The DCIT (Exemptions), Circle-2, Ahmedabad V. M/s. Gujarat Environment Service Society, Anand

ITA 3564/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8316 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 30-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH
• Keywords: Business income; Charitable institution
• Section: 12A; 11

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD : , , BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.3564/AHD/2016 ( / ASSESSMENT YEAR : 2012-13) DY.COMMISSIONER OF INCOME TAX (EXEMPTION), CIRCLE-2 AHMEDABAD 380 009 / VS. M/S.GUJARAT ENVIRONMENT SERVICE SOCIETY,1ST FLOOR KAIRA CAN OFFICE BLDG. NR.GANESH CHAR RASTA ANAND 388 001 ' ./ ./ PAN/GIR NO. : AAATG 1361 J ( '% / APPELLANT ) .. ( &'% / RESPONDENT ) '% ' / APPELLANT BY : SHRI SAURABH SINGH, SR.DR &'% ( ' / RESPONDENT BY : SHRI SULABH PAD SHAH, AR )* ( + / DATE OF HEARING 09/05/2018 ,-. ( + / DATE OF PRONOUNCEMENT 15/ 05 /2018 / O R D E R PER MS. MADHUMITA ROY - JM: BEING AGGRIEVED BY AND/OR DISSATISFIED WITH THE ORD ER DATED 29.09.2016 PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS)-5 , VADODARA [LD.CIT(A) IN SHORT] FOR ASSESSMENT YEAR (AY) 2012 -13 ARISING OUT OF THE ASSESSMENT ORDER DATED 21.3.201 5 PASSED BY THE ITO- ITA NO.3564/AHD /2016 DY.CIT (E) VS. M/S.GUJARAT ENVIRONMENT SERVICE SO CIETY ASST.YEAR 2012-13 - 2 - EXEMPTIONS WARD BARODA, THE INSTANT APPEAL HAS BEEN FILED BEFORE US BY THE REVENUE WITH THE FOLLOWING GROUNDS:- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(A) JUSTIFIED IN GIVING THE BENEFIT OF SE CTION 11(1)(A) OF THE ACT WHICH THE A.O. DISALLOWED BY INVOKING THE P ROVISION OF SECTION 2 (15). II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HA VE UPHELD THE ORDER OF THE ASSESSING OFFICER. 2. THE BRIEF FACTS LEADING TO THE CASE IS THIS THA T THE ASSESSEE SOCIETY HAS FILED A RETURN OF INCOME ITR-7 ON 26.0.2012 DEC LARING TOTAL INCOME AT RS.NIL AFTER CLAIMING THE EXEMPTION U/S.11 OF THE A CT. THE ASSESSEE SOCIETY IS A CONTRACTOR AND ITS ACTIVITIES ARE TO U NDERTAKE CLEAN ENVIRONMENT TO THE SOCIETY AS A WHOLE AND INCREASE THE FACILITIES TO HAVE BETTER ENVIRONMENT AS ENGAGED BY ITS MEMBER COMPANI ES/CONCERNS IN THE NAME AND STYLE OF GUJARAT ENVIRONMENT SERVICE SOCIE TY. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE ASSESSMENT WAS FINALIZED U/S.143(3) OF THE ACT VIDE ORDER DATED 21.03.2015 B Y MAKING FOLLOWING DISALLOWANCE. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE LEARNED ITA NO.3564/AHD /2016 DY.CIT (E) VS. M/S.GUJARAT ENVIRONMENT SERVICE SO CIETY ASST.YEAR 2012-13 - 3 - AO HAS DENIED AND REJECTED EXEMPTION CLAIMED U/S.11 (1)(A) OF THE INCOME TAX ACT ON THE GROUND THAT THE ACTIVITIES OF THE APPELLANT TRUST IS NOT IN THE NATURE OF CHARITABLE PURPOSE IN VIEW OF THE DEFINITION OF SECTION 2(15) OF THE ACT AND THEREFORE THE AMOUNT OF RS.36, 61,374/- AS SHOWN INCOME OVER EXPENDITURE IN THE INCOME-EXPENDITURE A CCOUNT IS TREATED AS BUSINESS INCOME OF THE APPELLANT. 2.1 AGAINST THE SAID ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) AND THE LD.CIT(A) ALLOWED THE APPEAL PREFERR ED BY THE ASSESSEE FOLLOWING THE ORDER PASSED BY THE LEARNED CIT(A) IN ASSESSEES OWN CASE FOR THE AY 2010-11 AND AY 2011-12 DIRECTING THE ASS ESSING OFFICER TO GRANT EXEMPTION UNDER SECTION 11(1)(A) OF THE ACT. CONSEQUENTLY, THE ADDITION OF RS.36,61,374/- ON THE ACCOUNT OF DISALL OWANCES CLAIM OF DEDUCTION UNDER SECTION 11 (1)(A) HAS BEEN DELETED. 3. THE LEARNED REPRESENTATIVE OF THE ASSESSEE CONT ENDED BEFORE US THAT THE ASSESSEE HAS BEEN ALLOWED EXEMPTION UNDER SECTI ON 11(1)(A) FOR THE LAST MANY YEARS AND THE AO HAS NOT BROUGHT OUT ANY DIFFERENCE BETWEEN THE ACTIVITIES OF THE ASSESSEE IN THE YEARS PRECEDI NG THE CURRENT ASSESSMENT YEAR AND IN THE CURRENT ASSESSMENT YEAR. HE HAS RE LIED UPON THE ORDER PASSED BY THE CIT(A) IN ASSESSEES OWN CASE FOR THE AY 2010-11 AND AY 2011-12 WHEREBY AND WHEREUNDER THE CONCERNED AO WAS DIRECTED TO ITA NO.3564/AHD /2016 DY.CIT (E) VS. M/S.GUJARAT ENVIRONMENT SERVICE SO CIETY ASST.YEAR 2012-13 - 4 - GRANT EXEMPTION UNDER SECTION11(1)(A) TO THE ASSESS EE AS CLAIMED BY IT. THE LEARNED DEPARTMENTAL REPRESENTATIVE MADE NO RIV AL SUBMISSION IN THIS REGARD. 4. IT WAS FURTHER SUBMITTED BY THE AR THAT THE SAID ORDERS PASSED BY THE LEARNED CIT(A) FOR THE AY 2010-11 AND AY 2011-1 2 HAVE ATTENDED FINALITY BY A COMMON ORDER DATED 25.10.2017 PASSED BY THE CO-ORDINATE BENCH OF THIS LEARNED TRIBUNAL UPHOLDING THE SAID O RDERS WHILE DISMISSING THE APPEALS PREFERRED BY THE REVENUE. A COPY OF THE SAID ORDER DATED 25.10.2017 WAS ALSO PRODUCED BEFORE THE COURT AT THE TIME OF HEARING OF THE MATTER. 5. WE HAVE PERUSED THE SAID ORDER; THE OPERATIV E PORTION THEREOF READS AS FOLLOWS: 8. AS DISCUSSED ABOVE, OBJECTS OF THE ASSESSEE HA S BEEN REPRODUCED BY THE LD.CIT(A) IN THE FINDING EXTRACTE D (SUPRA). MAIN OBJECT OF THE ASSESSEE WAS FOR PROVIDING CLEAN ENVIRONMENT TO THE SOCIETY, MAINTENANCE OF GARDEN, PLANTATION, HORTICULTURE ETC. THESE OBJECTS AND ACTIVITIES OF THE ASSESSEE WERE I N THE NATURE OF CHARITABLE PURPOSE, AND AS SUCH ACCEPTED BY THE REV ENUE IN THE PAST. EXEMPTION UNDER SECTION 11(1)(A) OF THE ACT HAS BEEN GRANTED TO THE ASSESSEE IN THE PAST, AND THERE IS N O CHANGE IN THE ITA NO.3564/AHD /2016 DY.CIT (E) VS. M/S.GUJARAT ENVIRONMENT SERVICE SO CIETY ASST.YEAR 2012-13 - 5 - FACTS AND CIRCUMSTANCES. REGISTRATION GRANTED UNDE R SECTION 12A HAS NOT BEEN CANCELLED. THE ACTIVITY OF THE ASSESS EE DOES NOT FALL IN THE EXPRESSION ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. IT IS SPECIFICALLY FALL WITHIN THE AMB IT OF PRESERVATION OF ENVIRONMENT. THE LD.CIT(A) HAS CONSIDERED BOTH TH ESE ASPECTS AND ACCEPTED EXPLANATION OF THE ASSESSEE THAT IT IS MEANT FOR PRESERVATION OF ENVIRONMENT AS WELL AS ITS OBJECTS ARE OF CHARITABLE NATURE. THE LD.CIT(A) HAS PUT RELIANCE UPON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF AHMEDABAD MANAGEMENT SYSTEM, 47 TAXMANN.COM 162 (GUJ.). AFTE R CONSIDERING WELL REASONED ORDER OF THE LD.CIT(A) I DO NOT FIND ANY REASON TO INTERFERE IN IT. IT IS UPHELD. BOTH THE APPEALS ARE DISMISSED. 5.1. WE FIND THAT THE ISSUE IS IDENTICAL IN NATURE AND ALREADY COVERED BY THE ASSESSEES OWN CASE FOR THE AY 2010-11 AND AY 2 011-12 BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS LEARNED T RIBUNAL AND, THEREFORE, CONSIDERING THIS PARTICULAR ASPECT OF THE MATTER, W E FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT( A) AND WE THUS DISMISS THE APPEAL PREFERRED BY THE REVENUE. ITA NO.3564/AHD /2016 DY.CIT (E) VS. M/S.GUJARAT ENVIRONMENT SERVICE SO CIETY ASST.YEAR 2012-13 - 6 - 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 15 / 0 5 / 201 8 SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 15/ 05/2018 0+..), .)../ T.C. NAIR, SR. PS !'#' / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &'% / THE RESPONDENT. 3. 12 3 / CONCERNED CIT 4. 3 ( ) / THE CIT(A)-6, VADODARA 5. 678 )2 , + 2 . , 1 / DR, ITAT, AHMEDABAD 6. 8:; <* / GUARD FILE. / BY ORDER, &6 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 9.5.18 (DICTATION-PAD PAG ES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.5.18 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 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.15.5.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.5.18 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