M/s Southern India Banks Staff Training College , Bangalore V. Commissioner of Income Tax (Exemptions) , Bangalore

ITA 3147/BANG/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6533 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 15-04-2021
• Assessment Year: 2017-2018
• Appeal Filed On: 26-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R PRATHIBA
• Keywords: Charitable institution; Set aside
• Section: 73; 11

Judgement Text

ITA NOS.2530/BANG/2017, 3147/BANG/2018&ITA NO.2431/BANG/2019 M/S. SOUTHERN INDIA BANKS STAFF TRAINING COLLEGE, BENGALURU IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2530/BANG/2017, ITA NO.3147/BANG/2018 & ITA NO.2431/BANG/2019 ASSESSMENT YEARS: 2016-17, 2017-18 & 2018-19 RESPECTIVELY M/S. SOUTHERN INDIA BANKS STAFF TRAINING COLLEGE NO.9, SHANKARAMATH ROAD SHANKARAPURAM BENGALURU 560 004. PAN NO : AAATS5632E VS. CIT (EXEMPTIONS) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SMT. R. PRATHIBA, A.R. RESPONDENT BY : SHRI PRADEEP KUMAR, D.R. DATE OF HEARING : 15.04.2021 DATE OF PRONOUNCEMENT : 15.04.2021 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE 3 APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST COMMON ORDER OF CIT(A). THE ASSESSEE HAS R AISED FOLLOWING COMMON GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (E) ERRED IN DECLINING TO GRANT EXEMP TION U/S.10(23C)(VI) OF THE ACT TO THE APPELLANT. ITA NOS.2530/BANG/2017, 3147/BANG/2018&ITA NO.2431/BANG/2019 M/S. SOUTHERN INDIA BANKS STAFF TRAINING COLLEGE, BENGALURU PAGE 2 OF 6 2. THE LEARNED COMMISSIONER OF INCOME-TAX (E) ERRED IN HOLDING THAT THE APPELLANT INSTITUTION WAS NOT SOLELY FOR EDUCATIONA L PURPOSES WITHOUT APPRECIATING THAT THE VARIOUS ACTIVITIES CARRIED ON BY THE APPELLANT WERE TOWARDS EDUCATIONAL PURPOSES OF THE BANKING STAFF A ND CONSEQUENTLY THE APPELLANT HAD FULFILLED ALL THE CONDITIONS REQUIRED U/S.10(23C)(VI) OF THE ACT TO AVAIL THE EXEMPTION AS PROVIDED THEREIN. 3. THE LEARNED COMMISSIONER(E) OUGHT TO HAVE APPRECIAT ED THAT THOUGH VARIOUS OBJECTS PROVIDED IN THE MEMORANDUM OF ASSOCIATION, THE APPELLANT HAD WHOLLY PROMOTED THE OBJECTS IN EDUCATING THE BANKING STAFF AND CONSEQUENTLY HE OUGHT TO HAVE HELD THAT THE APPELLANT WAS ELIGIBLE TO GET THE EXEMPTION U/S.10(23C)(VI) OF THE ACT. 4. THE LEARNED COMMISSIONER(E) OUGHT TO HAVE APPRECIAT ED THAT THE OTHER OBJECTS PROVIDED IN THE MEMORANDUM OF ASSOCIATION WOULD ALS O RELATE TO THE PROMOTION OF THE EDUCATION AMONGST THE STAFF AND WE RE NOT TO BE CONSIDERED ISOLATED TO DENY THE BENEFIT U/S.10(23C)(VI) OF THE ACT. ON THE CONTRARY, IT WAS DEMONSTRATED BEFORE THE LEARNED CIT(E) WITH MATERIA L EVIDENCE IN THE FORM OF INCOME AND EXPENDITURE ACCOUNT OF THE SOCIETY FOR T HE YEAR ENDED 31.3.2016 THAT THE OTHER OBJECTS VIZ.,(A) PROVIDING APPRAISAL PROGRAMMES, (B) CONSULTANCY SERVICES AND (C) FACULTY DEVELOPMENT PR OGRAMMES WERE NOT AT ALL PURSUED BY THE SOCIETY DURING THE RELEVANT PREVIOUS YEAR AND THAT THE SOCIETY EXISTED SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PROFIT; THE PREDOMINANT OBJECTIVE AND SOLITARY GOAL OF THE SOCIETY BEING IM PARTING OF EDUCATION. 5. THE LEARNED COMMISSIONER (E) FAILED TO CONSIDER THE DECISION OF THE INCOME- TAX APPELLATE TRIBUNAL, BANGALORE BENCH, BANGALORE IN THE CASE OF NATIONAL INSTITUTE FOR RURAL BANKING (ITA NO.923/BANG/2011 D T.17.7.2012) STATING THAT ALTHOUGH THE CASE IS SQUARELY APPLICABLE IN THE APP ELLANT'S CURRENT CASE, THE ALLOWABILITY FOR GRANT OF EXEMPTION BY ITAT, BANGAL ORE IS NOT THE FINAL AUTHORITY AND FINALITY HAD NOT YET BEEN REACHED. 6_ THE LEARNED COMMISSIONER (E) GROSSLY ERRED IN FA ILING TO UNDERSTAND THE VAST MEANING OF THE WORD 'EDUCATION' WHICH IS NOT SPECIF ICALLY DEFINED UNDER THE INCOME-TAX ACT AND WENT AHEAD TO DISTINGUISH THE VA RIOUS JUDGMENTS PLACED BEFORE HIM BY THE APPELLANT BY MERELY STATING THAT THE APPELLANT SOCIETY WAS NOT ENGAGED IN EDUCATIONAL ACTIVITIES IN THE TRUE S ENSE. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. ITA NOS.2530/BANG/2017, 3147/BANG/2018&ITA NO.2431/BANG/2019 M/S. SOUTHERN INDIA BANKS STAFF TRAINING COLLEGE, BENGALURU PAGE 3 OF 6 2. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OP INION THAT SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE TH IS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.2057/BANG/2016 AND THE TRIBUNAL VIDE ITS ORDER D ATED 11.3.2021 HELD AS FOLLOWS: 2. THE LD. AR SUBMITTED THAT THE ISSUE BEFORE THE TRIBUNAL WAS WITH REGARD TO, WHETHER THE ASSESSEE IS ENTITLED FOR EXE MPTION U/S. 10(23C(VI) OF THE ACT. IT WAS SUBMITTED THAT IN THE EARLIER AY 2014-15, THE ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIB UNAL AND VIDE ORDER DATED 26.8.2016 IN ITA NO.1408/BANG/2015, THE TRIBU NAL CONFIRMED THE ORDER OF THE CCIT IN DENYING EXEMPTION U/S. 10( 23C(VI) OF THE ACT. THE APPEAL AGAINST THE TRIBUNALS ORDER IS PENDING BEFORE THE HONBLE HIGH COURT OF KARNATAKA, WHEREIN THE FOLLOWING QUES TIONS OF LAW ARE FRAMED:- 1. WHETHER IN LAW, THE TRIBUNAL WAS RIGHT IN REJEC TING THE APPLICATION FOR EXEMPTION UNDER SECTION 10(23C)(VI) OF THE ACT WITHOUT CONSIDERING THE VAST DEFINITION THAT TH E WORD 'EDUCATION' EMBRACES ALTHOUGH THERE BEING NO SPECIF IC DEFINITION FOR 'EDUCATION' UNDER THE INCOME-TAX ACT OF 1961? 2. WHETHER IN LAW, THE TRIBUNAL WAS RIGHT IN CONSTR UING THAT THE ACTIVITIES CARRIED ON BY THE APPELLANT-SOC IETY WERE NOT FOR EDUCATIONAL PURPOSES? 3. THE HON'BLE COURT WAS PLEASED TO ADMIT THE APPEA L AND FRAMED THE SUBSTANTIAL QUESTIONS OF LAW, WHICH READS AS UNDER: - WHETHER IN LAW, THE TRIBUNAL WAS RIGHT IN REJECTIN G THE APPLICATION FOR EXEMPTION UNDER SECTION 10(23C)(VI) OF THE ACT WITHOUT CONSIDERING THE VAST DEFINITION THAT THE WO RD 'EDUCATION' EMBRACES ALTHOUGH THERE BEING NO SPECIFIC DEFINITIO N FOR 'EDUCATION' UNDER THE INCOME-TAX ACT OF 1961? 4. FURTHER IT WAS SUBMITTED THAT THE TRIBUNAL IN TH E EARLIER ULTIMATELY HAS HELD THAT THE JUDGMENTS CITED WERE NOT HELPFUL TO THE APPELLANT'S CASE AND HAD FURTHER OBSERVED THAT THE OBJECTS OF T HE APPELLANT-SOCIETY ARE NOT IN RESPECT OF EDUCATIONAL PURPOSES AND THEY AMOUNTED TO CONSULTANCY SERVICES. IT WAS ON THESE REASONS THE A PPEAL HAD BEEN ITA NOS.2530/BANG/2017, 3147/BANG/2018&ITA NO.2431/BANG/2019 M/S. SOUTHERN INDIA BANKS STAFF TRAINING COLLEGE, BENGALURU PAGE 4 OF 6 DISMISSED. HOWEVER, IN THE RELEVANT YEAR BEFORE THE HON'BLE COURT THE APPELLANT HAD MADE A DETAILED SUBMISSION BEFORE THE CCIT CITING VARIOUS CASE LAWS TO SUPPORT ITS CASE, THOUGH CCIT REFERRED THESE CASES TRIED TO DISTINGUISH THE SAME TO JUSTIFY THE DENIAL OF EXEMPTION. THE CCIT, HOWEVER, FAILED TO CONSIDER THE FACT THAT THE APPELLANT INSTITUTION IS CARRYING ON EDUCATIONAL ACTIVITY. HE HAD NOT CON TROVERTED THE FACT THAT THE APPELLANT HAD NOT CARRIED ON ANY ACTIVITY OF MERE CONSULTANCY. THE APPELLANT SPECIFICALLY BROUGHT TO THE NOTICE OF THE CCIT THAT THE APPELLANT WAS IMPARTING TRAINING TO THE PERSONNEL O F MEMBER BANKS AND OTHER OBJECTIVES ENUMERATED IN THE MEMORANDUM P ROVIDING APPRAISAL PROGRAMS, CONSULTANCY SERVICES AND OTHER MATTER CONDUCTIVE TO ECONOMIC BETTERMENT ARE NOT ALL PURSUED BY THE S OCIETY. IN FACTS THE AUDITED ACCOUNT FOR THE YEAR 31.3.2012 TO 31.3.2015 WERE FURNISHED TO PROVE THAT THERE WAS NO RECEIPT RECEIVED FOR SUCH A CTIVITY. EVEN THE SURPLUS MADE WAS NOT CONCLUSIVE TO HOLD THAT THE AP PELLANT SOCIETY WAS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 10(23C)(VI ) OF THE ACT AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF ADITANA R EDUCATIONAL INSTITUTION VS. ADDL.CIT (1997) 224 ITR 310 (SC) AN D ALSO THE DECISION OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF PINE GROVE INTERNATIONAL CHARITABLE TRUST VS. UOI AND OTHERS ( 2010) 327 ITR 73 (P&H). THE SUBMISSION OF THE APPELLANT BEFORE THE C CIT HAD BEEN BROUGHT OUT IN THE ORDER OF THE CCIT. THE VARIOUS J UDGMENTS REFERRED TO THEREIN WOULD SUPPORT THE CASE OF THE APPELLANT. FURTHER, THE ORDER IN THE CASE OF ITAT, BANGALORE BENCH, BANGALORE IN THE CASE OF ADIT(E) VS. M/S.NATIONAL INSTITUTE FOR RURAL BANKIN G, ITA NO.923/B.2011 DT.24TH JULY 2012 AND ALSO THE BOMBAY TRIBUNAL IN THE CASE OF NATIONAL INSTITUTE OF BANK MANAGEMENT VS. A DIT - ITA NO.2057/BANG/2016 PAGE 5 OF 7 ITA NOS.2913 86 2914/ MUM/2016 DT.25.1.2018 WERE FURNISHED TO SUPPORT THE CASE OF THE APPELLANT. IN THE BOMBAY TRIBUNAL'S JUDGMENT THE TRIBUNAL HAD ALSO HE LD UNDER IDENTICAL CIRCUMSTANCES THE INSTITUTION IS FOR EDUC ATIONAL PURPOSES AND ALSO ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT. HAVING HELD THAT THE APPELLANT IN THAT CASE WAS ELIGIBLE FOR EX EMPTION U/S.11 OF THE ACT, IT DID NOT CONSIDER THE FACT AS TO WHETHER THE INSTITUTION WAS ELIGIBLE FOR EXEMPTION U/S.10(23C)(VI) OF THE ACT, EVEN THOU GH A PRAYER IN THIS REGARD WAS MADE BY THE APPELLANT. FURTHER THE APPEL LANT RELIED ON THE FOLLOWING JUDGMENTS:- (A) DIGEMBER JAIN SOCIETY FOR CHILD WELFARE VS DGIT(E) 329 TR 459(DEL) (B) C.P.VIDYA NIKETAN INTER COLLEGE SHIKSHAN SOC. V S. UOI 359 ITR 322 (ALL) ITA NOS.2530/BANG/2017, 3147/BANG/2018&ITA NO.2431/BANG/2019 M/S. SOUTHERN INDIA BANKS STAFF TRAINING COLLEGE, BENGALURU PAGE 5 OF 6 5. ON THE SIMILAR CIRCUMSTANCES, THE ITAT, BOMBAY B ENCH HAS HELD THAT THE APPELLANT WAS FOR EDUCATIONAL INSTITUTION. IN T HE APPELLANT'S OWN CASE THE ITAT, BANGALORE BENCH HAD NOT GONE INTO TH E REAL ISSUE THAT THE APPELLANT-SOCIETY WAS FOR EDUCATIONAL PURPOSES AND HELD THAT THEIR SERVICES WERE ONLY FOR CONSULTANCY WHICH WAS CONTRA RY TO THE FACTS OF THE CASE WHICH WAS NOT GONE INTO DETAIL BY THE TRIB UNAL. 6. IN THE CIRCUMSTANCES, IT IS SUBMITTED THAT THE J UDGMENT OF THE APPELLATE TRIBUNAL IS DISTINGUISHABLE AND ON THE FA CTS OF THE CASE OF THE APPELLANT BEFORE THE APPELLATE TRIBUNAL THE OTHER J UDGMENT WOULD APPLY AND THE APPELLANT WAS ENTITLED TO THE EXEMPTI ON U/S.10(23C)(VI) OF THE ACT AS CLAIMED. 7. IN VIEW OF THE ABOVE, IT IS PRAYED THAT THE APPE AL MAY KINDLY BE BLOCKED UNTIL THE DISPOSAL OF THE APPEAL BY THE HON 'BLE HIGH COURT OF KARNATAKA IN THE APPELLANT'S OWN CASE FOR THE ASSES SMENT YEAR 2014- 15. IN THE ALTERNATIVE, IT IS ALSO PRAYED THAT THE ORDER OF THIS CIT MAY KINDLY BE SET ASIDE AND THE MATTER MAY BE RESTORED TO THE FILE OF THE CIT FOR FRESH ITA NO.2057/BANG/2016 PAGE 6 OF 7 ADJUDIC ATION AWAITING THE JUDGMENT OF THE HON'BLE COURT IN THE CASE OF TH E APPELLANT FOR THE ASSESSMENT YEAR 2014-15. 8. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE TRIBUNAL FOR EARLIER YEAR AND SUBMITTED THAT THE ISSUE NEED NOT BE REMITTED TO THE FILE OF THE CIT(EXEMPTIONS) AS THE ISSUE HAS ALREADY BEE N DECIDED AGAINST THE ASSESSEE FOR THE AY 2014-15. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, THE TRIBUNAL IN THE EARLIER YEAR FOR AY 2014-15 ONLY RELIED ON CLAUSE (D) & (G) OF THE MEMORANDUM OF ASSOCIATIO N OF THE ASSESSEE COLLEGE AND OVERLOOKED CLAUSE (A) & (B) OF THE MEMO RANDUM OF ASSOCIATION. HOWEVER, AT THIS STAGE, WE ARE NOT IN A POSITION TO TAKE A DECISION IN FAVOUR OF THE ASSESSEE, SINCE THE DECIS ION OF THE TRIBUNAL IS NOT DISTURBED BY ANY HIGHER FORUM. HOWEVER, IN THE INTERESTS OF JUSTICE, IT IS APPROPRIATE TO REMIT THE ISSUE IN DISPUTE TO THE FILE OF THE CIT(EXEMPTIONS) FOR APPROPRIATE DECISION, AFTER THE FINAL JUDGMENT OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF ASSESSEE FOR THE AY 2014-15. WITH THESE OBSERVATIONS, WE REMIT THE I SSUE TO THE FILE OF THE CIT(EXEMPTIONS). 10. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ITA NOS.2530/BANG/2017, 3147/BANG/2018&ITA NO.2431/BANG/2019 M/S. SOUTHERN INDIA BANKS STAFF TRAINING COLLEGE, BENGALURU PAGE 6 OF 6 3. TAKING A CONSISTENT VIEW, WE REMIT THIS ISSUE IN DISPUTE TO THE FILE OF THE A.O. ON SIMILAR DIRECTIO NS. 4. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH APR, 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER BANGALORE, DATED 15 TH APR, 2021. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.