M/s Kenchappa Samajika Shikshana Foundation , Davangere V. Assistant Commissioner of Income Tax Circle-1(1), Davangere

ITA 1974/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5039 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 08-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K N DHANDA
• Assessee Lawyers: R CHANDRASHEKAR
• Section: 10; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO. 1974/BANG/2018 ASSESSMENT YEAR : 2012 - 13 KENCHAPPA SAMAJIKA SHIKSHANA FOUNDATION, # 1382/5 & 6, 2 ND CROSS, SARASWATHI NAGARA, DAVANGERE 577 001. PAN: AABAK 6579J VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), DAVANGERE. APP ELLANT RESPONDENT APP ELLANT BY : SHRI R. CHANDRASHEKAR, ADVOCATE RESPONDENT BY : SHRI K.N. DHANDAPANI, JT.CIT(DR)(ITAT), BEN GALURU. DATE OF HEARING : 18.07 .2018 DATE OF PRONOUNCEMENT : 10. 08.2018 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 12.03.2018 OF THE CIT(APPEALS), DAVANGERE RELATING TO ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE THAT REQUIRES CONSIDERATION IN TH IS APPEAL IS WITH REGARD TO THE JUSTIFICATION OF REJECTION OF THE ASS ESSEES CLAIM FOR EXEMPTION OF INCOME OF RS.20,63,703 U/S. 10(23C)(IIIAD) OF TH E INCOME-TAX ACT, 1961 [THE ACT]. 3. THE TWO GROUNDS ON WHICH THE ASSESSEES CLAIM WA S REJECTED BY THE REVENUE AUTHORITIES ARE AS FOLLOWS:- ITA NO. 1974/BANG/2018 PAGE 2 OF 4 I] THE ASSESSEE DID NOT FILE RETURN OF INCOME WITHI N THE DUE DATE SPECIFIED U/S 139 OF THE ACT. TO CLAIM THE BEN EFIT OF EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT, THE ASSESS EE HAS TO COMPLY WITH THE PROVISIONS OF SECTION 139(4C) OF TH E ACT. THE ASSESSEE HAD FILED THE RI BELATEDLY ON 04/12/2013 A ND THEREFORE IS NOT ENTITLED TO CLAIM ANY EXEMPTION U/S 10(23C)(III AD) OF THE ACT. II] UPON PERUSAL OF THE MOA, THE AO NOTICED THAT TH E SOCIETY WAS ESTABLISHED NOT ONLY FOR THE SOLE PURPOSE OF ED UCATION BUT ALSO FOR OTHER OBJECTS SUCH AS IMPROVING THE ECONOM IC STANDARD OF THE POOR PEOPLE, PROMOTE GOOD HEALTH FOR THE PEOPLE THROUGH HEALTH AND NUTRITION PROGRAMME ETC., WHICH INDICATE D THAT THE ASSESSEE DID NOT FULFIL THE CONDITIONS LAID DOWN U/ S EXEMPTION U/S 10(23C) (IIIAD) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS) GIVIN G THE ABOVE REASONS FOR DENIAL OF EXEMPTION TO THE ASSESSEE, TH E ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD THE RIVAL SUBMISSIONS. THE PROVISIO NS OF SECTION 10(23C)(IIIAD) READS AS FOLLOWS:- ( 23C ) ANY INCOME RECEIVED BY ANY PERSON ON BEHALF OF . ( IIIAD ) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION E XISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE S OF PROFIT IF THE AGGREGATE ANNUAL RECEIPTS OF SUCH UNIVERSITY OR EDUCATIONAL INSTITUTION DO NOT EXCEED THE AMOUNT OF ANNUAL RECE IPTS AS MAY BE PRESCRIBED; OR 6. THE PROVISIONS OF SECTION 139(4C) OF THE ACT LAY S DOWN THAT EVERY INSTITUTION REFERRED TO IN (10)23C)(IIIAD) SHALL, I F THE TOTAL INCOME IN RESPECT OF WHICH SUCH RESEARCH ASSOCIATION, NEWS AGENCY, ASSOC IATION OR INSTITUTION, [PERSON OR] FUND OR TRUST OR UNIVERSITY OR OTHER ED UCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION OR TRADE UNIO N OR BODY OR AUTHORITY OR BOARD OR TRUST OR COMMISSION OR INFRASTRUCTURE DEBT FUND OR MUTUAL FUND OR SECURITISATION TRUST OR VENTURE CAPITAL COMPANY OR VENTURE CAPITAL FUND IS ITA NO. 1974/BANG/2018 PAGE 3 OF 4 ASSESSABLE, WITHOUT GIVING EFFECT TO THE PROVISIONS OF SECTION 10, EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOM E-TAX, FURNISH A RETURN OF SUCH INCOME OF THE PREVIOUS YEAR IN THE P RESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND ALL THE PROVISIONS OF THIS AC T SHALL, SO FAR AS MAY BE, APPLY AS IF IT WERE A RETURN REQUIRED TO BE FURNISH ED UNDER SUB-SECTION (1). 7. IT CAN BE SEEN FROM THE PROVISIONS OF SECTION 13 9(4C) OF THE ACT, FILING THE RETURN OF INCOME ON OR BEFORE THE DUE DA TE U/S. 139(1) OF THE ACT DOES NOT DISQUALIFY FROM CLAIMING EXEMPTION U/S. 10 (23C)(IIIAD) OF THE ACT. ALL THAT THE PROVISION REQUIRES IS THAT IF THE TOTA L INCOME FOR GIVING EFFECT OF PROVISIONS OF SECTION 10 EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX, THEY HAVE TO FILE A RETUR N OF INCOME IN THE PRESCRIBED FORM. THE SECTION FURTHER SAYS THAT SUCH RETURN OF INCOME WILL BE TREATED AS IF IT IS A RETURN REQUIRED TO BE FURNISH ED U/S. 139(1) OF THE ACT. 8. IN THE PRESENT CASE, THE ASSESSEE FILED RETURN O F INCOME FOR THE AY 2012-13 VALIDLY ON 04.12.2013 THOUGH IT WAS A BELAT ED RETURN IN TERMS OF SEC.139(1) OF THE ACT. BY REASON OF LATE FILING OF THE RETURN, THE ASSESSEE DOES NOT LOOSE EXEMPTION U/S. 10(23C)(IIIAD) OF THE ACT R.W.S. 139(4C) OF THE ACT. I THEREFORE HOLD THAT THIS REASON ASSIGNE D BY THE REVENUE AUTHORITIES FOR DENYING THE CLAIM OF EXEMPTION AS M ADE BY THE ASSESSEE IS WITHOUT ANY BASIS. 9. AS FAR AS THE OTHER GROUND ON WHICH THE REVENUE AUTHORITIES REJECTED THE CLAIM OF ASSESSEE IS THAT THE ASSESSEES OBJECT S ARE NOT SOLELY FOR THE PURPOSE OF EDUCATION AND IT ALSO CONTAINS OTHER OBJ ECTS SUCH AS IMPROVING ECONOMIC STANDARD OF THE POOR, PROMOTE GOOD HEALTH FOR THE PEOPLE, ETC. IT IS UNDISPUTED THAT THE ASSESSEE WAS FORMED AS A SOC IETY. AS FAR AS THE INCOME IN QUESTION IS CONCERNED, IT IS UNDISPUTED T HAT THE INCOME AROSE SOLELY FROM THE ACTIVITY OF ASSESSEE RUNNING THE ED UCATIONAL INSTITUTION. THE EXEMPTION U/S. 10(23C)(IIIAD) IS QUA THE INSTITUTION AND NOT QUA THE ITA NO. 1974/BANG/2018 PAGE 4 OF 4 ASSESSEE. THEREFORE, THE FACT THAT THERE ARE OTHER OBJECTS OTHER THAN EDUCATION, CANNOT BE THE BASIS TO DENY THE CLAIM OF ASSESSEE FOR EXEMPTION. AS ALREADY STATED, IT IS UNDISPUTED THA T THE INCOME CLAIMED AS EXEMPT AROSE FROM INSTITUTION PROVIDING EDUCATION. THAT INSTITUTION EXISTED SOLELY FOR THE PURPOSE OF EDUCATION AND NOT FOR THE PURPOSE OF PROFIT DURING THE RELEVANT PREVIOUS YEAR. THEREFORE, THE BASIS F OR REJECTING THE CLAIM OF ASSESSEE FOR EXEMPTION THAT ITS PURPOSE WAS NOT SOL ELY FOR EDUCATION CANNOT BE SUSTAINED. FOR THE REASONS GIVEN ABOVE, I DIRECT THE AO TO ALLOW THE EXEMPTION U/S. 10(23C)(IIIAD) OF THE ACT. 10. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF AUGUST, 2018. SD/- ( N.V. VASUDEVAN ) JUDICIAL MEMBER BANGALORE, DATED, THE 10 TH AUGUST, 2018. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.