Dy. Director of Income-Tax, Bangalore V. M/s. Daughters of St. Mary of Providence Society, Bangalore

ITA 2160/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7609 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHANKAR PRASAD
• Assessee Lawyers: V NARENDRA SHARMA
• Keywords: Charitable institution
• Section: 12; 2; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 2160 (BANG)/2016 (ASSESSMENT YEAR : 2012-13) THE DY. DIRECTOR OF INCOME TAX (EXEMPTION), BANGALORE. APPELLANT VS DAUGHTERS OF ST. MARY OF PROVIDENCE SOCIETY, NO. 4/1, JOHN ARMSTRONG ROAD, RICHARDS TOWN, BANGALORE -560 084 PAN: AAATD0916G RESPONDENT ASSESSEE BY : SHRI V. NARENDRA S HARMA, ADVOCATE REVENUE BY : SHRI DR. SHANKAR PRASAD, JCIT DATE OF HEARING : 08-08-2017 DATE OF PRONOUNCEMENT : 08-09-2 017 O R D E R PER SHRI A.K.GARODIA, AM THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDE R OF CIT (A) 14, LTU BENGALURU DATED 27.09.2016 FOR A. Y. 2012 13. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 2) DENIAL OF CARRY FORWARD OF EXCESS APPLICATION/DEFICIT OF CURRENT YEAR FOR APPLICATION IN SUBSEQUENT (FUTURE) YEAR: A) THE CIT (A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW SET-OFF OF EXCESS EXPENDITURE/APPL ICATION PERTAINING TO CURRENT ASST.YEAR AND EARLIER YEARS A GAINST THE INCOME OF THE FUTURE ASST.YEAR WITHOUT APPRECIA TING THE FACT THAT AS PER THE SCHEME OF TAXATION OF CHAR ITABLE OR RELIGIOUS TRUST/INSTITUTION AS CODIFIED U/S.11,1 2 AND 13, THERE IS NO PROVISION FOR COMPUTING LOSS FROM PROPE RTY HELD UNDER TRUST/INSTITUTION ON ACCOUNT OF EXCESS APPLICATION OF INCOME/FUNDS OF THE TRUST. ITA NO. 2160/B/2016 2 B) THE CIT (A) HAS FAILED TO APPRECIATE THE FACT TH AT THE NORMAL COMPUTATION OF INCOME UNDER RESPECTIVE HEADS AS ENVISAGED U/S 15 TO 59 ARE NOT APPLICABLE TO THE COMPUTATION OF INCOME IN RESPECT OF CHARITABLE TRUST/INSTITUTION FOR THE PURPOSE OF CLAIMING EXEMP TION UNDER SEC.11, 12 AND 13 AND, THEREFORE, THE PROVISI ONS RELATING TO SET-OFF OF LOSS FROM ONE SOURCE AGAINST THE INCOME FROM ANOTHER SOURCE, SET-OFF OF LOSS FROM ON E HEAD AGAINST INCOME FROM ANOTHER HEAD AND CARRY FORWARD AND SET-OFF OF LOSS AGAINST THE INCOME OF SUBSEQUENT YEARS AS ENVISAGED U/S 70 TO 79 ARE ALSO NOT APPLICABLE TO THE CHARITABLE TRUSTS/INSTITUTIONS. C) THE CIT (A) HAS FAILED TO DISCUSS THE ISSUE IN D ETAIL BRINGING OUT THE FACTS AND APPLYING THE RELEVANT PROVISIONS OF THE ACT, BUT CAME TO A CONCLUSION THA T EXCESS EXPENDITURE/EXCESS APPLICATION SHALL BE ALLO WED TO BE CARRIED FORWARD AND SET-OFF AGAINST THE INCOME O F THE FUTURE ASSESSMENT YEARS AND, THEREBY, RENDERING THE ORDER PERVERSE. 3. LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF THE AO WHEREAS THE LEARNED AR OF THE ASSESSEE SUPPORTED THE ORDER OF CIT (A). HE ALSO SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE IS ONLY ONE THAT WHETHER EXCESS OF EXPENDITURE/APPLICATION CAN BE ALLOWED TO BE CARRIE D FORWARD IN THE PRESENT YEAR FOR SET OFF IN FUTURE YEAR. HE SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER IN THE CASE OF M/S D OMINICIAN SISTERS OF PRESENTATION VS. DDIT (EXEMPTION) IN ITA NO. 318/BNG/2015 DATED 08. 01.2016 COPY ON PAGES 17 TO 27 OF THE PAPER BOOK. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT IN THE CASE CITED BY THE LEARNED AR OF THE ASSESSEE HAVING BEEN RENDERED IN THE CASE OF M/S DOMINICIAN SISTERS OF PRESENTATION VS. DDIT (EXEMPTION) (SUPR A), THE TRIBUNAL HAS FOLLOWED ANOTHER TRIBUNAL ORDER RENDERED IN THE CASE OF ST. FRANCIS DE SALES IN ITA NO. 315/B/2015 DATED 10.07.2015 AND REPRODUCED THE RELE VANT PORTION OF THIS TRIBUNAL ORDER. AS PER THE SAME REPRODUCTION, THE TRIBUNAL I N THAT ORDER HAS FOLLOWED THE ITA NO. 2160/B/2016 3 JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN T HE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION AS REPORTED IN 264 ITR 110. THE TRIBUNAL IN THE CASE OF M/S DOMINICIAN SISTERS OF PRESENTATION VS. DDIT (E XEMPTION) (SUPRA) HAS FOLLOWED THIS EARLIER TRIBUNAL ORDER AND THIS JUDGMENT OF HO NBLE BOMBAY HIGH COURT AND HELD THAT THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF EXCESS APPLICATION IS IN ACCORDANCE WITH THE JUDICIAL PRECEDENTS ON THE ISSUE AND THE S AME IS ALLOWABLE. LEARNED DR OF THE REVENUE COLD NOT POINT OUT ANY DIFFERENCE IN FACTS AND THEREFORE, WE FIND NO REASON TO TAKE A CONTRARY VIEW. THEREFORE RESPECTFULLY FOLLOW ING THE EARLIER DECISION OF THE CO ORDINATE BENCH, WE DECLINE TO INTERFERE IN THE ORDE R OF CIT (A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- ( LALI E T KUMAR) SD/- (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE D A T E D : 08.09.2017. *MS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.