Sri Pavan Educational Society , Tadipatri V. Asst. Commissioner of Income Tax, Circle-1, Ananthapur

ITA 222/Hyd/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3633 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 04-11-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 01-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Maximum Marginal Rate; Condonation of delay
• Section: 143(3); 12AA; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 222 /HYD./201 8 ASSESSMENT YEAR: 20 11 - 12 SRI PAVAN EDUCATIONAL SOCIETY VS. ACIT, CIRCLE 1 C/O SH. T.CHAITANYAKUMAR, ADVOCATE ANANTHAPUR FLAT NO.102, GOWRI APARTMENT URDULANE HIMAYATHNAGAR HYDERABAD PAN: AABAS4131Q (APPELLANT) (RESPONDENT) FOR ASSESSE E : S H. T.CHAITANYA KUM AR, A.R. FOR REVENUE : S MT. MATTA PADMA, D.R. DATE OF HEARING : 04 / 11 /19 DATE OF PRONOUNCEMENT : 11 / 11 /19 O R D E R THIS IS ASSESSEES APPEAL FOR A.Y. 2011 - 12 AGAINST THE ORDER OF THE LD.CIT(A), KURNOOL DATED 11 TH MAY, 2017. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY, WHICH DERIVES INCOME FROM EDUCATIONAL INSTITUTIONS. IT HAS FILED ITS RETURN OF INCOME FOR THE AY 201 1 - 12 ON 31.03.2013 ADMITTING A TOTAL INCOME OF RS. NIL AFTER CLAIMING EXEMPTION U/S 10(23C)(IIIAD) OF THE INCOME TAX ACT, 1961 (THE ACT). DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT , THE AO OBSERVED THAT THE AIMS AND OBJECTIVES OF THE A SSESSEE SOCIETY INCLUDED, ALSO OBJECTS WHICH ARE CHARITABLE IN NATURE AND NOT SOLELY FOR EDUCATIONAL PURPOSES . THEREFORE, T HE AO DENIED ASSESSEES CLAIM OF EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT . THE AO ALSO OBSERVED THAT ASSESSEE HAS NOT BEEN RECOGNISED U/S 12AA AND THEREFORE HELD THAT THE ENTIRE RECEIPT OF RS.15,7 2,470 / - IS LIABLE TO BE TAXED AT THE MAXIMUM MARGINAL RATE. ITA NO. 222 /HYD./201 8 AY 201 1 - 12 S RI PAVAN EDUCATIONAL SOCIETY, TADIPATRI VS. ACIT, CIRCLE 1, ANANTHAPUR 2 2.1. AGGRIEVED , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) , W HO CONFIRMED THE ORDER OF THE AO FOR NON - APPEARANCE OF THE ASSESSEE AND ALSO ON MERITS OF THE CASE. 2.2. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS A DELAY OF 86 DAYS IN FILING A PPEAL BEFORE THE TRIBUNAL AND HAS FILED AN APPLICATION FOR CONDONATION OF DELAY STATING THAT THE APPEAL ORDER WAS NOT SENT TO HIM , BUT WAS SENT TO HIS A.R. , WHO DID NOT INFORM HIM ABOUT THE RECEIPT OF THE ORDER AND, THEREFORE, THERE IS A DELAY OF 86 DA YS IN FILING THE APPEAL. 3.1. ON GOING THROUGH FORM 35 , I FIND THAT THE ADDRESS GIVEN THEREIN FOR SERVICE OF NOTICES TO THE ASSESSEE WAS THAT OF THE AUTHORISED REPRESENTATIVE ONLY. THEREFORE, I AM INCLINED TO ACCEPT THAT THE ORDER WAS SERVED ON HIS A. R., WHO MAY NOT HAVE INFORMED THE ASSESSEE. THEREFORE, I CONDONE THE DELAY OF 86 DAYS IN FILING OF THE APPEAL BEFORE THE TRIBUNAL. 3.2. ON MERITS , THE LD.COUNSEL SUBMITTED THAT THOUGH THE OBJECTIVES OF THE ASSESSEE SOCIETY ARE NOT SOLELY FOR EDUCATIONAL PURPOSES AND SOME OF THE OBJECTIVES ARE ALSO CHARITABLE IN NATURE , SINCE THE ASSESSEE CARRIED ON ONLY EDUCATIONAL ACTIVITY DURING THE RELEVANT AY , IT EXISTED SOLELY AND WHOLLY FOR EDUCAT IONAL PURPOSES AND SINCE ITS TOTAL RECEIPTS DURING THE RELEVANT F.Y. IS LESS THAN RS.1 CRORE, IT WAS ELIGIBLE TO CLAIM EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT . HE SUBMITTED THAT THE WORDS USED IN THE SECTION ARE EXISTING SOLELY FOR EDUCATIONAL PURPOSE S AND NOT FORMED FOR PROFIT . THEREFORE , HE PRAYED THAT THE AO MAY BE DIRECTED TO ALLOW EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT TO THE ASSESSEE. 3.2. LD.DR ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. HAVING REGARD TO RIVAL CONTE NTIONS AND MATERIAL PLACED ON RECORD, I FIND THAT THE ASSESSEES ONLY ACTIVITY THROUGHOUT THE PERIOD SINCE ITS INCEPTION IS CARRYING ON OF EDUCATIONAL ACTIVITIES ONLY . THEREFORE, IT CAN SAFELY BE SAID THAT IT EXISTED SOLELY FOR EDUCATIONAL PURPOSES DURIN G RELEVANT AY. HOWEVER, THESE FACTS NEED VERIFICATION BY THE AO. THEREFORE, I DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE AO FOR THE LIMITED PURPOSE TO FIND OUT WHETHER THE ITA NO. 222 /HYD./201 8 AY 201 1 - 12 S RI PAVAN EDUCATIONAL SOCIETY, TADIPATRI VS. ACIT, CIRCLE 1, ANANTHAPUR 3 ASSESSEE SOCIETY EXISTED SOLELY FOR EDUCATIONAL PURPOSES I.E. IT IS CARRYING ON ONLY EDUCATIONAL ACTIVITIES DURING THE RELEVANT A.Y. AND IF IT IS FOUND TO BE CORRECT, THE ASSESSEE IS TO BE ALLOWED EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT . 5. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 11 TH NOVEMBER, 2019. SD/ - (P MADHAVI DEVI) JUDICIAL MEMBER DATED: 11 TH NOVEMBER, 2019. *GMV COPY FORWARDED TO: 1. SRI PAVAN EDUCATIONAL SOCIETY, C/O SH. T.CHAITANYA KUMAR, ADVOCATE , FLAT NO.102, GOWRI APARTMENT , URDU LANE , HIMAYATH N AGAR , HYDERABAD 2. ACIT, CIRCLE 1 , A NANTHAPUR 3. PR.CIT, KURNOOL 4. D.R. ITAT HYDERABAD 5. GUARD FILE // C O P Y // ITA NO. 222 /HYD./201 8 AY 201 1 - 12 S RI PAVAN EDUCATIONAL SOCIETY, TADIPATRI VS. ACIT, CIRCLE 1, ANANTHAPUR 4 1. DRAFT DICTATED ON 04/11/ 19 2. DRAFT PLACED BEFORE THE AUTHOR 0 5 /11/19 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SRPS 11/11/19 6. KEPT FOR PRONOUNCEMENT 7. FILE SENT TO BENCH CLERK