ITO, Gurgaon V. M/s National Horticultural Board, Gurgaon

ITA 3337/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3999 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 16-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 07-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ TANDAN
• Assessee Lawyers: RAHUL BISHNOI
• Keywords: Business income
• Section: 143(3); 12A; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER ITA NO.3337/DEL/2010 ASSESSMENT YEAR : 2007-08 ITO, WARD-4, GURGAON. VS. NATIONAL HORTICULTURE BOARD, 85, INSTITUTIONAL AREA, SECTOR 18, GURGAON. PAN : AAATN0804F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAHUL BISHNOI, FCA REVENUE BY : SHRI RAJ TANDAN, CIT, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER OF THE CIT (A) DATED 26 TH APRIL, 2010 FOR ASSESSMENT YEAR 2007- 08. GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.3,80,16,160/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF PROCESSING FEE AND SERVICE CHARGES BY TREATING THE SAME AS SEPARATE BUSINESS INCOME OF THE ASSESSEE DISREGARDING THE FACT THAT RENDERING OF SERVICES AFTER CHARGING FEES FROM TH E CUSTOMERS IS IN THE NATURE OF BUSINESS SINCE THERE IS NO PROVISION IN THE AIMS AND OBJECTS OF THE SOCIETY FOR COLLECTING THESE RECEIPT AND THE ASSESSEE HAS NOT MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR THIS BUSINESS AND IS NOT ENTITLED TO EXEMPTION U/S 10(23C)(IV) OR U/S 11 OF THE INCOME TAX ACT, 1961. ITA NO.3337/DEL/2010 2 2. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE AT NIL ON 31 ST OCTOBER, 2007. THE ASSESSEE IS A SOCIETY DISBURSING SUBSIDIE S RECEIVED FROM MINISTRY OF AGRICULTURE, GOVERNMENT OF INDIA ON CHARITABLE BASIS AND IS ENGAGED IN THE PROMOTION OF POST HARVEST ACTIVI TIES IN INDIA. THE ASSESSEE IS ALSO REGISTERED U/S 12A OF THE INCOME TAX ACT A ND IS NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES U/S 10( 23C)(IV) OF THE IT ACT. IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE A SSESSEE IS CHARGING PROCESS FEES AND SERVICE CHARGES FROM ITS CUSTOME RS FOR RENDERING SERVICES. THE ASSESSING OFFICER TREATED SUCH AC TIVITY OF THE ASSESSEE AS AN ACTIVITY OF BUSINESS NATURE. AS THE ASSESSEE DID NOT MAINTAIN SEPARATE BOOKS OF ACCOUNT FOR SUCH BUSINESS, ACC ORDING TO THE ASSESSING OFFICER IT IS NOT ENTITLED FOR EXEMPTION EITHE R U/S 10(23C)(IV) OR SECTION 11 OF THE ACT. IT WAS NOTICED THAT THE A SSESSEE HAS EARNED INCOME OF `3,53,45,415/- AS PROCESSING FEE AND ` 26,70 ,741/- AS SERVICE CHARGES. THE PROCESSING FEE IS CHARGED FROM THE FARMERS FOR PROCESSING AND EXAMINATION OF THE PROJECT CLAIMED TO BE UNDERTAKEN BY THE FARMERS. THE SERVICE CHARGES ARE RECOVERED FROM T HE HORTICULTURE AND ANCILLARY INDUSTRY AND CONSULTANCY SERVICES @ 4%. THE PROCESSING FEE IS CHARGED @ 1% OF THE TOTAL COST OF THE PROJECT/ LOAN AMOUNT CLAIMED BY THE APPLICANT IRRESPECTIVE OF THE FACT TH AT THE LOAN IS SANCTIONED OR NOT. THE ASSESSING OFFICER ALSO NOTICED TH AT THERE IS NO PROVISION IN THE AIMS AND OBJECT OF THE SOCIETY FOR CH ARGING SUCH AMOUNTS. 3. IT WAS SUBMITTED BY THE ASSESSEE THAT PROCESSING CHARGES IS AN AMOUNT RECOVERED FROM THE BENEFICIARY FOR PROCESSING THE APPLICATION WHICH INCLUDES VERIFICATION OF INFORMATION/DOCUMENTS OF THE PROJECT SUBMITTED BY THE APPLICANT. THE ACCEPTANCE OF THE P ROJECT BY NATIONAL ITA NO.3337/DEL/2010 3 HORTICULTURE BOARD (NHB) IS DECIDED ON THE BASIS OF T HE PROCESSING WHICH IS THE FIRST STEP FOR IDENTIFICATION OF GENUINE BENEFICIARY FOR GRANT OF SUBSIDY TO ACHIEVE THE OBJECTIVE AND IT CANNOT BE CONSIDERED AS A SEPARATE BUSINESS ACTIVITY IN ITSELF. IT WAS SUBMITTED TH AT SERVICE CHARGES BELONG TO SOFT LOAN RELEASED BY THE ASSESSEE PRIOR TO FINANCIAL YEAR 2000-01 AND THESE CHARGES HAVE BEEN ACCOUNTED AS INCOME AND ARE UTILIZED BY THE ASSESSEE AS A PART OF 85% OF THE UTI LIZATION OF INCOME. IT WAS SUBMITTED THAT AIMS AND OBJECTS DULY EM POWER THE BOARD TO RECEIVE ANY KIND OF INCOME WHATSOEVER AND T HE ASSESSEE HAS BEEN RECEIVING EXEMPTION U/S 10(23C)(IV) SINCE ASSESSMENT YEAR 1987- 88. REFERENCE WAS MADE TO THE NOTIFICATION DATED 12 TH SEPTEMBER, 2006 ISSUED BY GOVERNMENT OF INDIA MENTIONING THEREIN THAT ANY INCOME OF THE BOARD SHALL NOT BE INCLUDED IN THE TOT AL INCOME. IT WAS SUBMITTED THAT IN THE EARLIER YEARS THE BOARD HAD BEE N RECEIVING PROCESSING CHARGES AND EXEMPTION WAS ALLOWED U/S 10(23C) (IV) OF THE ACT. ALL THE RECEIPTS ON ACCOUNT OF PROCESSING CHARGE S AND SERVICE CHARGES WERE PLACED BEFORE THE DEPARTMENTAL AUTHORIT IES AND THE ASSESSEE FOR ASSESSMENT YEAR 2008-09 HAS BEEN GRANTED EXEMPT ION AFTER DUE CONSIDERATION OF THE RECEIPTS. THE ASSESSING O FFICER DID NOT ACCEPT SUCH CONTENTIONS OF THE ASSESSEE. ACCORDING TO TH E ASSESSING OFFICER, THESE CHARGES ARE RECOVERED AND DEPICTS THE I NTENTION OF THE ASSESSEE TO EARN PROFITS BY EMPLOYING QUALIFIED PERSONS FO R EXAMINATION OF THE APPLICATIONS OF THE FARMERS AND TH E ASSESSEE IS CHARGING PROCESSING FEE AT A FIXED PERCENTAGE OF THE LOAN AMOUNT. NO SEPARATE BOOKS OF ACCOUNT HAVE BEEN MAINTAINED BY THE ASSESSEE FOR SUCH BUSINESS ACTIVITY AND, THEREFORE, THE ASSESSEE IS NOT E NTITLED FOR EXEMPTION U/S 10(23C)(IV) ON THESE RECEIPTS. SO FAR A S IT RELATES TO SERVICE CHARGES, THE ASSESSING OFFICER HELD THAT THEY PER TAINED TO THE SOFT LOANS GIVEN BY THE ASSESSEE BOARD PRIOR TO ASSESSMENT YE AR 2000- 01 AND THUS, ARE BUSINESS INCOME CHARGEABLE TO TAX. TH ERE IS NO PROVISION IN THE AIMS AND OBJECTS OF THE SOCIETY TO AUT HORISE COLLECTION ITA NO.3337/DEL/2010 4 OF THESE RECEIPTS, THEREFORE, THE SAME AMOUNTS TO BUSINE SS INCOME. AS THE ASSESSEE IS CARRYING ON THE BUSINESS ACTIVITY, IT IS NOT ENTITLED TO EXEMPTION U/S 10(23C)(IV) AND, IN THIS MANNER, LD. ASSE SSING OFFICER HAS ASSESSED THE INCOME OF THE ASSESSEE AT ` 3,80,16,156/- A GAINST THE RETURNED INCOME AT NIL. 4. BEFORE CIT (A), IT WAS SUBMITTED THAT THE ASSESSEE IS A BOARD PROMOTED BY GOVERNMENT OF INDIA AS A REGISTERED SOCIET Y TO PROMOTE AND ENCOURAGE HORTICULTURE ACTIVITY IN INDIA. IT I S REGISTERED U/S 12A WITH, CIT, ROHTAK AND HAS ALSO BEEN NOTIFIED BY THE C ENTRAL GOVERNMENT U/S 10(23C)(IV) VIDE NOTIFICATION DATED 1 2 TH SEPTEMBER, 2006 FOR THE ASSESSMENT YEARS 2005-06 TO 2007-08. IT WA S SUBMITTED THAT NHB IS A NODAL AGENCY WHICH HAS FRAMED VARIOUS SCH EMES TO ASSESS THE BENEFICIARY. UPTO 2001-02 THE ASSESSEE USED TO P ROVIDE SOFT LOANS ON WHICH SERVICE CHARGES @ 4% WERE CHARGED. THE RECOVERY OF THE SOFT LOANS FROM BENEFICIARIES WAS POOR AND, THEREFORE, THE SCHEME WAS DISCONTINUED FROM ASSESSMENT YEAR 2001-02. A NEW SCHEME WAS INTRODUCED FROM FINANCIAL YEAR 2000-01 AS P ER WHICH ASSISTANCE WAS PROVIDED IN THE NATURE OF SUBSIDY WHICH WA S RELEASED TO THE BENEFICIARIES THROUGH THE BANK. THE ASSESSEE COLLECT S PROCESSING CHARGES RANGING FROM 0.1% TO 0.5% FROM THE BENEFICIA RIES FOR PROCESSING THE APPLICATION WHICH INCLUDES VERIFICATION OF INFORMATION/DOCUMENTS SUBMITTED BY THE APPLICANTS . I T WAS SUBMITTED THAT SUCH COLLECTION OF PROCESSING CHARGES IS THE FIRST ST EP TOWARDS IDENTIFYING GENUINE BENEFICIARY. A COMMITTEE OF NH B PROCESS THE APPLICATION AND ACTUALLY VISITED THE SPOT FOR VERIFIC ATION OF THE LAND AND ITS DOCUMENTS. THE ACCEPTANCE OF THE PROJECT IS DECID ED ON THE BASIS OF SUCH PROCESSING. IT IS NOT A SEPARATE BUSINESS IN ITSELF . SIMILARLY, FOR SERVICE CHARGES ON SOFT LOANS ARE DULY ACCOUNTED FOR AS INCOME AND ARE BEING UTILIZED AS REQUIRED UNDER LAW. THE ASSESSING OFF ICER DID NOT PROPERLY APPRECIATE THE NOTIFICATION OF CENTRAL GOV ERNMENT DATED 12 TH ITA NO.3337/DEL/2010 5 SEPTEMBER, 2006 WHICH EXEMPT THE INCOME RECEIVED B Y THE ASSESSEE. THE ONLY CONDITION IMPOSED IS THAT IT HAS TO UTILIZE 8 5% OF ITS INCOME DURING THE ASSESSMENT YEAR AND THE ASSESSEE HAS UTILIZED MOR E THAN 85% OF ITS INCOME. IN ALL EARLIER YEARS SIMILAR NOTIF ICATION WAS ISSUED AND ASSESSMENT HAS BEEN FRAMED U/S 143(3) OF THE ACT AND INCOME WITH REGARD TO ALL THESE CHARGES (PROCESSING AND SERVICE CHARGES) HAVE BEEN CONSIDERED EXEMPT. THERE IS NO CHANGE IN THE FA CTS AND CIRCUMSTANCES OR IN THE PROVISIONS SINCE THE ASSESSMENT YEAR 2001-02. THERE WAS NO PROFIT MOTIVE INVOLVED IN SUCH TRANSACTIO NS. THE MEMORANDUM DULY AUTHORIZE THE ASSESSEE TO RECEIVE SUCH CONTRIBUTIONS. ON THESE SUBMISSIONS, LD. CIT (A) HAS RECO RDED A FINDING THAT PROCESSING OF APPLICATIONS FOR IDENTIFYING THE GE NUINE BENEFICIARY IS THE FIRST STEP AND IT IS A PART OF ACTIVITIES OF THE ASSESSEE AND IT IS NOT A SEPARATE BUSINESS ACTIVITY. HE FOUND FORCE IN THE AR GUMENT OF THE ASSESSEE THAT NOTIFICATION DATED 12 TH SEPTEMBER, 2006 ISSUED BY GOVERNMENT OF INDIA EXEMPTS ANY INCOME RECEIVED BY T HE ASSESSEE AND ALSO THAT THE ASSESSEE HAS UTILIZED 85% OF THIS INCOME FOR THE ACTIVITIES OF THE ASSESSEE. HE ALSO FOUND FORCE IN THE A RGUMENT OF THE ASSESSEE THAT FOR ALL THE EARLIER ASSESSMENT YEARS ASSESSMENTS WE RE FRAMED U/S 143(3) OF THE ACT AND SUCH CHARGES WERE NOT TREATED AS SEPARATE BUSINESS OF THE ASSESSEE, THEREFORE, THE ASSESSING OFF ICER HAS WRONGLY TREATED THE PROCESSING AND SERVICE CHARGES AS BU SINESS RECEIPTS AND PROCESSING OF APPLICATION OF THE BENEFICI ARIES AS SEPARATE BUSINESS ACTIVITY. THE ACTIVITY OF PROCESSING OF THE AP PLICATION IS AN INTEGRAL PART OF THE ACTIVITIES OF THE ASSESSEE AND THE RECEIPTS FROM THE SAME ARE TAKEN INTO ACCOUNT FOR THE PURPOSE OF APPLIC ATION OF 85% OF INCOME FOR CHARITABLE ACTIVITY. IT IS ON THESE FINDI NGS LD. CIT (A) HAS DELETED THE ADDITION. THE REVENUE IS AGGRIEVED, HEN CE, HAS FILED AFOREMENTIONED GROUNDS OF APPEAL. ITA NO.3337/DEL/2010 6 5. AFTER NARRATING THE FACTS, LD. DR RELYING UPON TH E FINDINGS RECORDED BY THE ASSESSING OFFICER, SUBMITTED THAT COLLEC TION OF PROCESSING CHARGES AND SERVICE CHARGES BY THE ASSESSEE WERE IN THE NATURE OF A SEPARATE BUSINESS CARRIED ON BY THE ASSESSEE AN D, THEREFORE, THE ASSESSING OFFICER WAS RIGHT IN REFUSING TH E BENEFIT TO THE ASSESSEE EITHER U/S 10(23C)(IV) OR U/S 11 OF THE ACT. HE CONTENDED THAT MEMORANDUM OF ASSOCIATION DID NOT EMPOWER THE ASSESSEE TO COLLECT SUCH CHARGES. THE ACTIVITY OF THE ASSESSEE WAS NOT CHARIT ABLE IN NATURE AND, HENCE, THE ASSESSING OFFICER WAS RIGHT IN ASSESSING THE AFOREMENTIONED PROCESSING CHARGES AND SERVICE CHARGES AS INCOME. 6. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR THAT A COPY OF MEMORANDUM OF ASSOCIATION IS PLACED AT PAGES 20-27 OF T HE PAPER BOOK. HE SUBMITTED THAT THE ASSESSEE IS A SOCIETY WORKING UNDER THE MINISTRY OF AGRICULTURE, GOVERNMENT OF INDIA. ITS OB JECTS INTER ALIA INCLUDE TO ENCOURAGE, PROMOTE AND DEVELOP THE HORTI CULTURE INDUSTRY AND TO ACHIEVE SUCH AN OBJECT THE ASSESSEE IS DISBURSING LO ANS, ETC. AND SUBSIDIES TO THE APPLICANTS UPON FULFILLMENT OF CER TAIN CONDITIONS FOR THEIR ELIGIBILITY. HE SUBMITTED THAT ACCORDING TO CLAUSE 4 (XXI) THE ASSESSEE IS AUTHORIZED TO ACQUIRE AND ACCEPT, GRANT, GIF TS, DONATIONS, SUBSCRIPTIONS AND CONTRIBUTIONS FROM ANY SOURCE WHATEVER , INCLUDING, BUT NOT LIMITED TO, THE CENTRAL GOVERNMENT FOR THE FURTHERANCE OF THE OBJECTS OF THE SOCIETY. REFERRING TO THE CONSTITUTIO N OF THE SOCIETY, HE SUBMITTED THAT SECRETARY (A&C), DEPTT. OF AGRICULTUR E AND COOPERATION, NEW DELHI, IS THE CHAIRMAN OF THE SOCIETY AND OTHER MEMBERS OF THE SOCIETY ARE ALSO EITHER SENIOR GOVERNMENT OFFICERS OR O FFICERS FROM SPECIALIZED FIELDS. HE SUBMITTED THAT THE SOCIETY RIGH T FROM INCEPTION HAS BEEN CHARGING SUCH AMOUNTS AND IT HAS BEEN ASSESSED ALSO U/S 143(3) BY THE DEPARTMENT AND IT HAS NEVER BEEN TAXED ON SUCH CHARGES. HE SUBMITTED THAT NOT ONLY U/S 12A, THE ASSESSEE HAS BEEN GRANTED REGISTRATION, BUT ALSO ASSESSEE HAS BEEN NOTIFIED BY WAY OF ITA NO.3337/DEL/2010 7 NOTIFICATION NO.252 OF 2006 DATED 12 TH SEPTEMBER, 2006 TO BE AN INSTITUTION EXEMPTED FROM INCOME TAX UNDER SUB-CLAUSE (IV) OF CLAUSE (23C) OF SECTION 10 AND IT HAS BEEN MENTIONED IN THE NOTIFICATION AS UNDER:- GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NEW DELHI, THE 12 TH SEPTEMBER, 2006 NOTIFICATION NOTIFICATION NOTIFICATION NOTIFICATION (INCOME TAX) (INCOME TAX) (INCOME TAX) (INCOME TAX) S.O. IN EXERCISE OF POWERS CONFERRED BY THE SUB-CLAU SE (IV) OF THE CLAUSE (23C) OF SECTION 10 OF THE INCOME TAX ACT, 1 961 (43 OF 1961), THE CENTRAL GOVERNMENT HEREBY NOTIFIES THAT ANY IN COME RECEIVED BY ANY PERSON ON BEHALF NOTIONAL HORTICUL TURE BOARD, NOTIONAL HORTICULTURE BOARD, NOTIONAL HORTICULTURE BOARD, NOTIONAL HORTICULTURE BOARD, GURGAON, HARYANA GURGAON, HARYANA GURGAON, HARYANA GURGAON, HARYANA (HEREINAFTER THE INSTITUTION) SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF SUCH PERSON AS ASSESSA BLE FOR THE ASSESSMENT YEARS 2005 ASSESSMENT YEARS 2005 ASSESSMENT YEARS 2005 ASSESSMENT YEARS 2005- -- -2006 TO 2007 2006 TO 2007 2006 TO 2007 2006 TO 2007- -- -2008 2008 2008 2008 SUBJECT TO THE FOLLOWING CONDITIONS: (I) THE INSTITUTION WILL APPLY ITS INCOME, OR ACCUMULA TE FOR APPLICATION, WHOLLY AND EXCLUSIVELY TO THE OBJECTS FOR WHICH IT IS ESTABLISHED AND IN A CASE WHERE MORE THAN FIFTEEN PER CENT OF ITS INCOME IS ACCUMULATED ON OR AFTE R THE 1 ST DAY OF APRIL, 2002, THE PERIOD OF THE ACCUMULATION OF THE AMOUNT EXCEEDING FIFTEEN PER CENT OF ITS INCOME SHALL IN NO CASE EXCEED FIVE YEARS; (II) THE INSTITUTION WILL NOT INVEST OR DEPOSIT ITS FUND (OTHER THAN VOLUNTARY CONTRIBUTION AND MAINTAINED IN THE FORM OF JEWELLERY, FURNITURE, ETC.) FOR ANY PERIOD DURING THE PREVIOUS YEARS RELEVANT TO THE ASSESSMENT YEARS MENTIONED ABOVE OTHERWISE THAN IN ANY ONE OR MORE OF THE FORMS OR MODES SPECIFIED IN SUB-SECTION (5) OF THE SEC. 11; (III) THIS NOTIFICATION WILL NOT APPLY IN RELATION TO AN Y INCOME BEING PROFITS AND GAINS OF BUSINESS, UNLESS THE BUSIN ESS IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE INSTITUTION AND SEPARATE BOOKS OF ACCOUNT ARE MAINTAINED IN RESPECT OF SUCH BUSINESS; (IV) THE INSTITUTION WILL REGULARLY FILE ITS RETURN OF I NCOME BEFORE THE INCOME TAX AUTHORITY IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME TAX ACT, 1961; (V) THAT IN THE VENT OF DISSOLUTION OF THE INSTITUTION, ITS SURPLUS AND THE ASSETS WILL BE GIVEN TO AN ORGANIZATION WITH SIMILAR OBJECTIVES. ITA NO.3337/DEL/2010 8 THIS NOTIFICATION IS APPLICABLE ONLY TO THE RECIPIENTS O F INCOME ON BEHALF OF THE INSTITUTION AND NOT TO ANY OTHER RECEIPT OR I NCOME OF SUCH RECIPIENTS. TAXABILITY OR, OTHERWISE OF THE INCOM E OF THE INSTITUTION WOULD BE SEPARATELY CONSIDERED AS PER THE PR OVISIONS OF THE INCOME TAX ACT, 1961. SD/- (DEEPAK GARG) (DEEPAK GARG) (DEEPAK GARG) (DEEPAK GARG) UNDER SE UNDER SE UNDER SE UNDER SECRETARY TO THE GOVT. OF INDIA. CRETARY TO THE GOVT. OF INDIA. CRETARY TO THE GOVT. OF INDIA. CRETARY TO THE GOVT. OF INDIA. NOTIFICATION NO. 252/2006 NOTIFICATION NO. 252/2006 NOTIFICATION NO. 252/2006 NOTIFICATION NO. 252/2006 F.NO. 197/63/2006 F.NO. 197/63/2006 F.NO. 197/63/2006 F.NO. 197/63/2006- -- -ITA.I ITA.I ITA.I ITA.I 7. HE SUBMITTED THAT ACCORDING TO THE AFOREMENTIONED NOTIFICATION, THE ASSESSEE HAS BEEN RECOGNIZED TO BE AN INSTITUTION ENJ OYING EXEMPTION OF ITS INCOME FOR ASSESSMENT YEARS 2005-06 TO 2 007-08. HE SUBMITTED THAT IT IS NOT EVEN THE CASE OF THE ASSESSING O FFICER THAT ASSESSEE DID NOT APPLY 85% OF ITS INCOME. HE SUBMITTED T HAT IT IS ALSO NOT THE CASE OF THE ASSESSING OFFICER THAT ASSESSEE HAS VIOLA TED ANY OF THE CONDITIONS LAID DOWN IN THE AFOREMENTIONED NOTIF ICATION. HE SUBMITTED THAT FOR ASSESSMENT YEAR 2008-09 TO 2010-11, T HE ASSESSEE HAD FILED AN APPLICATION FOR GRANT OF EXEMPTION U/S 10(23C)(IV) OF THE ACT WHICH WAS EARLIER REJECTED BY THE CCIT, PANCHKUL A, VIDE ORDER DATED 26 TH MARCH, 2008. AGAINST THE SAID ORDER OF THE CCIT, TH E ASSESSEE HAD FILED A WRIT PETITION IN PUNJAB & HARYANA HIGH COUR T WHICH WAS DECIDED BY HONBLE HIGH COURT VIDE ORDER DATED 28 TH AUGUST, 2008 IN WHICH THE AFOREMENTIONED ORDER REFUSING THE GRANT OF EXEMPTION U/S 10(23C)(IV) WAS REJECTED AND FRESH ORDER WAS DIRECTED TO BE PASSED. IN PURSUANCE OF DIRECTIONS OF HONBLE HIGH COURT, THE CCIT, AFTER EXAMINING ALL THE ASPECTS, HAS GRANTED THE REGISTRATION FOR ASSESSMENT YEAR 2 008-09. HOWEVER, SO FAR AS IT RELATES TO SUBSEQUENT YEARS, IN VIE W OF AMENDMENT IN SECTION 2 (15), HE HAS REJECTED THE CLA IM OF THE ASSESSEE. HE SUBMITTED THAT IN ANY CASE FOR ASSESSMENT YEAR 2007-08, THERE BEING A NOTIFICATION ISSUED BY THE CENTRAL GOVE RNMENT AND THE SAME BEING SUBSISTING TILL DATE, LD. CIT (A) HAS RIGHTLY GRANTED THE RELIEF TO THE ASSESSEE AND HIS ORDER SHOULD BE UPHELD. ITA NO.3337/DEL/2010 9 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE CONTENTS OF THE NO TIFICATION ISSUED BY THE GOVERNMENT OF INDIA VIDE WHICH THE ASSESSEE HAS B EEN RECOGNIZED TO BE AN INSTITUTION EXEMPT FROM PAYING T AX U/S 10(23C)(IV) HAVE ALREADY BEEN REPRODUCED IN THE EARLIER PART OF THIS ORDER. IT IS NOT EVEN THE CASE OF THE DEPARTMENT THAT IT DID NOT SPEND 85% OF ITS RECEIPTS FOR THE AIMS AND OBJECTS STATED IN THE MEMORAN DUM OF ASSOCIATION. THE ASSESSEE IS A SOCIETY WORKING UNDER THE C ONTROL OF GOVERNMENT OF INDIA. SUCH RECEIPTS HAVE NEVER BEEN BROUGHT TO TAX IN EARLIER ASSESSMENT YEARS. THEREFORE, IN OUR VIEW, THERE IS NO INFIRMITY IN THE ORDER OF THE CIT (A) VIDE WHICH IT HAS BEEN H ELD THAT THE ADDITION WAS NOT CALLED FOR. WE DECLINE TO INTERFERE AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 20.05.20 11. SD/- SD/- [B.K. HALDAR] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 20.05.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR, ITAT, DELHI BENCHES