M/s Vidyanidhi Education Trust, Bangalore V. Deputy Commissioner of Income Tax, Bangalore

ITA 1777/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7417 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Charitable institution; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO. 1 7 77 / BANG/201 6 ASSESSMENT YEAR : 20 1 1 - 12 M/S. VIDYANIDHI EDUCATION TRUST, NO. 42/3, SHIVANAHALLI, YELAHANKA, HOBLI, BANGALORE 560 084. PAN: AAATV 0825G VS. THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS), CIRCLE 17(2), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI RAVISHANKAR, ADVOCATE REVENUE BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 30 . 10 .201 7 DATE OF PRONOUNCEMENT : 31 .10 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF CIT(A)-14, LTU, BANGALORE DATED 27.07.2016 FOR ASSE SSMENT YEAR 2011-12. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER PASSED BY THE LEARNED HON'BLE COMMISSI ONER OF INCOME TAX [APPEAL] -14 INSO FAR AS IT IS AGAINST THE APPE LLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES AND THE FACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE TAXED O N AN INCOME DETERMINED BY THE LEARNED ASSESSING OFFICER AMOUNTI NG TO RS. 1,63,71,789/- AS AGAINST THE INCOME RETURNED BY THE APPELLANT OF RS. NIL UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT [A] FAILED TO APPRECIATE THAT TH E STANDARD DEDUCTION OF 15%UNDER SECTION 11 [1][A] IS TO BE CA LCULATED ON THE GROSS RECEIPTS AND NOT ON AMOUNT LEFT OVER AFTER AP PROPRIATION TOWARDS EXPENSES INCURRED TOWARDS OBJECTS OF THE TR UST, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED CIT [A] FAILED TO APPRECIATE THAT TH E ISSUE WHETHER THE PROVISIONS OF SECTION 11 [1] BEING THE ACCUMULATION OF 15%AVAILABLE AS PER THE STATUE IS ON THE GROSS RECEIPTS OR ON TH E NET RECEIPTS HAS ITA NO.1777/BANG/2016 PAGE 2 OF 3 BEEN DECIDED BY THE HON'BLE CO-ORDINATE BENCH OF DE CISION OF THIS HON'BLE TRIBUNAL IN THE CASE OF JYOTHI CHARITABLE T RUST IN 662/BANG/2015, ORDER DATED 14/08/2015, WHICH HAS HE LD THAT THE ACCUMULATION OF 15%UNDER SECTION 11[1][A] OF THE AC T HAS TO BE COMPUTED ON THE GROSS RECEIPTS AND NOT ON THE NET R ECEIPTS, WHICH IS SQUARELY COVERED IN FAVOUR OF THE APPELLANT UNDER T HE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE THE ORDER PASSED BY LEARNED CO MMISSIONER OF INCOME-TAX [APPEALS] IS BAD IN LAW AS THE APPELLANT WAS NOT GIVEN A REASONABLE OPPORTUNITY OF HEARING WHICH IS IN GRAVE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE UNDER THE FACTS AND C IRCUMSTANCES OF THE CASE. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 7. IN THE VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PR AYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUIT Y. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT ALTH OUGH THE ASSESSEE HAS RAISED AS MANY AS 7 GROUNDS OF APPEAL BUT THE ONLY ISSUE I NVOLVED IN THIS APPEAL IS THIS THAT WHETHER THE ASSESSEE IS ELIGIBLE FOR ACCUMULAT ION U/S. 11(1)(A) OF THE IT ACT TO THE EXTENT OF 15% OF GROSS RECEIPTS OR NET RECEI PTS. IN THIS REGARD, HE PLACED RELIANCE ON TRIBUNAL ORDER RENDERED IN THE CASE OF JYOTHY CHARITABLE TRUST VS. DCIT (EXEMPTIONS) IN ITA NO. 662/BANG/2015 DATED 14 .08.2015. HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER AND DRAWN OUR ATTENTI ON TO PAGE NOS. 10 & 11 OF THIS TRIBUNAL ORDER AND POINTED OUT THAT THE TRIBUN AL IN THIS CASE HAS FOLLOWED THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF BAI SONABAI HIRJI AGIARY TRUST VS. ITO AS REPORTED IN 93 ITD 70 (SB). HE ALSO SUBMITTED THAT THE RELEVANT PORTION OF THIS TRIBUNAL ORDER HAS BEE N REPRODUCED BY THE TRIBUNAL AND AS PER THE SAME, THE TRIBUNAL HAS FOLLOWED THE JUDGMENT OF HONBLE KERALA HIGH COURT RENDERED IN THE CASE OF CIT VS. PROGRA MME FOR COMMUNITY ORGANISATION AS REPORTED IN 228 ITR 620 (KERALA). 4. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF AUT HORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE ASSESSMENT ORDER, THIS IS THE ONLY OBJECTION OF THE AO THAT IN STEAD OF THE ASSESSEES CLAIM ITA NO.1777/BANG/2016 PAGE 3 OF 3 FOR ACCUMULATION U/S. 11(1)(A) OF THE IT ACT TO THE EXTENT OF 15% OF GROSS RECEIPTS OF THE ASSESSEE, THE ASSESSEE IS ELIGIBLE FOR SUCH ACCUMULATION ONLY TO THE EXTENT OF 15% OF NET RECEIPTS. ON THIS ASPECT, THE JUDGMENT OF KERALA HIGH COURT RENDERED IN THE CASE OF CIT VS. PROGRAMME FOR COMMUNITY ORGANISATION (SUPRA) SUPPORTS THE CASE OF THE ASSESSEE BECAUSE I T WAS HELD IN THIS CASE THAT THE ACCUMULATION U/S. 11(1)(A) OF THE IT ACT HAS TO BE COMPUTED AT 25% OF GROSS RECEIPTS. NOW AS PER THE AMENDMENTS IN THE LAW, PE RCENTAGE IS REDUCED TO 15% BUT THE OTHER THINGS REMAINS SAME. THEREFORE, RESPECTFULLY FOLLOWING THIS JUDGMENT OF THE TRIBUNAL AND IN TURN FOLLOWING THE JUDGMENT OF SPECIAL BENCH OF THE TRIBUNAL AND IN TURN FOLLOWING THE JUDGMENT OF HONBLE KERALA HIGH COURT, WE DIRECT THE AO TO ALLOW ACCUMULATION U/S. 11(1)(A) O F THE IT ACT TO THE EXTENT OF 15% OF GROSS RECEIPTS IN PLACE OF 15% OF NET INCOME ALLOWED BY HIM. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (GEORGE GEORGE K) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 31 ST OCTOBER, 2017. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.