Deputy Commissioner of Income-tax, V. Shri Balaji Society, Pune

ITA 2178/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2684 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 19-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: S N DOSHI; P B SANDBHOR
• Section: 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKAR A RAO, AM . / ITA NO.2178/PUN/2016 / ASSESSMENT YEAR : 2012-13 DCIT (EXEMPTION) CIRCLE, PUNE . /APPELLANT VS. SHRI BALAJI SOCIETY, PLOT NO.9, CLUSTER NO.2 KUMAR CITY, KALYANI NAGAR, PUNE 411 004 PAN : AAFTS1707B . / RESPONDENT / APPELLANT BY : SHRI S.B. PRASAD, CIT-DR / RESPONDENT BY : SHRI P.B. SANDBHOR & SHRI S.N. DOSHI / DATE OF HEARING : 24.10.2018 / DATE OF PRONOUNCEMENT: 02.11.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CI T(A)-10, PUNE, DATED 15-07-2016 FOR THE ASSESSMENT YEAR 2012-13. 2. BRIEFLY STATED, RELEVANT FACTS INCLUDE THAT THE ASSESSE E IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 AND BOMBAY PUBLIC TRUST ACT, 1950. ASSESSEE IS ALSO REGISTERED U/S.12A OF THE I.T. ACT. ASSESSEE FILED THE RETURN OF INCOME DECLARING NIL INCOME. ASS ESSEE BELONGED TO BALAJI GROUP OF EDUCATIONAL INSTITUTIONS AND CLAIMED ITS IN COME FOR THE YEAR EXEMPT U/S.11 OF THE ACT. DURING THE ASSES SMENT PROCEEDINGS, THE AO NOTICED THE PAYMENT OF RS.9.28 CRORES (ROUNDED OFF) TO ITS SISTER CONCERN NAMED M/S. SRI BALAJI CREATIVITIES (IN SHORT SBC). AO INVOKED THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT R.W.S. 13(1)(C) OF THE A CT AND HELD THE ENTIRE EXCESS INCOME AS INCREASED BY THE AO SHOULD BE TAXED AS PER THE ITA NO.2178/PUN/2016 SRI BALAJI SOCIETY 2 NORMAL PROVISIONS DENYING THE CLAIM OF EXEMPTION U/S. 11 OF THE ACT. IN THE ASSESSMENT, THE AO DENIED EXEMPTION TO BE IN CONSISTENT WITH THE EARLIER ASSESSMENT ORDERS OF HIS PREDECESSOR IN THE EARLIER ASSE SSMENT YEARS 2008,09, 2009-10, 2010-11 AND 2011-12. AO HELD IN PARA NO.7.2 OF HIS ORDER THAT THE ASSESSEE SOCIETY DIVERTED THE INCOME OF THE ASSESSEE OUT OF THE RESOURCES OF THE TRUST TO SBC VIOLATING THE PROVISIO NS OF SECTION 40A(2)(B) OF THE ACT. 3. DURING THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) NOTED VIDE PARA NO.9 THAT SIMILAR ISSUE REACHED THE TRIBUNAL IN THE EARLIER ASSESSMENT YEARS. THE TRIBUNAL, ON SIMILAR FACTS AND ISSUES, RAISED BY T HE REVENUE, DIRECTED FOR GRANT OF EXEMPTION TO THE ASSESSEE SOCIETY U/S.11 OF THE ACT BY HOLDING AS UNDER : 9. SINCE, FACTS BEING IDENTICAL, FOLLOWING APPELLA TE ORDERS OF MY LD. PREDECESSOR FOR A.Y.2008-09, 2010-11 AND 2011-12 WH ICH HAVE BEEN UPHELD AT THE LEVEL OF TRIBUNAL TOO, THE ASSESSING OFFICER IS DIRECTED TO GRANT EXEMPTION U/S.11 OF INCOME-TAX ACT............ 4. AGGRIEVED WITH THE SAID DECISION OF CIT(A) IN THE YEAR UNDER CONSIDERATION, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL W ITH THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD.CIT(A) WAS CORRECT IN HOLDING THAT THE PROVI SIONS OF SECTION 13(1)(C) AND 13(2)(C) OF THE I.T. ACT, 1961 WERE NOT ATTRACTED I N THIS CASE DESPITE THE FACT THAT PAYMENTS WERE MADE ON ACCOUNT OF ADVERTISEMENT TO PROHIBITED PERSONS? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS CORRECT IN HOLDING THAT THE ASSES SEE WAS ALLOWED TO CLAIM EXEMPTION U/S.11 OF THE I.T.ACT, 1961 DESPITE THE F ACT THAT THE PAYMENTS WERE MADE TO PROHIBITED PERSONS AS DEFINED U/S.13(1)(C) AND 13(2)(C) OF THE I.T. ACT, 1961. 5. LD. DR FOR THE REVENUE, WHILE RELYING ON THE ORDER OF THE AO, SUBMITTED THAT THE LD.CIT(A) WAR NOT CORRECT IN HOLDING TH AT THE PROVISIONS ITA NO.2178/PUN/2016 SRI BALAJI SOCIETY 3 OF SECTION 13(1)(C) AND 13(2)(C) OF THE ACT ARE NOT ATTRACTED IN THIS CASE DESPITE THE FACT THAT THE PAYMENTS WERE MADE ON ACCOU NT OF ADVERTISEMENT TO SBC THE PROHIBITED PERSONS. LD. DR PRAYED FOR REVERS ING THE ORDER OF CIT(A) AND ALLOWING THE APPEAL IN FAVOUR OF THE REVENUE. 6. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN I TA NOS.710 & 711/PUN/2015, DATED 30-06-2017 FOR THE A.YRS. 2010-11 AND 2011-12 AND READ THE CONTENTS OF PARA NO.7 TO DEMONSTRATE THAT TH E ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 7. WE HEARD BOTH THE PARTIES ON THIS ISSUE OF DENIAL OF EX EMPTION U/S.11 R.W.S. 13(1)(C) OF THE ACT AND FIND THAT SIMILAR ISSUE WAS ADJUD ICATED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR THE A.YRS. 2010-11 AND 2011-12. FOR THE SAKE OF COMPLETENES S, WE PROCEED TO EXTRACT THE OPERATIONAL PARA OF THE ORDER OF THE TRIBUNAL HERE AS UNDER : 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESP ECT TO DENIAL OF EXEMPTION BY INVOKING THE PROVISIONS OF SEC.13(1)(C) OF THE A CT. WE FIND THAT LD.CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HAD RELIED ON THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSE ES OWN CASE FOR A.Y. 2008-09. BEFORE US, REVENUE HAS NOT PLACED ANY MAT ERIAL ON RECORD TO DEMONSTRATE THAT THE FACTS IN THE YEAR UNDER APPEAL ARE DISTINGUISHABLE TO THAT OF EARLIER YEARS. IN VIEW OF THE AFORESAID FA CTS AND FOLLOWING THE SAME REASONING OF THE TRIBUNAL IN ASSESSEES OWN CASE FO R A.Y. 2008-09, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) . THUS, THE GROUNDS OF REVENUE ARE DISMISSED. FROM THE ABOVE, IT IS EVIDENT THAT THE TRIBUNAL GRANTED GA VE RELIEF TO THE ASSESSEE ON THE SIMILAR ISSUE OF APPLICABILITY OF PROVISIONS O F SECTION 11 R.W.S. 13(1)(C) OF THE ACT. IT IS UNDISPUTED FACT THAT THE AD VERTISEMENT EXPENDITURE WERE ALWAYS PAID BY THE ASSESSEE TO THE SAID SBC. IN THE PROCESS, THE TRIBUNAL RELIED ON ITS OWN ORDER IN THE ASSES SEES OWN CASE FOR THE A.Y. 2008-09 AS EXTRACTED IN PARA NO.5 OF THE ORDER OF TRIBUNAL. ITA NO.2178/PUN/2016 SRI BALAJI SOCIETY 4 CONSIDERING THE SETTLED NATURE OF THE ISSUE, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE REV ENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 02 ND DAY OF NOVEMBER, 2018. SD/- SD/- (SUSHMA CHOWLA) (D.KARUNAKAR A RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; DATED : 02 ND NOVEMBER, 2018. SATISH / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A)-10, PUNE 4. / THE CIT(EXEMPTION), PUNE 5. , , A / DR A, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE