M/s. Academy of Higher Education, Trichy V. ITO, Trichy

ITA 2659/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4308 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-04-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 14-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R SIVARAMAN
• Section: 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2659/MDS/2016 / ASSESSMENT YEAR : 2012-13 M/S. ACADEMY OF HIGHER EDUCATION, NATIONAL COLLEGE CAMPUS, DINDIGUL ROAD, TIRUCHIRAPALLI 620 001. PAN: AABTA3992J V. THE INCOME TAX OFFICER, EXEMPTION WARD, TIRUCHIRAPALLI 620 001. ( ! /APPELLANT) ( '# ! /RESPONDENT) ! $ /APPELLANT BY : SHRI R. SIVARAMAN, ADVOCATE '# ! $ /RESPONDENT BY : SHRI SASIKUMAR, JCIT $ /DATE OF HEARING : 19.04.2017 $ /DATE OF PRONOUNCEMENT : 05.06.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI DATED 29.07.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2012 -13. 2. SHRI R. SIVARAMAN, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE SOCIETY WAS REGISTERED U/S.12AA OF THE INC OME TAX ACT, 1961 2 I.T.A. NO. 2659/MDS/2016 (IN SHORT THE ACT). AS A CHARITABLE INSTITUTE DU RING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED DEDUCTION U/S.1 1 OF THE ACT. HOWEVER, THE AO DISALLOWED THE CLAIM OF THE ASSESSE E ON THE GROUND THAT THERE WAS A VIOLATION OF SECTION 13(1)(C) OF T HE ACT IN RESPECT OF LAND LEASED OUT TO M/S. GREAT BOMBAY CIRCUS. ACCORD ING TO THE LD. COUNSEL, THE ASSESSEE SOCIETY HAS ESTABLISHED AND R UNNING EDUCATIONAL INSTITUTIONS IN THE NAME AND STYLE OF N ATIONAL COLLEGE, TRICHY AND SESHA IYENGAR MEMORIAL HIGHER SECONDARY S CHOOL, TRICHY. THE ASSESSEE SOCIETY HAS A VACANT LAND WHICH WAS LET OUT TO GREAT BOMBAY CIRCUS. THE GREAT BOMBAY CIRCUS IN FAC T PAID DONATION OF RS.2,50,000/- TO THE ASSESSEE SOCIETY. THE AO FOUND THAT M/S. GREAT BOMBAY CIRCUS BY DONATING A SUM OF RS.2,50,000/- BECOMES A SPECIFIED PERSON OF THE SOCIETY. THEREFOR E PERMISSION GRANTED TO GREAT BOMBAY CIRCUS FOR CONDUCTING CIRCU S SHOWS WOULD AMOUNT TO VIOLATION OF SECTION 13(1)(C) OF THE ACT. 3. THE LD. COUNSEL FURTHER SUBMITTED THAT THE AO FOU ND THAT THE LAND WAS GIVEN TO GREAT BOMBAY CIRCUS WITHOUT CHARG ING ANY FEE OR RENT. ON A QUERY FROM THE BENCH, WHETHER THERE WAS ANY AGREEMENT BETWEEN THE ASSESSEE SOCIETY AND THE GREAT BOMBAY C IRCUS, THE ASSESSEE SUBMITTED THAT THERE WAS NO AGREEMENT. SI NCE THE GREAT BOMBAY CIRCUS DONATED RS.2,50,000/-, THE LAND WAS G IVEN AT FREE OF 3 I.T.A. NO. 2659/MDS/2016 COST. THEREFORE THERE WAS NO VIOLATION OF SECTION 1 3(1)(C) OF THE ACT AS CLAIMED BY THE REVENUE. 4. ON THE CONTRARY, SHRI SASIKUMAR, THE LD. DEPARTM ENTAL REPRESENTATIVE SUBMITTED THAT THE AO FOUND AS PER T HE PART OF THE ARRANGEMENT WITH GREAT BOMBAY CIRCUS, STAFF MEMBERS , STUDENTS OF THE HOSTEL ARE ALLOWED FREE CIRCUS SHOWS. THE ASSE SSEE SOCIETY HAS RECEIVED A DONATION OF RS.2,50,000/- AND THE LAND W AS SAID TO BE FREE OF COST FOR CONDUCTING CIRCUS SHOWS. BY VIRTUE OF DONATING RS.2,50,000/- TO THE SOCIETY, GREAT BOMBAY CIRCUS B ECOMES A SPECIFIED PERSON WITHIN THE MEANING OF SECTION 13(1 )(C) OF THE ACT. THEREFORE THERE WAS A CLEAR VIOLATION AND THE ASSESS EE IS NOT ELIGIBLE FOR EXEMPTION U/S.11 AND 12 OF THE ACT. THE LD. REP RESENTATIVE FURTHER SUBMITTED THAT WHEN THERE WAS A VIOLATION O F SECTION 13 OF THE ACT, PROVISIONS OF SECTION 11 & 12 OF THE ACT CANNO T COME TO THE RESCUE OF THE ASSESSEE FOR CLAIMING DEDUCTION. THER EFORE THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE DISALLOWANCE MADE BY THE AO. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE VACAN T LAND AVAILABLE WITH THE ASSESSEE SOCIETY WAS GIVEN TO GREAT BOMBAY CIRCUS FOR CONDUCTING CIRCUS SHOWS. THE ASSESSEE CLAIMS BEFORE THIS TRIBUNAL 4 I.T.A. NO. 2659/MDS/2016 THAT THERE WAS NO AGREEMENT BETWEEN THE ASSESSEE SO CIETY AND THE GREAT BOMBAY CIRCUS. THIS TRIBUNAL IS UNABLE TO ACC EPT THE CLAIM OF THE ASSESSEE. UNLESS THERE IS AN AGREEMENT, THE LA ND WOULD NOT HAVE BEEN PARTED WITH GREAT BOMBAY CIRCUS FOR CONDU CTING CIRCUS SHOWS. CIRCUS SHOWS CANNOT BE CONDUCTED WITHOUT OB TAINING PERMISSION / LICENSE FROM THE DISTRICT POLICE AUTHO RITIES AND OTHER AUTHORITIES FOR USING THE WILD ANIMALS. FOR USING T HE PREMISES OF THE SOCIETY, THERE SHOULD BE LICENSE FROM THE POLICE AU THORITIES. OTHERWISE GREAT BOMBAY CIRCUS COULD NOT HAVE CONDUC TED THE CIRCUS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT FOR ASCERTAINING THE REAL TERMS OF ALLOWING GREAT BOMBAY CIRCUS TO C ONDUCT CIRCUS SHOWS, THE AGREEMENT BETWEEN THE ASSESSEE AND GREAT BOMBAY CIRCUS NEEDS TO BE EXAMINED. SINCE, THE AGREEMENT WAS NOT PRODUCED EITHER BEFORE THE LOWER AUTHORITIES OR BEF ORE THIS TRIBUNAL, THE ASSESSEE INTENDS TO SUPPRESS THE REAL FACT BEFO RE THE INCOME TAX AUTHORITIES. THEREFORE THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE AO TO FIN D OUT THE REAL TERMS OF AGREEMENT BETWEEN THE ASSESSEE SOCIETY AND GREAT BOMBAY CIRCUS FOR ALLOWING THE GREAT BOMBAY CIRCUS TO CONDUCT CIRCUS SHOWS IN THE VACANT LAND WHICH BELONGS TO TH E ASSESSEE SOCIETY. ACCORDINGLY THE ORDERS OF THE LOWER AUTHOR ITIES ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE O F THE AO. AO SHALL RE-EXAMINE THE MATTER AFRESH FOR ASCERTAINING THE T ERMS OF AGREEMENT 5 I.T.A. NO. 2659/MDS/2016 BETWEEN THE SOCIETY AND THE GREAT BOMBAY CIRCUS AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN CASE, THERE WAS NO WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND THE GREAT BOMBAY CIRCUS, T HE AO SHALL ASCERTAIN HOW LICENSE/PERMISSION WAS GRANTED BY THE POLICE AND OTHER AUTHORITIES FOR CONDUCTING CIRCUS SHOWS IN THE PREM ISES BELONGING TO THE ASSESSEE. THE AO SHALL ALSO EXAMINE THE PERSON INCHARGE OF THE ASSESSEE SOCIETY TO FIND OUT THE REAL TERMS OF ALLO WING GREAT BOMBAY CIRCUS TO CONDUCT CIRCUS SHOWS IN THE VACANT LAND O F THE ASSESSEE. 7. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 5 TH JUNE, 2017 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESA N) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 5 TH JUNE, 2017. JR. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. !' /DR 6. #$ /GF