ACIT, Coimbatore V. Alpha foundation education and research, Trichy

ITA 2956/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96417 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 18-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2014
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Charitable institution
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . ! ' , # '$ % [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ] ./ I.T.A.NO.2956/MDS/2014 & CO NO.13/MDS/2015 / ASSESSMENT YEAR : 2011-12 THE ASSTT. COMMISSIONER OF INCOME-TAX (EXEMPTIONS) COIMBATORE VS. M/S ALPHA FOUNDATION FOR EDUCATION & RESEARCH ALPHA AVENUE, SUDHANA NAGAR KK NAGAR EAST EXTENSION TIRUCHIRAPALLI -620007 [PAN AABTA 8419 N ] (APPELLANT) (RESPONDENT /CROSS OBJECTOR ) DEPARTMENT BY : DR. B NISCHAL, JCIT ASSESSEE BY : SHRI NAGESWARA DUTT, ADVOCATE / DATE OF HEARING : 18 - 11 - 2015 / DATE OF PRONOUNCEMENT : 27 - 1 1 - 2015 & / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTI ON BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COM MISSIONER OF INCOME-TAX (APPEALS), TIRUCHIRAPALLI, DATED 25.9.20 14 FOR ASSESSMENT YEAR 2011-12. ITA NO.2956/14 CO 13/15 :- 2 -: 2. THE REVENUE RAISED A GROUND THAT THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE ASSE SSING OFFICER HAD NO JURISDICTION TO DENY EXEMPTION U/S 10(23C)(VI) OF THE ACT WITHOUT REFERRING THE MATTER TO THE CCIT FOR WITHDRAWAL OF SUCH APPROVAL, AND THE CIT(A) EXCEEDED HIS JURISDICTION IN DECIDING TH E ISSUES RAISED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER ON ME RITS, THEREBY ENTERING INTO THE ARENA WHERE THE CCIT ONLY HAD THE JURISDICTION AS PER 13 TH PROVISO TO SEC. 10(23C) OF THE ACT. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE-TRUST IS A PUBLIC CHARITABLE TRUST IN THE NAME OF THE ALPHA FOUNDATIO N FOR EDUCATION AND RESEARCH, SERVING THE CAUSE OF EDUCATION. THE ASSESSING OFFICER DENIED THE CLAIM OF THE TRUST FOR EXEMPTION U/S 11 ON THE GROUND THAT THE INCOME OF THE TRUST HAS BEEN APPLIED FOR PURPOS ES OTHER THAN THE PURPOSES OF THE TRUST. AGGRIEVED BY THE SAID ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) DATED 31.3.2014, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) ON 17.4.2014 AND HAS ALSO FILED A PETITION FOR SEEKING STAY OF RECOVERY OF TAX ON 21.4.2014 BEFORE THE CIT(A). IN THE MEANTIME, THE MADRAS HIGH COURT, MADURAI BENCH VIDE ITS ORDER DATED 28.4.2014 DIRECTED THE ASSESSEE TRUST TO PAY 50% O F THE TAX AND ALSO DIRECTED THE CIT(A) TO DISPOSE OF THE APPEAL WITHIN A PERIOD OF FOUR MONTHS FROM THE DATE OF PAYMENT OF 50% OF TAX BY TH E ASSESSEE- TRUST. THE ASSESSEE-TRUST HAS PAID ` 39,07,862/- BEING 50% OF THE ITA NO.2956/14 CO 13/15 :- 3 -: TAX AMOUNT (EXCLUDING INTEREST)AS ON 30.5.2014 WHIC H IS ALSO CONFIRMED BY THE ASSESSING OFFICER. ACCORDINGLY, THE CIT(A) DISPOSED OF THE APPEAL WITHIN FOUR MONTHS FROM THE DATE OF P AYMENT OF 50% OF THE TAX AS MENTIONED ABOVE. THE ASSESSEE-TRUST HA S BEEN APPROVED RECOGNITION U/S 10(23C)(VI) BY THE CHIEF COMMISSIO NER OF INCOME-TAX VIDE ORDER DATED 23.12.2008 IN C.NO.935(5)/CCIT/TRY /2007-08. 4. DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMEN T YEAR UNDER CONSIDERATION, THE ASSESSEE-TRUST ADVANCED A SUM OF ` 8,51,92,928/- FOR IMPORTING COURSEWARE THROUGH AFFL ATUS I LABS PVT. LTD, A COMPANY IN WHICH TWO OF THE TRUSTEES ARE DIR ECTORS TO FACILITATE TEACHING WITH TECHNOLOGY SUPPORT IN ITS SCHOOLS. T HE AMOUNT SO ADVANCED FOR PURCHASE OF COURSEWARE FOR THE PURPOSE OF EDUCATION HAS BEEN DEEMED TO BE INVESTMENT OF THE SURPLUS FUNDS O F THE TRUST IN MODES OTHER THAN THE MODES SPECIFIED IN SEC. 11(5) IN VIOLATION OF THE THIRD PROVISO TO SEC. 10(23C)(VI) OF THE ACT AND TH E EXEMPTION CLAIMED BY THE ASSESSEE-TRUST HAS BEEN DENIED. ON APPEAL, THE CIT(A)HAS GIVEN A FINDING THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S 10(23C)(VI) OF THE ACT. HOWEVER, IN HIS ORDER BEGI NNING FROM 2 ND PARA OF PAGE 16 TILL THE END OF HIS ORDER AT PAGE 21, HA S COMMENTED EXTENSIVELY ON VARIOUS ISSUES RAISED BY THE ASSESSI NG OFFICER IN HIS ORDER AND DID NOT FIND ANY MERIT IN THE SAME. BY D OING SO, THE CIT(A) HAS EXCEEDED HIS AUTHORITY AS ONLY THE CCIT IS EMPO WERED TO DO SO ITA NO.2956/14 CO 13/15 :- 4 -: UNDER CLAUSE (1) OF 1 ST PROVISO TO SEC. 143(3) R.W.13 TH PROVISO TO SEC. 10(23C) OF THE ACT. THEREFORE, THE REVENUE IS IN A PPEAL BEFORE US. 5. THE LD. DR SUBMITTED THAT THE FINDINGS GIVEN BY THE CIT(A) WITH REGARD TO MERIT OR OTHERWISE OF THE FINDINGS GIVEN IN THE ASSESSMENT ORDER SHOULD BE SET ASIDE ALTHOUGH RELIE F GRANTED ON THE GROUND THAT THE ASSESSING OFFICER HAD NO JURISDICTI ON TO ASSESS THE INCOME AT HIS LEVEL WITHOUT THE CANCELLATION OF THE REGISTRATION ALREADY GRANTED BY INVOKING 14 TH PROVISO TO SEC. 10(23C) OF THE ACT WHICH IS NOT AGITATED BY THE REVENUE. 6. WE HEARD BOTH PARTIES AND PERUSED THE MATERIAL ON R ECORD. ADMITTEDLY, AS SEEN FROM THE ORDER OF THE CIT(A), T HE FINDINGS GIVEN BY HIM BEGINNING FROM 2 ND PARA OF PAGE 16 TILL THE END OF HIS ORDER AT PAGE 21, HE HAS COMMENTED VARIOUS ISSUES RAISED BY THE ASSESSING OFFICER IN HIS ORDER. THUS, HE HAS EXCEEDED HIS AU THORITY AS THE CCIT IS ONLY EMPOWERED TO DO SO WHICH CANNOT BE PERMITTE D UNDER THE ACT. BEING SO, WE ARE INCLINED TO REMIT THE ENTIRE ISSUE BACK TO THE FILE OF THE CIT(A) TO GIVE FINDINGS ONLY FOR THE PURPOSE OF DISPOSING OF THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL BEFO RE HIM WITHOUT INTERFERING WITH THE AUTHORITY VESTED WITH THE CCI T. ACCORDINGLY, THE ENTIRE ISSUE IS REMITTED BACK TO THE CIT(A) TO DECI DE SAME AFRESH IN THE LIGHT OF THE GROUNDS RAISED BY THE ASSESSEE BEFORE HIM. ITA NO.2956/14 CO 13/15 :- 5 -: 7. THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SU PPORT OF THE ORDER OF THE CIT(A). IN VIEW OF OUR ORDER IN REV ENUES APPEAL, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME I NFRUCTUOUS, 8. IN THE RESULT, THE APPEAL BY THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION BY THE ASSESSEE IS DISMISSED AS HAVING BECOME INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2015, AT CHENNAI. SD/- SD/- ( . ! ' ) (G. PAVAN KUMAR) # / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER / CHENNAI / DATED: 27 TH NOVEMBER, 2015 RD ' #$ %$ / COPY TO: 1 . &' / APPELLANT 4. ( / CIT 2. ')&' / RESPONDENT 5. $*+ ' , / DR 3. ( () / CIT(A) 6. +/ 0 / GF