Sh S.S. Jain Sabha, Bathinda V. The Income Tax Officer, Bathinda

ITA 177/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0818 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-02-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Keywords: Depreciation; Charitable institution; Reassessment proceedings; Capital expenditure
• Section: 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (SMC). BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.177(ASR)/2015 ASSESSMENT YEAR:2011-12 PAN:AABTS6309K S.S. JAIN SABHA (REGD.) VS. INCOME TAX OFFICER, KIKAR BAZAR, WARD 2(1), BATHINDA. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ASHWANI KALIA, CA RESPONDENT BY: SH.R.K.SHARDA, DR DATE OF HEARING: 22/02/2016 DATE OF PRONOUNCEMENT: 12/04/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2011-12 AGAINST THE ORDER DATED 30.01.2015, PASSED BY THE L D. CIT(A), BATHINDA. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL: 1. THAT THE LD. CIT(A), BATHINDA HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.12,29,025/- MADE BY T HE AO WITH TOTAL DISREGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(A), BATHINDA HAS ERRED IN LAW A ND ON FACTS IN HOLDING THAT THE CAPITAL EXPENDITURE INCURRED BY TH E TRUST DURING THE YEAR WAS NOT APPLICATION OF ITS INCOME F OR THE PURPOSES OF OBJECTS OF THE TRUST. 3. THAT THE LD. CIT(A) BATHINDA HAS ERRED IN IGNORI NG THE FACT THAT THE APPELLANT CHARITABLE SOCIETY HAD APPLIED M ORE THAN 85% OF ITS INCOME FOR THE OBJECTS OF THE TRUST. 2. THE FACTS ARE THAT THE ASSESSEE IS A CHARITABLE INSTITUTION WHICH HAS THREE UNITS UNDER IT, NAMELY, ACHARYA JAIMAL JA IN GAUSHALA, BHOJ ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 2 RAJ S.S. JAIN PUBLIC SCHOOL AND PARKASHI HOSPITAL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE A SSESSEE HAD DEFAULTED ON THE PROVISIONS OF SECTION 11(2) OF THE ACT, WHICH MANDATES THAT WHERE 85% OF THE INCOME WAS NOT APPLIED, OR WA S NOT DEEMED TO HAVE BEEN APPLIED, TO CHARITABLE OR RELIGIOUS PURPO SES IN INDIA DURING THE PREVIOUS YEAR, BUT IS ACCUMULATED OR SET APART, EIT HER IN WHOLE, OR IN PART, FOR APPLICATION TO SUCH PURPOSES IN INDIA, SU CH INCOME SO ACCUMULATED OR SET APART SHOULD NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE I NCOME, PROVIDED SUCH PERSON SPECIFIES, BY NOTICE IN WRITING GIVEN TO TH E AO IN THE PRESCRIBED MANNER, I.E., FORM NO.10 BEFORE DUE DATE FOR FILING OF RETURN OF INCOME U/S 139 OF THE ACT, THE PURPOSE FOR WHICH THE INCO ME WAS ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH THE INCOME WA S TO BE ACCUMULATED OR SET APART, WHICH SHOULD IN NO CASE EXCEED 10 YEA RS AND THE MONEY SO ACCUMULATED OR SET PART WAS INVESTED OR DEPOSITED I N THE FORMS OR MODES SPECIFIED IN SECTION 11(5) OF THE ACT. THE AO HELD THAT SINCE THE ASSESSEE HAD NOT COMPLIED WITH THE SAID PROVISIONS, THE INCO ME OF THE ASSESSEE SOCIETY, AMOUNTING TO RS.12,29,025/-, WHICH WAS OVE R AND ABOVE 15% OF THE RECEIPTS, WAS NOT ELIGIBLE FOR EXEMPTION WITHIN THE MEANING OF SECTION 11(1) OF THE ACT. 3. THE ASSESSEE-SOCIETY CHALLENGED THE ORDER OF THE AO BEFORE THE LD. CIT(A) BY RAISING THE FOLLOWING GROUND: THAT THE ADDITION OF RS.12,29,025/- HAS BEEN MADE MERELY ON TECHNICAL GROUNDS EVEN THOUGH THE CHARITABLE SOCIET Y HAD GENUINE ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 3 REASONS FOR NOT FILING FORM NO.10 IN TIME AND HAD C OMPLIED WITH ALL OTHER REQUIREMENTS. THE ADDITION MAY KINDLY BE DELE TED. 4. DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE STATED THAT NEW FACTS HAD EMERGED, WHICH WERE NOT C ONSIDERED BY THE AO AT THE ASSESSMENT STAGE, AND REQUESTED FOR CONSIDER ATION OF THE FOLLOWING ADDITIONAL GROUND OF APPEAL: THE AMOUNT OF RS.17,94,115/- BEING CAPITAL EXPENDI TURE IS APPLICATION OF INCOME, HENCE, ADMISSIBLE AS DEDUCTI ON U/S 11(1). 5. THE SAID ADDITIONAL GROUND, ALONGWITH THE DOCUME NTS FURNISHED BY THE ASSESSEE, WAS REMANDED TO THE AO BY THE CIT(A). THE AO RETURNED THE REMAND WITH THE OBSERVATION THAT THE DOCUMENTS ANNEXED WITH THE WRITTEN SUBMISSION OF THE ASSESSEE WERE NOT OF ANY HELP TO THE ASSESSEE, AS MOST OF THE DOCUMENTS WERE ALREADY ON RECORD AND HAD DULY BEEN CONSIDERED WHILE PASSING THE ASSESSMENT ORDER. SO F AR AS REGARDS THE ADDITIONAL GROUND SEEKING THE CAPITAL EXPENDITURE TO BE CONSIDERED AS APPLICATION OF INCOME FOR AVAILING THE EXEMPTION U/ S 11(1) OF THE ACT, THE AO STATED THAT THE ASSESSEE HAD COMMITTED HIMSELF D URING THE ASSESSMENT PROCEEDINGS BY STATING THAT INCOME WAS UTILIZED/APPLIED PARTLY DURING THE FINANCIAL YEAR 2012-13 AND PARTLY IN F.Y. 2013-14, WHICH HAD BEEN DULY RECORDED IN PARA 2.3 OF THE ASS ESSMENT ORDER; AND THAT HENCE, THE ADDITIONAL GROUND TAKEN BY THE ASSE SSEE HAD NO RELEVANCE IN THE YEAR UNDER CONSIDERATION. 6. THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSES SEE BY HOLDING AS FOLLOWS: ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 4 ONLY SUCH EXPENDITURE IN THE NATURE OF CAPITAL EXP ENDITURE CAN BE CONSIDERED AS APPLICATION OF INCOME WHICH ARE MEANT FOR IMPROVING THE PROPERTY OF THE TRUST OR MAINTAINING IT, WHICH WOULD RESULT IN THE INCOME OF THE TRUST BEING MAINTAINED OR EVEN INCRE ASED AND WHICH INCOME IN TURN WILL BE AVAILABLE FOR CHARITABLE PUR POSES ALONE. FROM THE ACCOUNTS OF THE TRUST FILED BY THE ASSESSE E IT IS SEEN THAT MAINTENANCE EXPENDITURE OF BUILDINGS ETC. HAVE BEEN DEBITED IN THE INCOME AND EXPENDITURE ACCOUNT AND THE EXCESS OF IN COME OVER EXPENDITURE STOOD AT RS.23,75,980/- WHICH IS MORE T HAN 15% OF THE GROSS RECEIPTS OF RS.76,46,364/-. IN THIS VIEW OF T HE MATTER, THE ASSESSING OFFICERS ACTION IN DISSENTING RS.12,29, 025/- FROM EXEMPTION U/S 11(1) OF THE ACT STANDS SUSTAINED. 7. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIO N OF RS.12,29,025/- MADE BY THE AO WITH TOTAL DISREGARD TO THE FACTS OF THE CASE. HE FURTHER STATED THAT THE LD. CIT(A) ERRED IN HOLDING THAT T HE CAPITAL EXPENDITURE INCURRED BY THE TRUST DURING THE YEAR WAS NOT APPLI CATION OF ITS INCOME FOR THE PURPOSES OF THE OBJECTS OF THE TRUST; AND T HAT THE LD. CIT(A) ALSO ERRED IN IGNORING THAT THE ASSESSEE HAD APPLIED MOR E THAN 85% OF ITS INCOME FOR THE OBJECTS OF THE TRUST. 8. THE LD. DR PLACED STRONG RELIANCE ON THE IMPUGNE D ORDER. 9. NOW, THE QUESTION IS WHETHER THE EXPENDITURE INC URRED BY THE ASSESSEE AMOUNTS TO A CAPITAL EXPENDITURE, WHICH CA N BE SAID TO BE APPLICATION OF INCOME ENTITLED TO EXEMPTION U/S 11( 1) OF THE ACT. 10. THIS EXPENSE OF RS.17,94,115/- COMPRISES OF T WO PARTS: I) RS.8,59,261/- SPENT BY BHOJ RAJ S.S. JAIN SAB HA PUBLIC SCHOOL, BATHINDA, A SCHOOL OWNED BY THE ASSESSEE-SO CIETY, AND II) RS.9,34,854/- SPENT BY THE ACHARYA JAIMAL JAIN GAUSHALA OWNED BY THE ASSESSEE-SOCIETY. ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 5 11. THE DETAILS OF THE EXPENSES OF RS.8,59,261/- AR E CONTAINED IN THE SCHEDULE OF FIXED ASSETS (APB 8), FORMING PART OF T HE SCHOOLS BALANCE SHEET AS AT 31.03.2011. THESE DETAILS ARE AS FOLLOW S: OP. BALANCE ADDITIONS CLOSING BAL. 1. BUILDING 18,77,279.50 4,94,050.00 23,71,329.50 2. FURNITURE & FIX. 5,72,790.00 1,02,402.00 6,75, 192.00 3. COMPUTERS 2,97,685.00 52,200.00 3,49,885.00 4. ELECTRICAL ITEMS 98,934.00 40,079.00 1, 39,013.00 5. OFFICE EQUIPMENTS 51,074.00 77,960.00 1 ,29,034.00 6. BAND 14,945.00 ----- 14,945.00 7. AIR CONDITIONER --- 94,650.00 94,650.00 8. GENERATOR 38,500.00 --- 38,650.00 9. WATER COOLER 32,818.00 --- 32,818.00 10. BUS 5,65,000.00 ---- 5,65,000.00 11. WATER MOTOR 15,000.00 -- 15,000.00 12. RICKSHAW 2,080.00 (-)2,080.00 ---- 35,66,105.00 8,59,261.00 44,25,366.50 12. THE EXPENSES OF RS.9,34,854/- HAVE BEEN DETAILE D IN THE CHART OF FIXED ASSETS (APB-11) ACCOMPANYING THE INCOME & EXP ENDITURE ACCOUNT (FOR THE YEAR ENDED 31.03.2011) OF THE GAUSHALA OF THE ASSESSEE-SOCIETY, AS UNDER: PARTICULARS OP. BALANCE ADDITION DEPRECIATION CL. B ALANCE MOTOR 30,000.00 0.00 0.00 30,000.00 BUILDING 22,86,618.00 9,02,144.00 0.00 31,88,762.00 TOKA MACHINE 83,60.00 0.00 0.00 8,360 .00 ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 6 TRACTOR 1,10,700.00 0.00 0.00 1,10,700.00 GENERATOR 0.00 10,000.00 0.00 10,000.00 CYCLE 0.00 2,250.00 0.00 2,250.00 RICKSHAW 0.00 20,460.00 0.00 20,460.00 13. THE LD. CIT(A), IN PARA 6 OF HIS ORDER, WITH R EFERENCE TO CIT VS. KANNIKA PARAMESWARI DEVASTHANAM & ORS, 133 ITR 77 9 (MAD.), HAS OBSERVED THAT ONLY SUCH EXPENDITURES IN THE NATURE OF CAPITAL EXPENDITURE CAN BE CONSIDERED AS APPLICATION OF IN COME, WHICH ARE MEANT FOR IMPROVING THE PROPERTY OF THE TRUST, OR MAINTAINING IT, WHICH WOULD RESULT IN THE INCOME OF THE TRUST BEING MAINT AINED OR EVEN INCREASED AND WHICH INCOME IN TURN WILL BE AVAILABL E FOR CHARITABLE PURPOSES ALONE. IT HAS FURTHER BEEN OBSERVED THAT .. EVEN THE MADRAS HIGH COURT IN THE AFORE-MENTIONED CASE HELD THE FOL LOWING: WE WOULD MAKE IT CLEAR THAT EXCEPT ON THE POINT TH AT CAPITAL EXPENDITURE OF THE NATURE SET OUT HAD ALSO TO BE TA KEN INTO CONSIDERATION IN DETERMINING THE SURPLUS, WE HAVE N OT GIVEN ANY FINAL FINDING ON ANY OTHER ASPECT. 14. NEITHER OF THE ABOVE OBSERVATIONS OF THE LD. CI T(A), IT IS SEEN, IS AN OBSERVATION MADE BY THE HONBLE MADRAS HIGH COURT I N THE CASE OF KANNIKA PARAMESWARI DEVASTHANAM AND OTHERS (SUPR A). APROPOS THE FIRST OBSERVATION, THIS WAS THE OBSERVATION OF THE TRIBUNAL, WHICH STOOD CHALLENGED BEFORE THE HONBLE HIGH COURT AT THE HAN DS OF THE ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 7 DEPARTMENT. REFERRING TO THE RELEVANT PROVISIONS OF SECTION 11(4) OF THE ACT, AT PAGES 782 AND 783 OF THE REPORT, THE HONBL E HIGH COURT ACTUALLY HAS HELD AS FOLLOWS: THE ABOVE PROVISION GRANTS EXEMPTION FROM THE LEVY OF INCOME-TAX WITH RESPECT TO THE INCOME FROM PROPERTY HELD FOR C HARITABLE OR RELIGIOUS PURPOSES. THE SECTION CONTEMPLATES THE CO MPUTATION OF THE INCOME, IN ORDER TO FIND OUT WHETHER THE INCOME HAS BEEN APPLIED FOR CHARITABLE PURPOSES TO THE REQUIRED EXTENT. IT IS, THEREFORE, NECESSARY FOR THE ITO TO FIND OUT FIRST WHAT THE PROPERTY HEL D IN TRUST IS. HE WILL THEN HAVE TO ASCERTAIN, THE INCOME DERIVED FROM THE SAID PROPERTIES OF THE TRUST AND AFTER ASCERTAINING THE INCOME, HE WILL HAVE TO EXAMINE WHETHER ANY PART OF THE SAID INCOME HAS BEE N ACCUMULATED FOR APPLICATION. SUCH ACCUMULATION COULD BE ONLY UP TO A MAXIMUM OF 25 PER CENT. OF THE INCOME FROM THE PROPERTY OR RS. 10,000, WHICHEVER IS HIGHER. THIS PROVISION ITSELF SHOWS TH AT TO THE EXTENT OF 75 PER CENT. OF THE INCOME, THERE HAS TO BE AN APPL ICATION OF THE INCOME FOR CHARITABLE PURPOSES. IT IS IN THE CONTEX T OF THE APPLICATION OF THE INCOME THAT THE TRIBUNAL HAS OBSERVED IN PAR A. 5 OF ITS ORDER THAT THE EXPENDITURE IN IMPROVING THE PROPERTY OF T HE TRUST OR MAINTAINING IT RESULTING IN THE INCOME OF THE TRUST BEING MAINTAINED OR EVEN INCREASED WOULD HAVE TO BE TAKEN AS APPLICA TION FOR CHARITABLE PURPOSES. IN COMING TO THIS CONCLUSION, THE TRIBUNAL HAS MIXED UP TWO THINGS RELEVANT UNDER THE SECTION. THE SECTION REQUIRES CONSIDERATION OF THE OBJECTS OF THE TRUST AND ALSO OF THE INCOME DERIVED FROM THE PROPERTY HELD IN TRUST. . THE INCO ME FROM THE TRUST PROPERTIES HAS TO BE APPLIED ON THE OBJECTS OF THE TRUST. AS FAR AS THE OBJECTS OF THE TRUST ARE CONCERNED, THE APPLICATION OF THE AMOUNT CAN BE FOR REVENUE OR CAPITAL PURPOSES. THIS WAS THE CONCLUSION ARRIVED AT BY THE GUJARAT H IGH COURT IN SATYA VIJAY PATEL HINDU DHARAMSHALA TRUST V. CIT [1972] 86 ITR 683. IN THAT CASE, A TRUST WAS CREATED AND CERTAIN IMMOVABLE PROPERTIES WERE TRANSFERRED TO IT TO BE ADMINISTERE D AS A HINDU DHARAMSHALA. DURING THE RELEVANT YEARS, THE TRUSTEE S SPENT THE ENTIRE SURPLUS INCOME IN THE CONSTRUCTION OF A NEW DHARAMSHALA. THE I.T. DEPT. HELD THAT THE EXPENDITURE OF THE INCOME OF THE TRUST IN THE ACCOUNTING YEARS RELEVANT TO ASSESSMENT YEARS 1962- 63 AND 1963- 64, ON THE CONSTRUCTION OF A NEW DHARAMSHALA, WILL NOT QUALIFY FOR EXEMPTION IN VIEW OF SECTION 11 OF THE I.T. ACT, 1961. THE MATTER WAS TAKEN ON REFERENCE TO THE GUJARAT HIGH COURT, AND I T WAS HELD THAT EVEN CAPITAL EXPENDITURE WITH REFERENCE TO THE OBJE CTS OF THE TRUST WOULD BE APPLICATION OF THE INCOME FOR CHARITABLE P URPOSES. THE ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 8 AMOUNT SPENT ON THE CONSTRUCTION OF A NEW DHARAMSHA LA WAS, THEREFORE, CONSIDERED TO BE A PROPER APPLICATION OF THE INCOME IN THAT PARTICULAR CASE. THIS CASE ITSELF DEMONSTRATES THE DISTINCTION BETWEEN THE OBJECTS OF THE TRUST AND THE APPLICATIO N OF THE INCOME OF THE CHARITABLE TRUST. SO LONG AS THE EXPENDITURE HA D TO BE INCURRED OUT OF THE INCOME EARNED BY THE TRUST, EVEN IF SUCH EXPENDITURE IS FOR CAPITAL PURPOSES ON THE OBJECTS OF THE TRUST, THE I NCOME WOULD BE EXEMPT. THE TRIBUNAL IS, THEREFORE, WRONG IN PROCEE DING ON THE BASIS THAT IMPROVEMENT OF A PROPERTY HELD UNDER TRUST WOU LD BY ITSELF COME WITHIN THE SCOPE OF THE APPLICATION OF THE INCOME F OR CHARITABLE PURPOSES. HOWEVER, FACTS WILL HAVE TO BE INVESTIGATED TO FIND OUT WHETHER THE ASSESSEE HAD, IN INCURRING THE EXPENDITURE OF A CAP ITAL NATURE, PROMOTED THE OBJECTS OF THE TRUST BY APPLYING THE I NCOME TO THOSE OBJECTS. THE ITO WILL HAVE TO GO INTO THIS QUESTION , AS THE ASSESSMENT ITSELF HAS BEEN SET ASIDE BY THE TRIBUNA L AND RESTORED TO HIS FILE. THE RESULT IS THAT THE QUESTION REFERR ED TO US WOULD HAVE TO BE ANSWERED AS FOLLOWS: SO LONG AS THE INCOME DE RIVED FROM THE PROPERTY HELD UNDER TRUST HAD BEEN EXPENDED ON THE OBJECTS OF THE TRUST, THE INCOME WOULD BE EXEMPT UNDER SECTION 11 OF THE ACT. IF THIS WAS NOT DONE, THEN THE INCOME WOULD NOT BE EXE MPT. THE MATTER WILL HAVE TO BE CONSIDERED ONLY BY THE ITO I N REASSESSMENT PROCEEDINGS ARISING FROM THE SETTING ASIDE OF THE A SSESSMENT BY THE APPELLATE TRIBUNAL. (EMPHASIS SU PPLIED) 15. THUS, WHEREAS IT WAS THE TRIBUNAL , WHICH HAD HELD THAT ONLY SUCH EXPENDITURES IN THE NATURE OF CAPITAL EXPENDITURE C AN BE CONSIDERED AS APPLICATION OF INCOME, WHICH ARE MEANT FOR IMPROVIN G THE PROPERTY OF THE TRUST, OR MAINTAINING IT, WHICH WOULD RESULT IN TH E INCOME OF THE TRUST BEING MAINTAINED OR EVEN INCREASED AND WHICH INCOME IN TURN WILL BE AVAILABLE FOR CHARITABLE PURPOSES ALONE., THE HONBLE HIGH COURT CATEGORICALLY HELD THAT THE TRIBUNAL HAD MIXED UP T WO THINGS RELEVANT UNDER THE SECTION, I.E., THE OBJECTS OF THE TRUST A ND THE INCOME DERIVED ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 9 FROM THE PROPERTY HELD IN TRUST; THAT THE INCOME FR OM THE TRUST PROPERTIES HAS TO BE APPLIED ON THE OBJECTS OF THE TRUST; THAT AS FOR THE OBJECTS OF THE TRUST, THE APPLICATION OF THE AMOUNT CAN BE FOR REV ENUE OR CAPITAL PURPOSES; THAT SO LONG AS INCOME DERIVED FROM THE PROPERTY UNDER TRUST HAD BEEN EXPENDED ON THE OBJECTS OF THE TRUST, THE INCOME WOULD BE EXEMPT U/S 11 OF THE ACT AND IF THIS WAS NOT DONE, THEN THE INCOME WOULD NOT BE EXEMPT; AND THAT IT WAS, THEREFORE, TH AT THE TRIBUNAL WAS WRONG IN PROCEEDING ON THE BASIS THAT IMPROVEMENT OF A PROPERTY HELD UNDER TRUST WOULD BY ITSELF COME WITHIN THE SCOPE OF THE APPLICATION OF THE INCOME FOR CHARITABLE PURPOSES. 16. HENCE, THE OBSERVATION OF THE LD. CIT(A) IS A W RONG OBSERVATION, MADE AS A RESULT OF A COMPLETE MISREADING OF THE RE PORT OF THE DECISION IN THE CASE OF KANNIKA PARAMESWARI DEVASTHANAM AND OT HERS (SUPRA). 17. LIKEWISE, EVEN THE OTHER OBSERVATION OF THE LD. CIT(A) IS ERRONEOUS. THE OBSERVATION ASCRIBED BY THE LD. CIT(A) TO BE T HAT OF THE HONBLE HIGH COURT, IN FACT, IS NOT WHAT HAS BEEN HELD BY THE HO NBLE HIGH COURT. RATHER, AS NOTED HEREINABOVE, IT WAS THE CONCLUSION OF THE TRIBUNAL, WHICH THE HONBLE HIGH COURT HELD TO BE A WRONG ON E. 18. AS SUCH, THE ASSESSEE HAS CORRECTLY PLACED RELI ANCE ON KANNIKA PARAMESWARI DEVASTHANAM & OTHERS (SUPRA). THE LD. CIT(A) HAS ERRONEOUSLY MISAPPLIED THIS DECISION AGAINST THE A SSESSEE. NO CONTRARY DECISION HAS BEEN CITED BEFORE THIS BENCH. THE EXPE NDITURE INCURRED BY THE ASSESSEE HAS NOT BEEN SHOWN AS NOT EXPENDED ON AND FOR THE OBJECTS ITA NO.177(ASR)/2015 ASSESSMENT YEAR: 2011-12 10 OF THE TRUST. THEREFORE, IN KEEPING WITH KANNIKA P ARAMESWARI DEVASTHANAM & ORS. (SUPRA), THE INCOME OF THE ASSE SSEE-SOCIETY IS EXEMPT UNDER SECTION 11 OF THE ACT. 19. FOR THE ABOVE DISCUSSION, THE GRIEVANCE OF THE ASSESSEE IS JUSTIFIED AND IS ACCEPTED AS SUCH. THE ORDER UNDER APPEAL IS REVERSED. 20. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/04/ 2016 . SD/- (A.D. JAIN) JUDICIAL MEMBER /SKR/ DATED: 12/04/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: S. S. JAIN SABHA (REGD.), KIKAR BAZAR , BATHINDA. 2. THE ITO WARD-2(1), BATHINDA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.