Dy. CIT Cen Cir Kolhapur, Kolhapur V. Dr. D.Y. Patil Pratishtan, Kolhapur

ITA 1747/PUN/2012

• Counselvise Citation: 174724514 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 28-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Benefit of exemption
• Section: 143(3); 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1747/PN/2012 (ASSESSMENT YEAR : 2009-10) DY. COMMISSIONER OF INCOME TAX, (CENTRAL) CIRCLE, KOLHAPUR . APPELLANT VS. DR. D. Y. PATIL PRATISHTAN, 2126/E, TARABAI PARK, KOLHAPUR PAN : AAATD5311R . RESPONDENT DEPARTMENT BY : MR. A. K. MODI ASSESSEE BY : MR. NIKHIL PATHAK DATE OF HEARING : 27-09-2013 DATE OF PRONOUNCEMENT : 30-09-2013 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL HAS BEEN PREFERRED BY THE REV ENUE WHICH IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS), KOLHAPUR DATED 29.06.2012 WHICH, IN TURN, HAS ARISE N FROM AN ORDER DATED 29.12.2011 PASSED BY THE ASSESSING OFFICER, UNDER S ECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINI NG TO THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, THE REVENUE HAS RAISED FOLLOWING MAIN ISSUES :- 1. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING EXEMPT ION U/S.11 OF THE I.T. ACT TO THE ASSESSEE IGNORING THE FACT THAT ACTIVITIES OF T HE ASSESSEE ARE NOT GENUINE AND ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH TH E OBJECTS OF THE TRUST. 2. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING EXEMPT ION U/S.11 WHEREIN REGISTRATION U/S.12A WAS CANCELLED BY THE CIT. FURT HER ITATS ORDER RESTORING THE REGISTRATION U/S.12A IS CHALLENGED BY THE REVEN UE BEFORE THE HONBLE BOMBAY HIGH COURT. ITA NO.1747/PN/2012 A.Y. 2009-10 3 .WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING REMUNE RATION PAID TO RELATIVES OF TRUSTEES TO THE TUNE OF RS.69,11,783/- HOLDING THAT NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT MARKET VALUE OF THE SERVICES /JOBS WAS LESS THAN THE PAYMENTS MADE TO THEM WHEN THE PAYMENTS WERE SQUARE LY U/S.40A(2)(B) AND CONSTITUTED VIOLATION IN TERMS OF SECTION 13(1)(C). (II) WITHOUT PREJUDICE TO THE ABOVE, LD. CIT(A) HAS ERRED IN NOT EXERCISING HIS PLENARY POWERS WHICH ARE CONTERMINOU S WITH THAT OF ASSESSING OFFICER AS PER THE RATIO LAID DOWN BY CIT VS. KANP UR COAL SYNDICATE (1964) 53 ITR 225, 229 (SC). 3. IN BRIEF, THE FACTS ARE THAT THE RESPONDENT-ASSE SSEE IS A TRUST WHICH IS ENGAGED IN THE ACTIVITY OF RUNNING EDUCATIONAL INST ITUTIONS. ORIGINALLY IT WAS GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT B Y THE COMMISSIONER ON 15.11.1991 BUT VIDE ORDER DATED 30.11.2007 THE COMM ISSIONER INVOKED HIS POWER UNDER SECTION 12AA(3) OF THE ACT AND CANCELLE D SUCH REGISTRATION. IN VIEW OF THE AFORESAID, THE ASSESSING OFFICER DENIED THE BENEFIT OF EXEMPTION OF SECTIONS 11/12 OF THE ACT AND ALSO NOTED THAT ASSES SEE HAD VIOLATED THE PROVISIONS OF SECTION 13 (1)(C) OF THE ACT ALSO. AS A RESULT, THE ASSESSING OFFICER DETERMINED THE TOTAL INCOME OF RS.15,53,30, 650/- FOR THE ASSESSMENT YEAR 2009-10 AS AGAINST A RETURNED LOSS OF RS.23,42 ,30,902/-. ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). IN APPEAL, THE CIT(A) NOTED THAT THE ISSUE OF DENIAL OF EXEMPTION UNDER SECTIONS 11/ 12 WAS A SUBJECT MATTER OF APPEAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YE ARS 2007-08 AND 2008-09, WHEREIN THE THEN CIT(A) HAD UPHELD THE ASS ESSEES CLAIM OF EXEMPTION UNDER SECTION 11/12 OF THE ACT. FOLLOWING THE PRECEDENTS, THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE. AGAINST T HE AFORESAID DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US BY WAY O F GROUNDS OF APPEAL NOS. 1 AND 2, STATED ABOVE. 4. BEFORE US, IT WAS A COMMON GROUND BETWEEN THE PA RTIES THAT IN SO FAR AS THE CANCELLATION OF A REGISTRATION UNDER SECTION 12AA OF ACT BY THE COMMISSIONER IS CONCERNED THE SAME HAS BEEN RESTORE D BY THE TRIBUNAL ON AN APPEAL BY THE ASSESSEE VIDE ITA NO.182/PN/2008 DATE D 28.11.2008. IT WAS ITA NO.1747/PN/2012 A.Y. 2009-10 ALSO A COMMON GROUND BETWEEN THE PARTIES THAT SIMIL AR DISPUTE IN THE ASSESSEES OWN CASE HAS BEEN ADJUDICATED BY THE TRI BUNAL FOR ASSESSMENT YEARS 2007-08 AND 2008-09 VIDE ITA NO.253/PN/2012 A ND ITA NO.1372/PN/2012 DATED 25.06.2013 AND 11.09.2013 RES PECTIVELY. IT IS ALSO NOTABLE THAT IN THE ASSESSMENT YEAR 2006-07 ALSO TH E TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO.1592/PN/2011 DATED 14.12.2012 HAS HELD THAT THE ASSESSEE IS ENTITLED TO THE BENEFITS OF SECTION 11/ 12 OF THE ACT AND THAT THERE WAS NO VIOLATION OF THE PROVISIONS OF SECTION 13(1) (C) OR 13(1)(D) OF THE ACT. IN VIEW OF THE AFORESAID PRECEDENTS, WHICH HAVE NOT BE EN ALTERED BY ANY HIGHER AUTHORITY, IN OUR VIEW, THE AFORESAID GROUNDS RAISE D BY THE REVENUE DESERVE TO BE DISMISSED. MERELY BECAUSE THE REVENUE HAS NOT ACCEPTED THE DECISION OF THE TRIBUNAL AND HAS FILED AN APPEAL BEFORE THE HONBLE HIGH COURT IN AN EARLIER YEAR, CANNOT BE A GROUND TO TAKE A DIFFEREN T VIEW IN THE ABSENCE OF ANY ADVERSE ORDER CONTRARY TO THAT OF THE TRIBUNAL HAVI NG BEEN PASSED BY THE HONBLE HIGH COURT. IN VIEW OF THE AFORESAID PRECED ENTS, GROUNDS OF APPEAL NOS. 1 AND 2 ARE DISMISSED. 5. BY WAY OF THE GROUND OF APPEAL NO. 3, THE ISSUE IS WITH REGARD TO A DISALLOWANCE OF RS.69,14,783/- BEING PAYMENTS MADE TO PERSONS SPECIFIED UNDER SECTION 40A(2)(B) OF THE ACT ON THE GROUND TH AT SAME ARE IN VIOLATION OF THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER HAS BEEN DELETED BY THE CIT(A) FO LLOWING HIS OWN DECISION IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR OF 2008-09 ON A SIMILAR ISSUE. 6. BEFORE US, IT HAS BEEN POINTED OUT THAT THE TRIB UNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 VIDE ITA NO. 1 372/PN/2012 (SUPRA) HAS UPHELD THE STAND OF THE CIT(A) DELETING THE ADD ITION, AFTER CONSIDERING THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FO R THE ASSESSMENT YEAR 2007-08 VIDE ITA NO.253/PN/2012 (SUPRA). THE AFORES AID PRECEDENTS CONTINUE ITA NO.1747/PN/2012 A.Y. 2009-10 TO HOLD THE FIELD AND HAVE NOT BEEN ALTERED BY ANY HIGHER AUTHORITY AND THEREFORE WE AFFIRM THE ORDER OF THE CIT(A) DELETIN G THE IMPUGNED ADDITION, AS THE ISSUE INVOLVED IS SIMILAR. 7. IN THE RESULT, THE GROUND OF APPEAL NOS. 1, 2 AN D 3 RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 8. RESULTANTLY, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 30 TH SEPTEMBER, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT, KOLHAPUR; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE