Fateh Chand Charitable Trust, Muzaffarnagar V. Addl. CIT, Meerut

ITA 290/DEL/2012

• Counselvise Citation: 29020114 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 19-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHA KUMARI
• Assessee Lawyers: V RAJKUMARA
• Keywords: Depreciation; Charitable institution; Opportunity of being heard; Earning of tax free income
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER I.T.A .NO.-290/DEL/2012 (ASSESSMENT YEAR-2008-09) FATEH CHAND CHARITABLE TRUST, VS. ADDL. CIT 115 KM. MILE STONE, DELHI RANGE-2 DEHRADUN HIGHWAY, MUZAFFARNAGAR MUZAFFARNAGAR. PAN: AAATF1445N (APPELLANT) (RESPONDENT) ASSESSEE BY:-MR. V. RAJKUMARA, ADV. REVENUE BY:-MS. SUDHA KUMARI, CIT. DR ORDER PER R. S. SYAL, AM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT (APPEALS) ON 20.09.2011 IN RE LATION TO THE ASSESSMENT YEAR 2008-09. 2. FOLLOWING TWO GROUNDS HAVE BEEN RAISED IN T HIS APPEAL : - 1. THAT THE LD. CIT (A) HAS ERRED IN SUSTAINING THE DISALLOWANCE OF BROUGHT FORWARD AND SET OFF LOSS HOLDING THE SAME TO BE A CASE OF DOUBLE DEDUCTION, ALTHOUGH, THE I.T.A .NO.-290/DEL/2012 2 ASSESSEE HAS NOT CLAIMED DEPRECIATION AT ALL. HENCE THE ENTIRE DISCUSSION AND FINDINGS IN THE ORDER ARE RENDERED PREJUDICIAL AND AGAINST THE ACTUAL FACTS OF THE CASE. 2. THAT THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DISALLOWING THE CLAIM OF THE ASSESSEE ON ACCOUNT OF BROUGHT FORWARD AND SET OFF OF LOSS EMANATING FROM EXCESS APPLICATION OF FUNDS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE FILED ITS RETURN DECLARING NIL INCOME. IN THE COMPUTATI ON OF INCOME, FILED ALONG WITH THE RETURN OF INCOME, THE ASSESSEE SHOWED NET LOSS OF RS.41,49,73,163/- AS CARRIED FORWARD TO THE AY 2 009-10. IT WAS CLAIMED THAT THERE WAS EXCESS OF EXPENDITURE INCURR ED ON CHARITY OVER THE INCOME FOR THE CURRENT YEAR AS WELL AS EAR LIER YEARS WHICH SHOULD BE CARRIED FORWARD AND THEN APPLIED IN THE N EXT YEAR BY SETTING IT OFF AGAINST THE INCOME. THE AO REJECTED THE ASSESSEES CONTENTION BY NOTING THAT ITS INCOME WAS EXEMPT U/S 11 AND THE ONLY CRITERION WAS OF 85% APPLICATION OF INCOME BY CHARITABLE INSTITUTIONS/TRUST. IF THERE WAS EXCESS EXPENDITURE , THE SAME COULD NOT BE CARRIED FORWARD. THE AO OPINED THAT IF THE V IEW POINT OF THE ASSESSEE WAS ACCEPTED, IT WOULD RESULT IN GRANTING DOUBLE BENEFIT, ONE BEING THE EXEMPT INCOME AND THE OTHER BEING CAR RY FORWARD OF LOSSES. HE THEREFORE, HELD THAT THE ASSESSEE WAS NO T ENTITLED TO CARRY FORWARD AMOUNT OF EXPENDITURE OVER THE INCOME TO TH E NEXT YEAR. I.T.A .NO.-290/DEL/2012 3 THUS THE CLAIM OF CARRY FORWARD WAS REJECTED AND TH E INCOME WAS COMPUTED AT NIL. THE ASSESSEE REMAINED UNSUCCESSF UL BEFORE THE LD. CIT (A) AS WELL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT TH E ASSESSEES APPEAL FOR THE AY 2006-07 CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL IN ITA NO. 1665/DEL/2012. IDENTICAL GROUND S WERE RAISED IN SUCH YEAR WHICH HAVE BEEN REPRODUCED BY THE TRIB UNAL IN PARA 3 OF ITS ORDER DATED 29.6.2012, A COPY WHICH HAS BEEN PLACED ON RECORD. AFTER CONSIDERING THE RIVAL CONTENTIONS, TH E TRIBUNAL HAS UPHELD THE ASSESSEES VIEW POINT IN THE MATTER OF C ARRY FORWARD. 5. THE LD. DR SUBMITTED THAT THE VIEW TAKEN BY THE LD. CIT (A) BE ACCEPTED IN THE LIGHT OF THE JUDGMENT OF THE HON BLE DELHI HIGH COURT IN CIT VS. INDIA NATIONAL THEATRE TRUST (2008) 305 ITR 149 (DEL) AND THE JUDGMENT OF HONBLE KERALA HIGH COURT IN LISSIE MEDICAL INSTITUTIONS VS. CIT (2012) 348 ITR 344 (KE RALA). WE ARE NOT CONVINCED WITH THE SUBMISSIONS ADVANCED ON BEHA LF OF THE REVENUE FOR THE REASON THAT THE TRIBUNAL HAS ACCEPT ED THE ASSESSEES CONTENTION IN ITS OWN CASE FOR THE AY 20 06-07 BY RELYING ON CERTAIN DECISIONS WHICH HAVE BEEN REPROD UCED IN THE ORDER. AS THERE IS A DIRECT DECISION GIVEN BY THE T RIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING YEAR, WE ARE UNABLE TO I.T.A .NO.-290/DEL/2012 4 OBSERVE DEPARTURE FROM THE SAME. AT THIS JUNCTURE, IT WOULD BE RELEVANT TO MENTION THAT THE JUDGMENTS RELIED BY TH E LD. DR ARE OF NON-JURISDICTIONAL HIGH COURTS IN AS MUCH AS THE AS SESSEE FALLS UNDER THE JURISDICTION OF THE HONBLE ALLAHABAD HIG H COURT AND THE TRIBUNAL HAS ALSO CONSIDERED CERTAIN JUDGMENTS OF T HE OTHER HONBLE HIGH COURTS BEFORE GRANTING RELIEF TO THE A SSESSEE IN ITS EARLIER ORDER. AS NO CONTRARY JUDGMENT OF THE HONB LE JURISDICTIONAL HIGH COURT HAS BEEN BROUGHT TO OUR NOTICE AND THERE IS A DECISION BY THE TRIBUNAL FOR THE EARLIER YEAR, WHICH IN TURN IS ALSO BASED ON CERTAIN JUDGMENTS, WE ARE UNABLE TO ACCEPT THE CONT ENTION OF THE LD. DR TO DEVIATE FROM THE VIEW TAKEN BY THE TRIBUNAL I N ASSESSEES OWN CASE. FURTHER, NO MATERIAL HAS BEEN PLACED ON R ECORD TO SHOW THAT THE SAID ORDER OF THE TRIBUNAL HAS BEEN REVERS ED OR MODIFIED IN ANY MANNER BY THE HONBLE HIGH COURT. RESPECTFULLY FOLLOWING THE PRECEDENT, WE HOLD IN PRINCIPLE THAT THE ASSESSEE I S ENTITLED TO CARRY FORWARD THE AMOUNT OF BROUGHT FORWARD LOSSES ALONG WITH LOSS INCURRED FOR THE CURRENT YEAR. 6. THE LD. DR HAS ALSO POINTED OUT CERTAIN FACTUAL INA CCURACIES IN THE COMPUTATION OF LOSS BY THE ASSESSEE FOR THE CURRENT YEAR. WE DIRECT THE AO TO VERIFY THE CORRECT AMOUNT OF THE L OSS FOR THE CURRENT YEAR AND THEN WORK OUT THE CORRECT AMOUNT O F LOSS TO BE CARRIED FORWARD FOR THE CURRENT YEAR AS WELL AS EAR LIER YEARS BY CONSIDERING THE DECISION TAKEN BY THE TRIBUNAL FOR SUCH EARLIER I.T.A .NO.-290/DEL/2012 5 YEARS. AS SUCH THE IMPUGNED ORDER IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE AO FOR ASCERTAINING THE CORRECT QUANTUM OF THE AMOUNT OF LOSS TO BE CARRIED FORWARD AFTER A LLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17/01/2014. SD/- SD/- (RAJPAL YADAV) (R. S. SY AL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17/01/2014 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR I.T.A .NO.-290/DEL/2012 6 DATE INITIAL 1. DRAFT DICTATED ON 16-01-2014 PS 2. DRAFT PLACED BEFORE AUTHOR 16-1-2014 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 17-1-2014 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 17-1-2014 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. *