARE IN THE NATURE OF TRADE OR COMMERCE AND THE RECEIPTS EXCEED THE THRESHOLD LI MIT OF RS.25 LAKHS AS PRESCRIBED UNDER 2 ND PROVISO TO SECTION 2(15) OF THE ACT. 2.2 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE FINANCE ACT 2008 W.E.F.01.04.2009 HAS MADE A VERY FUNDAMENTAL AND DRASTIC CHANGE BY EXCLUDING A GROUP OF TRUSTS FROM ENGAGING INTO TRADE AND BUSINESS RELATED ACTIVITIES. THEREFORE, THESE TRUSTS WHICH ARE PURSUING THE RESIDUARY CATEGORY OBJECTS UNDER CHARITABLE PURPOSE ARE DEBARRED FROM HAVING ANY TRADE OR BUSINESS RELATED ACTIVITY . 2.3 THE LEARNED CIT(A) FAILED TO P LACE RELIANCE ON THE DECISION OF THE HONBLE ITAT PANAJI BENCH IN THE CASE OF ENTERTAINMENT SOCIETY OF GOA VS. COMMISSIONER OF INCOME - TAX (2013) 34 TAXMANN.COM 210. 4. AT THE TIME OF HEARING, I T WAS SUBMITTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THA T THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT DENIED THE EXEMPTION U/S.10(23C)(IV) OF THE ITA NO S . 1399, 1400 & 1401 /CHNY/20 19 : - 3 - : INCOME TAX ACT, 1961 ON THE GROUND THAT THE ASSESSEE WAS HIT BY THE AMENDED PROVISO TO SECTION 2(15) OF THE INCOME TAX ACT, 1961, AND AS WHAT THE ASSESSEE WAS D OING WAS NOT OF GENERAL PUBLIC UTILITY. IT WAS SUBMITTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAD ALLOWED THE ASSESSEES CLAIM BY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE ASSESSEES OWN CASE IN WRIT PETITION NO.7722 OF 2018 FOR THE ASSESSMENT YEAR 2015 - 16 AND BY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN I.T.A. NO.2172/CHNY2017 DATED 23.04.2018 FOR THE ASSESSMENT YEA R 2012 - 2013, AS ALSO THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN I.T.A. NO.1192/MDS/2014 FOR THE ASSESSMENT YEAR 2010 - 2011. IT WAS A SUBMISSION BY THE LEARNED CIT DEPARTMENTAL REPRESENTATIVE THAT THE ASSESSEE IS NO T ENTITLED TO THE BENEFIT OF EXEMPTION U/S.10(23C)(IV) OF THE INCOME TAX ACT, 1961 AND THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS LIABLE TO BE REVERSED. ITA NO S . 1399, 1400 & 1401 /CHNY/20 19 : - 4 - : 5. THE LEARNED COMMISSIONER OF INCOME TAX VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 6. IN REPLY, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL AS REFERRED TO ABOVE, AS ALSO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN WRIT PETITION REFERRED TO ABOVE. 7 . WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUSED THE MATERIALS AVAILABLE ON RECORD. 8. A PERUSAL OF THE ORDER OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL REFERRED TO ABOVE, AS ALSO THE DECISION OF THE HONBL E JURISDICTIONAL HIGH COURT IN WRIT PETITION CLEARLY SHOWS THAT THE ASSESSEE HAS BEEN HELD TO BE ELIGIBLE FOR THE BENEFIT OF EXEMPTION U/S.10(23C)(IV) AND THAT THE ASSESSEES FACTS ARE NOT HIT BY THE PROVISO TO SECTION 2 (15) OF THE INCOME TAX ACT, 1961. FURTHER, AS IT IS NOTICED THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAD FOLLOWED JUDICIAL DISCIPLINE IN FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE EARLIER ITA NO S . 1399, 1400 & 1401 /CHNY/20 19 : - 5 - : ASSESSMENT YEARS, WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE LEARNED CIT(A) AND THE SAME STANDS CONFIRMED. 9 . IN THE RESULT, THE APPEAL S OF THE REVENUE IN I.T.A. NO S . 1399, 1400 & 1401 /CHNY/20 19 ARE DISMISSED . OR DER PRONOUNCED IN THE OPEN COURT ON 2 8 TH MAY , 2020 IN CHENNAI. SD/ - ( . ) ( S. JAYARAMAN ) /ACCOUNTANT MEMBER / CHENNAI, / DATED: 2 8 TH MAY , 2020 IA, SR. PS SD/ - ( ) (GEORGE MATHAN) /JUDICIAL MEMBER / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF