ACIT(Exemption),Circle-2, Chandigarh V. M/s HAryana Livestock Development Board, Panchkula

ITA 230/CHANDI/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2983 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 09-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA
• Assessee Lawyers: A K SOOD
• Keywords: Set aside
• Section: 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 230/CHD/2020 / ASSESSMENT YEAR : 2014-15 THE ACIT (EXEMPTIONS), CIRCLE-2, CHANDIGARH M/S HARYANA LIVESTOCK DEVELOPMENT BOARD, PLOT NO. 9-12, PASHUDHAN BHAWAN, SECTOR-2, PANCHKULA ./PAN NO: AAAAH1452Q / APPELLANT /RESPONDENT HEARING THOUGH VIDEO CONFERENCING / REVENUE BY : SMT. C. CHANDRAKANTA, CIT /ASSESSEE BY : SHRI A.K. SOOD, C.A. /DATE OF HEARING : 20.04.2021 / DATE OF PRONOUNCEMENT : 16.06.2021 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER DATED 11.12.2019 OF THE COMMISSIONER OF INCOM E TAX (APPEALS), PANCHKULA [HEREINAFTER REFERRED TO AS CIT(A)] 2. THE REVENUE IN THIS APPEAL HAS TAKEN FOLLOWING G ROUNDS OF APPEAL:- I . THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD, CIT(A) HAS ERRED IN LAW IN NOT APPRECIATING THE FAC T THAT THE ASSESSEE HAS GIVEN A VERY GENERAL PURPOSE FOR ACCUM ULATION I.E. 'TO ACHIEVE THE OBJECTS OF THE BOARD' WHICH IS IN CLEAR DEFIANCE OF STATUTORY PROVISIONS THAT PURPOSES OF ACCUMULATION HAVE TO BE SPECIFIC. ITA NO. 230-CHD-2020 M/S HARYANA LIVESTOCK DEVELOPMENT BOARD, PANCHKULA 2 II. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT{A) HAS ERRED IN LAW IN NOT TAKING COGNIZANCE OF THE ASSESSEE'S OBJECTS IN MEMORANDUM OF ASSOCIATION IN TRUE SENSE AS THE ASSESSEE HAS ITSELF MENTIONED IN POINT 1.5.1 AS 'OBJECTS' WHICH THE CIT (A) HAS HELD TO BE AS A SIN GULAR OBJECT. III. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN NOT TAKING INTO CONSIDER ATION POINTS 1.5.2 TO 1.5.20 OF ASSESSEE'S MEMORANDUM OF ASSOCIATION, WHICH ARE EXTENSION OF OBJECTS OF THE ASSESSEE. IV. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD, CIT(A) HAS ERRED IN LAW IN NOT TAKING IN CONSIDERAT ION THE JUDICIAL PRONOUNCEMENT OF HON'BLE HIGH COURT, REPOR TED IN 199 ITR 819, WHICH GOES TO THE ROOT OF THE MATTER, AND WHEREIN IT IS MENTIONED THAT IT IS NOT SUFFICIENT T O MERELY INDICATE OBJECTS OF THE TRUST TO BE ELIGIBLE FOR AC CUMULATION UNDER SECTION 11(2). V. THAT THE APPELLANT CRAVES TO LEAVE, ADD OR AMEN D THE GROUNDS OF APPEAL ON OR BEFORE THE APPEAL HEARD AND DISPOSED OFF. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SO CIETY HAS BEEN GRANTED REGISTRATION U/S 12AA OF THE INCOME TAX ACT , 1961 BY THE COMMISSIONER OF INCOME TAX, PANCHKULA VIDE ORDER NO . 5405 DATED 27/1/2003. THE SOCIETY RECEIVED GOVERNMENT GRANTS AND WAS UNDERTAKING DEVELOPMENT PROJECTS OF THE GOVERNMENT THROUGH VARIOUS GOVERNMENT AGENCIES. THE MAIN OBJECTIVE OF THE SOCI ETY WAS TO IMPROVE THE BREEDING AND MANAGEMENT OF LIVESTOCK PRODUCTION THROUGHOUT THE TERRITORY OF HARYANA. DURING THE YEAR UNDER CONSIDE RATION, THE ASSESSEE HAD SHOWN ANNUAL INCOME OF RS. 34,17,64,841/-. THE MAIN SOURCE OF INCOME OF THE ASSESSEE WAS ONLY GRANTS RECEIVED FRO M GOVERNMENT. AS ITA NO. 230-CHD-2020 M/S HARYANA LIVESTOCK DEVELOPMENT BOARD, PANCHKULA 3 PER SECTION 11, THE ASSESSEE WAS REQUIRED TO APPLY 85% OF ITS INCOME FOR THE OBJECTS OF THE SOCIETY. THE 85% OF RS. 34,17,64 ,841/- IS RS. 29,05,00,116/-. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SPENT ONLY RS. 25,95,33,703/- ON THE OBJECTS OF THE SOCIE TY AND, THUS, THERE WAS A SHORTFALL OF RS. 3,09,66,413/- IN UTILIZATION OF 85% OF INCOME RECEIVED. THE ASSESSEE FILED FORM 10 TO CARRY FORWA RD THE SHORTFALL AS ACCUMULATION. THE ASSESSING OFFICER REJECTED FORM 1 0 AS THE ASSESSEE HAS NOT BEEN ABLE TO SPECIFY THE OBJECTS FOR WHICH THE ACCUMULATION HAS BEEN MADE AND AS SUCH THE BENEFIT OF SECTION 11(2) WAS NOT ALLOWED. THEREFORE, ASSESSING OFFICER MADE ADDITION OF RS.3 ,09,66,412/-. 4. IN APPEAL, THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE IN FORM NO.10 HAD SPECIFICALLY MENTIONED THAT THE PURPOSE FOR ACCUMULATION OF INCO ME WAS TO ACHIEVE THE OBJECTS OF THE BOARD. HE FURTHER OBSERVED THAT THE OBJECTS FOR WHICH THE ACCUMULATION WAS PROPOSED TO BE WERE VERY CLEAR AND SPECIFIC AS THERE WAS ONLY A SINGULAR OBJECT OF THE APPELLANT B OARD BEING TO IMPROVE THE BREEDING AND PRODUCTION OF LIVESTOCK IN THE STA TE OF HARYANA. HE, THEREFORE, OBSERVED THAT THE ASSESSEE HAD A SINGULA R OBJECT SPECIFIC AND NOT GENERAL FOR THE PURPOSE OF WHICH THE INCOME WAS ACCUMULATED. HE ACCORDINGLY, SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. ITA NO. 230-CHD-2020 M/S HARYANA LIVESTOCK DEVELOPMENT BOARD, PANCHKULA 4 5. AFTER HEARING THE LD. COUNSEL FOR THE ASSESSEE F OR THE PURPOSE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT( A). THERE IS NO MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORD INGLY DISMISSED. ORDER PRONOUNCED ON 16.06.2021. SD/- SD/- ( N.K. SAINI) (SANJAY GARG) /VICE PRESIDENT / JUDICIAL MEMBER DATED : 16.6.2021 . . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR