The Asstt. Commissioner of Income Tax (Exemptions), Circle-1, Ahmedabad V. Gujarat Council of Vocational Training, Gandhinagar

ITA 3378/AHD/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4464 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 15-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B PARMAR
• Assessee Lawyers: SU RENDRA KUMAR
• Keywords: Charitable institution
• Section: 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ./ I.T.A. NOS. 3378 & 3379/AHD/2016 ( / ASSESSMENT YEAR : 2009-10 & 2012-13) ACIT(EXEMPTION), CIRCLE 1, AHMEDABAD 380 009 / VS. GUJARAT COUNCIL OF VOCATIONAL TRAINING, BLOCK NO.8, 3 RD FLOOR, DR. JIVRAJ MEHTA, BHAWAN, GANDHINAGAR. ./ ./ PAN/GIR NO. : AABTG 2713 R ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI SURENDRA KUMAR, CIT-D.R. REVENUE BY : SHRI TUSHAR HEMANI & P.B. P ARMAR, AR / DATE OF HEARING 01/08/2018 / DATE OF PRONOUNCEMENT 25/10/2018 ! / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE REVENUE AGAINST THE SEPARATE ORDERS OF THE COMMISSI ONER OF INCOME TAX (APPEAL)- GANDHINAGAR [CIT(A) IN SHORT] VIDE APPEAL NO. CIT(A)- GNR/514/2015-16 & CIT(A)-GNR/515/2015-16 DATED 28.09.2016 RELEVANT TO ASSESSMENT YEARS (AYS) 2009-10 & 2012-1 3. ITA NOS.3378 & 3379/AHD/2016 A. YS 2009-10 & 2012-13 GUJARAT COUNCIL AND VOCATIONAL TRAINING - 2 - FIRST WE TAKE UP THE APPEAL OF THE REVENUE IN ITA N O. 3378/AHD/2016 PERTAINING TO THE A.Y. 2009-10: 2. THE SAME GROUNDS OF APPEAL RAISED BY THE REVEN UE IN BOTH THE APPEAL ARE AS UNDER:- I. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSEE'S APPE AL NEGATING THE FINDINGS OF THE ASSESSING OFFICER DENYING THE BENEF ITS OF SECTION 11(1)(A) & 11(2) OF THE I.T. ACT. II. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) IS JUSTIFIED IN GIVING THE BENEFIT OF SECTIO N 11 & 12 WHICH THE A.O. DISALLOWED BY INVOKING THE PROVISION OF SECTIO N 2(15) R.W.S.13(8) OF THE ACT. III. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IV. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) MAY BE SET ASIDE AND THAT OF T HE ASSESSING OFFICER BE RESTORED. 3. THE SOLITARY ISSUE RAISED BY THE REVENUE IS THAT THE LD. CIT(A) ERRED IN ALLOWING THE BENEFIT OF SECTION 11(1)(A) & 11(2) OF THE ACT WHICH IS CONTRARY TO THE PROVISIONS OF SECTION 2(15 ) R.W.S. 13(8) OF THE ACT. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN AOP TRUST AND ENGAGED IN PROVIDING VOCATIONAL TRAINING. THE AO DU RING THE ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS CHARGING FEE/CONSIDERATION FROM THE ACTIVITY OF VOCATIONAL TRAINING. AS PER TH E AO, THE ACTIVITY OF THE ITA NOS.3378 & 3379/AHD/2016 A. YS 2009-10 & 2012-13 GUJARAT COUNCIL AND VOCATIONAL TRAINING - 3 - ASSESSEE FALLS UNDER THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL UTILITY. ACCORDINGLY, THE AO WAS OF THE VIEW THAT THE EXEMPTION UNDER SECTION 11(1)(A)/11(2) OF THE ACT IS NOT AVAILABLE TO THE ASSESSEE AS PER THE PROVISO OF SECTION 2(15) OF THE ACT. THUS, THE AO SOUGHT CLARIFICATION FROM THE ASSESSEE ON THE ISSUES AS DISCUSSED ABOVE. 5. IN COMPLIANCE TO IT, THE ASSESSEE SUBMITTED AS U NDER: ' AS REGARDS EXPLANATION REQUIRED, BY YOUR GOODSELF A S TO BY INCOME EARNED BY RENDERING SERVICES FOR FEE SHOULD NOT TRE ATED AS ADVANCEMENT OF OBJECT OF PUBLIC UTILITY WE UNDER, ADVICE OF OUR CLIENT, BEG TO SUBMIT THAT GUJARAT COUNCIL OF VOCATIONAL TRAINING (GCVT) IS A CHARITABLE TRUST REGISTERED UNDER BOMBAY PUBLIC TRUST ACT AND HAS BEEN CARRYING OUT ACTIVITIES IN THE FIELD OF PROVIDING VOCATIONAL EDUCATION IN THE STATE OF GUJARAT. OUR ACTIVITIES INCLUDE DEVELOPING CURRI CULUM FOR VOCATIONAL EDUCATION, PAPER SETTING, CONDUCTING EXAMINATION, C ERTIFICATIONS, ASSESSMENT OF ANSWER SHEETS, PROMOTING COURSES IS F OREIGN LANGUAGE , PROVIDING TRAINING IN VOCATIONAL COURSES ETC. ALL T HESE ACTIVITIES ARE EDUCATIONAL ACTIVITIES AND THE TRUST CAN RENDER SER VICES BY CHARGING FEES FOR EDUCATIONAL ACTIVITIES CARRIED OUT BY THE TRUST CARRIED OUT BY THE TRUST. WE WOULD LIKE TO BRING TO YOUR NOTICE THAT THE APPL ICABILITY OF PROVISO TO SECTION 2(15) WAS ONE OF THE ISSUE OF AP PEAL FILED BY GCVT BEFORE LD. COMM. OF INCOME TAX (APPEALS), GANDHINAGAR IN RESPECT OF A.Y. 2011-12 AND THE APPEAL WAS ALLOWED. THE COPY O F APPEAL ORDER HAS ALSO BEEN SUBMITTED TO YOUR GOODSELF. HOWEVER, THE AO DISAGREED WITH THE CONTENTIONS OF T HE ASSESSEE AND HELD THAT THE ACTIVITIES OF THE TRUST ARE COVERED UNDER THE PROVISO OF SECTION 2(15) OF THE ACT. ACCORDINGLY, THE AO DISALLOWED TH E CLAIM OF THE ASSESSEE U/S 11(1)(A) AND 11(2) OF THE ACT AMOUNTIN G TO RS.66,06,046/- ITA NOS.3378 & 3379/AHD/2016 A. YS 2009-10 & 2012-13 GUJARAT COUNCIL AND VOCATIONAL TRAINING - 4 - AND 2 CRORES RESPECTIVELY, WHICH WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 6. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD. C IT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE I DENTICAL ISSUE WAS DECIDED BY THE LD. CIT(A) VIDE HIS ORDER DATED 30.0 7.2014 PERTAINING TO THE A.Y. 2011-12. THEREFORE, THE ASSESSEE CLAIMED T HAT IT IS ELIGIBLE FOR EXEMPTION U/S 11(1)(A)/11(2) OF THE ACT. THE LD. CI T(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: 4.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSE SSMENT ORDER AND SUBMISSION MADE BY THE APPELLANT. AS BROUGHT TO MY NOTICE, ON GOING THROUGH THE APPELLATE ORDER FOR AY 2011-12, IT IS P ERUSED THAT THE FACTS ARE SIMILAR THIS YEAR AS WELL. AO HAS ALSO DISALLOW ED THE CLAIM OF THE APPELLANT ON SIMILAR LINES TO AY 2011-12. THE APPEA L DECIDED BY THE UNDERSIGNED FOR AY 2011-12 IS REPRODUCED AS UNDER: 4.3 I HAVE GONE THROUGH THE FACTS OF THE CASE, ASSESSME NT ORDER, AND THE CONTENTIONS OF THE APPELLANT. THE AO HAS CONTENDED THAT THE APPELLANT IS CARRYING OUT ACTIVITIES OF VOCATIONAL TRAINING AND SKILL DEVELOPMENT AND RECEI VES CONSIDERATION/FEE IN RESPECT OF ACTIVITIES AND HAS HUGE INCOME OVER E XPENDITURE AND SERVICES ARE PROVIDED FOR A CONSIDERATION. THE AO HAS THEREF ORE HELD THAT APPELLANT'S ACTIVITIES ARE NOT FOR CHARITABLE PURPO SE AS DEFINED IN SEC. 2(15) OF THE ACT AND THEREFORE, IT IS NOT GRANTED A NY BENEFIT OF DEDUCTION U/S 11 & 12 OF THE ACT. THE APPELLANT SUBMITTED THAT ITS OBJECTS ARE THAT O F CHARITABLE PURPOSE AND IMPARTING VOCATIONAL TRAINING AND IT IS REGISTE RED U/S 12AA OF THE IT ACT AS A CHARITABLE TRUST. DURING THE COURSE OF APP ELLATE PROCEEDINGS, APPELLANT HAS SUBMITTED FORM NO.10 WHICH WAS ALSO S UBMITTED TO THE AO ALONG WITH REGULATIONS TO ACCUMULATE THE UNUTILIZED RECEIPTS TOWARDS THE ITA NOS.3378 & 3379/AHD/2016 A. YS 2009-10 & 2012-13 GUJARAT COUNCIL AND VOCATIONAL TRAINING - 5 - OBJECT OF THE TRUST. CONSIDERING THIS, THE APPELLAN T HAS COMPLIED WITH THE REQUIREMENTS OF THE SECTION 11(2) OF THE ACT. FURTH ER, THE TRUST HAS BEEN GRANTED REGISTRATION U/S 12AA WHICH NOT WITHDRAWN B Y THE CIT. CONSIDERING THESE FACTS, THE AO IS NOT JUSTIFIED IN HOLDING THAT ACTIVITIES OF THE APPELLANT ARE NOT FOR CHARITABLE PURPOSES, AS D EFINED IN SECTION 2(15) OF THE ACT. THE AO IS ALSO NOT JUSTIFIED IN HOLDING THAT THE DEDUCTION U/S 11 IS NOT ALLOWABLE TO THE APPELLANT ON THE GROUND THA T THERE IS EXCESS OF INCOME OVER EXPENDITURE. HERE IT IS NOTICED THAT TO TAL RECEIPTS FOR THE YEAR UNDER CONSIDERATION ARE RS.5,61,84,537/- (3122325 + 24961312] AGAINST WHICH THE APPELLANT HAS INCURRED EXPENDITURE FOR IT S ACTIVITIES DURING THE YEAR TOTALING TO RS.1,50,85,285/- (7373762 + 771152 3). IT HAS FURTHER SUBMITTED RESOLUTION AND FORM NO. 10 TO ACCUMULATE RS.4,00,00,000/- OUT OF INCOME FOR THE YEAR FOR OBJECTS OF THE TRUST IN FUTURE. THUS, AGGREGATE OF THESE TWO FIGURES WORKS OUT TO RS.5,50,85,285/- AND IT IS MORE THAN 85% OF RECEIPTS FOR THE YEAR. THUS, THE TRUST HAS COMPL IED WITH THE PROVISIONS OF SEC. 11(2) OF THE ACT, ALSO. IN VIEW OF THE ABOVE, IT IS HELD THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S. 11 OF THE ACT. THEREFORE, THE DISALL OWANCE MADE BY THE AO OF RS.4,10,99,251/- IS DIRECTED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. FROM THE ABOVE, IT IS VERY CLEAR THAT THE ISSUE INV OLVED IN THE PRESENT APPEAL IS SIMILAR TO THAT THAT DECIDED FOR AY 2011- 12, ON WHICH APPELLANT HAS HEAVILY PLACED ITS RELIANCE. THEREFOR E, I DO NOT FIND ANY REASON TO DEVIATE FROM THE DECISION TAKEN AND THE R ELEVANT GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE APPELLANT HOLDIN G THAT APPELLANT IS ELIGIBLE FOR DEDUCTION U/S 11 OF THE ACT AND ADDITI ONS MADE ARE HEREBY DIRECTED TO BE DELETED. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. 7. THE LD. DR BEFORE US VEHEMENTLY SUPPORTED THE OR DER OF AO. ITA NOS.3378 & 3379/AHD/2016 A. YS 2009-10 & 2012-13 GUJARAT COUNCIL AND VOCATIONAL TRAINING - 6 - 8. ON THE OTHER HAND, LD. AR BEFORE US MADE A STATE MENT ACROSS THE BAR THAT THE IDENTICAL ISSUE PERTAINING TO THE A.Y. 2011-12 HAS BEEN DECIDED BY THE LD. CIT(A) IN ITS FAVOR. THEREAFTER, NO APPEAL WAS PREFERRED BY THE REVENUE AGAINST SUCH ORDER. THUS, THE IMPUGNED ISSUE HAS REACHED TO ITS FINALITY BY THE ORDER OF LD. CIT (A) PERTAINING TO THE A.Y. 2011-12. THE LD. AR VEHEMENTLY SUPPORTED THE O RDER OF LD. CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE DEDUC TION CLAIMED BY THE ASSESSEE U/S 11(1)(A)/11(2) OF THE ACT WAS DENIED B Y THE AO ON THE GROUND THAT THE ACTIVITY OF THE ASSESSEE INVOLVES A DVANCEMENT OF ANY OTHER ABJECT OF GENERAL PUBLIC UTILITY AND ITS RECE IPTS EXCEEDS THE MANDATORY LIMIT AS SPECIFIED UNDER PROVISO TO SECTI ON 2(15) OF THE ACT. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THERE W AS NO APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. C IT(A) PERTAINING TO THE A.Y. 2011-12 WHICH IMPLIES THAT THE ORDER OF LD . CIT(A) REACHED TO ITS FINALITY. IN OUR CONSIDERED VIEW, ONCE, THE ORD ER OF THE LD CIT(A) HAS REACHED TO ITS FINALITY TO ANY OF THE ASSESSMENT YE AR THEN ON THE SAME GROUND NO APPEAL BY THE REVENUE CAN BE PREFERRED TO THE HONBLE ITAT IN OTHER YEARS. IN THIS REGARD, WE DRAW SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CI T VS. EXCEL INDUSTRIES LIMITED REPORTED IN 358 ITR 295 WHEREIN IT WAS HELD AS UNDER: ITA NOS.3378 & 3379/AHD/2016 A. YS 2009-10 & 2012-13 GUJARAT COUNCIL AND VOCATIONAL TRAINING - 7 - 31. IT APPEARS FROM THE RECORD THAT IN SEVERAL ASSESSM ENT YEARS, THE REVENUE ACCEPTED THE ORDER OF THE TRIBUNAL IN FAVOU R OF THE ASSESSEE AND DID NOT PURSUE THE MATTER ANY FURTHER BUT IN RE SPECT OF SOME ASSESSMENT YEARS THE MATTER WAS TAKEN UP IN APPEAL BEFORE THE BOMBAY HIGH COURT BUT WITHOUT ANY SUCCESS. THAT BEING SO, THE REVENUE CANNOT BE ALLOWED TO FLIP-FLOP ON THE ISSUE AND IT OUGHT L ET THE MATTER REST RATHER THAN SPEND THE TAX PAYERS' MONEY IN PURSUING LITIGA TION FOR THE SAKE OF IT. 9.1 WE ALSO OBSERVED THAT THERE IS NO CHANGE IN THE FAC TS AND CIRCUMSTANCES IN THE IMPUGNED CASE IN COMPARISON TO THE PREVIOUS ASSESSMENT YEARS AND THE REVENUE IN EARLIER YEAR HA S ACCEPTED THE SAME. THEREFORE IN OUR CONSIDERED VIEW THE PRINCIPLES OF CONSISTENCY SHOULD BE APPLIED. IN THIS REGARD WE FIND PRINCIPLES LAID DOW N IN THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS. COMMISSIONER OF INCOME TAX (1992) 193 ITR 0321 (SC) ARE DIRECTLY ATTRACTED TO THE INSTANT CASE WHEREIN IT WAS OBSERV ED THAT IN THE ABSENCE OF ANY MATERIAL CHANGE IN THE FACTS, THE REVENUE SHOUL D NOT TAKE A DIFFERENT VIEW IN THE OTHER YEAR. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 11(1)(A)/11(2) OF THE ACT. ACCORDINGLY, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). HENCE, THE GROUND OF AP PEAL OF THE REVENUE IS DISMISSED. ITA NOS.3378 & 3379/AHD/2016 A. YS 2009-10 & 2012-13 GUJARAT COUNCIL AND VOCATIONAL TRAINING - 8 - NOW WE TAKE UP THE APPEAL OF THE REVENUE IN ITA NO. 3379/AHD/2016 PERTAINING TO THE A.Y. 2012-13: 10. AT THE OUTSET WE NOTE THAT THE ISSUES RAISED BY THE REVENUE IN ITA NO. 3379/AHD/2016 ARE EXACTLY IDENTICAL TO THE ISSU ES RAISED IN ITA NO. 3378/AHD/2016 WHICH HAVE ALREADY DECIDED IN THE AFO RESAID PARAGRAPHS. BOTH THE LD. DR & AR AGREED BEFORE US THAT WHATEVER WOULD BE TAKEN IN ITA 3378/AHD/2016 WILL BE APPLIED FOR THE APPEAL ON HAND. ACCORDINGLY WE DISMISS GROUND OF APPEAL OF THE REVENUE IN VIEW OF THE DISMISSAL OF APPEAL OF THE REVENUE IN ITA NO. 3378/AHD/2016. THU S THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 11. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 25/10/2018 SD/- SD/- /- (RAJPAL YADAV) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 25/10/2018 PRITI YADAV, SR.PS ITA NOS.3378 & 3379/AHD/2016 A. YS 2009-10 & 2012-13 GUJARAT COUNCIL AND VOCATIONAL TRAINING - 9 - ! '#$ %$ /COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. &'( ) / CONCERNED CIT 4. ) ( ) / THE CIT(A)-GANDHINAGAR, AHMEDABAD. 5. $* + '''( , '( / DR, ITAT, 6. + ,- . / GUARD FILE. ! / BY ORDER , TRUE COPY / / 0 (DY./ASSTT.REGISTRAR) '( , 01 & / ITAT, AHMEDABAD 1. DATE OF DICTATION 05/10/2018 (PAGE-3) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : .. 15/10/2018 3. OTHER MEMBER.. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 23/10/2018 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 10. DATE OF DESPATCH OF THE ORDER