The Dy. CIT (Exemptions), Ahmedabad V. Friends of WWB India, Ahmedabad

ITA 1549/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9906 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 22-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Benefit of exemption; Cancellation of registration
• Section: 143(3); 12A; 12; 11

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 1549/AHD/2017 WITH CROSS OBJECTION NO. 48/AHD/2018 ( ASSESSMENT YEAR : 2010-11) THE DY. COMMISSIONER OF INCOME-TAX (EXEMPTIONS) CIRCLE-1, AHMEDABAD / VS. FRIENDS OF WWB INDIA 101, SAKAR-I BUILDING, OPP. GANDHIGRAM RAILWAY STATION, AHMEDABAD 380009 ./ ./ PAN/GIR NO. : AAATF0274B ( APPELLANT / RESPONDENT ) .. ( RESPONDENT / CROSS OBJECTOR ) / REVENUE BY : SHRI VINOD TANWANI, SR. D.R. / ASSESSEE BY : SHRI SANJAY R. SHAH, A.R. DATE OF HEARING 28/03/2019 ! / DATE OF PRONOUNCEMENT 29/03/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-9, AHMEDABAD (CIT(A) IN SHORT), DATED 2 7.04.2017 ARISING IN THE ASSESSMENT ORDER DATED 30.03.2015 PASSED BY THE ASSESSING ITA NO. 1549/AHD/17 WITH CO NO. 48/AHD/2018 [DCIT(EXEMPTIONS) VS. FRIENDS OF WWB INDIA] A.Y. 20 10-11 - 2 - OFFICER (AO) UNDER S. 143(3) R.W.S. 147 OF THE INCO ME TAX ACT, 1961 (THE ACT) CONCERNING AY 2010-11. 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN T HE REVENUES APPEAL AS CAPTIONED ABOVE. ITA NO. 1549/AHD/2017 (REVENUES APPEAL) 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA DS AS UNDER:- 1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN A LLOWING THE PAYMENT OF RS.5 CORES MADE TO IFGI HOLDING IT TO BE NOT COVERE D BY SECTION 40A(2)(A) OF THE ACT AND TREATING IT AS ALLOWABLE EXPENDITURE . 2) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN G RANTING THE BENEFIT OF EXEMPTION U/S. 11 & 12 OF THE ACT TO THE ASSESSEE I GNORING THE FACT THAT THE ACTIVITY OF THE ASSESSEE WAS IN THE FORM OF ADVANCE MENT OF GENERAL PUBLIC UTILITY AND NOT RELIEF OF POOR AS DEFINED IN SECTIO N 2(15). 4. BRIEFLY STATED, THE ASSESSEE IS A TRUST REGISTER ED UNDER BOMBAY TRUST ACT, 1950 AND A SOCIETY REGISTERED THE SOCIET IES REGISTRATION ACT, 1860. THE ASSESSEE IS STATED TO BE REGISTERED AS C HARITABLE TRUST UNDER S.12A OF THE ACT. DURING YEAR UNDER CONSIDERATION, THE AO IN THE COURSE OF ASSESSMENT UNDER S.143(3) R.W.S. 147 OF T HE ACT DENIED THE BENEFIT OF EXEMPTION UNDER S.11 & 12 OF THE ACT ON THE GROUND THAT REGISTRATION OF THE TRUST WAS WITHDRAWN FROM AY 200 9-10 ONWARDS. THE INCOME OF THE TRUST WAS ACCORDINGLY COMPUTED AS PER THE NORMAL PROVISIONS OF THE ACT IN THE YEAR UNDER CONSIDERATI ON. THE AO INTER ALIA DISALLOWED CORPUS DONATION GIVEN BY THE ASSESSEE T O INDIAN FOUNDATION FOR INCLUSION GROWTH (IFIG) PEGGED AT RS .5CRORE. IT WAS OBSERVED BY THE AO THAT THE DONATION WAS GIVEN TO A RELATED PERSON COVERED UNDER S.40A(2)(A) OF THE ACT AND ALSO ALLEG ED THAT THIS MONEY WAS SIPHONED OFF FROM THE TRUST. THE AO FINALLY AS SESSED THE TAXABLE INCOME OF THE ASSESSEE AT RS.9,35,24,850/-. ITA NO. 1549/AHD/17 WITH CO NO. 48/AHD/2018 [DCIT(EXEMPTIONS) VS. FRIENDS OF WWB INDIA] A.Y. 20 10-11 - 3 - 5. AGGRIEVED, THE ASSESSEE PREFERRED THE APPEAL BEF ORE THE CIT(A). 6. ON REAPPRAISAL OF THE SUBMISSIONS AND EVIDENCES PLACED ON RECORD, THE CIT(A) FOUND THAT THE REGISTRATION GRAN TED TO THE ASSESSEE TRUST UNDER S.12A OF THE ACT CANNOT BE DISLODGED. THE CIT(A) ALSO FOUND MERIT IN THE ELIGIBILITY OF CLAIM OF DEDUCTIO N TOWARDS CORPUS DONATION BY THE ASSESSEE TO IFIG. THE CANCELLATION OF REGISTRATION UNDER S.12AA(3) OF THE ACT WAS ACCORDINGLY MODIFIED AND RESTORED AND THE BENEFIT OF EXEMPTION UNDER S.11 & 12 OF THE ACT WAS GRANTED TO THE ASSESSEE HOLDING THAT THE ACTIVITIES OF THE TRUST A RE CHARITABLE ACTIVITIES FOR THE PURPOSES OF SECTION 2(15) OF THE ACT. THE CORPUS DONATION WAS ALSO CONSIDERED AS APPLICATION OF INCO ME AS BEING GIVEN AS DONATION TO ANOTHER CHARITABLE TRUST. 7. THE REVENUE HAS AGITATED THE AFORESAID RELIEFS G RANTED BY THE CIT(A) BEFORE THE TRIBUNAL. 8. THE LEARNED AR FOR THE ASSESSEE IN THE REVENUES APPEAL SUBMITTED THAT THE CHALLENGE OF THE REVENUE ARE TWO FOLD; FIRSTLY, THE CANCELLATION OF REGISTRATION OF THE ASSESSEE AS CHA RITABLE TRUST HAS BEEN WRONGLY REVOKED AND SECONDLY, THE CIT(A) HAS WRONGL Y GRANTED RELIEF TO THE ASSESSEE TOWARDS CORPUS DONATION TO IFIG AS APPLICATION OF INCOME FOR THE PURPOSES OF SECTION 11 OF THE ACT. THE LEARNED AR SUBMITTED THAT AS REGARDS FIRST CONTENTION OF THE R EVENUE, THE ISSUE HAS ALREADY BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE BY THE CO-ORDINATE BENCH OF THE ITAT IN ITA NO.2076/AHD/2014 ORDER DAT ED 14.08.2015 CONCERNING AY 2009-10. AS PER THE AFORESAID ORDER, THE CO-ORDINATE BENCH HAS RESTORED THE CERTIFICATE GRANTED UNDER S. 12A BY HOLDING THAT ACTIVITIES ARE BEING CARRIED OUT AS PER OBJECTS OF THE TRUST AND THEREFORE, THE REASON TO DENY THE BENEFIT OF EXEMPT ION UNDER S.11 OF THE ACT AS NO LONGER VALID AND DO NOT SURVIVE ANY M ORE. ADVERTING TO ITA NO. 1549/AHD/17 WITH CO NO. 48/AHD/2018 [DCIT(EXEMPTIONS) VS. FRIENDS OF WWB INDIA] A.Y. 20 10-11 - 4 - SECOND ASPECT, THE LEARNED AR CONTENDED THAT SIMILA R DONATION OF RS.45 CRORES GIVEN TO IFIG WERE TREATED AS APPLICAT ION OF INCOME AND THE PROVISIONS OF SECTION 11(1)(A) OF THE ACT WAS H ELD TO BE MET OUT BY THE DONOR TRUST BY THE CO-ORDINATE BENCH OF TRIBUNA L IN AY 2011-12 IN ITA NO.1927/AHD/2016 ORDER DATED 09.03.2017. SIMIL AR VIEW HAS BEEN AGAIN TAKEN IN ASSESSEES OWN CASE IN AY 2012- 13 IN ITA NO.1608/AHD/2017. THE LEARNED AR THEREFORE SUBMITT ED THAT THE SECOND GRIEVANCE OF THE REVENUE ALSO HAS NO LEGAL F OUNDATION AND THEREFORE APPEAL OF THE REVENUE REQUIRES TO BE DISM ISSED ON BOTH COUNTS. 9. THE LEARNED AR THEREAFTER REFERRED TO ITS GROUND S OF CROSS OBJECTION AND FAIRLY SUBMITTED THAT HE DOES NOT SEE K TO PRESS GROUND NOS. 1 & 2 OF ITS CROSS OBJECTION CONCERNING THE VA LIDITY RE-ASSESSMENT UNDER S.147 OF THE ACT. THE LEARNED AR FURTHER POI NTED OUT THAT GROUND NO.3 IS ALSO RENDERED INFRUCTUOUS AS THE DED UCTION CLAIMED IS AVAILABLE ON MERITS IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH IN OTHER ASSESSMENT YEARS AND CONSEQUENTLY, THE CROSS OBJECTION OF THE ASSESSEE DOES NOT CALL FOR ANY SUBSTANTIVE ADJUDIC ATION. 10. THE LEARNED DR RELIED UPON THE ORDER OF THE AO AND OFFERED NO COMMENT IN ELABORATION. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. AS NARRATED ON BEHALF OF THE ASSESSEE NOTED ABOVE, THE GRIEVANC ES OF THE REVENUE HAVE BEEN ADDRESSED IN NEGATIVE BY THE CO-ORDINATE BENCH OF TRIBUNAL IN OTHER ASSESSMENT YEARS ON SIMILAR FACTS. THEREF ORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A ) WHICH IN CONFORMITY WITH THE SUBSISTING ORDER OF THE ITAT. 12. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ITA NO. 1549/AHD/17 WITH CO NO. 48/AHD/2018 [DCIT(EXEMPTIONS) VS. FRIENDS OF WWB INDIA] A.Y. 20 10-11 - 5 - 13. IN VIEW OF THE SUBMISSIONS MADE ON BEHALF THE A SSESSEE, CROSS OBJECTION OF THE ASSESSEE IS ALSO DISMISSED. 14. IN THE COMBINED RESULT, APPEAL OF THE REVENUE A S WELL AS CROSS OBJECTION OF THE ASSESSEE, BOTH ARE DISMISSED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 29/03/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- $. / REVENUE 2. / ASSESSEE &. '() * / CONCERNED CIT 4. *- / CIT (A) -. ./0 122()3 ()!3 45' / DR, ITAT, AHMEDABAD 6. 078 9 / GUARD FILE. BY ORDER / 3 /4 ()!3 45' THIS ORDER PRONOUNCED IN OPEN COURT ON 29/03/2019