Asstt. Commissioner of Income Tax-I, Kanpur V. M/s Indore Education & Cultural Centre, Kanpur

ITA 337/LKW/2014

• Counselvise Citation: 33723714 RSA 2014
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P K KAPOOR
• Keywords: Charitable institution; Opportunity of being heard; Fair market value; Competent authority
• Section: 143(3); 12A; 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.337/LKW/2014 ASSESSMENT YEAR:2006-07 A.C.I.T.-1, KANPUR. VS. M/S INDORE EDUCATION & CULTURAL CENTRE, 6/14, SHANTI NAGAR, KANPUR. PAN:AAATM6983E (APPELLANT) (RESPONDENT) C.O.NO.18/LKW/2014 (IN ITA NO.337/LKW/2014) ASSESSMENT YEAR:2006-07 A.C.I.T.-1, KANPUR. VS M/S INDORE EDUCATION & CULTURAL CENTRE, 6/14, SHANTI NAGAR, KANPUR. PAN:AAATM6983E (RESPONDENT) (OBJECTOR) REVENUE BY SHRI AMIT NIGAM, DR ASSESSEE BY SHRI P. K. KAPOOR, C. A. DATE OF HEARING 09/10/2015 DATE OF PRONOUNCEMENT 2 0 / 11 /2015 O R D E R PER A. K. GARODIA, A.M. THIS APPEAL IS FILED BY THE REVENUE AND THE C.O. IS FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST THE ORDER OF LE ARNED CIT(A)-II, KANPUR DATED 31/01/2014 FOR ASSESSMENT YEAR 2006-07 . 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 2 1. LD. COMMISSIONER OF INCOME TAX (APPEAL)-II, KAN PUR ERRED IN LAW AND ON FACTS IN TREATING THE APPELLANT SOCIETY AS REGISTERED U/S12A OF THE INCOME TAX WHIL E DECIDING THE APPEAL AGAINST THE ASSESSMENT ORDER DATED 21.11.2008 U/S 143(3) OF THE INCOME TAX ACT, 1961 PASSED BY DCIT-1, KANPUR, WHEREAS AS PER PROVISIONS OF SECTION 246A OF THE INCOME TAX ACT, 1961 NO SUCH POWER REGARDING 12A MATTERS LIES WITH CIT(A). 2. LD. COMMISSIONER OF INCOME TAX (APPEAL)-II, KANP UR ERRED IN LAW AND ON FACTS IN TREATING THE APPELLANT SOCIETY AS REGISTERED U/S 12A OF THE INCOME TAX WHI LE DECIDING THE APPEAL AGAINST THE ASSESSMENT ORDER DATED 21.11.2008 U/S 143(3) OF THE INCOME TAX ACT,1961 PASSED BY DCIT-1, KANPUR BY IGNORING THE FACT THAT THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IN CASE OF SOCIETY FOR THE PROMOTION OF EDUCATION, ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT VS CIT(CENTRAL) (2008) 216 CTR 167 AS RELIED UPON BY CIT(A) HAS BEEN REFERRED TO LARGER BENCH OF HON'BLE ALLAHABAD HIGH COURT AS MENTIONED IN THE JUDGMENT DATED 05.08.2013 IN CASE OF COMMISSIONER OF INCOME TAX VS MUJAFARNAGAR DEVELOPMENT AUTHORITY (INCOME TAX APPEAL NO.348 OF 2008. 3. LD. COMMISSIONER OF INCOME TAX (APPEAL)-II, KANP UR HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE EXEMPTION U/S 11 OF THE ACT TO THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE TIME FRAME UNDER SUB SECTION (2) OF SECTION 12AA OF THE INCOME TAX ACT, 1961 FOR GRANT OF REGISTRATION U/S 12A IS ONLY DIRE CTORY AND NOT MANDATORY AS HAS BEEN HELD BY HON'BLE HIGH COURT OF MADRAS IN THE CASE OF CIT-I, SALEM VS. SHE ELA CHRISTIAN CHARITABLE TRUST [2013] 32 TAXMANN.COM 24 2 (MADRAS). 4. LD. COMMISSIONER OF INCOME TAX (APPEAL)-II, KANP UR HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE APPEA L OF THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS VIOLATED PROVISIONS OF SECTION 13 OF T HE INCOME TAX ACT, 1961 HENCE THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE INCOME TAX ACT . 3 5. LD. COMMISSIONER OF INCOME TAX (APPEAL)-II, KANP UR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.45,90,000/- ON ACCOUNT OF DONATION TO THE SOCIETY M/S SHYAM BIHARI MISHRA MEMORIAL TRUST WHIC H IS NOT REGISTERED U/S 12A OF THE ACT. 6. LD. COMMISSIONER OF INCOME TAX (APPEAL)-II, KANP UR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS. 45,90,000/- ON ACCOUNT OF DONATION TO THE SOCIETY M/S SHYAM BIHARI MISHRA MEMORIAL TRUST TO WHOM EXEMPTION U/S 10(23)(C)(VI) HAS BEEN DENIED BY THE COMPETENT AUTHORITY. 7. LD. COMMISSIONER OF INCOME TAX (APPEAL)-II., KAN PUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS. 89,995/- ON ACCOUNT OF TRANSPORTATION CHARGE S WITHOUT APPRECIATING THE FACT THAT PAYMENT WAS MADE TO M/S HRM TRAVELS WHICH IS A CONCERN OF MEMBERS OF THE SOCIETY AND THEREFORE IT IS PROHIBITED U/S 13(3 ) OF THE ACT. 8. LD. COMMISSIONER OF INCOME TAX (APPEAL)-II, KANP UR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS. 89,995/- ON ACCOUNT OF TRANSPORTATION CHARGE S WITHOUT APPRECIATING THE FACT THAT ENTIRE AMOUNT OF TRANSPORTATION CHARGES WAS REMITTED TO THE TRANSPOR TS M/S HRM TRAVELS IN ADVANCE AND NO INTEREST THEREON WAS CHARGED BY THE ASSESSEE SOCIETY FROM THE TRANSPORTER. 9. THE ORDER OF THE LEARNED CIT(A)-II, KANPUR DATED 31/01/2014 BEING ERRONEOUS IN LAW AND ON FACTS, BE VACATED AND THE ORDER DATED 21/11/2008 PASSED U/S 143(3) OF INCOME TAX ACT, 1961 BY THE ASSESSING OFFICER BE RESTORED. 3. GROUNDS AS PER THE C.O. OF THE ASSESSEE ARE AS UNDER:- 1. BECAUSE THE ORDER DATED 31.01.2014 AS PASSED B Y THE LD. CIT(A) ACCORDED FULLY WITH THE PROVISIONS O F LAW AND THE APPEAL FILED BY THE REVENUE BEING 4 337/LKW/2014 FOR THE ASSESSMENT YEAR 2006-07 IS NOT MAINTAINABLE. 2. BECAUSE M/S SHYAM BIHARI MISHRA MEMORIAL TRUST ( TO WHOM DONATION AMOUNTING TO RS.45,90,000/- HAD BEEN GIVEN BY THE ASSESSEE/RESPONDENT) DULY REGISTERED UNDER SECTION 12AA OF THE ACT AND SUCH REGISTRATION BEING IN FORCE EVEN ON DATE, THE PAYME NT AMOUNTED TO APPLICATION OF INCOME AND THE CONTENTIONS RAISED BY THE REVENUE IN ITA NO.337/LKW/14 IS NOT MAINTAINABLE EITHER ON FACTS O R IN LAW. 3. BECAUSE TRANSPORTATION CHARGES AMOUNTING TO RS.89,995/- AS HAD BEEN PAID TO M/S HRM TRAVELLERS REPRESENTED FAIR MARKET VALUE OF THE SERVICES PROVIDED/GOODS SUPPLIED BY THE PAYEE AND THE SAME WERE OUTSIDE THE PURVIEW OF SECTION 13(3) OF THE AC T. 4. AT THE VERY OUTSET, IT WAS SUBMITTED BY LEARNED D. R. OF THE REVENUE THAT CIT(A) HAS DECIDED THE ISSUE BY FOLLOW ING THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE O F SOCIETY FOR THE PROMOTION OF EDUCATION, ADVENTURE SPORT & CONSERVAT ION OF ENVIRONMENT VS CIT(CENTRAL) (2008) 216 CTR 167. HE FURTHER SUB MITTED THAT BY FOLLOWING THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH C OURT, IT WAS HELD BY CIT(A) THAT THE ASSESSEE SHOULD BE TREATED AS REGIS TERED U/S 12A BUT THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS NO MORE A GOOD LAW BECAUSE THIS ISSUE WAS REFERRED TO LARGER BENCH OF HONBLE ALLAHABAD HIGH COURT AND LARGER BENCH OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS MUJAFARNAGAR DEVELOPM ENT AUTHORITY (INCOME TAX APPEAL NO.348 OF 2008 DATED 05/02/2015) HAS HELD THAT THE JUDGMENT OF DIVISION BENCH OF HONBLE ALLAHABAD HIG H COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS MUJAFARNA GAR DEVELOPMENT AUTHORITY (INCOME TAX APPEAL NO.348 OF 2008 (SUPRA) DOES NOT LAY DOWN THE CORRECT POSITION OF LAW AND NON DISPOSAL OF APP LICATION FOR REGISTRATION BY GRANTING OR REFUSING REGISTRATION BEFORE THE EXP IRY OF SIX MONTHS, AS 5 PROVIDED U/S 12AA(2) OF THE ACT, WOULD NOT RESULT I N A DEEMED GRANT OF REGISTRATION. IT WAS SUBMITTED THAT AS PER THIS JU DGMENT OF FULL BENCH OF HONBLE ALLAHABAD HIGH COURT, THE ORDER OF CIT(A) I S NOT SUSTAINABLE. 5. AS AGAINST THIS, LEARNED A. R. OF THE ASSESSEE S UPPORTED THE ORDER OF CIT(A). HE ALSO SUBMITTED THAT EVEN IF THE ORDE R OF CIT(A) IS NOT SUSTAINED THEN ALSO, THE MATTER SHOULD BE RESTORED BACK TO HIS FILE FOR FRESH DECISION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS PE R THE JUDGMENT OF FULL BENCH OF HON'BLE ALLAHABAD HIGH COURT IN THE C ASE OF COMMISSIONER OF INCOME TAX VS MUJAFARNAGAR DEVELOPMENT AUTHORITY (S UPRA), THE DECISION OF DIVISION BENCH OF HONBLE ALLAHABAD HIGH COURT I N THE CASE OF SOCIETY FOR THE PROMOTION OF EDUCATION, ADVENTURE SPORT & C ONSERVATION OF ENVIRONMENT (SUPRA), IS NO MORE A GOOD LAW. THEREF ORE, THE ORDER OF CIT(A) IS NOT SUSTAINABLE BECAUSE HE HAS DECIDED TH E APPEAL ON THIS BASIS THAT IN VIEW OF THE DECISION OF DIVISION BENCH OF H ONBLE ALLAHABAD HIGH COURT IN THE CASE OF SOCIETY FOR THE PROMOTION OF E DUCATION, ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT (SUPRA), THE AS SESSEE SHOULD BE CONSIDERED AS DULY REGISTERED U/S 12A OF THE ACT. NOW HE HAS TO FIND OUT AS TO WHETHER REGISTRATION U/S 12A HAS BEEN ACTUALL Y GRANTED TO THE PRESENT ASSESSEE OR NOT AND THEREAFTER HE SHOULD DE CIDE ALL THE ISSUES AFRESH. IN THIS VIEW OF THE MATTER, WE SET ASIDE T HE ORDER OF CIT(A) AND RESTORE THE ENTIRE MATTER BACK TO HIS FILE FOR FRES H DECISION IN VIEW OF THE JUDGMENT OF FULL BENCH OF HON'BLE ALLAHABAD HIGH CO URT IN THE CASE OF COMMISSIONER OF INCOME TAX VS MUJAFARNAGAR DEVELOPM ENT AUTHORITY (SUPRA) AND AS PER ABOVE DISCUSSION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. SINC E WE ARE RESTORING BACK THE MATTER BACK TO CIT(A), WE DO NOT MAKE ANY COMME NT ON THE MERIT OF VARIOUS ADDITIONS MADE BY ASSESSING OFFICER AND DEL ETED BY CIT(A). 6 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 8. REGARDING THE CROSS OBJECTION OF THE ASSESSEE, W E FIND THAT THE SAME IS IN SUPPORT OF THE ORDER OF CIT(A) AND SINCE WE HAVE SET ASIDE THE ORDER OF CIT(A) AND RESTORED THE ENTIRE MATTER BACK TO HIS FILE FOR FRESH DECISION BY FOLLOWING THE JUDGMENT OF FULL BENCH OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF MUJAFARNAGAR DEVELOPMENT AUTHORITY (SUPRA), THERE IS NO MERIT IN THE CROSS OBJECTION FILED BY T HE ASSESSEE. 9. IN THE RESULT, THE CROSS OBJECTION OF THE ASSESS EE STANDS DISMISSED. 10. IN THE COMBINED RESULT, THE APPEAL OF THE REVEN UE IS ALLOWED FOR STATISTICAL PURPOSES WHEREAS CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A . K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:20/11/2015 *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. REG ISTRAR