DCIT (E), Circle- 1(1), New Delhi V. DLF Qutab Enclave Complex Educational Charitable Trust , New Delhi

ITA 3369/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3913 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 08-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Assessee Lawyers: R S SINGHI
• Keywords: Charitable institution; Benefit of exemption
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI B BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS.3369 & 3370/DEL/2018 ASSESSMENT YEARS : 2013-14 & 2014-15 DCIT, CIRCLE-1(1)(E), ROOM NO.2418, 24 TH FLOOR, E-2 BLOCK, PRATYAKSHKAR BHAWAN, DR. SHYAMA PRASAD MUKHERJEE CIVIC CENTRE, JAWAHARLAL NEHRU MARG, NEW DELHI-110002 VS DLF QUTAB ENCLAVE COMPLEX EDUCATIONAL CHARITABLE TRUST, 9 TH FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI-110001 PAN-AAATD0852D APPELLANT RESPONDENT APPELLANT BY MS. NIDHI SRIVASTAVA - CIT - DR RESPONDENT BY SH. R.S. SINGHI, CA & SH.SATYAJEET GOEL, CA DATE OF HEARING 06 .10 .2021 DATE OF PRONOUNCEMENT 07 . 10 .2021 ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE BOTH APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 13.02.2018 OF THE LD. COMMI SSIONER OF ITA NO. 3369 & 3370/DEL/2018 2 | P A GE INCOME TAX (APPEALS)-40, NEW DELHI (HEREINAFTER REFE RRED TO CIT(A)) FOR THE ASSESSMENT YEARS 2013-14 AND 2014 -15 RESPECTIVELY. THE REVENUE HAS RAISED FOLLOWING GROU NDS OF APPEAL FOR THE ASSESSMENT YEAR 2013-14:- WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN LAW IN ALLOWING THE ASSESSEE THE BENEFIT OF EXEMPTION UI/S 11 & 12 OF THE ACT IGNORING THE FACT THAT THOUGH TH E OBJECTS OF THE ASSESSEE SOCIETY MAY SEEM TO BE CHARITABLE, YET THE ACTIVITIES CARRIED OUT BY THE SOCIETY, WHICH YIELDED INCOME TO IT ARE COMMERCIAL IN NATURE. 2. A PERUSAL OF THE ABOVE GROUND OF APPEAL REVEALS THAT THE ISSUE INVOLVED IN THIS CASE IS AS TO WHETHER THE ASSESSEE IS ENTITLED TO THE BENEFIT OF THE EXEMPTION U/S 11 R.W. S. 12 OF THE INCOME TAX ACT, (HEREINAFTER REFERRED TO THE ACT) FOR THE YEAR UNDER CONSIDERATION. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT OUT ATTENTION TO THE IMPUGNED ORDER OF THE LD. CIT(A) TO SUBMIT THAT THE LD. CIT(A) IN PARA 4 OF THE IMPUGNE D ORDER HAS MENTIONED THAT THE ISSUE IS COVERED BY THE DECISION OF THE ITAT IN ASSESSEES CASE FOR THE ASSESSMENT YEARS 2002-03 , 2005-06 TO 2008-09, 2009-10 AND 2011-12. THE LD. CIT(A) HA S ALSO ITA NO. 3369 & 3370/DEL/2018 3 | P A GE REPRODUCED THE RELEVANT PART OF THE ORDER OF THE DE LHI BENCH OF THE ITAT IN THE CASE OF THE ASSESSEE FOR AY 2011-12 PASSED IN ITA NO.6615/DEL/2015 FOR THE SAKE OF READY REFERENC E IS REPRODUCED HEREUNDER AS UNDER:- 4.1.2 HON'BLE ITAT, DELHI BENCH 'F' IN APPELLANT'S OWN CASE FOR ASSESSMENT YEAR 2011-12 IN ITA NO.6615/DEL/2015 HAV E HELD AS UNDER: '4. WE HAVE HEARD THE ID. AUTHORIZED REPRESENTATIVE S OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, IN AY 2009-10, THE COORDINATE BENCH OF THE TRIBUNAL VIDE AN ORDER DATED 20.08.2014 PASSED IN ASSESSEE'S OWN REJECTED THE APPEAL FILED BY THE REV ENUE DENYING THE BENEFIT OF EXEMPTION UNDER SECTIONS 11 & 12 OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE DURING THE YEAR UNDER ASS ESSMENT. IN THE BACKDROP OF THE AFORESAID UNDISPUTED FACTS AND CIRCUMSTANCES OF THE CASE, WHEN WE EXAMINE THE ASSE SSMENT ORDER PASSED BY THE AO AND GROUNDS OF APPEAL RAISED BY THE REVENUE, IT IS TRANSPIRED THAT PRESENT APPEAL HAS B EEN FILED, JUST FOR SOLE REASON THAT 'THE DECISIONS RENDERED BY THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR AY 2009-10 HAS NOT BEEN ACC EPTED BY THE DEPARTMENT AND APPEAL HAS BEEN FILED IN THE HON 'BLE HIGH COURT.' THIS TREND OF FILING APPEAL IS NOT ONLY DIS APPOINTING BUT LEADS TO THE MULTIPLICITY OF THE LITIGATION BECAUSE OTHERWISE NO SUBSTANTIAL ILLEGALITY OR PERVERSITY HAS BEEN POINT ED OUT BY THE REVENUE. 6. NOT ONLY THIS DECISION RENDERED BY THE TRIBUNAL HAS FURTHER BEEN AFFIRMED BY THE HON'BLE HIGH COURT OF DELHI IN ITA NO.626/2012 ORDER DATED 27.02.2013, COPY OF WHICH I S AVAILABLE AT PAGES 4 TO 6 OF THE PAPER BOOK, BY MAKING FOLLOW ING OBSERVATIONS:- ' THE RESPONDENT HAD CHALLENGED THE SAID ORDER OF C ANCELLATION OF REGISTRATION BEFORE THE TRIBUNAL ON THE GROUND THAT THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) DID NOT HAVE THE POWER TO C ANCEL A ITA NO. 3369 & 3370/DEL/2018 4 | P A GE REGISTRATION UNDER SECTION 12A PRIOR TO 01.06.2010 WHICH WAS THE DATE ON WHICH AN AMENDMENT WAS BROUGHT ABOUT IN SECTION 12AA(3). SECTION 12AA(3) READS AS UNDER:- '(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) OR HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A(AS IT STOOD BEFORE ITS A MENDMENT BY THE FINANCE (NO.2) ACT, 1996 (33 OF 1996) AND SUBSE QUENTLY THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SU CH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELLIN G THE REGISTRATION OF SUCH TRUST OR INSTITUTION. ? HOWEVER, THE WORDS- 'OR HAS OBTAINED REGISTRATION A T ANY TIME UNDER SECTION 12A (AS IT STOOD THE BEFORE ITS AMEND MENT BY THE FINANCE (NO.2) ACT, 1996 (33 OF 1996)' WERE INSERTE D BY VIRTUE OF THE FINANCE ACT, 2010 WITH EFFECT FROM 01.06.2010. THIS MEANT THAT THE POWER TO CANCEL THE REGISTRATION WAS CONFE RRED UNDER SECTION 12AA(3) ONLY WITH EFFECT FROMOL.06.2010. TH IS IS EXACTLY WHAT HAS BEEN HELD BY THIS COURT IN DIT V. MOOL CHA ND KHAIRATI RAM TRUST-339 ITR 622 (DEL) THIS WOULD BE CLEAR FRO M THE OBSERVATIONS TO THE FOLLOWING EFFECT:- '7. FROM THE CONJOINT READING OF SUB-SECTION (1) CL AUSE (B) AND SUB-SECTION (3) OF SECTION 12 A A, IT WOULD BE SEEN THAT THE CANCELLATION OF THE REGISTRATION WAS PROVIDED WHERE THE REGISTRATION WAS GRANTED UNDER CLAUSE (B) OF SUB-SE CTION (1). FURTHER CANCELLATION UNDER SUB-SECTION (3) WAS ALSO PROVIDED WHERE THE REGISTRATION WAS OBTAINED AT ANY TIME UND ER SECTION 12A (MAY BE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB- SECTION (1) OF SECTION 12A). BUT THIS POWER OF CANCELLATION OF REG ISTRATION OBTAINED UNDER SECTION 12A CAME TO BE INCORPORATED BY WAY OF AMENDMENT INTRODUCED BY THE FINANCE ACT, 2010 WITH EFFECT FROM 1ST JUNE, 2010. THAT BEING THE INTERPRETATION OF SU B-SECTION (3), IT IS AMPLY CLEAR THAT THE POWER TO CANCEL THE REGISTR ATION ONCE GRANTED WAS ONLY CONFINED TO THE REGISTRATION GRANT ED UNDER CLAUSE (B) OF SUB-SECTION 1 OF SECTION 12AA TILL BE FORE 1ST JUNE, 2010 OF COURSE, NOW WITH EFFECT FROM 1ST JUNE, 2010 , THE POWER VESTS WITH THE COMMISSIONER EVEN TO CANCEL THE REGI STRATION GRANTED UNDER ANY OF THE CLAUSES OF SUB-SECTION (1) OF SECTION 12A. IN THAT VIEW OF INTERPRETATION, WE ARE OF THE CONSIDERED VIEW THAT THERE WAS NO POWER VESTED WITH THE COMMISSIONE R TO CANCEL OR WITHDRAW THE REGISTRATION GRANTED TO THE ASSESSE E UNDER SECTION 12A(A) IN THE YEAR 1974.' THEREFORE, THE TRIBUNAL WAS RIGHT IN HOLDING THAT T HE ORDER DATED ITA NO. 3369 & 3370/DEL/2018 5 | P A GE 31.12.2009 PASSED BY THE DIRECTOR OF INCOME-TAX (EX EMPTION) CANCELLING THE REGISTRATION OF THE RESPONDENT UNDER SECTION 12A WAS INVALID INASMUCH AS THE DIRECTOR INCOME-TAX (EX EMPTIONS) DID NOT HAVE THE JURISDICTION TO DO SO TILL 01.06.2 010 WHEN THE AMENDMENT WAS INTRODUCED IN SECTION 12AA(3) AS INDI CATED ABOVE. 8. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE AND FOL LOWING THE ORDER PASSED BY THE COORDINATE BENCH OF THE TRIBUNA L AFFIRMED BY THE HON'BLE DELHI HIGH COURT AND THE FACT THAT T HERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES IN CASE AT HA ND NOR THERE IS ANY CHANGE IN THE OBJECTS AND ACTIVITIES OF THE SOCIETY, WE FIND NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER P ASSED BY THE ID. CIT (A), HENCE THE PRESENT APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED.' 4.1.3. SINCE FACTS OF THE CASE ARE SIMILAR TO THOSE FOR T HE EARLIER ASSESSMENT YEARS AS WELL AS ASSESSMENT YEARS 2011-12 AND 2012-13, RESPECTFULLY THE DECISION OF THE HON'BLE ITAT, DELH I IN APPELLANT'S OWN CASE FOR ASSESSMENT YEAR 2011-12, THE ASSESSING OFFICER IS DIRECTED TO ALLOW EXEMPTION UN DER SECTION WITH ALL CONSEQUENTIAL BENEFITS. GROUNDS OF APPEAL NOS. 1 TO 7 ARE ALLOWED. 4. IN THE LIGHT OF THE ABOVE DECISION OF THE CO-OR DINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE, IN THE ABSENCE OF ANY MATERIAL CHANGE IN THE FACTUAL MATRI X, WE HEREBY DECLINE TO INTERFERE WITH THE ORDER OF LD. CIT(A) 5. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 07/ 10/2021. SD/- (ANIL CHATURVEDI) SD/- (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI; DATED: 07 / 10/2021 . ITA NO. 3369 & 3370/DEL/2018 6 | P A GE F{X~{T F{X~{T F{X~{T F{X~{T COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI