The ACIT,GNR Circle, Gandhinagar V. Entrepreneurship Development Institute of India, Gandhinagar

ITA 1688/AHD/2012

• Counselvise Citation: 168820514 RSA 2012
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 01-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TIRKEY
• Assessee Lawyers: A C SHAH
• Keywords: Charitable institution
• Section: 143(3); 12A; 11

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER 1. ./ I.T.A. NO.1688/AHD/2012 1. ./ I.T.A. NO.1689/AHD/2012 ( & ' & ' & ' & ' / / / / ASSESSMENT YEARS : 2006-07 & 2009-10 RESPECTIVELY ) DY.CIT GANDHINAGAR & & & & / VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA VILL BHAT, TAL.DIST. GANDHINAGAR 382 428 ( '# ./)* ./ PAN/GIR NO. : AAATI 07840B ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . ' / APPELLANT BY : SHRI A.TIRKEY, SR.D.R. ,-(+ / . ' / RESPONDENT BY : SHRI A.C.SHAH &0 / # / / / / DATE OF HEARING : 26.9.12 12' / # / DATE OF PRONOUNCEMENT : 28/9/12 '3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE ARISING FROM THE ORDERS OF LD.CIT(A)-GANDHINAGAR DATED 14/05/20 12 PASSED FOR A.YS. 2006-07 & 2009-10 AND THE GROUNDS RAISED ARE AS UND ER:- 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND O N FACTS BY HOLDING THE RE-ASSESSMENT PROCEEDINGS U/S.147 OF TH E ACT AS INVALID. ITA NOS.1688 & 1689/AHD/2012 DCIT VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA ASST.YEARS - 2006-07 & 2009-10 - 2 - 2. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN TREATING REGISTRATION U/S.12A OF THE ACT AS VALID T HEREBY ALSO ALLOWING THE ASSESSEE TO BE ELIGIBLE FOR DEDUCTION U/S.11 OF THE ACT. 3. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND O N FACTS IN DELETING THE ADDITIONS MADE BY THE AO ON ACCOUNT OF DISALLOWING EXEMPTION U/S.11 OF THE ACT AMOUNTING TO RS.69,91,1 22/- (FOR A.Y. 09-10 RS.1,56,91,01/-). 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) R.W.S.147 RESPECTIVELY DATED 28/1 2/2011 AND 29/12/2011 THAT THE ASSESSEE IS AN EDUCATIONAL INS TITUTION, PROVIDING TEACHING IN RESPECT OF ENTREPRENEURSHIP DEVELOPMENT . THE AO HAS DISALLOWED THE CLAIM OF DEDUCTION U/S.11(1)(A) OF I T ACT PRIMARILY ON THE GROUND THAT NO INSTRUMENT EVIDENCING CREATION OF A TRUST FOR CHARITABLE PURPOSES HAS BEEN EXECUTED AND THE ASSESSEE IS ONLY A CHARITABLE INSTITUTION. BEING AGGRIEVED FOR BOTH THE YEARS, T HE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY WHO HAS OPINED IN FAVOUR OF THE ASSESSEE IN THE FOLLOWING MANNER:- 5. THE FIRST GROUND AND ITS SUB-PARTS ARE AGAINST RE-OPENING AND THE GROUND NO.2 IS ON THE MERITS AS TO WHETHER THE INCO ME IS EXEMPT U/S. 11. AS THE FACTS AND CIRCUMSTANCES ARE INTER-R ELATED, THESE ARE DISCUSSED TOGETHER. AFTER CONSIDERATION OF THE ASSE SSMENT ORDER, WRITTEN SUBMISSIONS AND EVIDENCES, THE FOLLOWING IM PORTANT FACTS AND MY CONSIDERED OPINION EMERGE:- A) THE ORIGINAL ASSESSMENT WAS PASSED U/S... 143(3 ) AND EXEMPTION U/S. 11 WAS GRANTED TO THE ASSESSEE. B) ALTHOUGH, THE APPELLANT HAS CLAIMED IN THE WRIT TEN SUBMISSIONS THAT DURING THE ORIGINAL (REGULAR) ASSESSMENT PROCEEDINGS, SPECIFIC QUERY WAS RAISED ASKING FOR COPY OF TRUST DEED AND IN RESPONSE, MEMORANDUM OF ASSOCIATION WAS ENCLOSED; DURING THE APPELLATE PROCEEDINGS THE APPELLANT FAILED TO ITA NOS.1688 & 1689/AHD/2012 DCIT VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA ASST.YEARS - 2006-07 & 2009-10 - 3 - PROVE IT. HOWEVER, IT IS ALSO TRUE THAT THE TRUST DEED WAS ALREADY IN THE RECORD OF THE AO AS DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) FOR AY 2005- 06, THESE WERE SPECIFICALLY ASKED FOR AND SUBMITTED (REFER TO THE APPELLATE ORDER IN FIRST APPEAL FOR A Y 2005-06 DTD. 26/05/2011 APPEAL NO.CIT(A)/GNR/155/2010-LL AGAINST ORDER U/S 143(3) RW 147). THE EXEMPTION WAS ALLOWED FOR MANY YEARS INCLUDING THE YEAR IN QUESTION, AND THEREFORE, THE LOGICAL ASSUMP TION IS THAT THESE WERE CONSIDERED BY THE AO. FOR THIS CONCLUSION, SUPPORT IS TAKEN FROM THE DECISION OF H ON'BLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LT D (SUPRA). C) THE CASE HAS BEEN REOPENED AND DECIDED AGAINST THE ASSESSEE BY THE AO SAYING THAT THE ASSESSEE IS AN INSTITUTION AND NO TRUST HAS BEEN CREATED (NO INSTR UMENT EVIDENCING CREATION IS AVAILABLE}. FURTHER, AO HAS HELD THAT THE REGISTRATION U/S. 12A IS FOR THE INSTITUTI ON AND THE ASSESSEE IS NOT A TRUST BUT A CHARITABLE INSTITUTIO N. D) FROM THE MEMORANDUM & RULES FILED (WHICH WAS AVAILABLE WITH THE AO IN THE ORIGINAL ASSESSMENT AL SO}, IT IS CLEAR THAT THE PROPERTY IS VESTED IN THE GOVERNI NG BODY, THE GOVERNING BODY AND ITS POWERS AND FUNCTIONS ARE CLEARLY DEFINED ALONG WITH THE OBJECTIVES. IT CAN B E SAID THAT THE PROPERTY IS HELD UNDER TRUST AS REQUIRED U NDER THE PROVISIONS OF SEC. 11. NOT ONLY THIS, THE INSTI TUTION IS REGISTERED AS PUBLIC TRUST UNDER MUMBAI PUBLIC TRU ST, 1950 SUB-RULE 29 UNDER REGN. NO. F/934/AHMEDABAD DATED 3 RD JUNE, 1983. IN THIS REGARD I HAVE RELIED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GU JARAT MARITIME BOARD 295 ITR 561 WHEREIN THE BOARD'S PROPERTY WAS HELD TO BE HELD IN TRUST, FOR THE PURP OSE OF SEC. 11. IN VIEW OF THE ABOVE FACTS AND OBSERVATIONS, THE RE OPENING IS HELD TO BE INVALID AS BEING MERELY A CHANGE OF OPIN ION. FURTHER, IT IS HELD THAT PROPERTY IS VESTED IN THE TRUST, THE TRUS TEES BEING THE GOVERNING BODY, AND THE GOVERNING BODY AND ITS POWE RS AND FUNCTIONS ARE CLEARLY DEFINED ALONG WITH THEE OBJECTIVES. FUR THER, THE ASSESSEE HAS DULY BEEN GRANTED REGISTRATION U/S.12A OF THE I T ACT. THEREFORE, ON MERITS ALSO THE ASSESSEE IS HELD TO BE ELIGIBLE FOR DEDUCTION U/S.11. 3. FROM THE SIDE OF THE LD.SR.DR MR.A.TIRKEY APPEAR ED AND SUPPORTED THE ORDER OF THE AO. FROM THE SIDE OF T HE RESPONDENT-ASSESSEE ITA NOS.1688 & 1689/AHD/2012 DCIT VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA ASST.YEARS - 2006-07 & 2009-10 - 4 - LD.AR MR.A.C.SHAH APPEARED AND INFORMED THAT THE I NSTITUTE WAS SET UP BY CENTRAL FINANCIAL INSTITUTIONS, SUCH AS, IDBI, I CICI, SBI. THE INSTITUTE IS REGISTERED U/S.12A(A) OF IT ACT. TH E EDUCATIONAL ACTIVITY IS DULY GOVERNED BY MEMORANDUM OF ASSOCIATION AND RULE S. THE ASSESSEE IS ALSO REGISTERED UNDER SOCIETY REGISTRATION ACT, 1860. THE INSTITUTE IS ALSO REGISTERED UNDER BOMBAY PUBLIC TRUST ACT, 1950 . IN THIS REGARD, RELEVANT CERTIFICATES WHICH WERE STATED TO HAVE BEE N PLACED BEFORE THE REVENUE AUTHORITIES, ARE ALSO PLACED IN THE SHORT C OMPILATION. 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED VIEW THAT THE VIEW EXPRESSED BY THE LD.C IT(A) IN RESPECT OF BOTH THE GROUNDS DESERVES TO BE UPHELD. THIS INS TITUTE IS FORMED BY A MEMORANDUM AND RULES WITH THE OBJECT TO ORGANIZE PR OGRAMMES AND TO MOTIVATE INDIVIDUALS AND TO GIVE EDUCATION IN RESPE CT OF DEVELOPMENT OF ENTREPRENEURSHIP. THIS INSTITUTE HAS BEEN GOVERNE D BY DIRECTORS AND EXECUTIVE DIRECTORS SERVING WITH CERTAIN GOVERNMENT BODIES, SUCH AS, IDBI, IFCI, ICICI, STATE BANK OF INDIA, GOVERNMENT OF GUJARAT. THIS INSTITUTE IS ORGANIZED BY THE GRANTS RECEIVED FROM CENTRAL AND STATE GOVERNMENT AND ALSO GRANTS RECEIVED FROM SPONSORS. FUNDS OF THE INSTITUTE CONSISTED DONATIONS AND MEMBERSHIP FEES. UNDISPUTEDLY, THE INSTITUTE IS REGISTERED UNDER SOCIETY REGISTRATION ACT, 1860 AND BOMBAY PUBLIC TRUST ACT, 1950. THE INSTITUTE IS ALSO REGI STERED BY THE COMMISSIONER OF INCOME-TAX DEPARTMENT AS PRESCRIBED UNDER SECTION 12A OF IT ACT. WE THEREFORE HOLD THAT THE INSTITUT E QUALIFIES FOR THE EXEMPTION AS PRESCRIBED U/S.11 OF IT ACT. RESULT ANTLY, THE GROUNDS RAISED BY THE REVENUE ARE HEREBY DISMISSED FOR BOTH THE YEARS. ITA NOS.1688 & 1689/AHD/2012 DCIT VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA ASST.YEARS - 2006-07 & 2009-10 - 5 - 5. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. SD/- SD/- ( .. ) ( ) '# ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 28/ 09 /2012 ..&, .&../ T.C. NAIR, SR. PS '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4'/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-GANDHINAGAR 5. 49: ,& , , / DR, ITAT, AHMEDABAD 6. :; <0 / GUARD FILE. '3& '3& '3& '3& / BY ORDER, -4 , //TRUE COPY// = == =/ // / ) ) ) ) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DIRECT DICTATION DATED 26/09/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/09/12. OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 28.9.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.9.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER