CONFEDERATION OF INDIAN TEXTILE INDUSTRY, MUMBAI V. THE INCOME TAX OFFICER (EXEMPTION)-1(2), MUMBAI

ITA 2242/MUM/2023

AI Insights

The Confederation of Indian Textile Industry appealed against the orders of the Income Tax Officer (Exemptions) for the assessment years 2015-16 and 2016-17, which denied them exemption under section 11 of the Income Tax Act. The primary contention was that the appeals were decided ex-parte without proper adjudication on merits, and the income from non-members was treated as business income. The Tribunal noted that a similar issue had been decided in favor of the assessee in a previous year and restored the matter to the CIT (A)/NFAC for a decision on merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302300 (ITAT-MUMBAI)
• Duration Of Justice: 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-06-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 20-06-2023
• Other Referred Cases: ITA No. 2435/Mum/2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; TDS
• Section: 11; 143(3); 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘C‘ BENCH MUMBAI BEFORE: SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.2242/Mum/2023 (Assessment Year :2016-17) & ITA No.2243/Mum/2023 (Assessment Year :2015-16) Confederation of Indian Textile Industry 1508,Maker Chambers-V 221, Nariman Point Mumbai- 40021 Vs. Income Tax Officer (Exemptions) 1(2) Piramal Chambers, Lalbaug Mumbai- 40012 PAN/GIR No.AAACT0174H (Appellant) .. (Respondent) Assessee by Ms. Urvi Mehta Revenue by Shri Soumendu Kumar Dash Date of Hearing 30/06/2023 Date of Pronouncement 10/07/2023 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeals have been filed by the assessee against the separate impugned orders dated 15/05/2023 and 06/06/2023, for the quantum of the assessment passed u/s 143(3) for the A.Y. 2015-16 and 2016-17. ITA NOs. 2242 & 2243/Mum/2023 AYs. 2015-16 & 2016-17 Confederation of Indian Textile Industry 2 2. In both the appeals common grounds raised are; firstly, the Ld. NFAC has erred in deciding the appeal of the assessee ex-parte without adjudicating the issues on its merits; secondly, non- granting of exemption u/s. 11 of the Act); and lastly, not relying the decision of earlier years including the current years to be carried forward for set-off in subsequent years. Apart from that in A.Y. 2016-17 assessee has taken ground for relief of TDS amounting to Rs. 1,496/-. 3. Brief facts are that the assessee is registered u/s 12A of the Act looking to its charitable objects and its income and expenditure account was subject to computation and exemption u/s 11 of the Act. The assessee is confederation of Indian Textile Industry registered u/s 25 of the companies Act. Objects of the trust have been incorporated and the assessment order. The Ld. AO observed that, as per the memorandum of association assessee’s nature of activity is limit to its member only and working on ‘mutuality’ concept. However, he noted that income from non members be treated as business income and also after referring to CBDT circular no. 11/2008 dated 19/12/2008 and held that the assessee is a mutual association and not a charitable entity. Accordingly, he held that and entire receipt received from non members is actually business income and denied exemption u/s. 11. ITA NOs. 2242 & 2243/Mum/2023 AYs. 2015-16 & 2016-17 Confederation of Indian Textile Industry 3 4. The Ld. CIT (A) has dismissed the appeal of ex-parte on the ground that notices send to the assessee was not complied with and without adjudicating on merits has confirmed the addition. 5. Before us the Ld. Counsel brought on record that in AY 2013- 14, this Tribunal by order dated 17/07/2020 in ITA No. 2435/Mum/2019 has allowed the exemption u/s 11 on exactly similarly set of facts. However, Ld. DR submitted that the matter should be restored back to the file of the first appellate authority for deciding the issues on merits. 6. We have considered the material on records and find that Ld. NFAC/CIT(A) has decided the ex-parte without adjudicating on merits and accordingly, without even considering the judgment of Tribunal in assessee’s own case on similarly set of facts. Accordingly, we restore both the appeals to the file of Ld. CIT (A)/NFAC to decide the issue on merits after considering the decision of the Tribunal and assessee’s own case and grant consequential relief. 7. In the result, both the appeals of the assessee are allowed for the statistical purpose. Order pronounced on 10 th July, 2023 Sd/- (BR BASKARAN) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 10/07/2023 ITA NOs. 2242 & 2243/Mum/2023 AYs. 2015-16 & 2016-17 Confederation of Indian Textile Industry 4 Shubham P.Lohar Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy//