M/s. Nachi Muthu Industrial Association, CHENNAI V. ACIT, Coimbatore

ITA 219/CHNY/1996

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64216 (ITAT-CHENNAI)
• Duration Of Justice: 16 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-08-2012
• Assessment Year: 1991-1992
• Appeal Filed On: 06-02-1996
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 219/MDS/1996 ASSESSMENT YEAR : 1991-92 M/S.NACHI MUTHU INDUSTRIAL ASSOCAITION, 102, COIMBATORE ROAD, POLLACHI. [PAN: CQ 0143] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(1), COIMBATORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE RESPONDENT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 28.08.2012 DATE OF PRONOUNCEMENT : 28.08.2012 ORDER PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), COIMBATORE DA TED 19.12.1995 FOR THE ASSESSMENT YEAR 1991-92. SHRI SAROJ KUMAR PARID A, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.E. B. RENGARAJAN, JUNIOR STANDING COUNSEL REPRESENTED ON BEHALF OF THE REVEN UE. 2. THE ONLY ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE ADDITION OF ` .2,50,950/- REPRESENTING SURPLUS FROM SAKTHI INSTIT UTE OF INFORMATION TECHNOLOGY AS TAXABLE INCOME IN THE HANDS OF THE AS SESSEE. THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.219 219219 219/M/ /M/ /M/ /M/96 9696 96 2 COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE SAID SURPLUS IS EXEMPT FROM TAX UNDER SECTION 10(22) OF THE INCOME TAX ACT. 3. THE ASSESSING OFFICER, WHILE PASSING THE ASSESS MENT ORDER FOLLOWING HIS EARLIER ORDER FOR THE ASSESSMENT YEAR 1990-91 H ELD THAT THE ASSESSEE WAS RUNNING A COMPUTER CENTRE SAKTHI INSTITUTE OF INFORMATION TECHNOLOGY AND THIS COMPUTER CENTRE LIES CLEARLY OUTSIDE THE P URVIEW OF EDUCATION INSTITUTION AS STIPULATED IN SECTION 10(22) OF THE ACT. HE OBSERVED THAT WHAT THE ASSESSEE CARRIED WAS ONLY A BUSINESS BY RUNNING A COMPUTER TRAINING CENTRE. 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) HELD FOLLOWING HIS EARLIER ORDER FOR THE ASSESSMENT YEAR 1990-91, THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 10(22) OR SECTI ON 11(4A) OF THE INCOME TAX ACT. 5. ON FURTHER APPEAL BY THE ASSESSEE, THIS TRIBUNA L HELD THAT FOLLOWING ITS EARLIER ORDER FOR THE ASSESSMENT YEAR 1990-91IN I.T .A. NO. 224/MDS/1994 DATED 07.08.2003 HELD THAT PROVIDING KNOWLEDGE IN C OMPUTER AND MAKING PEOPLE UNDERSTAND ITS FUNCTIONS AND EDUCATING THEM IN THE USE OF IT IS EQUALLY EDUCATIONAL AND THEREFORE, THE INCOME FROM THE TRAI NING CENTRE IS EXEMPT UNDER SECTION 10(22) OF THE ACT. 6. THE REVENUE FILED AN APPEAL BEFORE THE HONBLE HIGH COURT OF MADRAS AGAINST THIS ORDER OF THE TRIBUNAL. THE HONBLE HIG H COURT, BY ITS ORDER DATED 26.07.2011 IN TAX CASE (APPEAL) NO. 389 OF 2005 SET ASIDE THE ORDER OF THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.219 219219 219/M/ /M/ /M/ /M/96 9696 96 3 TRIBUNAL DATED 25.09.2004 FOR THE ASSESSMENT YEAR 1 991-92 AND REMANDED THE MATTER FOR FRESH CONSIDERATION FOLLOWING ITS EA RLIER ORDER IN T.C.(A) NO. 467 OF 2004 FOR THE ASSESSMENT YEAR 1990-91. IN THE LIGHT OF THE OBSERVATIONS OF THE HONBLE HIGH COURT AND ITS ORDE R IN T.C.(A) NO. 467 OF 2004, WE FEEL IT NECESSARY THAT THIS ISSUE HAS TO B E EXAMINED BY THE ASSESSING OFFICER AFRESH WHETHER THE COMPUTER TRAIN ING CENTRE OF THE ASSESSEE IS AN EDUCATIONAL INSTITUTION EXISTING SOL ELY FOR EDUCATIONAL PURPOSE AND NOT FOR THE PURPOSE OF PROFIT WITHIN THE MEANIN G OF PROVISIONS OF SECTION 10(22) OF THE ACT. THEREFORE, WE DIRECT THE ASSESSI NG OFFICER TO EXAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 28 TH AUGUST, 2012 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER CHENNAI, DATED, THE 28.08.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.