ITO (Exemptions), New Delhi V. M/s. Khetri Trust, New Delhi

ITA 2547/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7020 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 30-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K TEWARI
• Assessee Lawyers: P J KHANNA
• Keywords: Rule of consistency
• Section: 143(3)

Judgement Text

ITA NO. 2547/DEL/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT & SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.-2547/DEL/2015 ( ASSESSMENT YEAR: 2011-12) ITO(EXEMPTIONS) WARD-1(4), ROOM NO. 2421, PRATYAKSH KAR BHAWAN, 24 TH FLOOR, E-2, BLOCK, DR. S.P. MUKHERJEE CIVIC CENTRE, NEW DELHI. VS KHETRI TRUST, 5, SARDAR PATEL MARG, NEW DELHI. PAN NO. AAATK0565C APPELLANT RESPONDENT REVENUE BY SH. K. TEWARI, SR. DR ASSESSEE BY SH. P.J. KHANNA, CA ORDER PER K. NARASIMHA CHARY, J.M. CHALLENGING THE ORDER DATED 09.02.2015 IN APPEAL NO . 563/2013-14 PASSED BY THE COMMISSIONER OF INCOME TA X (APPEALS)-40, NEW DELHI (LD. CIT(A)). REVENUE PR EFERRED THIS APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT (A) HAS ERRED IN NOT ADJUDICATING THE ADDIT ION OF THE ACCUMULATED SURPLUS OF RS. 71,00,470/- AS INCOME OF THE TRUST IGNORING THIS FACT THAT ASSESSEE FAILED TO UTILIZED THE SAME WITHIN THE SPECIFIED TIME. 2. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. DATE OF HEARING 10.07.2018 DATE OF PRONOUNCEMENT 10.07.2018 ITA NO. 2547/DEL/2015 2 2. FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHA RITABLE TRUST REGISTERED ON 14.04.1987 AND IS ALSO REGISTERED U/S 12AA(1) OF THE INCOME TAX ACT, 1961 (THE ACT) DATED 14.06.1989. THE TRUST WAS FOUNDED BY RAJA BAHADUR SINGH OF KHETRI OF RAJASTHA N. THE RAJA HAD MADE A WILL OF HIS OWN PROPERTY IN THE NAME OF THE TRUST BUT HIS LEGAL HAIRS HAD MADE A CLAIM ON THE SHARE OF TH E PROPERTY AND THE DISPUTE IS PENDING IN THE HIGH COURT AND THE PR OBATE IS YET TO BE GRANTED. THE CASES ARE PENDING IN THE RAJASTHAN AND DELHI HIGH COURTS AND THERE IS STATUS QUO ON THE PROPERTI ES OF THE TRUST. THE ASSESSEE RECEIVES THE RENTAL INCOME AND THE FDR INTEREST ETC. WHICH ARE UTILIZED FOR ADMINISTRATIVE EXPENSES OF T HE TRUST. THE AO HAS BEEN DENYING THE EXEMPTION U/S 11(1) OF THE ACT ON THE GROUND THAT THE DISPUTE REGARDING THE PROBATE OF TH E WILL REGARDING THE TRUST IS STILL PENDING AND TRUST IS Y ET TO TAKE A LEGAL STATUS AND AS SUCH THE ASSESSEE CANNOT BE ASSESSED FOR ANY INCOME. THE SAME WAS, HOWEVER, ALLOWED BY THE HONB LE DELHI HIGH COURT FOR THE AY 1991-92 VIDE THE ORDER DATED 17.07.2014 IN ITA NO. 162/2001. THE AO HAD ALSO DENIED THE EXEMP TION DURING THE AY 2010-11 BUT THE SAME HAS BEEN ALLOWED BY THE LD. CIT (A)- XI, DELHI FOLLOWING THE ORDER OF THE HONBLE DELHI HIGH COURT VIDE THE APPELLATE ORDER DATED 17.10.2014. THE AO HAS A GAIN DENIED THE EXEMPTION U/S 11(1) OF THE ACT DURING THE CURRE NT AY 2011-12 FOLLOWING THE EARLIER YEARS ORDER MAINLY ON THE GR OUND THAT THE ASSESSEE HAS NOT DONE ANY CHARITABLE WORK. 3. THE ASSESSEE WAS IN APPEAL BEFORE THE LD. CIT(A) AGAINST THE ORDER OF THE AO AND IT IS SUBMITTED THAT THE AO IS NOT JUSTIFIED TO DENY THE EXEMPTION U/S 11(1) OF THE ACT. THE ASSES SEE ALSO RELIED ITA NO. 2547/DEL/2015 3 ON THE ORDER OF THE LD. CIT (A)-XI, DELHI FOR THE A Y 2010-11 IN WHICH THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED I N A DETAILED ORDER VIDE THE ORDER DATED 17.10.2014. LD. CIT(A) FOLLOWED THE RULE OF CONSISTENCY AND THE PRECEDENCE OF THE EARLI ER APPELLATE ORDERS OF THE AY 2010-11 OF HIS PREDECESSOR AND DIR ECTED THE AO TO ALLOW THE EXEMPTION TO THE ASSESSEE WITHOUT CONS EQUENTIAL BENEFITS. HENCE THE REVENUE IS BEFORE US IN THIS A PPEAL. 4. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE ARGUMENTS OF THE COUNSEL ON EITHER SIDE. THERE IS NO DENIAL OF THE FACT THAT UNDER THE VERY SIMILAR CIRCUMSTANCES THE HONBLE HIGH COURT ALLOWED THE EXEMPTION U/S 11(1) OF THE ACT BY ORDER DATED 17.07.2014 IN ITA NO. 162/2001 FOR THE AY 1991-92 A ND EVER SINCE THE TRIBUNAL HAS BEEN FOLLOWING THE SAME WHEN EVER THIS DISPUTE HAS ARISEN. 5. WE HAVE PERUSED THE ORDERS PASSED BY THE TRIBUNA L IN RESPECT OF THE ASSESSMENT YEARS 2001-02 TO 2010-11 THE COPIES OF WHICH ARE PRODUCED BEFORE US AND THIS TRIBUNAL HAS ALLOWING THE CLAIM OF THE ASSESSEE U/S 11(1) OF THE ACT CONSISTE NTLY. COPIES OF THE ORDERS DATED 11.02.2016 AND 22.07.2016 PASSED B Y THE ASSESSING OFFICER U/S 143(3) OF THE ACT FOR THE ASS ESSMENT YEARS 2013-14 AND 2014-15 ARE PRODUCED BEFORE US TO DEMON STRATE THE FACT THAT THE ASSESSING OFFICER ALLOWED THE CLAIM O F THE ASSESSEE. 6. IN THE CIRCUMSTANCES, FOLLOWING THE RULE OF CONS ISTENCY AND PRECEDENCE, IN VIEW OF THE CONSISTENT VIEW TAKEN BY THIS TRIBUNAL WHILE RESPECTFULLY FOLLOWING THE ORDERS OF THE HON BLE HIGH COURT, WE DO NOT FIND ANY ILLEGALITY OR IRREGULARITY IN TH E IMPUGNED ORDER, ITA NO. 2547/DEL/2015 4 AS SUCH, WHILE UPHOLDING THE SAME, WE DO NOT FIND A NY MERITS IN THIS APPEAL. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ACCO RDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.07.2018 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA CHA RY) PRESIDENT JUD ICIAL MEMBER DATED: 10.07.2018 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 10.07.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.07.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 10.7.18 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 10.7.18 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 11.7.18 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 11.7.18 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 11.7 .18 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER