VAIJNATH BHAVDARSHAN (BHAVNAGAR), MUMBAI V. ASSTT. DIT - E -(II)(2), MUMBAI

ITA 3057/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5812 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONI
• Keywords: Maximum Marginal Rate
• Section: 11; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 3052/MUM/18 2011-12 VAIJNATH BHAVDARSHAN (KODINAR), NIRMAL NIKETAN, 2, DR. BHAJEKAR STREET, MUMBAI [PAN: AAATV2852P] ASST. DIRECTOR OF INCOME TAX, EXEM-(II)(2), MUMBAI 3053/MUM/18 2011-12 VAIJNATH BHAVDARSHAN TRUST (AHMEDABAD), NIRMAL NIKETAN, 2, DR. BHAJEKAR STREET, MUMBAI [PAN: AAATV2853N] ASST. DIRECTOR OF INCOME TAX, EXEM-(II)(2), MUMBAI 3054/MUM/18 2011-12 VAIJNATH BHAVDARSHAN (BURHANPUR), NIRMAL NIKETAN, 2, DR. BHAJEKAR STREET, MUMBAI [PAN: AAATV2855L] ASST. DIRECTOR OF INCOME TAX, EXEM-(II)(2), MUMBAI 3055/MUM/18 2011-12 VAIJNATH BHAVDARSHAN (KHEDA), NIRMAL NIKETAN, 2, DR. BHAJEKAR STREET, MUMBAI [PAN: AAATV6160G] ASST. DIRECTOR OF INCOME TAX, EXEM-(II)(2), MUMBAI 3056/MUM/18 2011-12 VAIJNATH BHAVDARSHAN (VALSAD), NIRMAL NIKETAN, 2, DR. BHAJEKAR STREET, MUMBAI [PAN: AAATV0188Q] ASST. DIRECTOR OF INCOME TAX, EXEM-(II)(2), MUMBAI 3057/MUM/18 2011-12 VAIJNATH BHAVDARSHAN (BHAVNAGAR), NIRMAL NIKETAN, 2, DR. BHAJEKAR STREET, MUMBAI [PAN: AAATV2854M] ASST. DIRECTOR OF INCOME TAX, EXEM-(II)(2), MUMBAI 3058/MUM/18 2011-12 VAIJNATH BHAVDARSHAN (VERAVAL), NIRMAL NIKETAN, 2, DR. BHAJEKAR STREET, MUMBAI [PAN: AAAAV0012A] ASST. DIRECTOR OF INCOME TAX, EXEM-(II)(2), MUMBAI ITA NOS. 3052 TO 3059/MUM/2018 : 2 : 3059/MUM/18 2011-12 ATTREY BHAV DARSHAN, NIRMAL NIKETAN, 2, DR. BHAJEKAR STREET, MUMBAI [PAN: AAAAA0027A] ASST. DIRECTOR OF INCOME TAX, EXEM-(II)(2), MUMBAI APPELLANT BY : SHRI RAJESH P. SHAH, RESPONDENT BY : SHRI VIJAY KUMAR SONI, DR DATE OF HEARING : 29-01-2019 DATE OF PRONOUNCEMENT : 01-02-2019 O R D E R THESE ARE EIGHT APPEALS BY EIGHT DIFFERENT ASSESSEES AND THESE ARE DIRECTED AGAINST SEPARATE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-1, MUMBAI, FOR THE AY. 2011-12 AND ALL THE ORDERS OF THE CIT (A) ARE DATED 08-02-2018. SINCE THE FACTS AND ISSUES INVOLVED IN A LL THESE APPEALS ARE COMMON AND IDENTICAL, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMM ON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE IDENTICAL GROUNDS RAISED BY THE ASSESSEE IN THE SE APPEALS READ AS UNDER: 1) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN UPHOLDING THE ASSESSING OFFICER'S ACTION IN DENYING BENEFIT OF SECTION 11 OF IT ACT TO THE APPELLANT TRUST WITHOUT APPRECI ATING THE FACT THAT PRIMARY OBJECT OF THE TRUST IS RELIEF TO THE POOR, EDUCATION AND MEDICAL RELIEF I.E. ACTIVITY CARRIED OUT BY THE TRUST AND T HE AMOUNT IS SPENT TOWARDS FULFILLMENT OF THE OBJECT OF THE TRUST WITHOUT PREJUDICE TO THE GROUND 1 ITA NOS. 3052 TO 3059/MUM/2018 : 3 : 2) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE AND IN LAW LEARNED CIT (A) ERRED IN DENYING EXEMPTION U/S 11 W ITHOUT REJECTING THE REGISTRATION U/S 12A 3) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN UPHOLDING THE ASSESSING OFFICER'S ACTION IN TAXING THE INCOME DETERMINED BY HER, AT THE MAXIMUM MARGINAL RATE OF TAX ENVISAGED IN THE PROVISO TO SECTION 164(2). THE APPELLANT CRAVES FOR LEAVE TO ADD, TO ALTER, TO DELETE THE ABOVE GROUND OF APPEAL IF NECESSARY. 3. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT IN RESPECT OF TEN DIFFERENT BUT CONNECTE D ASSESSEES FOR THE SAME ASSESSMENT YEAR, THE TRIBUNAL HAS ALREADY RESTORED THE MATTER BACK TO THE FILE OF AO FOR FRESH DECISION IN ITA NOS. 2515/MUM/2018 TO 2518/MUM/2018 & 2521/MUM/2018 TO 2526/MUM/2018, DT. 26-12-2018. HE SUBMITTED A COPY OF THIS TRIBUNALS ORDER. HE ALSO SU BMITTED THAT ON THE SAME LINE, IN THE PRESENT EIGHT APPEALS ALSO, THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO FOR FRES H DECISION WITH SIMILAR DIRECTIONS. AT THIS JUNCTURE, A QUERY WA S RAISED BY THE BENCH FROM THE LD. DR OF THE REVENUE AS TO WHETHE R, FACTS ARE SAME OR THERE IS ANY DIFFERENCE IN FACTS IN THE PRESENT CASES. IN REPLY, LD. DR OF THE REVENUE COULD NOT POI NT OUT ANY DIFFERENCE IN THE FACTS. ITA NOS. 3052 TO 3059/MUM/2018 : 4 : 4. IN VIEW OF THE ABOVE DISCUSSION, I DEEM IT FIT AND PROPER TO SET ASIDE THE ORDERS OF THE LEARNED CIT (A) IN ALL TH E PRESENT APPEALS AND RESTORE THE MATTER BACK TO THE FILE OF AO F OR FRESH DECISION WITH SIMILAR DIRECTIONS. HENCE, I REPRODUC E PARA NOS. 10 & 11 OF THIS TRIBUNALS ORDER CITED SUPRA, FOR REA DY REFERENCE: 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUS ED MATERIALS ON RECORD. IT IS EVIDENT, ASSESSEE'S CLAIM OF EXEMPTIO N UNDER SECTION 11 OF THE ACT HAS BEEN DENIED BY THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS) PRIMARILY ON THE GROUND THAT THE ASSESSEE HAS NOT APPLIED INCOME / FUND TOWARDS THE OBJECTS O F THE TRUST. THE LEARNED COMMISSIONER (APPEALS) HAS FURTHER OBSERVED THAT MAJOR EXPENDITURE INCURRED BY THE ASSESSEE WAS ASSOCIATED WITH AGRICULTURAL ACTIVITIES. HE HAS ALSO OBSERVED THAT THE ASSESSEE FAILED TO EXPLAIN HOW THE POOL-FARMERS HAVE BENEFITED FROM THE ACTIVITIES OF THE TRUST. THE DEPARTMENTAL AUTHORITIES HAVE ALSO O BSERVED THAT THE EXPANSES TOWARDS VARIOUS ACTIVITIES CONSTITUTE LESS THAN 12% OF THE RECEIPT OF THE ASSESSEE DURING THE YEAR, HENCE, THE PROVISION OF SECTION 11(2) OF THE ACT IS NOT COMPLIED. AS COULD BE SEEN FROM THE MATERIAL ON RECORD, THE ASSESSEE HAS BEEN GRANTED R EGISTRATION UNDER SECTION 12A OF THE ACT ON THE BASIS OF THE OBJECTS MENTIONED IN THE TRUST DEED. 'HERE IS NO ALLEGATION EITHER BY THE AS SESSING OFFICER OR BY THE LEARNED COMMISSIONER (APPEALS) THAT THERE IS ANY VARIANCE IN THE OBJECTS OF THE TRUST AS MENTIONED IN THE ORIGIN AL TRUST DEED. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE REGISTRATIO N GRANTED UNDER SECTION 12A OF THE ACT TO THE ASSESSEE IS STILL IN VOGUE. THEREFORE, IF AS PER THE OBJECTS OF THE EXISTING TRUST DEED THE ASSE SSEE IS REQUIRED TO UNDERTAKE CHARITABLE ACTIVITY BY WAY OF FARMING / A GRICULTURE IN THE AGRICULTURE LAND HELD BY IT THEN ASSESSEE'S CLAIM O F EXEMPTION UNDER SECTION 11 OF THE ACT CANNOT BE DENIED. THEREFORE, BEFORE DENYING ASSESSEE'S CLAIM OF EXEMPTION, THE ASSESSING OFFICE R ON THE BASIS OF COGENT MATERIAL BROUGHT ON RECORD MUST DEMONSTRATE THAT THE ASSESSEE HAS NOT APPLIED ITS INCOME / FUND TOWARDS THE OBJECTS OF THE TRUST. BY MERELY ALLEGING THAT THE ASSESSEE IS EXPLOITING LABOUR IN ITA NOS. 3052 TO 3059/MUM/2018 : 5 : THE NAME OF GOD WITHOUT BRINGING ANY MATERIAL ON RE CORD, IS NOT ENOUGH TO DENY ASSESSEE'S CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT. FURTHER, ASSESSEE'S CLAIM THAT WHILE APPLYING THE CONDITIONS OF SECTION 11(2) OF THE ACT AGRICULTURAL INCOME SHOULD BE KEPT OUT HAS NOT BEEN CONSIDERED BY THE DEPARTMENTAL AUTHORITIES . THEREFORE, ON OVERALL CONSIDERATION OF THE FACTS AND MARTIAL ON R ECORD, WE ARE OF THE VIEW THAT THE ISSUES RAISED BY THE ASSESSEE IN THE PRESENT APPEAL HAVE TO BE RESTORED BACK TO THE FILE OF THE ASSESSI NG OFFICER FOR DE NOVO ADJUDICATION AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND EXAMINING THE MATERIALS BROUGHT ON RECORD AND I N ACCORDANCE WITH THE STATUTORY PROVISIONS AS WELL AS RELEVANT C ASE LAWS. ACCORDINGLY, WE DO SO. NEEDLESS TO MENTION, THE ASS ESSING OFFICER MUST DECIDE THE ISSUES AFTER AFFORDING REASONABLE O PPORTUNITY OF BEING HEARD T TO THE ASSESSEE AND MUST PASS A SPEAK ING AND WELL REASONED ORDER DEALING WITH ALL THE SUBMISSIONS OF THE ASSESSEE- WITH THE AFORESAID OBSERVATIONS, GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. 11. FACTS AND ISSUES IN ALL OTHER APPEALS IN THIS B UNCH BEING IDENTICAL, OUR DECISION IN ITA NO. 2525/MUM./2018, WILL APPLY MUTATIS MUTANDIS TO ALL THESE APPEALS AS WELL. 5. IN THE RESULT, ALL THE PRESENT EIGHT OF VARIOUS CON NECTED ASSESSEES APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF FEBRUARY, 2019 SD/- (A.K. GARODIA) /ACCOUNTANT MEMBER /MUMBAI; /DATED : 1 ST FEBRUARY, 2019 TNMM ITA NOS. 3052 TO 3059/MUM/2018 : 6 : / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. # $ ( ) / THE CIT(A), MUMBAI 4. # $ / CIT, MUMBAI 5. '()*+ , #-*+#. , / DR, ITAT, MUMBAI 6. )/01 / GUARD FILE # / BY ORDER, ' //TRUE COPY// /# (DY./ASST. REGISTRAR) #-*+#., / ITAT, MUMBAI