Ashwini Sahakari Rugnalaya Research Centre, Solapur V. Assistant Commissioner of Income-tax,

ITA 1534/PUN/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 0029 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 12-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Section: 143(3); 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1534 /P U N/20 1 6 / ASSESSMENT YEAR: 20 11 - 12 ASHWINI SAHAKARI RUGNALAYA & RESEARCH CENTRE, PLOT NO. 108, NORTH SADAR BAZAR, SOLAPUR 413002 PAN : AAAJA0041K . / APPELLANT VS. THE ASSISTANT COMMISSIONER O F INCOME TAX, CIRCLE 1, SOLAPUR . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPOND ENT BY : SHRI NIRUPAMA KOTRU / DATE OF HEARING : 28 . 1 2 .201 7 / DATE OF PRONOUNCEMENT: 29 . 1 2 .201 7 / ORDER PER SUSHMA CHOWLA, JM: T H E APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT( A ) - 1 0 , PUNE , DATED 1 0.05.2016 RELATING TO ASSESSMENT YEAR 20 11 - 12 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . ITA NO . 1534/PUN/2016, A.Y. 2011 - 12 2 2. THE LD. AR FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEARS 2004 - 05 TO 2009 - 1 0. 3. THE LD. DR FOR THE REVENUE ON THE OTHER HAND PLACED RELIANCE ON THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEAL BUT THE IS SUE RAISED IN ALL THE GROUNDS OF APPEAL IS THAT WHERE THE ASSESSEE TRUST HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT THEN THE ASSESSEE IS ENTITLED TO CLAIM THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. WE FIND THAT YEAR UNDER APPEAL IS ASSESSMENT YEAR 2011 - 12. THE ASSESSEE WAS A CO - OPERATIVE SOCIETY REGISTERED UNDER THE MAHARASHTRA CO - OPERATIVE SOCIETY ACT. THE ASSESSEE WAS NOT REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT. THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APP EALS) WERE OF THE VIEW THAT THE ASSESSEE SOCIETY WAS A TAXABLE ENTITY BEING CO - OPERATIVE SOCIETY AND WAS NOT ENTITLED TO CLAIM THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. 5. SIMILAR ISSUE OF CLAIM OF EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT AROS E IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2004 - 05. THE TRIBUNAL IN ITA NO. 450/PUN/2014 RELATING TO ASSESSMENT YEAR 2004 - 05 ALONG WITH THE APPEALS IN ASSESSMENT YEARS 2005 - 06 TO 2009 - 10 WITH CONSOLIDATED ORDER DATED 30.11.2017 AFTER CONSIDERING THE FACT UAL AND THE LEGAL ASPECTS OF THE ISSUE HELD THAT THE ASSESSEE WAS ENTITLED TO CLAIM EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. HOWEVER, BECAUSE OF MINOR MISTAKE OF NOT DEALING WITH THE SECOND ISSUE A CORRIGENDUM ORDER WAS PASSED ON 08.12.2017. THE REL EVANT FINDINGS OF THE ITA NO . 1534/PUN/2016, A.Y. 2011 - 12 3 TRIBUNAL IN ALLOWING THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT HAS BEEN DECIDED AFTER THE CORRIGENDUM ORDER AS UNDER : 20. NOW COMING TO THE SECOND OBJECTION OF THE AUTHORITIES BELOW THAT THE ASSESSEE WAS NOT REGISTERED WITH T HE BOMBAY PUBLIC TRUST. THE ASSESSEE WAS A COOPERATIVE SOCIETY AND HAD SPECIFIC OBJECT OF RUNNING THE HOSPITAL WHEREIN IN THE BYE - LAWS IT WAS CLEARLY PROVIDED THAT THE SURPLUS ALSO WOULD FLOW BACK FOR THE ACTIVITIES OF THE TRUST AND WOULD NOT BE DISTRIBU TED AMONG THE MEMBERS. THE PERUSAL OF THE ASSESSMENT ORDER REFLECTS THAT THE ASSESSING OFFICER CONSIDERED THE ISSUE OF GRANT OF EXEMPTION IN THE LIGHT WHETHER THE ASSESSEE WAS CARRYING ON THE ACTIVITIES OF PHILANTHROPY OR NOT. HOWEVER, IN VIEW OF THE DEV ELOPMENTS AFTER THE ORDERS PASSED BY THE AUTHORITIES BELOW, WE FIND NO MERIT IN THE SAID EXERCISE CARRIED OUT BY THE ASSESSING OFFICER, WHICH HAS BEEN CONFIRMED BY THE CIT(A). IN THE CASE OF THE ASSESSEE ITSELF, WHICH WAS A COOPERATIVE SOCIETY ADMITTEDLY NOT REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT AND WAS RUNNING THE MULTI - SPECIALITY HOSPITAL IN THE YEARS UNDER APPEAL AND ALSO IN THE SUCCEEDING YEARS, THE ASSESSING OFFICER IN ASSESSMENT YEAR 2014 - 15 AND EVEN AS RECENT AS IN ASSESSMENT YEAR 2015 - 16 VID E ORDER DATED 17 - 11 - 2017 HAD HELD THE ASSESSEE TO BE ELIGIBLE FOR GRANT OF EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT, VIDE ORDERS PASSED UNDER SECTION 143(3) OF THE ACT. IN OTHER WORDS, THE CLAIM OF THE ASSESSEE OF BEING REGISTERED UNDER SECTION 12AA O F THE ACT HAS BEEN ACCEPTED AND ADOPTED FOR GIVING RELIEF TO THE ASSESSEE BY WAY OF EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. THE SECOND ASPECT WHICH IS RELATED TO A TRUST IS ITS ENTITLEMENT TO CLAIM RECOGNITION UNDER SECTION 80G OF THE ACT. THE ASSE SSEE HAD BEEN GRANTED THE SAID RECOGNITION UNDER SECTION 80G OF THE ACT BY THE COMMISSIONER VIDE ITS ORDER DATED 30 - 03 - 2017, COPY OF WHICH IS PLACED ON RECORD. IN VIEW OF THESE SUBSEQUENT EVENTS, WE HOLD THAT THE ASSESSEE AFTER RECEIVING THE DEEMED REGIST RATION UNDER SECTION 12AA OF THE ACT, IS ENTITLED TO CLAIM THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. THE SAME CANNOT BE DENIED TO THE ASSESSEE ON THE ASPECT OF THE ASSESSEE HAVING RECEIVED DEEMED REGISTRATION OR THE ASSESSEE NOT BEING REGISTERED U NDER THE BOMBAY PUBLIC TRUST ACT OR ANY OTHER ISSUE IN THIS REGARD. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE IN THE YEARS UNDER APPEAL. CONSEQUENT TO OUR ALLOWING THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE, THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT IN ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 IS NOT WARRANTED. HENCE, THE SAID ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 6. THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL IN THE EARLIER YEAR AND FOLLOWING THE SAME PARITY OF REASONING, WE DIRECT THE ASSESSING OFFICER TO ALLOW EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE. ACCORDINGLY, THE GROUND S OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. ITA NO . 1534/PUN/2016, A.Y. 2011 - 12 4 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 29 TH DAY OF DECEMBER, 2017 . SD/ - SD/ - ( ANIL CHATURVEDI ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 29 TH DECEMBER, 2017 . RK / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE C I T (A) - 1 0 , PUNE ; 4. THE C I T ( EXEMPTION), PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE