DCIT (Exemptions), Circle-2, Ahmedabad V. Shree Bharatimiya Memorial Foundation, Surat,

ITA 2619/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4955 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 28-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Keywords: Charitable institution
• Section: 143(3); 11

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 2619/AHD/2017 ( ASSESSMENT YEAR : 2013-14) DY. COMMISSIONER OF INCOME-TAX (EXEMPTIONS) CIRCLE-2, AHMEDABAD 2 ND FLOOR, NATURE VIEW BUILDING, OPP: H. K. HOUSE, ASHRAM ROAD, AHMEDABAD 380009 / VS. SHREE BHARTIMAIYA MEMORIAL FOUNDATION BHARAT CANCER HOSPITAL, SURAT BARDOLI ROAD, SAROLI, SURAT - 395010 ./ ./ PAN/GIR NO. : AAFTS1489L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. K. DEV, SR.D.R. / RESPONDENT BY : SHRI HARDIK VORA, A.R. DATE OF HEARING 08/05/2019 !'# / DATE OF PRONOUNCEMENT 29/05/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-9, AHMEDABAD, (CIT(A) IN SHORT), DATED 19.09.2017 ITA NO. 2619/AHD/17 [DCIT(EXEMP.) VS. SHREE BHARTIMAIYA MEMORIAL FOUNDATION] A.Y. 2013-14 - 2 - ARISING IN THE ASSESSMENT ORDER DATED 30.03.2016 PA SSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT) CONCERNING AY 2013-14. 2. THE GROUND OF APPEAL RAISED BY REVENUE READS AS UNDER: 1. THE LD. CIT(A) HAS ERRED IN THE LAW AND ON FACT S IN ALLOWING CARRY FORWARD EXCESS EXPENDITURE FOR FUTUR E YEARS AGAINST ITS FUTURE INCOME IN ABSENCE OF ANY EXPRESS PROVISION IN THE ACT REGARDING THE SAME. 3. THE ASSESSEE IS A PUBLIC CHARITABLE TRUST AND HAS BEEN GRANTED REGISTRATION UNDER S.12A(A) OF THE INCOME TAX ACT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE TRUST HAS CL AIMED SET OFF OF DEFICITS ON EARLIER YEAR AY 2009-10 TO THE EXTENT O F RS.1,21,07,908/-. THE AO WHILE PASSING THE ASSESSM ENT ORDER UNDER S.143(3) OF THE ACT DISALLOWED CARRIED FORWAR D DEFICIT FOR BEING SET OFF. 4. IN THE FIRST APPEAL AGAINST THE AFORESAID ACTION OF THE AO, THE CIT(A) ALLOWED CARRY FORWARD OF EXCESS EXPENSES OVE R NEXT YEARS. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LEARNED DR FOR THE REVENUE RELIED UPON THE O RDER OF THE AO WHILE THE LEARNED AR FOR THE ASSESSEE RELIED UPO N THE ORDER OF THE CIT(A) AS WELL AS VARIOUS JUDICIAL PRONOUNCEMEN TS IN THIS REGARD. ITA NO. 2619/AHD/17 [DCIT(EXEMP.) VS. SHREE BHARTIMAIYA MEMORIAL FOUNDATION] A.Y. 2013-14 - 3 - 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE SOLITARY QUESTION THAT ARISES FOR ADJUDICATION WHET HER THE TRUST HAS INCURRED DEFICIT DUE TO EXCESS SPENDING ON THE OBJE CT OF THE TRUST DURING THE PARTICULAR YEAR AND WHETHER EXCESS EXPEN DITURE INCURRED IN EARLIER YEARS BY THE TRUST COULD BE ALL OWED TO BE SET OFF AGAINST THE INCOME OF SUBSEQUENT YEAR BY INVOKING S ECTION 11 OF THE ACT. THE ISSUE IS NO LONGER RES INTEGRA. THE HONBLE GUJARAT HIGH COURT IN CIT VS. SHRI PLOT SHWETAMBER MURTI PU JAK JAIN MANDAL (1995) 211 ITR 0293 (GUJ) HAS RENDERED DECIS ION FAVOURABLE TO THE ASSESSEE ON THE VERY ISSUE. THE HONBLE GUJARAT HIGH COURT HAS HELD THAT THERE IS NOTHING IN THE LA NGUAGE OF SECTION 11(1)(A) OF THE ACT TO INDICATE THAT THE IN COME FROM TRUST PROPERTY SHOULD HAVE BEEN APPLIED FOR CHARITABLE OR RELIGIOUS TRUSTS ONLY IN THE YEAR IN WHICH SUCH INCOME HAS AR ISEN. THE EXPENDITURE INCURRED IN THE EARLIER YEAR CAN BE MET OUT OF THE INCOME OF THE SUBSEQUENT YEAR AND UTILIZATION OF SU CH INCOME FOR MEETING THE EXPENDITURE OF THE EARLIER YEAR WOULD A MOUNT TO SUCH INCOME BEING APPLIED FOR CHARITABLE OR RELIGIOUS TR USTS. THE HONBLE GUJARAT HIGH COURT FURTHER HELD THAT INCOME DERIVED FROM TRUST PROPERTY HAS TO BE COMPUTED ON COMMERCIAL PRI NCIPLES AND CONSEQUENTLY DEFICIT ARISING OUT OF EXPENDITURE OVE R INCOME FOR THE PREVIOUS YEAR SHOULD, THEREFORE, BE SET OFF AGA INST SURPLUS OF INCOME OVER EXPENDITURE RELATING TO THE SUBSEQUENT YEAR. SIMILAR VIEW HAS BEEN EXPRESSED IN CIT VS. MAHARANA OF MEWA R CHARITABLE FOUNDATION (1987) 164 ITR 439 (RAJ) AND CIT VS. MATRISEVA TRUST (2000) 242 ITR 20 (MAD). WHATEVER LITTLE CONTROVERSY MIGHT BE EXISTING HAS BEEN PUT TO REST BY THE RECENT DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT(EXEMPTION) VS. SUBROS EDUCATION SOCIETY (2018) 303 CTR 1 ITA NO. 2619/AHD/17 [DCIT(EXEMP.) VS. SHREE BHARTIMAIYA MEMORIAL FOUNDATION] A.Y. 2013-14 - 4 - (SC). HENCE, THE CIT(A) IN OUR VIEW HAS CORRECTLY APPLIED THE LAW AS EVOLVED BY THE JUDICIAL PRECEDENTS. IN THE ABSENCE OF ANY INFIRMITY IN THE ORDER OF THE CIT(A), WE DECLINE TO INTERFERE THEREWITH. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. SD/- SD/- (RAJPAL YADAV) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 29/05/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 29/05/201 9 ITA NO. 2619/AHD/17 [DCIT(EXEMP.) VS. SHREE BHARTIMAIYA MEMORIAL FOUNDATION] A.Y. 2013-14 - 5 - 1.DATE OF DICTATION ON 27.05.2019 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 27.05.2019 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 29.05.2019 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 29.05.2019 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 29.05.2019 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 9.05.2019 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER