Income Tax Officer, Khamgaon V. M/s Satpuda Education Society, Buldhana

ITA 169/NAG/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84681 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2014
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 25-04-2013
• Court: TRIBUNAL
• Department Lawyers: S C THAKAR; C J THAKAR
• Assessee Lawyers: MAYANK PRIYADARSHI
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . ITA NO.169/NAG/2013 ( AY: 2005 - 2006 ) . ITA NO.170/NAG/2013 ( AY: 2006 - 2007 ) . ITA NO.171/NAG/2013 ( AY: 2007 - 2008 ) INCOME TAX OFFICER, KHAMGAON, DIST: BULDHANA . / VS. M/S. SATPUDA EDUCATION SOCIETY, JALGAON JAMOD, DUST: BULDANA. ./ PAN: ABIFS9797F ( / APPELLANT) .. ( / RESPONDENT ) . ITA NO.45/NAG/2012 M/S. SATPUDA EDUCATION SOCIETY, JALGAON JAMOD, DUST: BULDANA. / VS. COMMISSIONER OF INCOME TAX - 1, ROOM NO.2078, AAYAKAR BHAVAN, CIVIL LINES, NAGPUR - 440001. ./ PAN: ABIFS9797F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI C.J. THAKAR & MR. S.C. THAKAR / RESPONDENT BY : SHRI MAYANK PRIYADARSHI, DR / DATE OF HEARING : 10 .09.2014 / DATE OF PRONOUNCEMENT : 11 .09.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE 4 APPEALS UNDER CONSIDERATION. OUT OF FOUR APPEALS, 3 APPEALS ARE FILED BY THE REVENUE AND 1 APPEAL IS FILED BY THE ASSESSEE. SINCE, THE ISSUES RAISED IN ALL THESE APPEALS ARE CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. 2. FIRSTLY, WE SHALL TAKE UP THE APPEALS FILED BY THE REVENUE. SINCE, THE GROUNDS RAISED IN ALL THE THREE APPEALS FILED BY THE REVENUE ARE 2 IDENTICAL, THEREFORE, FOR THE SAKE OF REFERENCE, WE UNDERTAKE THE GROUNDS RAISED WITH REGARD TO THE AY 2005 - 2006, WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN ALLOWING EXEMPTION U/S 10(23C) THOUGH THE OBJECTS OF THE SOCIETY ARE NOT SOLELY FOR EDUCATION PURPOSE . THE OBJECTS SUCH AS STITCHING, SSI TRAINING, MEDICAL ASSISTANCE ETC., ARE NEITHER INTEGRALLY CONNECTED WITH NOR ARE THEY ANCILLARY OR INCIDENTAL TO PRIMARY OBJEC TS OF EDUCATION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF BUILDING FUND RECEIPTS FOR AY 2005 - 06, 2006 - 07 & 2007 - 08 WHICH ARE VOLUNTARY CONTRIBUTIONS RECEIVED FROM GENERAL PUBLIC AND ARE TAXABLE U/S 2(24)(IIA) . THESE ARE NOTHING BUT ANONYMOUS DONATIONS REFERRED TO IN SECTION 115BBC ON WHICH TAX IS PAYA B LE AND SHALL BE INCLUDED IN TOTAL INCOME IN ACCORDANCE WIT H PROVISO TO SECTION 10(23C) . 3. AT THE OUTSET, SHRI MAYANK PRIYADARSHI, LD DR BROUGHT ATTENTION TO THE ABOVE GROUNDS AND ARGUED THAT THE ASSESSEE IS NOT ENTITLED TO EXEMPTION U/S 10(23C) OF THE ACT AS ITS ANCILLARY OBJECTS ARE NOT CONNECTED TO THE PRIMA RY OBJECT OF EDUCATION. IN SUPPORT OF HIS ARGUMENT, LD DR HEAVILY RELIED ON THE ORDER OF THE AO. 4. ON THE OTHER HAND, SHRI C.J. THAKAR & MR. S.C. THAKAR , LD COUNSELS FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT (A) AND MENTIONED THAT THESE ANCILLARY OBJECTS ARE ABORTIVE OBJECTS WHICH WERE NOT ACTED UPON BY THE ASSESSEE TILL DATE. THUS, THE SAID ANCILLARY OBJECTS, WHICH WERE NOT ACTED UPON, CANNOT BE T HE GROUND FOR DENIAL OF EXEMPTION. FURTHER, IT IS THE ARGUMENT OF THE LD COUNSEL THAT THE ASSESSEES OBJECTS WERE ALSO HELD NOT CHARITABLE BUT THE SAID ORDER OF THE DIT WAS REVERSED BY THE ORDER OF THE TRIBUNAL VIDE ITA NO.224/NAG/2009 , DATED 25.7.2011 (P AGES 1 TO 10 OF THE PAPER BOOK ARE RELEVANT IN THIS REGARD). THUS, IT IS THE FINDING OF THE TRIBUNAL THAT ALL THE OBJECTS OF THE SOCIETY ARE CHARITABLE. FURTHER, REFERRING TO THE GROUND NO.2 OF THE APPEAL, LD REPRESENTATIVES OF BOTH THE PARTIES MENTIONED THAT THE PROSPECTIVE AMENDMENT BROUGHT BY THE FINANCE ACT, RELATING TO THE TREATMENT OF ANONYMOUS DONATIONS REFERRED TO IN SECTION 115BBC , WAS APPLIED DIRECTLY FOR THE YEARS UNDER CONSIDERATION WHICH IS UNSUSTAINABLE. IN VIEW OF THE ABOVE, THE ORDER OF T HE CIT (A) IS FAIR AND REASONABLE AS PER THE LD COUNSEL. 3 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED ORDERS OF THE TRIBUNAL (SUPRA) AND THE RELEVANT MATERIAL PLACED BEFORE US. ON PERUSAL OF THE ORDER OF THE CIT (A) IN GENERAL AND PARA 26 IN GENERAL, WE FIND THE SAME IS RELEVANT IN THIS REGARD. FOR THE SAKE OF COMPLETENESS OF THIS ORDER THE SAID PARA 26 OF THE CIT (A)S ORDER IS REPRODUCED HERE WHICH READ AS UNDER: 26. IN THE LIGHT OF THE ABOVE DISCUSSION AND ALSO RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS OF VARIOUS HONBLE HIGH COURTS AND HONBLE SUPREME COURT, I AM OF THE CONSIDERED OPINION THAT THE SOCIETY / TRUST AND THE EDUCATIONAL INSTITUTIONS RUN BY IT ARE TO BE SEEN INDEPENDENTLY FOR THE PURPOSE OF EXEMPTION U/S 10(23C) . THE CONDITIONS AND RECEIPTS OF EACH OF THE INSTITUTE HAVE TO BE CONSIDERED INDEPENDENTLY. FROM THE FACTS AND CIRCUMSTANCES, IT CAN BE CONCLUDED THAT EACH OF THE INSTITUTIONS OF THE APPELLANT SOCIETY IS FULFILLING THE CO NDITIONS APPLICABLE AS PER THE PROVISIONS OF SECTION 10(23C)(IIIAB) AND 10(23C)(IIIAD). THEREFORE, I AGREE WITH THE CLAIMS OF THE APPELLANT SOCIETY AND ACCORDINGLY DECIDE THAT THE APPELLANT SOCIETY IS ELIGIBLE FOR EXEMPTION U/S 10(23C)ON THE INCOME FOR AL L THE THREE YEARS IN RECEIPT OF BOTH THE AIDED AND UN - AIDED EDUCATIONAL INSTITUTIONS. 6. FROM THE ABOVE, WE FIND THAT W HILE ADJUDICATING THE ISSUE UNDER CONSIDERATION I.E., WHETHER THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 10(23C) OF THE ACT OR NOT, THE CIT (A) HAS DISCUSSED THE ISSUE AT LENGTH AND CONSIDERED THE SUBMISSIONS MADE BY BOTH THE PARTIES AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN OUR OPINION, THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND WE FIND NO INFIRMITY IN HIS OR DER. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE IN ALL THE THREE APPEALS ARE DISMISSED . 7. IN THE RESULT, ALL THE THREE APPEALS OF THE REVENUE ARE DISMISSED. .ITA NO.45/NAG/2012 (BY ASSESSEE) 8. THIS APPEAL FILED BY THE ASSESSEE ON 13.2.2012 IS AGAINST THE ORDER OF THE CIT - I, NAGPUR DATED 23.12.2011. 9. AT THE OUTSET, LD COUNSELS FOR THE ASSESSEE MENTIONED THAT THE APPEAL UNDER CONSIDERATION RELATES TO THE REQUIREMENT OF RETROSPECTIVE APPLICATION OF THE ORDER OF 4 THE TRIBUNAL WITH REGARD TO THE REGISTRATION U/S 12AA OF THE ACT TO THE EARLIER YEARS. IT IS RELEVANT TO MENTION HERE THAT THE REGISTRATION WAS ALLOWED BY THE TRIBUNAL VIDE ITS ORDER DATED 25.7.2011 AND IT IS ONLY PROSPECTIVE IN APPLICATION. IT IS THE SUB MISSION OF THE LD COUNSELS THAT IN CASE OF FAVOURABLE ORDERS TO THE ASSESSEE IN ITA NOS. 169 TO 171/NAG/2013, THE APPEAL ITA NO.45/NAG/2012 MAY BE DISMISSED AS WITHDRAWN. 10. AFTER DISCUSSION WITH THE LD DR IN THIS REGARD, WE FIND THAT THE INSTANT APPEAL I S REQUIRED TO BE DISMISSED AS WITHDRAWN. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED AS WITHDRAWN. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED AS WITHDRAWN . ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2014. SD/ - SD/ - (VIVEK VARMA) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER NAGPUR ; 11 /09/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , NAGPUR / DR, ITAT, NAGPUR. 6. / GUARD FILE . //TRUE COPY// / BY ORDER, (SR. PRIVATE SECRETARY) ITAT, NAGPUR