ACIT, V. M/s Agriculture Pruduce Market committee,

ITA 186/PAT/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7775 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 21-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K DAS
• Assessee Lawyers: S IKESH JHA
• Keywords: Charitable institution; Deemed to accrue or arise in india
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA BEFORE SHRI J.SUDHAKAR REDDY (AM) & SHRI SANDE E P GOSAIN (JM) I T A NO. 1 86 / PAT /20 1 4 ASSESSMENT YEAR S : 200 8 - 09 A CIT VS. M/S. AGRICULTURE PRODUCE MARKET COMMITTEE . , CIRCLE - 2 , CHAPRA. MUZAFFARPUR . ( APPELLANT) (RESPONDENT) PAN - AA ALA04559Q DEPARTMENT BY : S HRI K . K. DAS , DR . ASSESSEE BY : SHRI S IKESH JHA , A DV . DATE OF HEARING: - 04 /1 0 /201 7 DATE OF PRONOUNCEMENT: - 06 / 1 0 /201 7 OR DER PER SANDEEP GOSAIN,JUDICIAL MEMBER: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE CIT (A) - 1 DATED - 07 .0 8 .201 4 AND PERTAINS TO ASSESSMENT YEAR 200 4 - 0 5 . 2. THE EFFECTIVE ISSUE RAISED IN GROUND S OF APPEAL READ AS UNDER: 1. THAT T HE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN DELETING THE ADDITI O N S MADE BY THE AO BY DENYING THE BENEFIT U/S 11(2) OF THE I. T. ACT,1961. 2. ANY OTHER GROUND WILL BE TAKEN AT THE TIME OF HEARING. 3 . AN APPLICATION FOR ADJOURNMENT WAS FILED BY THE ASSES SEE. HOWEVER, AFTER GOING THROUGH THE CONTENTS OF THE APPLICATION, WE DO NOT FIND ANY I TA NO. - 1 86 / PAT /20 1 4 2 JUSTIFICATION FOR ADJOURNING THE CASE. THEREFORE, THE REQUEST OF ADJOURNMENT MADE BY ASSESSEE STANDS DISMISSED. 4. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS CHA LLANGING THE ORDER OF APPEAL IN DELETING THE ADDITIONS MADE BY THE AO, DENYING THE BENEFIT U/S 11(2) OF THE INCOME - TAX ACT , 1961 TO THE ASSESSEE . 5 . WE HAVE HEARD THE COUNSEL FOR BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORD ERS OF THE AUTHORITIES BELOW. 6. BEFORE WE DECID E THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE AND ANALYSE THE ORDERS PASSED BY THE LD. CIT(A) WHILE DEALING WITH THIS GROUND. THE LD. CIT(A) HAS DEALT WITH THIS GROUND AT PAGE NOS. 4 TO 7 IN ITS ORDE R. THE EFFECTIVE PORTION IS REPRODUCED BELOW: GROUND NO. 3, 4 & 5 RELATES TO DENIAL OF BENEFIT U/S 11(2) OF THE I . T, ACT AN D NOT ACCEPTING FORM NO. 10 SUBMITTED BY THE APPELLANT WITH THE ORIGINAL RETURN. THE A . O. OBSERVED THAT THE ASSESSEE COMMITTEE HAS NOT GIVEN A NOTICE BY WAY OF DECLARATION IN FORM NO. 10 ALONG WITH THE RETURN OF INCOME. IN AB SENCE OF DEC L ARATION FORM NO. 10, IT CANNOT BE ASCERTAINED HOW THE ACCUMULATED FUND SHALL BE UTILIZED FOR CHARITABLE PURPOSES. IN THE PRESENT CASE THE COMMITTEE STOOD DISSOLVED JUST A FEW MONTHS AFTER THE END OF THE ASSESSMENT YEAR. IN OTHER WORDS THE ASSESSEE RNARKETINQ COMMITTEE STOPPED IT'S OPERATION W.E F. 30.08.2006 THUS THE CHANCES OF UTILIZATION OF THE ACCUMULATED FUND FOR CHARITABLE PURPOSES REDUCED TO NIL . THEREFORE, THE BENEFIT OF SECTION 11(2) OF THE I . T. ACT, 1961 CANNOT BE ALLOWED. THE APPELLANT SUBMITTED THAT WE HAVE FILED OUR RETURN ON 31 . 10 . 2005 . CLAIMING EXEMPTION U/S 11 OF THE I . T. ACT 1961 AND FILED FORM NO.10 ALONG WITH RETURN FOR ACCUMULATION OF FUND U/S 11(2) A.O. HAS DISALLOWED IT ON THE FOLLOWING GROUNDS : - (A) FORM 1( 1 I S NOT ACCOMPANIED BY A COPY OF RESOLUTION. I TA NO. - 1 86 / PAT /20 1 4 3 (B) TIME FRAME OF SIX MONTHS AS GIVEN IN FORM 10 FOR INVESTMENT HAS NOT BEEN FULFILLED. (C) GROUND FOR ACCUMULATION IS GENERAL IN NATURE AND NOT SPECIFIC . THAT IN VIEW OF THE ABOVE IT IS SUBMITTED AS UNDER: (A) THAT ENTIRE PROCEEDING REGISTER WAS PRODUCED ' BEFORE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. (B) THAT IT IS HUMBLY SUBMITTED THAT ALL INVESTMENT HAS BEEN MAD E IN THE SBI AMY BRANCH CHAPRA IN THE FORM OF F.D. AND ALL DETAILS REGARDING THIS HAD BEEN FURNISHED BEFORE A . O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER WE ARE AGAIN GIVING THE DETAILS OF INVESTMENT FOR YOUR KIND PERUSAL AND RECORDS VIDE ANNEX URE 1 , TO THIS WRITTEN SUBMISSION. (C) THAT IT IS HUMBLY SUBMITTED THAT SPECIFIC REASONING DETAILS HAS BEEN GIVEN IN FORM NO.10 ITSELF. THE AP PELLANT SUBMITTED THE FOLLOWING JUDICIAL DECISIONS: (A) BHARAT KALIAN PRATISTHAN VS OIT(EXEMPTION) 299 ITR 486 (DE LHI) (B) CIT VS ANJUMAN M , OINIA FAKHARIA 208 ITR 568 (RAJASTHAN HIGH COURT) (C)DIT (EXEMPTION) VS. OAULAT RAM EDUCATION SOCIETY (2005) 278 ITR - 260 DELHI . (D) SRI MAYUR FOUNDATION VS. ITO 94 CTR (TRI) 112 (AHD.) (E)NAGPUR HOTEL ASSOCIATION VS. CIT 247 ITR TH AT IN VIEW OF THE JUDGMENT OT HAS BEEN HELD THAT WHERE THE GENUINENESS OF THE TRUST IS NOT IN DOUBT AND THE INVESTMENT OF MONEY HAS BEEN MADE BY THE TRUST IN THE PRESCRIBED SECURITIES OR EVEN IF THEY ARE WILLING TO D POSIT THE AMOUNT IN THE PRESCRIBED SECU RITY SOME TIME BEFO E ASKING FOR GRANT OF BENEFIT, TRUST SHOULD NOT BE DENIED THE BENEFIT OF SECTION 11(2) AND THE APPLICATION U/S 11(2) FI L ED BEYOND THE TIME LIMIT PRESCRIBED UNDER RULE 17 SHOULD BE ENTERTAINED AND DELAY SHOULD BE CONDONED. THE SUBMISSI ONS OF THE APPELLANT HAVE BEEN CONSIDERED. AS PER THE PROVISIONS OF SECTION 11(5) THE FORMS AND MODES OF INVESTING OR DEPOSITING THE MONEY REFERRED IN CLAUSE (B) OF SUB - SECTION 2 HAVE BEEN OUTLINED. THE I TA NO. - 1 86 / PAT /20 1 4 4 APPELLANT HAS DEPOSITED THE AMOUNT WITH STATE BANK OF INDIA, AGRICULTURE MARKET YARD BRANCH AND WOULD THUS BE REQUIREMENT OF SECTION 11(2) , IT IS HOWEVER A MATTER OF FACT THAT THE MARKET COMMITTEE WAS DISSOLVED ON 30.08.2006 AND THE AMOUNT ACCUMULATED WOULD NOT HAVE BEEN A PLIED IN FULL FOR CHARITABLE OR RELIGIOUS PURPOSES AS PER THE PROVISIONS OF SECTION 11(3) WHICH ARE REPRODUCED BELOW: [(3) ANY INCOME RETE.RED TO IN SUB - SECTION (2) WHICH - . (A) IS APPLIED TO PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS URPOSES AS AFORESEID OR CEASES TO BE ACCUMULATED OR SET APART FOR APPLICAT I ON TH ERETO, OR [(B) C EASES TO REMAIN TNVESTED OR DEPOSITED IN ANY OF THE FORMS OR MODES SPECIFIED IN SUB - S ECTION (5), OR) (C) - I S NOT UTILISED FOR THE PURPOSE FOR WHICH IT IS SO ACCUMULATED OR SET APART DURING THE PER I OD REFERRED T O IN CLAUSE LA) OF THAT SUB - SECTION OR IN THE YEAR IMMEDIATELY FOLLOWING THE EXPIRY THEREOF, 7[(D} IS CREDITED OR PAID TO ANY TRUST OR INSTITUTION REGISTERED UNDER SECTION 12AA OR TO ANY FUND OR I NSTITUTION OR TRUST OR ANY UNIVERSIT Y OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION REFERRED TO I N SUN - CLAUSE(IV) OR SUB - CLAUSE (V) OR SUB - CLAUSE( VI) OR SUB CLAUSE (VIA) OF CLAUSE (23C) OF SECTION 10.] SHALL BE DEEMED TO BE THE INCOME OF SUCH PERSON OF THE PREVIOUSYEAR IN WHICH IT IS SO APPLIED OR CEASES TO BE SO ACCUMULATED OR SET APART OR CEASES TO REMAIN SO INVESTED OR DEPOSITED OR [CREDITED OR PAID OR).AS THE CASE MAY BE OF THE PREVIOUS YEAR IMMEDIATELY FOLLOWIN THE EXPIRY OF THE PERIOD AFORESAID . } AS PER SECTION 11 SUB - SECT I O N ( 3) THE INCOME SET . AP ERT F O R THE S PEC I F I ED PURPOSES WHICH IS NOT UTI L IZED FOR THE P U R POSE FOR WH I CH I T I S ACCU M U L A T ED FOR SET APART SHAL L BE DEEMED TO BE INCOME O F THE PREVIOUS Y EAR IN WH I C H IT CEASES TO BE SO ACCUMULATED . ON THE DISSOLUTION OF THE MARKET COMM I TTEE THE ACCUMULATED F UND FOR CHARITABLE PURPOSES WOULD NOT HAVE BEEN USED . HOW EVER, IT WOULD BE THE , DEEMED INCOME OF THE PREV I OUS YEAR 2006 - 07 I .E .A.Y. 2007 - 08 AND SHOULD HAVE BEEN ASSESSED ACCORDINGLY . AS I T I S NOT ASSESSABLE IN A . Y.2004 - 05, THE A DDITION I S ACCORDINGLY DELETED . I TA NO. - 1 86 / PAT /20 1 4 5 7 . AFTER HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND HAVING HEARD THE COUNSEL FOR BOTH THE PARTIES AT LENGTH, WE FIND THAT WHILE DEALING WITH THIS GROUND THE LD. CIT(A) HAS DULY CONSIDERED ALL THE FACTS OF THE PRESENT CASE AND HAS RIGHTLY CONCLUDED THAT WHERE THE GENUINENESS OF THE TRUST IS NOT IN D OUBT AND THE INVESTMENT OF MONEY HAS BEEN MADE BY THE TRUST IN THE PRESCRIBED SECURITIES OR EVEN IF THEY ARE WILLING TO DEPOSIT THE AMOUNT IN THE PRE SCRIBED SECU RITY S OME TIME BEFORE ASKING FOR G RANT OF BENEFIT, TRUST SHOULD NOT BE DENIED THE BENEFIT OF SECTION 11(2) AND THE APPLICATION U/S.11(2) FILED BEYOND T HE TIME LIMIT PRESCRIBED UNDER RULE 17 SHOULD BE ENTERTAINED AND DELAY SHOULD BE CONDONED. 8. AS PER THE FACTS OF THE PRESENT CASE, THE ASSESSEE IS AN AGRICULTURE PRODUCE MARKET COMMITTEE AND WAS GRANTED REGISTRATION U/S.12AA OF THE ACT. T HE ASSESSEE HAD DEPOSITE D THE AMOUNT IN THE STATE BANK O F INDIA , AGRICULTURE MARKET YARD BRANCH AND HAD THUS COM PLIED THE REQUIREMENT OF SECTION 11(2) OF THE ACT.THE LD. CIT(A) HAS ALSO CONSIDED THE FACTUAL POSITITION IN THE PRESENT CASE AS A MATTER OF FACT, THE MARKET COMMITTEE WAS DISSSOLVE ON 30.08.2006 AND, THEREFORE, AS PER SECTION 11 SUB SECTION (3), IF THE INCOME SET APART FOR THE SPECIFIC PURPO SE W HICH IS NOT UTILIZED FOR THE PURPOSE FOR WHICH IT IS ACCUMULATED FOR SET APART SHALL BE DEEMED INCOME OF THE PREVIOUS YEAR, IN WHICH IT CEASES TO BE SO ACCUMULATED. THUS, ON THE I TA NO. - 1 86 / PAT /20 1 4 6 DISSOLUTION OF MARKET COMMITTEE, THE ACCUMULA TED FUNDS FOR CHARITABLE PURPOSE WOULD BE DEEMED INCOME OF THE PREVIOUS YEAR 2006 - 07 I.E. A. Y - 2007 - 08 THUS NOT ASSESS ABLE OF IN ASSESSMENT YEAR 2004 - 05. THEREFORE, CONSIDERING THOSE FACTS THE LD. CIT(A) RIGHTLY DELETED THE ADDITIONS. 9 . NO NEW FACTS, CI RCUMSTANCES OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US IN ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD. CIT(A) . 10 . SO IN THESE CIRCUMSTANCE S , WE ARE UNABLE TO FIND ANY ILLEGALITY OR IRREGULARITY IN THE FINDINGS OF THE LD. CIT(A). WE THEREFORE, FIND THAT THERE ARE NO GROUND TO INTERFRERE WITH THE FINDINGS OF THE LD. CIT(A) . HENCE, THE GROUND RAISED BY THE REVENUE IS DISMISSED AND THE ORDER PASSED BY THE LD.CIT(A) IS UPHLED. 11 . I N THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. O RDER IS PRONOUNCED IN THE OPEN COURT ON 6 TH OCTOBER , 201 7 . SD/ - SD/ - ( J. SUDHAKAR REDDY ) ( SANDEEP GOSAIN ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE OF ORDER: 6 TH OCTOBER , 201 7 . S . S INH A (PS) COPY OF THE ORDER FORWARD ED TO : 1. THE APPELLANT . 2. THE RESPONDENT.: I TA NO. - 1 86 / PAT /20 1 4 7 3. THE CIT(A) - PATNA 4. CIT , PATNA 5. INCOME TAX APPELLATE TRIBUNAL,PATNA 6. GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY