ADIT (E)-II(2), MUMBAI V. VAIBHAV MEDICAL & EDUCATION FOUNDATION, MUMBAI

ITA 2248/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71098 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 10-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D PRABHAKAR REDDY
• Assessee Lawyers: RONAK G DOSHI
• Keywords: Charitable institution; Earning of tax free income
• Section: 12A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 2248/MUM/2012 (ASSESSMENT YEAR: 2007-08) ASST. DIT (EXEMPTION)-II(2) M/S. VAIBHAV MEDICAL & ROOM NO. 507, PIRAMAL CHAMBERS EDUCATION FOUNDATION LALBAUG, PAREL VS. C-1, ADITYA BIRLA CENTRE MUMBAI 400012 S.K. AHIRE MARG, WORLI MUMBAI 400030 PAN - AAATB3207A APPELLANT RESPONDENT APPELLANT BY: SHRI D. PRABHAKAR REDDY RESPONDENT BY: SHRI RONAK G. DOSHI DATE OF HEARING: 10.09.2013 DATE OF PRONOUNCEMENT: 10.09.2013 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-I, MUMBAI AND IT PERTAINS TO A.Y. 2007-08. 2. THE FOLLOWING GROUNDS WERE URGED BY THE REVENUE: - 1. WHETHER ON THE FACTS OF THE CASE AND IN LAW, T HE LD. CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT AND ALLOWI NG SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS, AS ALLO WING THE DEFICIT WILL TANTAMOUNT TO DOUBLE DEDUCTION ON ACCO UNT OF EXPENDITURE OUT OF EXEMPT INCOME. 2. WHETHER ON THE FACTS OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN IGNORING THE RATIO OF HON'BLE SUPREME COUR T JUDGEMENT IN THE CASE OF ESCORTS LTD. VS. UNION OF INDIA (199 IT R 43) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTIO N CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDE D BY LAW, IN ADDITION TO NORMAL DEDUCTION. 3. WE HAVE HEARD THE LEARNED D.R. AS WELL AS THE LEARN ED COUNSEL FOR THE ASSESSEE IN THIS REGARD AND CAREFULLY PERUSED THE R ECORD. THE ASSESSEE IS A CHARITABLE TRUST REGISTERED WITH CHARITABLE COMMISS IONER AS WELL AS UNDER ITA NO. 2248/MUM/2012 VAIBHAV MEDICAL & EDUCATION FOUNDATION 2 SECTION 12A OF INCOME TAX ACT, 1961. THE ACTIVITIES OF THE TRUST ARE TO PROVIDE FINANCIAL ASSISTANCE TO VARIOUS CHARITABLE INSTITUTIONS FOR MEDICAL RELIEF, SPORTS AND CULTURAL ACTIVITIES. FOR THE YEA R UNDER CONSIDERATION THE ASSESSEE CLAIMED SET OFF OF DEFICIENCY OF EARLIER Y EARS AGAINST CURRENT YEARS INCOME. IN THE OPINION OF THE AO THERE IS NO PROVIS ION FOR CARRY FORWARD OF EXPENDITURE SINCE THERE IS ONLY A PROVISION FOR CAR RY FORWARD OF INCOME UNDER SECTION 11(2) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE CONTE NDED BEFORE THE CIT(A) THAT THE ISSUE STANDS SQUARELY COVERED BY TH E DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL 264 ITR 110 AS WELL AS THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SWETAMBER MURTI PUJAK 211 ITR 293. IT WAS THUS CONTENDED THAT THE EXCESS EXPENDITURE INCURRED IN THE EARLIER YEARS CAN BE CARRIED FORWARD AND ADJUSTED AGAINST THE INCOME OF THE CURR ENT YEAR AND ANY UNADJUSTED AMOUNT CAN BE ALLOWED TO BE CARRIED FORW ARD. 5. THE LEARNED CIT(A) ACCEPTED THE CONTENTION OF THE A SSESSEE IN THE LIGHT OF THE DECISIONS CITED SUPRA. HE FURTHER OBSERVED T HAT THE DEFICIT IN EACH YEAR SHOULD BE WORKED OUT WITHOUT CONSIDERING THE ACCUMU LATION OF 25%/15%. ACCORDINGLY THE AO WAS DIRECTED TO VERIFY THE RECOR DS AND WORKOUT THE CORRECT AMOUNT OF LOSS AND ALLOW THE BALANCE LOSS, IF ANY, TO BE CARRIED FORWARD. 6. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) REVENU E IS IN APPEAL BEFORE US. AT THE TIME OF HEARING THE LEARNED D.R. SUBMITTED THAT IN THE ABSENCE OF CLEAR STATUTORY PRESCRIPTION PERMITTING THE ASSESSEE TO CARRY FORWARD AND SET OFF AGAINST THE INCOME OF THE CURRE NT YEAR THE AO WAS JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE. I T MAY BE NOTICED THAT THE AO REFERRED TO THE JUDGEMENT OF THE HON'BLE BOMBAY HIG H COURT (SUPRA) BUT THE CLAIM OF THE ASSESSEE WAS REJECTED ON THE GROUND TH AT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT HAS NOT REACHED ITS FINAL ITY THOUGH THE DEPARTMENT COULD NOT FILE SLP ON TECHNICAL REASONS. THE LEARNED D.R. COULD NOT POINT OUT ANY DIRECT CONTRARY DECISION ON THIS POINT AND HE IMPLIEDLY ADMITTED THAT AGAINST THE VIEW TAKEN BY THE HON'BLE BOMBAY HIGH COURT ITA NO. 2248/MUM/2012 VAIBHAV MEDICAL & EDUCATION FOUNDATION 3 REVENUE HAS NOT TAKEN IN FURTHER APPEAL/SLP TO THE HON'BLE SUPREME COURT. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE WE A RE OF THE FIRM VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A) DOES NOT CAL L FOR ANY INTERFERENCE. WE, THEREFORE, DISMISS THE APPEAL FILED BY REVENUE AND UPHOLD THE ORDER OF THE LEARNED CIT(A). ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH SEPTEMBER, 2013. SD/- SD/- (D. KARUNAKARA RAO) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 10 TH SEPTEMBER, 2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) I, MUMBAI 4. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.