M/s Anikethana Trust, Bangalore V. Assistant director of Income tax(exemptions), Bangalore

ITA 1690/BANG/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95331 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 04-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 29-12-2014
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: H GURUSWAMY ITP
• Keywords: Charitable institution; Competent authority
• Section: 12AA; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.1690/(BANG)/2014 (ASSESSMENT YEAR : 2009-10) M/S ANIKETHANA TRUST, NO.65, LAGGERE MAIN ROAD, LAGGERE, BANGALORE AP PELLANT VS THE ASST. DIRECTOR OF INCOME TAX (EXMPTN) CIRCLE-17(1) BANGALORE RESPONDE NT APPELLANT BY : SHRI H. GURUSWAMY, ITP RESPONDENT BY : DR. P.K.SRIHARI, ADDL. CIT DATE OF HEARING : 04.11.2015 DATE OF PRONOUNCEMENT : 06-11-2015 O R D E R PER SMT ASHA VIJAYARAGHAVAN, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE CIT(A), BANGALORE DATED 30-09-2014 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAS FILED ITS RETURN OF I NCOME FOR THE ASSESSMENT YEAR 2009-10 ON 31-07-2009, DECLARING NIL INCOME AFTER C LAIMING EXEMPTION ADMISSIBLE OR THE CHARITABLE TRUST. THE TRUST HAS A LSO FILED ALONG WITH THE RETURN OF INCOME THE AUDITED BALANCE SHEET, INCOME AND EXP ENDITURE STATEMENT AND RECEIPTS AND PAYMENT ACCOUNTS FOR THE YEAR ENDING 3 1-03-2009 RELEVANT TO THE 2 ITA NO.1690/BANG/2014 ASSESSMENT YEAR 2009-10. THE NECESSARY AUDIT REP[OR TS WERE ALSO FILED IN SUPPORT OF THE ACCOUNTS MAINTAINED BY THE ASSESSEE. THE ASSESSEE HAD DECLARED EXCESS OF INCOME OVER EXPENDITURE AMOUNTING TO RS.1 ,52,144/- FOR WHICH THE ASSESSEE HAS CLAIMED EXEMPTION FROM TAX. 3. THE ASSESSEE AS PER INCOME AND EXPENDITURE ACC OUNT FOR THE YEAR ENDING 31-03-2009 HAS DECLARED THE RECEIPTS OF RS. 35,74,173/- CONSISTING OF COLLECTION OF FEE OF RS.34,44,186/- INTEREST ON SB ACCOUNT OF RS.44,055/- AND INTEREST ON FD OF RS.85,932/-. THUS, THE GROSS RECE IPTS OF THE ASSESSEE AMOUNTS TO RS.35,74,133/-. THE AO HAS COMPUTED THE SCRUTINY ASSESSMENT U/S 144 OF THE IT ACT, DATED 08-11-2011 FOR NON-APP EARANCE OF THE ASSESSEE OR ANY OF ITS REPRESENTATIVES ON THE HEARING DATE MENT IONED IN THE LETTER DATED 20- 10-2011. 4. THE AO HAS COMPLETED THE ASSESSMENT DETERMINI NG THE TOTAL INCOME AT RS.11,52,144/- BEING THE SURPLUS INCOME OF RS.1, 52,144/- AS PER THE INCOME AND EXPENDITURE ACCOUNT AND BUILDING FUND OF RS.10,00,000/- AS AGAINST NIL INCOME DECLARED BY THE ASSESSEE. THE A O HAS COMPUTED THE INCOME DENYING THE EXEMPTION CLAIMED BY THE ASSESSEE MAINL Y ON THE GROUND THAT THE EXEMPTION CLAIMED WAS NOT ALLOWABLE IN THE ABSENCE OF REGISTRATION U/S 12AA OF THE ACT, 1961. 3 ITA NO.1690/BANG/2014 5. BEFORE THE LOWER AUTHORITIES, THE LEARNED COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS NOT APPRECIATED THE FACT THAT THE ASSESSEE DURING THE YEAR ENDING 31-03-2009 RELEVANT TO AY: 2009-10 HAS RECEIVED ONLY FEES FROM THE STUDENTS AND BANK INTEREST AS DECLARED IN THE INCOME AND EXPENDITURE ACCOUNT. 6. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER S UBMITTED THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS NOT ENTITLED FOR EXEMPTION IN THE ABSENCE OF REQUIRED REGISTRATION U/S 12AA OF TH E ACT, WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE SOLELY AND MAINLY EXISTS FOR PROVIDING EDUCATION AND NOT FOR THE PURPOSES OF PROFIT AND ACCORDINGLY, THE ASSESSEE WAS ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAD) OF THE IT ACT, SINCE T HE GROSS RECEIPTS OF THE ASSESSEE TRUST WAS LESS THAN RS.ONE CRORE. 7. IT WAS ALSO POINTED OUT THAT THE ASSESSEES RE CEIPTS FOR THE YEAR ENDING 31-03-2009 RELEVANT TO THE ASSESSMENT YEAR 2009-10 HAVE NOT EXCEEDED A SUM OF RS. ONE CRORE AS PRESCRIBED UNDER RULE 2(BC(1) O F THE IT RULES. THE REGISTRATION U/S 12AA OF THE ACT, WAS NOT MANDATORY AS LONG AS THE GROSS RECEIPTS OF THE ASSESSEE DID NOT EXCEED THE PRESCRI BED LIMIT OF RS.ONE CRORE AND THEREFORE, THE AO WAS NOT JUSTIFIED TO DENY THE EXE MPTION CLAIMED BY THE ASSESSEE. 4 ITA NO.1690/BANG/2014 8. WE ARE OF THE OPINION, THAT THE REFUSAL OF THE R EGISTRATION U/S 12AA OF THE ACT, 1961 OUGHT TO HAVE NOT BEEN CONSIDERED AS A GROUND FOR DENYING THE EXEMPTION ADMISSIBLE U/S 10(23C)(IIIAD) OF THE ACT. THE AO HAS WRONGLY HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR THE EXEMPTIO N AS THE COMPETENT AUTHORITY HAS REJECTED THE ASSESSEES CLAIM FOR REG ISTRATION U/S 12AA OF THE IT ACT. THE ASSESSEE WAS AGGRIEVED WITH ASSESSMENT O RDER AND THEREFORE, FILED AN APPEAL BEFORE THE LEARNED CIT(A)-V, BANGALORE AN D THE APPEAL SO FILED WAS LATER TRANSFERRED TO THE LEARNED CIT(A)-LTU, BANGAL ORE HAS NOT APPRECIATED THE ASSESSEES CLAIM FOR DEDUCTION U/S 10(23C)(IIIAD) OF THE ACT, AND MAINLY RELIED UPON THE REFUSAL OF REGISTRATION U/S 12AA OF THE AC T AND CONFIRMED THE ADDITION MADE BY THE AO. WE ARE OF THE OPINION, TH AT IRRESPECTIVE E OF GRANTING/REFUSAL OF THE REGISTRATION U/S 12AA OF TH E ACT, THE CLAIM FOR EXEMPTION CANNOT BE DENIED IN RESPECT OF THE EDUCAT ION INSTITUTIONS, WHOSE TURNOVER DOES NOT EXCEED RS.ONE CRORE, P.A AS PER S EC.10(23C)(IIIAD) OF THE ACT, WHICH IS AN OVERRIDING PROVISION. THEREFORE, THE A SSESSMENT ORDER DATED 30- 09-2014 PASSED BY THE LEARNED CIT(A)-LTU, BANGALORE WAS NOT IN ACCORDANCE WITH THE LAW AND FACTS OF THE CASE AND THEREFORE, T HE ASSESSMENT ORDER SO PASSED IS SET ASIDE. 9. IN THE RESULT, THE ASSESSEE'S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TH E 6 TH NOVEMBER, 2015. (JASON P BOAZ) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED S: 06-11-2015 PLACE: BANGALORE AM* 5 ITA NO.1690/BANG/2014 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER AR, ITAT, BANGALORE