DDIT (E), New Delhi V. Niilm Delhi Education Trust, New Delhi

ITA 2331/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3728 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 01-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 29-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD MOHSIN ALAM
• Keywords: Benefit of exemption
• Section: 11

Judgement Text

I.T.A. NO.2331 /DEL/2009 1/4 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH F BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO. 2331 /DEL/2009 (ASSESSMENT YEAR 2005-06) DY. DIRECTOR OF VS. NIILM DELHI EDUCATIONAL TRUST INCOME TAX (E), B-II/61, M.C.I.E., INV. CIR-II, NEW DELHI. DELHI MATHURA ROAD, BADARPUR, NEW DELHI-110 044 (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAATN5594N APPELLANT BY: MOHD. MOHSIN ALAM, CIT DR RESPONDENT BY: SMT. INDRA BANSAL, FCA ORDER PER A. K. GARODIA, AM: 1. THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(A) XXI, NEW DELHI DATED 30.03.2009 FOR THE ASSESSMENT YEAR 2005-06. THE GROUNDS RAISE D BYTE REVENUE READ AS UNDER: 1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN GRANTING BENEFIT OF EXEMPTION U/S 11(2) OF RS.1,12,85,755/- WHEN THE A.O. HAS FOUND THE ASSESSEE HAS NOT PASSED ANY RESOLUTION AS REQUIRED AND DID NOT MAINTAIN A PROPER MINUTE BOOK OF SOCIETY. 2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) WAS JUSTIFIED IN ALLOWING EXEMPTION U/S 11 WHEN THE A.O. HAS FOUND THAT THE I.T.A. NO.2331 /DEL/2009 2/4 ASSESSEE HAS CLAIMED ACCUMULATION OF INCOME U/S 11 BY PRODUCING OF RESOLUTION VIDE DATED 23.09.2005 WHICH WAS NEVER PASSED AND CONSEQUENTLY ACTIVITY OF ASSESSEE WERE NOT CHARITABLE AS ITS ACTIVITY INVOLVED FRAUDULENT ACT. 3) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C SE, THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION OF EXPENDITURE OF RS.4,51,23,803/-. 2. IT WAS SUBMITTED BY THE LD. D.R. THAT ALTHOUGH THRE E GROUNDS ARE RAISED BUT THE ISSUE INVOLVED IS ONE ON LY AS TO WHETHER THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U /S 11 OR NOT. OUR ATTENTION WAS DRAWN TO PAGE 8 OF THE ASSESSMENT ORDER WHEREIN IT IS NOTED BY THE A.O. TH AT AS PER ANNEXURE WITH FORM 10, THERE WAS A RESOLUTION I N A MEETING HELD ON 23.09.2005 REGARDING ACCUMULATION O F FUNDS IN EXCESS OF 15% OF THE TOTAL RECEIPTS. HE SUBMITTED THAT SINCE THE BOARD MEETING WAS NOT PROP ER, THE ASSESSEE CANNOT BE ALLOWED EXEMPTION U/S 11 AND HENCE THE ORDER OF LD. CIT(A) SHOULD BE REVERSED AN D THAT OF THE A.O. SHOULD BE RESTORED. AS AGAINST TH IS, THE LD. A.R. FOR THE ASSESSEE SUPPORTED THE ORDER OF TH E LD. CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, AND PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE OR DERS OF AUTHORITIES BELOW. IT IS NOTED BY THE A.O. ON P AGE 7 OF THE ASSESSMENT ORDER THAT HE ASSESSEE CLAIMED DEDUCTION U/S 11(2) AT RS.112.85 LACS. IT IS ALSO NOTED BY THE A.O. THAT THE ASSESSEE HAS FILED FORM 10 AND I.T.A. NO.2331 /DEL/2009 3/4 THEREAFTER ON THE BASIS THAT THE CLAIM OF THE ASSES SEE REGARDING BOARD MEETING HELD ON 23.09.2005 COULD NO T BE SUBSTANTIATED BY HE ASSESSEE IT WAS HELD BY THE A.O. THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 11. IN THIS REGARD, WE HAVE GONE THROUGH THE PROVISIONS OF SECTION 11(2) AND WE FIND THAT AS PER THE PROVISION S OF SECTION 11(2), WHEN THE UTILIZATION OF FUNDS IS LES S THAN 85% AND THE ASSESSEE WANTED TO ACCUMULATE AND SET APART SUCH EXCESS FUNDS WHICH COULD NOT BE UTILIZED , THE ASSESSEE IS REQUIRED TO INTIMATE THE A.O. IN FORM 1 0 REGARDING SUCH ACCUMULATION OF FUNDS. FORM 10 WAS DULY FILED BY THE ASSESSEE AS HAS BEEN NOTED BY THE A.O. AT PAGE 7 OF THE ASSESSMENT ORDER. THERE IS NO OBJ ECTION OF THE A.O. IN THIS REGARD THAT THERE IS ANY DEFECT IN FORM 10 OR THAT THE SAID FORM WAS NOT FILED IN TIME. TH E ONLY OBJECTION OF THE A.O. IS THAT IN THE SAID FORM 10, REFERENCE WAS MADE TO A BOARD MEETING HELD ON 23.09.2005 BUT THE SAME COULD NOT BE SUBSTANTIATED BY THE ASSESSEE. WE FIND THAT THERE IS NO REQUIREMENT AS PER THE PROVISIONS OF SECTION 11(2) REGARDING ANY B OARD MEETING OR RESOLUTION BY ANY COMMITTEE OF TRUSTEES. A COPY OF FORM 10 IS AVAILABLE IN THE PAPER BOOK ON P AGES 27-28. THIS FORM 10 IS DULY SIGNED BY A TRUSTEE. CONSIDERING THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE SAID FORM 10 IS IN ORDER AND HENCE THE A.O. WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF TH E I.T.A. NO.2331 /DEL/2009 4/4 ASSESSEE REGARDING EXEMPTION U/S 11. WE ALSO FIND THAT THE A.O. HAS TAXED THE AMOUNT OF GROSS RECEIPT I.E. RS.6,63,64,182/- AND IN THIS PROCESS, HE HAS NOT AL LOWED DEDUCTION OF EXPENSES ALSO INCURRED BY THE ASSESSEE TO THE EXTENT OF RS.4,51,23,803/-. WE ARE IN AGREEMENT WITH THE LD. CIT(A) THAT THE ASSESSEE IS ELIGIBLE F OR EXEMPTION U/S 11 AND HENCE THE INCOME OF HE ASSESSE E HAS TO BE ASSESSED AT RS. NIL AFTER ALLOWING DEDUCT ION ON ACCOUNT OF EXPENSES INCURRED BY IT OF RS.451.23 LAC S AND AFTER ALSO ALLOWING TO THE ASSESSEE DEDUCTION U/S 1 1(2) ALSO OF RS.112.85 LACS. TOTAL OF THESE TWO IS MORE THAN 85% OF THE GROSS RECEIPT AND HENCE THE ENTIRE INCOM E OF THE ASSESSEE HAS TO BE ACCEPTED AS EXEMPTED U/S 11 OF THE ACT. IN VIEW OF THIS, WE DO NOT FIND ANY REASO N TO INTERFERE IN THE ORDER OF LD. CIT(A) AND HENCE WE CONFIRM THE SAME. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. 5. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 8 TH JUNE 2010. SD/- SD/- (RAJPAL YADAV) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:18 TH JUNE, 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI