ITO (Exemptions), New Delhi V. M/s. Indian National Theatre Trust, New Delhi

ITA 165/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4083 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 08-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A

Judgement Text

IN THE INCOME - TAX APPELLATE TRIBUNAL, DELHI BENCH C , NEW DELHI BEFORE : SHRI H.S. SIDHU , JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 165/DEL./2015 ASSESSMENT YEAR: 2010 - 11 I.T.O. (EXEMPTION), WARD 1(2), NEW DELHI. (APPELLANT) VS. INDIAN NATIONAL THEATRE TRUST, 4, SAFDAR HAHMI MARG, NEW DELHI. PAN - AAATI1040E (RESPONDENT) APPELLANT BY SH. ARUN KUMAR YADAV, SR. DR RESPONDENT BY SH. V.P. GUPTA, ADVOCATE ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE REVENUE CHALLENGING THE ORDER OF LD. CIT(A) - XI, NEW DELHI DATED 09.10.2014 FOR A.Y. 2010 - 11 ON THE FOLLOWING GROUND : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE SOCIETY IS A CHARITABLE ORGANIZATION DESPITE THE FACT THAT THE ASSESSEE SOCIETY WAS DOING BUSINESS WITHIN THE MEANING OF AMENDED PROVISIONS OF SECTION 2(15) OF THE INCOME TAX ACT, 1961. 2. AS EMERGED FROM THE ABOVE GROUND OF APPEAL AND THE FACTS ATTENDING TO THE PRESENT CASE, WE OBSERVE THAT THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS WHETHER THE ASSESSEE IS ELIGIBLE FOR EXEMPTION ON ITS INCOME U/S. 11 OF THE IT DATE OF HEARING 10.10.2017 DATE OF PRONOUNCEMENT 11 .10.2017 ITA NO. 165/DEL./2015 2 ACT OR NOT . THE BRIEF FACT S OF THE CASE ARE THAT THE ASSESSEE SOCIETY IS REGISTERED U/S. 12A OF THE IT ACT WITH THE OBJECT TO CARRY OUT CHARITABLE ACTIVITIES TO PROMOTE ARTISTIC AND CULTURAL EXPRESSION THROUGH DRAMA, MUSIC AND EDUCATION. THE ASSESSEE COMPANY WAS IN POSSESSION OF PR EMISES WHICH ALSO CONSISTS OF AN AUDITORIUM WHICH IS PROVIDED TO VARIOUS CHARITABLE INSTITUTIONS FOR THE PURPOSE OF ARTISTIC AND CULTURAL PROGRAMMES. A PORTION OF THE PREMISES WAS ALSO GIVEN ON RENT TO DERIVE REGULAR INCOME TO SUPPORT THE CHARITABLE ACTIVI TIES. THE ASSESSING OFFICER ANALYZING THE ACTIVITIES OF THE ASSESSEE IN TERMS OF AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT, OBSERVED THAT THE ASSESSEE WAS INDULGED IN ADVANCEMENT OF OBJECT OF GENERAL PUBLIC UTILITY AND THAT THE PRINCIPAL ACTIVITY OF A SSESSEE WAS TO LET OUT THE AUDITORIUM WITH CLEAR PROFIT MOTIVE AND AS SUCH THE ASSESSEE - ORGANIZATION CANNOT BE REGARDED AS CHARITABLE ORGANIZATION. HE, THEREFORE, DENIED EXEMPTION U/S. 11 OF THE ACT TO THE ASSESSEE - SOCIETY ON ITS INCOME AND ACCORDINGLY ASS ESSED THE TOTAL INCOME OF RS.1,08,84,519/ - TO TAX. THE LD. CIT(A), AFTER FOLLOWING THE DECISIONS OF ITAT DELHI BENCHES IN ASSESSEE S OWN CASES FOR A.Y, 1986 - 87 TO 1988 - 89 VIDE ORDER DATED 22.04.1999, DECISION OF HIGH COURT IN ASSESSEE S OWN CASE FOR A.Y. 2008 - 09 AND AGAIN THE DECISION OF ITAT, DELHI BENCH IN ASSESSEE S CASE FOR A.Y. 2009 - 10, WHEREIN THE SAME ACTIVITIES OF THE ASSESSEE SOCIETY WERE HELD TO BE CHARITABLE IN NATURE, ALLOWED THE APPEAL OF THE ASSESSEE OBSERVING AS UNDER : ITA NO. 165/DEL./2015 3 7.4. IT IS OBSERVED THAT THERE IS NO CHANGE IN THE ACTIVITIES OF THE APPELLANT SOCIETY FOR THE YEAR UNDER CONSIDERATION AND THESE ARE SIMILAR TO AY 2008 - 09 AND 2009 - 10 AND AS WELL AS IN PRECEDING YEARS WHEREIN THE HON'BLE COURTS HAVE HELD THAT ACTIVITIES CONDUCTED BY THE APPE LLANT SOCIETY ARE CHARITABLE IN NATURE. THEREFORE, THE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT IS NOT AT ALL ATTRACTED BECAUSE BASIC CHARACTER OF THE SOCIETY HAS BEEN HELD TO BE CHARITABLE IN NATURE. IN VIEW OF THE FACT THAT THERE IS NO CHANGE IN TH E ACTIVITIES OF THE APPELLANT FROM EARLIER YEARS, THE FINDINGS MADE BY THE HON'BLE COURTS IN EARLIER YEARS IN APPELLANT'S OWN CASE CLEARLY COVER THE PRESENT ISSUE UNDER APPEAL. FOLLOWING THE SAME THE GROUNDS OF APPEAL ARE ALLOWED AND THE APPELLANT IS ENTIT LED FOR EXEMPTION U/S 11 OF THE ACT. THE CONSEQUENTIAL GROUNDS OF APPEAL ARE ALLOWED IN VIEW OF THE MAIN ISSUE DECIDED IN THE APPELLANT'S FAVOUR. THEREFORE, GROUNDS OF APPEAL ARE ALLOWED. 3. THE LEARNED DR RELIED ON THE ORDER OF THE AO AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE EXEMPTION U/S. 11 OF THE ACT IGNORING THE FACT THAT THE ACTIVITIES OF THE ASSESSEE SOCIETY WERE NOT CHARITABLE IN TERMS OF AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT. THE LD. AR OF THE ASSESSEE - SOC IETY, ON THE OTHER RELIED ON THE IMPUGNED ORDER. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF MATERIAL AVAILABLE ON RECORD, WE FIND NO JUSTIFICATION TO INTERFERE WITH THE IMPUGNED ORDER. IT IS NOTABLE THAT THE ISSUE UNDER CONSIDERATION IS SQ UARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN ASSESSEE S OWN CASE FOR A.Y. 2008 - 09 AND AGAIN BY THE ORDER OF ITAT, DELHI BENCH IN ASSESSEE S CASE FOR A.Y. 2009 - 10, WHEREIN THE SAME ACTIVITIES OF THE ASSESS EE SOCIETY WERE HELD TO BE CHARITABLE IN NATURE. THE LD. LEARNED CIT(A) ITA NO. 165/DEL./2015 4 HAS REPRODUCED THE RELEVANT EXTRACTS OF THE ABOVE DECISIONS IN THE IMPUGNED ORDER, AGAINST WHICH NO MATERIAL IS PLACED BEFORE US ON BEHALF OF THE REVENUE TO DEVIATE FROM THE VIEW ALREA DY FORMED BY HON BLE JURISDICTIONAL HIGH COURT AS WELL AS BY COORDINATE BENCH, AS NOTED ABOVE. THERE BEING NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE NOT INCLINED TO DISTURB THE FINDINGS REACHED BY THE LD. CIT(A) IN THE IMPUGNED ORDER WHI LE ALLOWING THE APPEAL OF THE ASSESSEE. WE, ACCORDINGLY, FIND THE APPEAL OF THE REVENUE DEVOID OF MERITS AND LIABLE TO BE DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.10.2017 . SD/ - SD/ - ( H.S. SIDHU ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11.10.2017 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI