Hariday, New Delhi V. ADIT (Exemption), New Delhi

ITA 3531/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3828 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 02-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Benefit of exemption
• Section: 143(3); 234B; 12A; 201; 12; 11

Judgement Text

1 ITA NOS. 3530 TO 3534/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO. 3530/DEL/20 17 (A.Y 2010-11) I.T.A. NO. 3531/DEL/20 17 (A.Y 2011-12)) I.T.A. NO. 3532/DEL/20 17 (A.Y 2012-13) I.T.A. NO. 3533/DEL/20 17 (A.Y 2013-14) I.T.A. NO. 3534/DEL/20 17 (A.Y 2014-15) (THROUGH VIDEO C ONFERENCING) HARIDAY FLAT NO. 70, POCKET-1 SECTOR-2, DWARKA NEW DELHI AAATH1934J (APPELLANT) VS ADIT (EXEMPTION) TRUST CIRCLE-II CIVIC CENTRE, NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THESE FIVE APPEALS ARE FILED BY THE ASSESSEE AGAIN ST THE ORDER DATED 27/03/2017 PASSED BY CIT (A)-40, NEW DELHI FOR ASSE SSMENT YEARS 2011-12 TO 2014-15 RESPECTIVELY. 2. THE GROUNDS OF APPEAL ARE AS UNDER: I.T.A. NO. 3530/DEL/2017 (A.Y 2010-11) 1. THAT THE ORDER OF THE LEARNED CIT (APPEAL) IS BA D IN LAW AND AGAINST THE STATUTORY PROVISIONS. 2. THAT THE LEARNED CIT APPEAL HAS ERRED IN CONFIRMIN G THE ADDITIONS OF RS. APPELLANT BY NONE RESPONDENT BY SH. VIVEK VARDHAN, SR. DR DATE OF HEARING 04.10.2021 DATE OF PRONOUNCEMENT 11.10.2021 2 ITA NOS. 3530 TO 3534/DEL/2017 55,73,410 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENT/ REMITTANCE MADE TO THE UNIVERSITY OF TEXAS, USA AS NOT AN APPL ICATION OF INCOME U/S 11(1) (C) OF THE INCOME TAX ACT, 1961. I.T.A. NO. 3531/DEL/2017 (A.Y 2011-12) 1. THAT THE ORDER OF THE LEARNED CIT (APPEAL) IS B AD IN LAW AND AGAINST THE STATUTORY PROVISIONS. 2. THAT THE LEARNED CIT APPEAL HAS ERRED IN CONFIR MING THE ADDITIONS OF RS. 36,62,871/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF PAYMENT/ REMITTANCE MADE TO THE UNIVERSITY OF TEXAS, USA AS NOT AN APPLICATION OF INCOME U/S 11(1) (C) OF THE INCOME TAX ACT, 1961. I.T.A. NO. 3532/DEL/2017 (A.Y 2012-13) 1. THAT THE ORDER OF THE LEARNED CIT (APPEAL) IS B AD IN LAW AND AGAINST THE STATUTORY PROVISIONS. 2. THAT THE LEARNED CIT APPEAL HAS ERRED IN CONFIRM ING THE ADDITIONS OF RS. 35,25,428/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF PAYMENT/ REMITTANCE MADE TO THE UNIVERSITY OF TEXAS, USA AS NOT AN APPLICATION OF INCOME U/S 11(1) (C) OF THE INCOME TAX ACT, 1961. I.T.A. NO. 3533/DEL/2017 (A.Y 2013-14) 1. THAT THE ORDER OF THE LEARNED CIT (APPEAL) IS B AD IN LAW AND AGAINST THE STATUTORY PROVISIONS. 2. THAT THE LEARNED CIT APPEAL HAS ERRED IN CONFIR MING THE ADDITIONS OF RS. 39,60,766/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF PAYMENT/ REMITTANCE MADE TO THE UNIVERSITY OF TEXAS, USA AS NOT AN APPLICATION OF INCOME U/S 11(1) (C) OF THE INCOME TAX ACT, 1961. I.T.A. NO. 3534/DEL/2017 (A.Y 2014-15) 1.THAT THE ORDER OF THE LEARNED CIT (APPEAL) IS BA D IN LAW AND AGAINST THE STATUTORY PROVISIONS. 2. THAT THE LEARNED CIT APPEAL HAS ERRED IN CONFIRM ING THE ADDITIONS OF RS. 32,84,213/-MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENT/ REMITTANCE MADE TO THE UNIVERSITY OF TEXAS, USA AS NOT AN APPLICATION OF INCOME U/S 11(1) (C) OF THE INCOME TAX ACT, 1961. 3. THE ISSUES ARE IDENTICAL IN ALL THE APPEALS. THE REFORE, WE ARE TAKING ASSESSMENT YEAR 2010-11. HRIDAY ('THE ASSESSEE SOCI ETY') IS A REGISTERED SOCIETY REGISTERED WITH THE REGISTRAR OF SOCIETIES, DELHI. THE ASSESSEE SOCIETY IS 3 ITA NOS. 3530 TO 3534/DEL/2017 A VOLUNTARY ORGANIZATION OF PUBLIC HEALTH PROFESSIO NALS, SOCIAL SCIENTISTS AND LAWYERS ENGAGED IN ADVOCACY AND RESEARCH AIMING TO PROMOTE HEALTH AWARENESS AND INFORM HEALTH ACTIVISM AMONG YOUTH IN INDIA. TH E ASSESSEE SOCIETY WORKS IN COLLABORATION WITH WORLD HEALTH ORGANIZATION, TH E MINISTRY OF HEALTH AND FAMILY WELFARE AND THE MINISTRY OF ENVIRONMENT AND FORESTRY, GOVERNMENT OF INDIA. THE BASIC VISION OF THE ASSESSEE SOCIETY IS TO INSPIRE AND INFORM THE YOUNG PERSON TO ACT AS CHANGE AGENTS FOR IMPROVING THE HEALTH OF THE SOCIETY, RESULTING IN THE HEALTHY YOUTH AND A HEALTHY NATION . ITS MISSION IS TO DESIGN, DEVELOP, IMPLEMENT AND EVALUATE STRATEGIES ADDRESSI NG HEALTH RELATED ISSUES AND TO DISSEMINATE, BUILT CAPACITY, PROMOTE ADVOCAC Y AND HEALTH ACTIVISM BESIDES REPLICATION OF SUCCESSFUL HEALTH PROGRAMS A ND PRACTICES WITH OTHER WORKING TOWARDS SIMILAR GROUPS. THE KEY FOCUS AREAS OF THE APPELLANT SOCIETY ARE AS UNDER. A. RESEARCH B. AWARENESS C. ADVOCACY D. CAPACITY BUILDING E. LEGAL GUIDANCE THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY U/S 1 43(2) OF THE INCOME TAX ACT, 1961 AND THE ASSESSMENT ORDER U/S 143(3) OF THE INC OME TAX ACT, 1961 WAS PASSED ON 21.03.2013 AT AN INCOME OF RS. 70,78,989 BY DENYING THE BENEFIT OF SECTION 11 & SECTION 12 . THE FACTS OF THE CASE ARE THAT DURING THE YEAR UNDE R CONSIDERATION A SUM OF RS. 55,73,410 WAS SPENT TOWA RDS SUB GRANT TO UNIVERSITY OF TEXAS WITH ITS PRINCIPAL PLACE OF BUS INESS AT HOUSTON, TEXAS, USA. THE ASSESSING OFFICER WHILE PASSING THE ASSESS MENT ORDER- MENTIONED IN THE ASSESSMENT ORDER THAT THE UNIVERSITY OF TEXAS I S A FOREIGN ENTITY , NOT BEING REGISTERED U/S 12A OR FCRA, 1976, THEREFORE T RANSFER OF FUNDS TO THE EXTENT OF RS. 55,73,410 ATTRACTS THE PROVISION OF S ECTION 11(1)(C ) OF THE INCOME TAX ACT, 1961. IT WAS EXPLAINED BEFORE THE ASSESSIN G OFFICER BY THE ASSESSEE THAT SECTION 11(1)(C ) OF THE INCOME TAX ACT, 1961 RELATES TO THE INCOME TO BE EXEMPT U/S. 11(1)(C) AS DIRECTED BY THE BOARD BY GE NERAL OR SPECIAL ORDER 4 ITA NOS. 3530 TO 3534/DEL/2017 WHEREAS IN THE CASE OF THE ASSESSEE SOCIETY THE FUN DS HAVE BEEN SPENT BASED ON THE SUB GRANT TO THE UNIVERSITY OF TEXAS, USA OU T OF THE FUNDS RECEIVED EARLIER FROM NATIONAL INSTITUTE OF HEALTH (NIH) WHI CH HAVE ALREADY BEEN INCLUDED IN THE RECEIPT SIDE OF THE INCOME AND EXPE NDITURE ACCOUNT HENCE SECTION 11(1)(C) IS NOT APPLICABLE IN THE PRESENT C ASE. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT ALL THE DETAILS O F THE EXPENSES AS INCURRED BY THE APPELLANT SOCIETY HAVE BEEN PRODUCED FOR VERIFI CATION BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER DISALLOWED THE AMOUN T REMITTED TO THE UNIVERSITY OF TEXAS, USA AS NOT AN APPLICATION OF INCOME U/S 1 1(1)(C) OF THE INCOME TAX ACT, 1961 AND FURTHER BASED ON ABOVE DENIED THE BEN EFIT OF SECTION 11 & SECTION 12 TO THE APPELLANT SOCIETY. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. DESPITE GIVING NOTICE FOR HEARING FOR 04.10.2021 , NONE APPEARED ON BEHALF OF THE ASSESSEE. IN-FACT, THE NOTICE HAS BE EN RETURNED BACK WITH THE REMARK THAT THE PARTY IS NOT LIVING AT THE ADDRESS MENTIONED. THE ASSESSEE HAS NOT FILED ANY NEW ADDRESS IN FORM 36. THEREFOR E, WE ARE TAKING UP ALL THE APPEAL AND TAKE IT COGNIZANCE OF THE ASSESSMENT ORD ER AND THE ORDER OF THE CIT(A) AND THE SUBMISSION MADE BY THE ASSESSEE BEFO RE THE REVENUE AUTHORITIES. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD LD. DR AND PERUSED ALL THE RELEVAN T MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT(A) HAS CATEGORICALLY GIVEN THE FINDING THAT FOR THE ASSESSMENT YEARS 2011-12, 2012-13, 201 3-14 AND 2014-15. THE ASSESSEES APPLICATION OF INCOME OF TRUST OUTSIDE I NDIA WAS DENIED AND THUS EXEMPTION U/S 11 WAS DENIED TO THE ASSESSEE ON ACCO UNT OF VIOLATION IN TERMS OF SECTION 11 (1)(C), EXEMPTION UNDER THIS SECTION CANNOT BE DENIED UNDER THIS 5 ITA NOS. 3530 TO 3534/DEL/2017 SECTION AND ONLY THE PORTION OF INCOME TO THE EXTEN T NOT APPLIED IN INDIA WILL NOT BE ELIGIBLE FOR EXEMPTION. THE ASSESSING OFFIC ER WAS DIRECTED ACCORDING BY THE CIT(A). THE ASSESSEE HAS CHALLENGED THE DENIAL OF EXEMPTION U/S 11 FOR VIOLATION OF SECTION 13(1) (C) READ WITH SECTION 1 3(3) WHEREIN THE CIT(A) HAS HELD THAT THE ASSESSING OFFICER IS NOT JUSTIFIED I N DENY THE BENEFIT OF EXEMPTION U/S 11 OF THE ACT AND THUS DELETED THE DISALLOWANCE OF RS. 5,46,226/- MADE IN ASSESSMENT YEAR 2014-15 BEING 15% OF SALARY MADE U/ S 40A(2) (A) AND ALLOWED THE SAID GROUND OF THE ASSESSEE. AS RELATED TO FLO ATING THE LEVY OF INTEREST U/S 234B AND SECTION 234D. THE CIT(A) RELIED THE DECIS ION OF THE HONBLE APEX COURT IN CASE OF ANJUMAN H GLASS WARE 252 ITR 1 CIT INDIA HINDUSTAN BULB CARRIERS 259 ITR 449 AS WELL AS THE DECISION OF T HE HONBLE KERALA HIGH COURT IN CASE OF KERALA CHEMICALS AND PROTEINS 323 ITR 58 4 MADRAS HIGH COURT IN CASE OF INFRASTRUCTURE FINANCE COMPANY LTD. 340 ITR 580 FOR THE PERIOD AFTER 1/6/2003 IRRESPECTIVE OF THE ASSESSMENT YEAR INVOLV ED AS IT WAS INTRODUCED W.E.F. THAT DATE AND THUS, DISMISS THE GROUNDS OF T HE ASSESSEE. THE DECISION OF THE CIT(A) ON EACH OF THE ISSUES WERE ELABORATED AN D THE SAME ARE AS PER LAW. THUS, THERE IS NO NEED TO INTERFERE WITH THE FINDIN GS OF THE CIT(A). HENCE, ALL THE APPEALS OF THE ASSESSEES ARE DISMISSED. 8. IN RESULT, ALL THE FIVE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF OCTOBER, 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 11/10/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT 6 ITA NOS. 3530 TO 3534/DEL/2017 ASSISTANT REGISTRAR ITAT NEW DELHI