Appeal Details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 8755 (ITAT-AMRITSAR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 9 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-02-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
23-01-2017
Assessment Year
2010-2011
Appeal Filed On
12-04-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDH AR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NOS.203, 204, 205 (ASR)/2016 ASSESSMENT YEARS: 2010-11 ITO (EXEMPTIONS), WARD JALANDHAR. VS. ST. FRANCIS CONVENT SCHOOL, TARAN TARAN, H.O.-BISHOP HOUSE, CIVIL LINES, JALANDHAR. PAN: AAFTS-5346E (APPELLANT) (RESPONDENT) I.T.A NO.206 (ASR)/2016 ASSESSMENT YEARS: 2010-11 ITO (EXEMPTIONS), WARD JALANDHAR. VS. ST. CHRIST THE KING CONVENT SCHOOL, PATHANKOT, H.O.-BISHOP HOUSE, CIVIL LINES, JALANDHAR. PAN: AAEFC-0236G (APPELLANT) (RESPONDENT) I.T.A NO.209 (ASR)/2016 ASSESSMENT YEARS: 2010-11 ITO (EXEMPTIONS), WARD JALANDHAR. VS. ST. JUDES CONVENT SCHOOL, NAKODAR H.O.-BISHOP HOUSE, CIVIL LINES, JALANDHAR. PAN: AAETS-3007J (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. BALWINDER KAUR (DR. ) RESPONDENT BY: SH. G.S.SYAL (ADV.) DATE OF HEARING: 23.01.2017 DATE OF PRONOUNCEMENT: 21.02.20 17 ITA NO.203 TO 206 & 209(ASR)/2016 ASST. YEAR: 2010-11 2 ORDER PER T. S. KAPOOR (AM): THIS IS A BUNCH OF FIVE APPEALS FILED BY REVENUE AG AINST THE SEPARATE ORDERS OF LD. CIT(A), JALANDHAR, ALL DATED 01.12.2015, FOR ASST. YEAR:2010-11. 2. THE REVENUE HAS TAKEN IDENTICAL GROUNDS IN THESE APPEALS, WHEREIN IT IS AGGRIEVED WITH THE ACTION OF LD. CIT( A), BY WHICH HE HAD DELETED THE PENALTY IMPOSED BY ASSESSING OFFICER U/ S 271(1)(C) OF THE ACT. 3. AT THE OUTSET, THE LD. DR SUBMITTED THAT THERE W AS A DELAY IN FILING OF THESE TWO APPEALS BY 25 DAYS AND THE REASONS OF DELAY WAS STATED TO BE THAT IN THE MONTH OF MARCH, 2016 THERE WERE A NU MBER OF TIME BARRING MATTERS AND THEREFORE, ASSESSING OFFICER COULD NOT FILE THE APPEALS WITHIN PRESCRIBED PERIOD. THE LD. DR IN THIS RESPECT INVIT ED OUR ATTENTION TO A COPY OF AFFIDAVIT PLACED ON RECORD DULY SINGED BY A SSESSING OFFICER. 4. THE LD. AR HAD NO OBJECTION, IF THE DELAY WAS CO NDONED, THEREFORE, WE CONDONED THE DELAY AND LD. DR WAS DIRECTED TO PR OCEED WITH HER ARGUMENT. 5. THE LD. DR SUBMITTED THAT ASSESSEE SOCIETY WAS C LAIMING EXEMPTION U/S 10(23C) (VII) BUT DURING THE YEAR UND ER CONSIDERATION NO SUCH CLAIM WAS MADE AS THE EXPENDITURE DURING THE Y EAR UNDER CONSIDERATION WAS MORE THAN RECEIPTS. IT WAS SUBMIT TED THAT APPLICATION OF ASSESSEE FOR GRANT OF APPROVAL U/S 10(23C)(VI) H AS BEEN WITHDRAWN BY ITA NO.203 TO 206 & 209(ASR)/2016 ASST. YEAR: 2010-11 3 THE WORTHY CHIEF COMMISSIONER OF INCOME TAX, LUDIHA NA, VIDE ORDER DATED 13.12.2012 AND THEREFORE, ALSO THE ASSESSEE W AS NOT ELIGIBLE FOR EXEMPTION. THE LD. DR FURTHER SUBMITTED THAT IN CIVIL WRIT PE TITION FILED BY ST. FRANCIS CONVENT SCHOOL, JANDIALA GURU, UNDER SIMILA R FACTS AND CIRCUMSTANCES IT WAS DECIDED BY THE HONBLE JURISDI CTIONAL HIGH COURT IN FAVOUR OF REVENUE. IT WAS SUBMITTED THAT ASSESSEE C OMPANY HAD BEEN REGULARLY PAYING SUBSTANTIAL AMOUNT OF MONEY UNDER THE HEAD OF EDUCATION EXTENSION SERVICES TO ANOTHER SOCIETY NAM ELY DIOCESE OF JALANDHAR, WHICH HAD SOME OBJECTS RELIGIOUS IN NATU RE. THEREFORE, THOSE OBJECTS CANNOT BE CONSIDERED SOLELY FOR EDUCATIONAL PURPOSES AND THEREFORE, THE AUTHORITIES BELOW HAD RIGHTLY HELD T HAT PAYMENT BY THE ASSESSEE TO DIOCES OF JALANDHAR WAS NOT SOLELY FOR EDUCATIONAL PURPOSES AND THEREFORE, ASSESSING OFFICER MADE THE ADDITION FOR SUCH PAYMENT AND PASSED PENALTY ORDERS U/S 271(1)(C) OF THE ACT. 6. THE LD. AR, ON THE OTHER HAND SUBMITTED THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MISSIONARIES OF JESUS ANOTHER GROUP COMPANY HAS HELD THAT PAYMENT OF EDUCATION EXTENSIO N SERVICES TO DIOCESE OF JALANDHAR IS AN ALLOWABLE EXPENSES AND T HEREFORE HE ARGUED THAT ISSUE BEING HIGHLY DEBATABLE AND THE LD. CIT(A ) HAS RIGHTLY ALLOWED THE APPEALS OF ASSESSEE. THE LD. AR FURTHER SUBMITTED THAT HONBLE TRIBUNAL VIDE ORDER DATED 26.09.2016 IN BUNCH OF APPEALS HAS HELD THAT AMOUNT PAID TO ITA NO.203 TO 206 & 209(ASR)/2016 ASST. YEAR: 2010-11 4 DIOCESE OF JALANDHAR IS TO BE ALLOWED AS APPLICATIO N OF INCOME AND HAS ALSO HELD THE REGISTRATION U/S 12A TO BE APPLICABLE RETROSPECTIVELY. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSE E HAS BEEN ENJOYING EXEMPTION U/S 10(23C)(VII) OF THE ACT., HOWEVER, FO R THE YEAR UNDER CONSIDERATION THE SAID EXEMPTION WAS WITHDRAWN. THE ASSESSEE WAS ALSO NOT GRANTED EXEMPTION U/S 12A OF THE ACT. IT IS ALSO OBSERVED FROM THE ORDER OF LD. CIT(A) THAT IN THE CASE OF MISSIONARIE S OF JESUS, ANOTHER GROUP OF SOCIETY, THE HONBLE PUNJAB & HARYANA HIGH COURT HAS HELD THE PAYMENT OF EDUCATION EXTENSION SERVICES TO DIOCESE OF JALANDHAR WAS AN ALLOWABLE EXPENSE AND WHEREAS IN THE CASE OF ST FRA NCIS CONVENT SCHOOL SUCH EXPENDITURE HAS BEEN HELD TO BE NOT ALLOWABLE. THEREFORE, THE LD. CIT(A) HAS RIGHTLY HELD THAT ISSUE WAS A HIGHLY CONTENTIOUS, DEBATABLE ISSUE AND THEREFORE, HE RIGHTLY HELD THAT ASSESSEE HAS NOT CONCEALED OR FILED INACCURATE PARTICULARS OF INCOME. WE FURTHER FIND THAT IN A BUNCH OF APPEALS THE HON BLE TRIBUNAL VIDE ORDER DATED 26.09.2016 HAS GRANTED REGISTRATIO N TO VARIOUS SCHOOLS U/S 12A RETROSPECTIVELY AND HAS ALSO HELD THE PAYME NT TO DIOCESE OF JALANDHAR AS AN ALLOWABLE EXPENSES. FOR THE SAKE OF CONVENIENCE THE RELEVANT PARA OF T HE HONBLE TRIBUNAL ORDER IS REPRODUCED HERE IN BELOW. 32. NOW, APROPOS THE MERITS, THE QUESTION IS WHE THER PAYMENT OF EDUCATION EXTENSION SERVICES TO THE DIOCESE OF JALA NDHAR, NOTIFIED U/S 10 ITA NO.203 TO 206 & 209(ASR)/2016 ASST. YEAR: 2010-11 5 (23C)(VI), AS WELL AS REGISTERED U/S 12A OF THE ACT AND PERSUING THE OBJECT OF PROMPTING EDUCATION THROUGH RUNNING VARIOUS SCHOOLS , CAN BE REGARDED AS APPLICATION OF INCOME. 33. HERE, IT IS NOT IN DISPUTE THAT THE DIOCES E OF JALANDHAR IS NOT ONLY REGISTERED U/S 12A OF THE ACT, IT IS ALSO NOTIFIED U/S 10(23C)(VI) OF THE ACT. BESIDES, FOR A.YS. 2007-08 TO 2013-14, VIDE ORDERS PASSED U/S 143(3) OF THE ACT (COPIES ON RECORD), ITS STANDS TAKEN NOTE OF TH AT THE DIOCESE OF JALANDHAR IS RUNNING VARIOUS SCHOOLS AND THAT EXEMPTION U/SS 11 AND 12 OF THE ACT HAS BEEN ALLOWED WITH REGARD TO ITS INCOME. THEREFO RE, IT HAS WRONGLY BEEN HELD IN THE IMPUGNED ORDER THAT THE PAYMENT OF EDUC ATION EXTENSION SERVICES MADE BY THE ASSESSEE TO THE DIOCESE OF JALANDHAR OU T OF THE CURRENT YEAR INCOME, AS IS ALSO AVAILABLE FROM THE INCOME AND EX PENDITURE ACCOUNT OF THE RELEVANT FINANCIAL YEARS, IS NOT ALLOWABLE AS APPLI CATION OF INCOME. 34. IN THIS REGARD, IN CIT VS. SARLADEVI SARAB HAI TRUST (NO. 2), 172 ITR 698 (GUJ), IT HAS BEEN HELD THAT WHEN A CHARITABLE TRUST DONATES ITS INCOME TO ANOTHER TRUST HAVING SIMILAR OBJECTS, THE PROVIS IONS OF SECTION 11(1)(A) CAN BE SAID TO HAVE BEEN MET BY SUCH DONOR TRUST. FOR T HIS PROPOSITION, THE ASSESSEE HAS CORRECTLY RELIED ON THE FOLLOWING DECI SIONS TOO: (I) CIT VS. THANTHI TRUST 239 ITR 502 (SC) (II) CIT VS. HINDUSTAN CHARITY TRUS T 139 ITR 913 (CAL.) (III) CIT VS. SHRI RAM MEMORIAL FOUND ATION 269 ITR 35 (DEL.) (IV) CIT VS. NIRMALA BAKUBHAI FOUNDATION 226 ITR 3 94 (GUJ). YET AGAIN, THESE DECISIONS HAVE REMAINED UNCONTROV ERTED. 35. THEN, SECTION 11(3)(D) OF THE ACT, WHICH WA S BROUGHT IN BY THE FINANCE ACT, 2002, W.E.F. 01.04.2003, BARS DONATION BY A CH ARITABLE TRUST TO ANOTHER CHARITABLE TRUST, OUT OF ACCUMULATED INCOME, FROM B EING CONSIDERED AS APPLICATION OF INCOME. HOWEVER, AS IS PATENT ON REC ORD, THE PAYMENT OF EDUCATION EXTENSION SERVICES MADE BY THE ASSESSEE T O THE DIOCESE OF JALANDHAR IS OUT OF ITS CURRENT YEARS INCOME AND N OT OUT OF ANY ACCUMULATED INCOME. 36. IN THIS REGARD, IN DIT(E) VS. BAGRI FOUNDATI ON, 344 ITR 193 (DEL), IT HAS BEEN HELD THAT THE RESTRICTION/EMBARGO IN DONAT ION BY ONE CHARITABLE TRUST TO ANOTHER IS ONLY RESTRICTED TO ACCUMULATION S MADE IN EXCESS OF 15% OF INCOME OF THE TRUST, AS REFERRED TO IN SECTION 11(2 ) OF THE ACT; AND THAT THE SAID PROHIBITION DOES NOT APPLY TO CURRENT YEAR INC OME, OR EVEN TO ACCUMULATIONS UP TO 155% U/S 11(1)(A) OF THE ACT. 37. OTHER THAN THE ABOVE, THE ASSESSING OFFICER H AS OBSERVED THAT THE DIOCESE OF JALANDHAR WAS ALSO HAVING SOME RELIGIOUS OBJECTS. THIS, HOWEVER, IS NOT AT ALL DETRIMENTAL TO THE CLAIM OF THE ASSES SEE. IT MAY BE REITERATED THAT THE DIOCESE OF JALANDHAR STANDS NOTIFIED U/S 1 0(23C)(VI) OF THE ACT. THIS PROVISION, IT MAY BE NOTED, IS APPLICABLE TO UNIVER SITIES AND EDUCATIONAL INSTITUTIONS, WHICH EXIST SOLELY FOR EDUCATIONAL PU RPOSES AND NOT FOR PURPOSES OF PROFIT. NEITHER THE ASSESSMENT ORDER/S OF THE AS SESSEE/S, NOR THE ASSESSMENT ORDER/S OF THE DIOCESE OF JALANDHAR, CAR RY ANY FINDING OF THE DIOCESE OF JALANDHAR PURSUING RELIGIOUS OBJECTS. ME RELY HAVING RELIGIOUS ITA NO.203 TO 206 & 209(ASR)/2016 ASST. YEAR: 2010-11 6 OBJECTS DOES NOT AMOUNT TO PURSUING RELIGIOUS OBJEC TS. IT IS THE ACTUAL OBJECTS PERUSED AND THE ACTUAL ACTIVITIES UNDERTAKEN, WHICH ARE OF CONSEQUENCE SO FAR AS REGARDS OUR PRESENT PURPOSES. THE DECISIONS IN HARF CHARITABLE, TRUST VS. CCIT, 376 ITR 110 (P&H) AND DIGEMBER JAIN SOC IETY FOR CHILD WELFARE VS. DGIT(E), 185 TAXMANN 255 (DEL.) ARE ELOQUENT D ECISIONS ON THIS MATTER, IN FAVOUR OF THE ASSESSEE. 38. THEREFORE, IT CANNOT BE DENIED THAT THE DI OCESE OF JALANDHAR IS ENGAGED SOLELY IN PURSUING THE OBJECT OF EDUCATION. IT RUNS VARIOUS SCHOOLS. HENCE, IT IS BUT CHARITABLE INSTITUTION PURSUING OB JECTS WHICH ARE SIMILAR TO THOSE OF THE ASSESSEE. THAT BEING SO, THE AMOUNT PA ID TO THE DIOCESE OF JALANDHAR BEING OUT OF THE CURRENT YEAR INCOME AND NOT OUT OF ACCUMULATED INCOME, SUCH PAYMENT OF EDUCATION EXTENSION SERVICE S TO THE DIOCESE OF JALANDHAR IS TO BE ALLOWED AS APPLICATION OF THE IN COME. IT IS SO ORDERED. 39. IN VIEW OF THE ABOVE DISCUSSION, WE HOLD T HAT (1) THE SUBSEQUENT GRANT OF REGISTRATION IN ALL THE CASES RESPECTIVELY OPERATES RETROSPECTIVELY FOR ALL THE YEARS UNDER CONSIDERATION; AND (2) PAYMENT OF EDUCATION EXTENSION SERVICES TO THE DIOCESE OF JALANDHAR IS APPLICATION OF INCOME, DULY SATISFYING THE PROVISIONS OF SECTIONS 11(1) AND 11(3)(D) OF TH E ACT. IN VIEW OF THE ABOVE FACTS AND JUDICIAL PRECEDENTS , WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A), THEREFORE , WE DISMISS THE APPEALS OF THE REVENUE. 8. IN THE RESULT, THE APPEALS FILED BY REVENU E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 .02. 2017. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21.02.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER
