Dy Commissioner of Income Tax, Faizabad V. M/s. Krishi Utpadan Mandi Samiti, Barabanki

ITA 316/LKW/2012

• Counselvise Citation: 31623714 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: P K KAPOOR
• Keywords: Charitable institution; Condonation of delay
• Section: 11; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.316/LKW/2012 ASSESSMENT YEAR:2008 - 09 DY.C.I.T., CIRCLE - FAIZABAD. VS. KRISHI UTPADAN MANDI SAMITI, RUDAULI, BARABANKI. PAN:AABTK0799H (APPELLANT) (RESPONDENT) ITA NO.112/LKW/2013 ASSESSMENT YEAR:2004 - 05 INCOME TAX OFFICER - 6(2), LUCKNOW. VS. KRISHI UTPADAN MANDI SAMITI, BANTHRA, LUCKNOW. PAN:AAAAK6202D (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. P. SRIVASTAVA, D. R. RESPONDENT BY SHRI P. K. KAPOOR, C.A. DATE OF HEARING 03/03/2014 DATE OF PRONOUNCEMENT 2 3 /05/2014 O R D E R PER BENCH: I.T.A. NO.316/LKW/2012 THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A) - I, LUCKNOW DATED 16/03/2012 FOR ASSESSMENT YEAR 2008 - 2009. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. WHETHER THE LD.CIT(A) WAS RIGHT IN TREATING THE AMOUNT OF RS.24,89,000/ - OF INCOME TAX AS ELIGIBLE FOR EXEMPTION A S PER S. 11 OF INCOME TAX ACT, 1961. 2 2. WHETHER LD.CIT(A) WAS CORRECT IN TREATING AMOUNT OF INCOME TAX PAID AS A RESULT OF BANK ACCOUNT ATTACHED BY THE DEPARTMENT AS AN OUTGOING OR EXCLUDIBLE FROM THE RECEIPTS OF THE ASSESSEE MANDI SAMITI AS NOT AVAILABLE FOR APPLICATION/UTILIZATION. 3. WHETHER LD.CIT(A) WAS RIGHT IN TREATING THE AMOUNT OF RS.24,89,000/ - OF INCOME TAX AS ELIGIBLE FOR EXEMPTION AS PER S. 11 DESPITE THE FACT THAT INCOME TAX IS NOT AN APPLICATION WITHIN THE MEANING OF SECTION 11 OF THE I.T. ACT, 1961. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). IN PARTICULAR, OUR ATTENTION WAS DRAWN TO PARA 5 ON PAGE 8 OF THE ORDER OF CIT(A). HE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: ( I ) COMMISSIONER OF INCOME - TAX VS JANAKI AMMAL AYYA NADAR TRUST [1985] 153 ITR 159 (MAD) ( II ) COMMISSIONER OF INCOME - TAX VS NIZAM'S SUPPL. RELIGIOUS ENDOWMENT TRUST [1981] 127 ITR 378 ( III ) COMMISSIONER OF INCOME - TAX VS JAYASHREE CHARITY TRUST [1986] 159 ITR 280 (CAL) 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENTS CITED BY LEARNED A.R. OF THE ASSESSEE. WE FIND THAT THE ONLY ISSUE INV OLVED IS THIS AS TO WHETHER THE AMOUNT OF RS.24.89 LAC PAID BY THE ASSESSEE ON ACCOUNT OF INCOME - TAX IS TO BE CONSIDERED AS APPLICATION OF INCOME OR NOT FOR THE PURPOSE OF COMPUTING ASSESSEES INCOME UNDER THE PROVISIONS OF SECTION 11 OF THE ACT. AS PER THE JUDGMENT S CITED BY LEARNED A.R. OF THE ASSESSEE, IT WAS HELD BY VARIOUS HIGH COURTS THAT PAYMENT OF TAX OUT OF CURRENT YEARS INCOME SHOULD BE TREATED AS HAVING BEEN APPLIED FOR CHARITABLE PURPOSES BECAUSE SUCH PAYMENT WAS MADE TO PRESERVE THE CORPUS FOR THE EXISTENCE OF THE TRUST. RESPECTFULLY FOLLOWING 3 THE SE JUDGMENT S OF VARIOUS HIGH COURT S , WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. I.T.A. NO.112/LKW/2013 6. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A) - II, LUCKNOW DATED 31/12/2012 FOR ASSESSMENT YEAR 2004 - 2005. 7. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE COMMISSIONER OF INCOME - TAX (APPEAL), LUCKNOW HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO THE AO TO RE - COMPUTE THE INCOME OF THE ASSESSEE BY TREATING THE AMOUNT OF RS.80,17,988/ - (AMOUNT PAID FOR DEVELOPMENT UTILIZATION RS.56,05,8817 - + RS.24,12,107/ - AMOUNT OF VIKAS CESS UTILIZED FOR DEVELOPMENT WORK) TRANSFERRED BY THE ASSESSEE TO THE KRISHI UTPADAN MANDI PARISHAD AS APPLICATION OF INCOME FOR CHARITABLE PURPOSE BY THE ASSESSEE WITHIN THE MEANING OF SECTION 11(1)(A) OF THE INCOME - TAX ACT, 1961 IN VIEW OF THE FACT THAT THE OBJECT OF THE ASSESSEE SAMITI IS ONLY FOR THE PURPOSE OF COLLECTION OF MANDI SHULK WHERE AS UTILIZATION OF THE SAME I.E. APPLICATION OF FUNDS IS BEING MADE BY ANOTHER SEPARATE ENTITY NAMELY 'RAJYA KRISHI UTPADAN MANDI PARISHAD' WHOS E ACCOUNTS ARE NOT VERIFIABLE. 2. THE COMMISSIONER OF INCOME - TAX (APPEAL), LUCKNOW HAS ERRED IN LAW AND ON FACTS IN ACCEPTING THE ACCUMULATION OF INCOME OF RS.7,91,423/ - BY ACKNOWLEDGING FORM NO. 10 FILED BY THE ASSESSEE AFTER STIPULATED TIME LIMIT GIVEN FOR THIS PURPOSE, IGNORING THE FACT THAT RULE 17 OF THE INCOME TAX RULE DOES NOT PERMIT THE FILING OF FORM NO. 10 AFTER THE EXPIRE OF THE TIME ALLOWED UNDER SUB - SECTION 1 OF SECTION 139 FOR FURNISHING THE RETURN OF INCOME AND THE COMMISSIONER OF INCOME - TAX HAS ALREADY REJECTED THE ASSESSEE'S REQUEST FOR CONDONATION OF DELAY FOR FILING OF FORM NO. 10. 4 3. THAT THE APPELLANT CRAVES LEAVES TO ADD OR AMEND ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AND OR TO ADD ANY FRESH GROUNDS AS AND WHEN IT IS REQUIRED TO DO SO. 8. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS REGARDING GROUND NO. 1, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS KRISHI UTPADAN MANDI SAMITI AS REPORTED IN [2012] 348 ITR 566 (SC) . REGARDING GROUND NO. 2, HE PLACED RELIANCE ON THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF RAJAN PRODUCTS VS UNION OF INDIA AS REPORTED IN [2001] 247 ITR 101 (RAJ) . HE ALSO PLACED RELIANCE ON THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS MAYUR FOUNDATION AS REPORTED IN [2005] 274 ITR 562 (GUJ) . 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. REGARDING THE FIRST ISSUE, AS PER GROUND NO. 1 OF THE REVENUES APPEAL, WE FIND THAT THE ONLY ISSUE INVOLVED IS THAT AS TO WHETHER THE AMOUNT PAID BY THE ASSESSEE TO KRISHI UTPADAN MANDI PARISHAD IS TO BE CONSIDERED AS APPLICATION OF I NCOME FOR CHARITABLE PURPOSE OR NOT. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT. HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A). ACCORDINGLY, GROUND NO. 1 IS REJECTED. 10. REGARDING GROUND NO. 2 OF THE REVENUES APPEAL, WE FIND THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS NAGPUR HOTEL OWNERS' ASSOCIATION AS REPORTED IN [2001] 247 ITR 201 (SC) WHEREIN IT WAS HELD THAT THE REQUIREMENT OF LAW IS THAT NOTICE OF ACCUMULATION IN FORM NO. 10 IS TO BE FURNISHED BEFORE THE ASSESSING OFFICER BEFORE THE ASSESSING OFFICER COMPLETES THE ASSESSMENT. IN THE PRESENT CASE ALSO, IT IS NOT THE CASE OF THE R EVENUE THAT SUCH NOTICE OF ACCUMULATION IN FORM NO. 10 WAS NOT FURNISHED 5 BEFORE THE ASSESSING OFFICER BEFORE HE COMPLETED THE ASSESSMENT AND HENCE, BY RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE ALSO. ACCORDINGLY, GROUND NO. 2 IS ALSO REJECTED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 12. IN THE COMBINED RESULT, BOTH THESE APPEALS OF THE REVENUE ARE DIMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 3 /05/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR