DCIT-I, Bareilly V. MANAS STHALI, Bareilly

ITA 286/LKW/2011

• Counselvise Citation: 28623714 RSA 2011
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cancellation of registration
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI H.L. KARWA, VICE PRESIDENT AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.286/LKW/2011 ASSESSMENT YEAR:2007-08 DCIT CIRCLE I, BAREILLY MANAS STHALI BAREILLY ROAD, FAREEDPUR, BAREILLY V. PAN:AAATM4429M (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. RAJESH YADAV, CIT (DR) RESPONDENT BY: NONE DATE OF HEARING: 16.08.2011 DATE OF PRONOUNCEMENT: 16.08.2011 O R D E R PER H. L. KARWA: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), BAREILLY DATED 22.12.2010 RELATING TO ASSESSMENT YEAR 2007-08. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IN THIS APPEAL READS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY DELETING THE ADDITION OF ` 17,18,977 WHICH WAS MADE BY THE ASSESSING OFFICER TREATING THE RECEIPTS NOT UTILIZED FOR THE PURPOSES FOR WHICH THE TRUST WAS CREATED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A REGISTERED SOCIETY, RUNNING AN EDUCATIONAL INSTITUTION IN THE DISTRICT OF BAREILLY, AS PER THE OBJECTS OF THE SOCIETY. THE SOCIETY IS REGISTERED UNDER SECTION 12A OF THE INCOME- TAX ACT, 1961 (IN SHORT THE ACT). ACCORDINGLY, IT IS ENJOYING EXEMPTION UNDER SECTION 11 OF THE ACT AFTER COMPLYING ALL THE NECESSARY CONDITIONS AS LAID DOWN IN THE ACT. THE EDUCATIONAL INSTITUTION IS AFFILIATED WITH THE CENTRAL BOARD OF :-2-: SECONDARY EDUCATION, NEW DELHI (CBSE). WHILE GRANTING APPROVAL, THE STATE GOVERNMENT/CBSE HAS IMPOSED A CONDITION THAT THE INSTITUTION SHALL RESERVE 10% OF THE TOTAL SEATS FOR THE CHILDREN BELONGING TO SCHEDULED CASTES/TRIBES. WHILE FRAMING THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS CONSIDERED 10% OF THE GROSS RECEIPTS OF THE SOCIETY AS INCOME FOR THE YEAR UNDER REFERENCE SINCE, IN HIS OPINION, THE SOCIETY HAS NOT RESERVED 10% SEATS FOR THE CHILDREN OF THE SCHEDULED CASTES/TRIBES. BEFORE THE ASSESSING OFFICER, IT WAS EXPLAINED BY THE ASSESSEE THAT THE ABOVE CONDITIONS IS ONE OF THE BYE LAWS AND NOT THE OBJECT OF THE SOCIETY. FURTHER, THE CLASS-WISE STRENGTH OF THE STUDENTS, COPIES OF THE ADMISSION FORMS SUBMITTED BY THE STUDENTS, ETC HAD BEEN SUBMITTED TO THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE SUBMISSIONS AND WENT ON TO CONSIDER 10% OF THE GROSS RECEIPT OF THE SOCIETY AS INCOME STATING THAT ATLEAST 10% OF THE TOTAL RECEIPTS ARE NOT UTILIZED FOR THE PURPOSES FOR WHICH THE SOCIETY HAD BEEN ESTABLISHED. 4. ON APPEAL, THE LD. CIT(A), BAREILLY DELETED THE ADDITION AND ALLOWED THE APPEAL OF THE ASSESSEE RELYING ON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04 AND 2004-05. 5. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE LD. CIT(A), BAREILLY. 6. AFTER HEARING THE LD. D.R. AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE TRIBUNAL HAD THE OCCASION TO CONSIDER SIMILAR ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 IN ITA NO. 48/LUC/2007. THE TRIBUNAL VIDE ITS ORDER DATED 15.2.2008 DELETED THE ADDITION MADE ON THE SIMILAR GROUND HOLDING THAT THE ISSUE HAS NO RELEVANCE AT ALL FOR TREATING 10% OF THE GROSS RECEIPTS AS ASSESSEES INCOME. THIS BENCH OF THE TRIBUNAL FURTHER HELD THAT THE ASSESSING OFFICER HAS ONLY TO EXAMINE THE APPLICATION OF THE SURPLUS FOR THE OBJECTS OF THE TRUST AND TO MAKE THE ADDITION IF THE ASSESSEE HAS NOT APPLIED ITS INCOME TOWARDS THE OBJECTS OF THE TRUST. THE AFORESAID DECISION FOR ASSESSMENT YEAR 2003-04 HAD BEEN FOLLOWED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 IN ITA NO. 350/LUC/2009 AND THE ORDER WAS PASSED ON 14.8.2009. THE COPY OF THE ORDER DATED 14.8.2009 READS AS UNDER:- :-3-: 6. AFTER CONSIDERING THE TOTALITY OF THE FACTS PARTICULARLY THE FACT THAT A SIMILAR ISSUE HAD BEEN DECIDED BY THE TRIBUNAL IN THE AFORESAID REFERRED TO ORDER WHEREIN THE RELEVANT FINDING IN THE SIMILAR ISSUE HAD BEEN GIVEN IN PARA 9 WHICH READS AS UNDER: 9. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. D.R. AND THE MATERIALS ON RECORD. AS IS EVIDENT FROM THE ORDER OF THE ASSESSING OFFICER, THE ASSESSING OFFICER PREPARED A DRAFT ASSESSMENT ORDER DATED 7.12.2006 AND SENT TO THE C.I.T., BAREILLY PROPOSING CANCELLATION OF REGISTRATION U/S. 12A(A) OF THE ACT. THE LD. C.I.T EXAMINED THE CASE AND VIDE LETTER DATED 23.3.2006 HELD THAT IT IS NOT A FIT CASE FOR CANCELLATION OF REGISTRATION U/S. 12A(A) OF THE ACT. BESIDES, THE ORDER OF THE ASSESSING OFFICER MERGED WITH THE ORDER OF THE C.I.T. ONCE THE C.I.T. HAS REJECTED THE DRAFT ASSESSMENT ORDER, THE ASSESSING OFFICER SHOULD NOT HAVE PROCEEDED TO DECIDE THE CASE ON ANOTHER ANGLE BY PROPOSING ADDITION OF 10% OF THE SURPLUS OF THE ASSESSEE. EVEN OTHERWISE ALSO, THE ASSESSING OFFICER HAS ONLY TO EXAMINE THE APPLICATION OF SURPLUS FOR THE OBJECTS OF THE TRUST AND TO MAKE THE ADDITION IF THE ASSESSEE HAS NOT APPLIED ITS INCOME TOWARDS THE OBJECTS OF THE TRUST. THE ASSESSING OFFICER HAS NOT DOUBTED THAT THE APPLICATION OF INCOME OF THE TRUST IS FOR EDUCATIONAL PURPOSES BUT HAS MADE THE ADDITION ON THE GROUND THAT ONE OF THE BYELAWS HAS NOT BEEN FOLLOWED. IN THIS CONNECTION, IT IS NOTICEABLE THAT THE ALLEGED INFRINGEMENT IS OF A CONDITION FOR GRANT OF RECOGNITION BY CBSE BOARD, BUT EVEN CBSE BOARD :-4-: HAS NOT CANCELLED THE ASSESSEE TRUST'S RECOGNITION ON THE SAID GROUND. BE THAT AS IT MAY, THIS ISSUE HAS NO RELEVANCE AT ALL FOR TREATING 10% OF THE GROSS RECEIPTS AS ASSESSEE'S INCOME. IN VIEW OF THE ABOVE, WE HOLD THAT THE LD. C.I.T (A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. C.I.T (A) AND REJECT THE GROUNDS TAKEN BY THE DEPARTMENT. 7. IN THE STATEMENT OF FACTS SUBMITTED BY THE REVENUE, IT HAS BEEN ADMITTED THAT THE FACTS OF THE CASE ARE SIMILAR TO THE CASE FOR ASSESSMENT YEAR 2003-04. IT IS ALSO SUBMITTED THAT THE APPEAL IS BEING FILED TO KEEP THE MATTER ALIVE. NO NEW FACTS HAVE BEEN BROUGHT ON RECORD BY THE DEPARTMENT DURING THE YEAR UNDER CONSIDERATION. THEREFORE, FOLLOWING THE ORDERS OF THE TRIBUNAL PASSED IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04 AND 2004-05 (SUPRA), WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE REVENUE. 8. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.8.2011. SD/- SD/- [ N. K. SAINI] [H. L. KARWA] ACCOUNTANT MEMBER VICE PRESIDENT DATED:16.8.2011 JJ:1608 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR