The ACIT,GNR Circle, Gandhinagar V. Entrepreneurship Development Institute of India, Gandhinagar

ITA 2072/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85634 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 19-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: A C SHAH
• Keywords: Reopening of assessment; Charitable institution; Difference of opinion; Change of opinion
• Section: 143(3); 12A; 147; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA NO. 2072/AHD/2011 (ASSESSMENT YEAR: 2005-06) ASSTT. COMMISSIONER OF INCOME-TAX GANDHINAGAR CIRCLE, GANDHINAGAR APPELLANT VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA, VILL. BHAT, TAL.DIST. GANDHINAGAR RESPONDEN T PAN: AAATI0740B / BY REVENUE :SHRI V. K. SINGH, SR. D.R. / BY ASSESSEE : SHRI A. C. SHAH, A.R. /DATE OF HEARING :12.01.2015 !' /DATE OF PRONOUNCEMENT :23.01.2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS), GANDHINAGAR, DATED 26.05.2011 FOR A.Y. 2005-06 ON THE FOLLOWING GROUND : I.T.A. NO. 2072/AHD/2011 FOR A.Y. 05-06 (ACIT VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA) PAGE 2 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AN DO N FACTS IN TREATING THE REOPENING OF ASSESSMENT BY ISSUING THE NOTICE U/S 147 OF THE IT ACT AS INVALID. 2. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AN DON FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTI ON U/S 11 OF THE IT ACT TO THE ASSESSEE TO THE EXTENT OF RS.10,19,11,212/-. 2. IN CASE OF ASSESSEE, ORIGINAL ASSESSMENT WAS PAS SED U/S. 143(3) AND EXEMPTION U/S. 11 WAS GRANTED TO THE ASS ESSEE. DURING ORIGINAL ASSESSMENT PROCEEDINGS, SPECIFIC QU ERY WAS RAISED ASKING FOR COPY OF TRUST DEED. IN RESPONSE, MEMORANDUM OF ASSOCIATION WAS ENCLOSED. FURTHER, CERTIFICATE U/S. 12A WAS CALLED FOR AND SUBMITTED. AS THESE WERE SPECIFIC QU ERIES, THEREFORE, LOGICAL ASSUMPTION WAS THAT THESE WERE C ONSIDERED BY ASSESSING OFFICER FOR HIS CONCLUSION. HOWEVER, ASSESSING OFFICER REOPENED THE CASE STATING THAT ASSESSEE IS AN INSTITUTION AND NOT TRUST HAS BEEN CREATED. ASSESSING OFFICER HELD THAT REGISTRATION U/S. 12A IS FOR THE INSTITUTION AND TH E ASSESSEE IS NOT A TRUST BUT A CHARITABLE INSTITUTION. FROM THE MEMORANDUM & RULES FILED (WHICH WAS AVAILABLE WITH THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT), IT IS CLEAR THAT THE PROPERTY IS VESTED IN GOVERNING BODY, THE GOVERNING BODY AND ITS POWERS AND FUNCTIONS ARE CLEARLY DEFINED ALONG WITH THE OBJECTIVES. IT REVEALED THAT PROPERTY IS HELD UNDE R TRUST AS REQUIRED UNDER THE PROVISIONS OF SECTION 11. NOT O NLY THIS, THE INSTITUTION IS REGISTERED AS PUBLIC TRUST UNDER MUM BAI PUBLIC TRUST, 1950 SUB-RULE 29 UNDER REGISTRATION. NO. F/934/AHMEDABAD DATED 3 RD JUNE, 1983. IN VIEW OF ABOVE I.T.A. NO. 2072/AHD/2011 FOR A.Y. 05-06 (ACIT VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA) PAGE 3 OBSERVATION REOPENING WAS RIGHTLY HELD TO BE INVALI D BY CIT(A) AS BEING MERELY CHANGE OF OPINION. SAME IS UPHELD. 2.1 FURTHER, IT WAS HELD BY CIT(A) THAT PROPERTY IS VESTED IN THE TRUST, TRUSTEES BEING THE GOVERNING BODY AND GO VERNING BODY AND ITS POWERS AND FUNCTIONS ARE CLEARLY DEFIN ED ALONG WITH OBJECTIVES. FURTHER, ASSESSEE HAS DULY GRANTE D REGISTRATION U/S. 12A OF THE ACT. THEREFORE, ON ME RITS ALSO ASSESSEE WAS HELD TO BE ELIGIBLE FOR DEDUCTION U/S. 11. THIS VIEW ON THE MERIT IS COVERED BY THE ORDER OF ITAT, AHMADABAD IN ASSESSEES OWN CASE IN ITA NOS. 1688 & 1689/AHD/ 2012 FOR A.Y. 2006-07 & 2009-10 AS PLACED ON PAGE NOS. 23 TO 27 OF THE PAPER BOOK, WHEREIN TRIBUNAL HELD AS UNDER: 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED VIEW THAT THE VIEW EXPRESSED BY T HE LD.CIT(A) IN RESPECT OF BOTH THE GROUNDS DESERVES T O BE UPHELD. THIS INSTITUTE IS FORMED BY A MEMORANDUM AN D RULES WITH THE OBJECT TO ORGANIZE PROGRAMMES AND TO MOTIVATE INDIVIDUALS AND TO GIVE EDUCATION IN RESPE CT OF DEVELOPMENT OF ENTREPRENEUR SHIP. THIS INSTITUTE H AS BEEN GOVERNED BY DIRECTORS AND EXECUTIVE DIRECTORS SERVI NG WITH CERTAIN GOVERNMENT BODIES, SUCH AS, IDBI, IFCI, ICI CI, STATE BANK OF INDIA, GOVERNMENT OF GUJARAT. THIS INSTI TUTE IS ORGANIZED BY THE GRANTS RECEIVED FROM CENTRAL AND S TATE GOVERNMENT AND ALSO GRANTS RECEIVED FROM SPONSORS. FUNDS OF THE INSTITUTE CONSISTED DONATIONS AND MEMB ERSHIP FEES. UNDISPUTEDLY, THE INSTITUTE IS REGISTERED U NDER SOCIETY REGISTRATION ACT, 1860 AND BOMBAY PUBLIC TRUST ACT , 1950. THE INSTITUTE IS ALSO REGISTERED BY THE COMMISSIONER OF INCOME-TAX DEPARTMENT AS PRESCRIBED UNDER SECTION 12A OF IT ACT. WE THEREFORE HOLD TH AT THE INSTITUTE QUALIFIES FOR THE EMPTION AS PRESCRIBED U /S. LL OF IT ACT. RESULTANTLY, THE GROUNDS BY THE REVENUE ARE HE REBY DISMISSED FOR BOTH THE YEARS. I.T.A. NO. 2072/AHD/2011 FOR A.Y. 05-06 (ACIT VS. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE OF INDIA) PAGE 4 IN VIEW OF ABOVE, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO HAS RIGHTLY DIRECTED THE ASSESSING OF FICER TO ALLOW DEDUCTION U/S.11 OF THE INCOME TAX ACT TO ASSESSEE TO THE EXTENT OF RS.10,19,11,212/-. SAME IS UPHELD. 3. AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSE D AS DISCUSSED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF JANUARY, 2015. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA # # # # %& %& %& %& '&' '&' '&' '&' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. ,, - / CONCERNED CIT 4. -- / CIT (A) 5. &12 %, , / DR, ITAT, AHMEDABAD 6. 256 78 / GUARD FILE. BY ORDER / # , 9/ , , ;