DCIT (Exemptions), CHENNAI V. International Institute of Bio-Technology & Toxicology, CHENNAI

ITA 1835/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2817 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 14-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATHCIT
• Assessee Lawyers: S BHASKAR
• Section: 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & S HRI S.JAYARAMAN , ACCOUNTANT MEMBER ./ I.T.A.NOS.1833,1834 & 1835/CHNY/2019 AND C.O. NOS.80, 81 & 82/CHNY/2019 / ASSESSMENT YEARS : 2010-11, 2011-12 & 2015-16 ) THE DEPUTY COM MISSIONER OF INCOME TAX,(EXEMPTIONS), CHENNAI CIRCLE,CHENNAI. VS. M/S.INTERNATIONAL INSTITUTE OF BIO-TECHNOLOGY AND TOXICOLOGY , 12,HARLEYS ROAD, KILPAUK, CHENNAI 600 010. [PAN AAATF 0061 E ] ( / APPELLANT) ( /RESPONDENT/ CROSS OBJECTOR) / APPELLANT BY : MR.S.BHARATH,C.I.T D.R !' /RESPONDENT BY : MR.S.BHASKAR,ADVOCATE & / DATE OF HEARING : 03 - 09 - 201 9 & / DATE OF PRONOUNCEMENT : 03 - 09 - 201 9 / O R D E R PER BENCH: ITA NOS.1833 & 1834/CHNY/2019 ARE APPEALS FILED BY THE REVENUE AND C.O NOS.80 & 81/CHNY/2019 ARE CROSS-OBJECTIONS FILED BY THE ASSESSEE AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INC OME TAX (APPEALS)- 10, CHENNAI, IN ITA NOS.196 & 197/17-18 DATED 28.02 .2019 FOR ASSESSMENT ITA NOS.1833 TO1835/CHNY/2019 C.O NO.80 TO 82/CHNY/19 :- 2 -: YEARS 2010-11 & 2011-12. ITA NO.1835/CHNY/2019 IS AN APPEAL FILED BY THE REVENUE AND C.O NO.83 /CHNY/2019 IS CROSS-OBJECTION S FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)- 10, CHENNAI, IN ITA NOS.198/17-18/C.I.T(A)-10(TR.) DATED 28.02.2019 FOR ASSESSMENT YEAR 2015-16. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN ALL THESE APPEALS AND CROSS OBJECTIONS, ALL THESE APPEALS OF REVENUE AND C.O. FILED BY THE ASSESSEE ARE DISPOSED OF BY THIS COMMON ORDER. 2. MR.S.BHARATH REPRESENTED ON BEHALF OF THE REVENUE AND MR.S.BHASKAR REPRESENTED ON BEHALF OF THE ASSESSEE. 3. THE REVENUE HAS RAISED THE FOLLOWING COMMON GR OUNDS IN ALL THESE THREE APPEALS FOR OUR CONSIDERATION. 1. THE ORDER OF THE LD. CIT(A) IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 2.1 THE LD.CIT(A) IS NOT JUSTIFIED IN GRANTING EXE MPTION U/S.10(21) OF THE ACT CATEGORIZING THE INSTITUTION AS ASSOCIATION. 2.2. THE LD.CIT(A) FAILED TO APPRECIATE THE FACT T HAT THE DGIT(EXEMPTION) HAS PASSED REVISION ORDER U/S.154 O N 12.07.2006 VIDE F.NO.DGIT(E)/TN-43/154/35(1)(III)/2 006-07/630 CATEGORIZING THE ASSESSEE AS INSTITUTION ONLY FOR T HE PURPOSE OF SEC.35(1)(III) OF THE ACT AND THUS REVERSED THE EAR LIER ORDER DATED 08.02.2006. ITA NOS.1833 TO1835/CHNY/2019 C.O NO.80 TO 82/CHNY/19 :- 3 -: 2.3 THE LD.CIT(A) OUGHT TO HAVE HELD THT THE CATEG ORIZATION AS INSTITUTION OF THE ASSESSEE DEPRIVES THE ASSESSEE O F THE EXEMPTION U/S.10(21) OF THE ACT WHICH IS AVAILABLE ONLY TO AN ASSESSEE CATEGORIZED AS ASSOCIATION FOR THE PURPOSE OF SEC.35(1)(II) OF THE ACT. 2.4 THE LD.CIT(A) ERRED BY RELYING ON THE THE INCO ME TAX APPELLATE TRIBUNAL ORDER PASSED FOR ASSESSMENT YEAR 1997- 98 IN ITA NO.2309/MDS/2005 DATED 26.05.2006 AND FOR THE ASSESSMENT YEARS 2012-13 TO 2014-15 VIDE ITA NO.289 6,2897 & 2898/CHNY/2017 DATED 26.04.2018 WITHOUT NOTING THAT THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF THE HON BLE I.T.A.T AND APPEALS HAVE BEEN FILED BEFORE HONBLE MADRAS H IGH COURT AND THE ISSUE HAS NOT BECOME FINAL. 4. AT THE TIME OF HEARING, IT IS SUBMITTED BY THE LD.AR THAT THE ISSUE IN THESE APPEALS OF REVENUE ARE SQUARELY COVE RED BY THE DECISIONS OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1997-98 IN ITA NO.230 9/MDS/2005 VIDE ORDER DATED 26.05.2006 AND FOR THE ASSESSMENT YEARS 2012- 13 TO 2014-15 IN ITA NOS.2896 TO 2898/MDS/2017 VIDE ORDER DATED 26.04.2018. IT WAS FURTHER SUBMITTED THAT LD.CIT(A) HAD FOLLOWED THE JUDICIAL DISCIPLINE BY FOLLOWING DECISIONS OF T HE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEAR 1997-98 AND FOR THE ASSESSMENT YEARS 2012-13 T O 2014-15 (SUPRA). IT WAS SUBMITTED THAT THE ONLY ISSUE IN TH ESE APPEALS WAS ITA NOS.1833 TO1835/CHNY/2019 C.O NO.80 TO 82/CHNY/19 :- 4 -: AGAINST THE ACTION OF LD.CIT(A) GRANTING EXEMPTION U/S.10(21) OF THE ACT. 5. IN REPLY, LD.DR STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PRIMARY ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1997-9 8 REFERRED TO SUPRA WHEREIN WHEREIN THE CO-ORDINATE BENCH OF THI S TRIBUNAL HAS HELD AS FOLLOWS: IT IS SEEN FROM THE CERTIFICATE OF REGISTRATION OF SOCIETIES THAT EXCEPT THE CHANGE IN THE NAME, THERE IS NO CHANGE IN THE O BJECTIVES OF THE ASSESSEE-SOCIETY SINCE ITS INCEPTION AND THIS CHANG E WAS EFFECTED BY THE REGISTRAR OF SOCIETIES ON MAY, 2002 WHEREIN IT IS C ERTIFIED THAT THE SOCIETY FREDRICK INSTITUTE OF PLANT PROTECTION AND TOXICOLOGY (FIPPAT) CHANGED ITS NAME AS INTERNATIONAL INSTITUTE OF BIO TECHNOLOGY AND TOXICOLOGY (IIBAT) IT IS A FACT THAT THE ASSESSEE-SOCIETY IS A REGISTERED SOCI ETY ENGAGED IN SCIENTIFIC RESEARCH ACTIVITIES AND EVER SINCE ITS I NCEPTION IT IS ENGAGED WITH THE OBJECTIVES OF THE RESEARCH IN PLAN PROTECT ION, TOXICOLOGY AND RELATED AREAS WHICH TAKEN OUT FROM THE OBJECT OF TH E SOCIETY READS AS UNDER: 1. TO CONDUCT STUDIES ON PLANT PROTECTION, DISSIPATION/ENVIRONMENTAL FATE AND CHARACTERIZE CHE MISTRY OF PLANT PROTECTION SUBSTANCES COVERING BIOLOGICAL, MICROBIA L, BOTANICAL AND SYNTHETIC PESTICIDES. 2. TO ELUCIDATE POSSIBLE TOXICOLOGICAL CONSEQUENCES DU E TO THE USE OF AGROCHEMICALS SUCH AS PESTICIDES AND DRUGS/PHARMACEUTICALS INCLUDES NATURAL!AYURVEDIC DR UGS. 3. TO ANALYZE AND EVALUATE BLO SAFETY OF TRANSGENIC CROPS/FOOD. 4. TO COMPUTE RISK ASSESSMENT, BASED UPON BLO SAFETY INVESTIGATIONS, OF TRANSGENIC CROPS, RECOMBINANT DN A AND OTHER BIOTECH BASED PRODUCTS. 5. TO IDENTIFY AND SEARCH FOR NATURAL/BIOLOGICAL AGENT S WHICH CAN ALLEVIATE THE POSSIBLE TOXICOLOGICAL MANIFESTAT IONS CAUSED BY CHEMICAL PESTICIDES. ITA NOS.1833 TO1835/CHNY/2019 C.O NO.80 TO 82/CHNY/19 :- 5 -: 6. TO CONDUCT BASIS RESEARCH STUDIES TO DEVELOP, CHARA CTERIZE AND TEST IN VITRO CELL LINE MODELS TO ASSESS TOXICI TY OF ENVIRONMENTAL AGENTS. 7. TO ESTABLISH AND CONDUCT NON-CLINICAL SAFETY ASSESS MENT OF ENVIRONMENTAL AGENTS UNDER THE PRINCIPLES OF GOOD L ABORATORY PRACTICES (GLP) THE DENIAL OF EXEMPTION BY THE ASSESSING OFFICER IS BASED ON THE FACT THAT THE ASSESSEE IS CLASSIFIED AS AN INSTITUTION. IT IS THE CASE OF THE DEPARTMENT THAT THE ASSESSEE-SOCIETY IS CLASSIFIED AS AN INSTITUTION AND NOT AS AN ASSOCIATION AND AS PER THE PROVISIONS OF SEC.10(21) OF THE ACT, EXEMPTION IS AVAILABLE ONLY TO AN ASSOCIATION. BUT ONCE THE FACT THAT THE ASSESSEE-SOCIETY IS ENGAGED IN RESEARCH WORK REGARD ING AGRICULTURE RELATED ACTIVITIES AND IT IS RECOGNIZED AS A LEADIN G NATIONAL BODY IN THE FIELD OF RESEARCH IN BIO-TECHNOLOGY AND TOXICOLOGY. FURTHER, THE CENTRAL BOARD OF DIRECT TAXES HAS CLASSIFIED THE ASSESSEE-S OCIETY AS AN ASSOCIATION IN THE YEAR 1997, AFTER DUE VERIFICATIO N OF ITS OBJECT AS WELL AS ITS ACTIVITIES AND THERE IS NO CHANGE IN THE OBJ ECTIVES OF THE ASSESSEE-SOCIETY FROM ITS INCEPTION TILL DATE. IN V IEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWIN G THE TRIBUNALS DECISION CITED SUPRA, WE HOLD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SEC.1O(21) OF THE ACT AS THE ASSESSEE-SOCIETY IS ENGAGED IN RESEARCH WORK IN AGRICULTURE RELATED ACTIVITIES. AS IT IS NOTICED THAT THE DECISION OF THE CO-ORDINA TE BENCH OF THIS TRIBUNAL HAS BEEN FOLLOWED BY THE LD.CIT(A) FOR THE ASSESSMENT YEAR 1997-98, 2000-01 AND 2012-13, 2013-14 AND 2014-15, AND THE YEARS UNDER APPEAL ARE THE YEARS IN BETWEEN THE YEA RS, WHICH HAVE BEEN MISSED OUT, AND ALSO NO DISTINGUISHING FACTS H AVE BEEN BROUGHT OUT BY THE REVENUE, RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OW N CASE REFERRED TO SUPRA, THE FINDINGS OF LD.CIT(A) IN ALL THESE AP PEALS STAND CONFIRMED. ITA NOS.1833 TO1835/CHNY/2019 C.O NO.80 TO 82/CHNY/19 :- 6 -: 8. IN RESPECT OF CROSS OBJECTIONS FILED BY THE A SSESSEE , NO SERIOUS ARGUMENTS HAVE BEEN PLACED BEFORE US. ALL THE CROSS OBJECTIONS ARE DISMISSED AS NOT ARGUED. 9.IN THE RESULT, THE APPEALS FILED BY THE REVENUE F OR ASSESSMENT YEARS 2010-11, 2011-12 & 2015-16 ARE DISMISSED AND CORRESPONDING CROSS OBJECTIONS OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 03 RD SEPTEMBER, 2019, AT CHENNAI. SD/- SD/- ( ) (S. JAYARAMAN) # /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ # / JUDICIAL MEMBER / CHENNAI * / DATED: 03 RD SEPTEMBER, 2019. K S SUNDARAM !,- .- / COPY TO: 1 . / APPELLANT 4. / / CIT 2. !' / RESPONDENT 5. - !2 / DR 3. / () / CIT(A) 6. / GF