DDIT (E)I(2), MUMBAI V. TATA INSTITUTE OF SOCIAL SCIENCE, MUMBAI

ITA 3660/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101076 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR; MANJUNATHA SWAMY
• Assessee Lawyers: ANIL J SATHE
• Keywords: Reopening of assessment; Charitable institution
• Section: 143(3); 12A; 147; 148; 12; 15; 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER ITA NO S . 3660 & 3661 /MUM/20 13 (ASSESSMENT YEAR S : 200 4 - 05 & 2006 - 07 ) ASST. DIRECTOR OF INCOME - TAX(EXEMPTION) - 1(2), MUMBAI. APPELLANT VS. TATA INSTITUTE OF SOCIAL SCIENCE, SION TR O MBAY ROAD, DEONAR, MUMBAI - 400 088. RESPONDENT PAN: A AATT4224B APPELLANT BY : S/ SHRI MANJUNATHA SWAMY, CIT(DR) & SUMIT KUMAR . RESPONDENT BY: SHRI ANIL J.SATHE (AR) DATE OF HEARING: 1 8 /08/2015 . DATE OF PRONOUNCEMENT : : 16 / 0 9 /2015 O R D E R PER VIJAY PAL RAO, JM: THESE TWO APPEALS BY THE REVENUE PERTAIN TO ASSESSMENT YEARS 2004 - 05 AND 2006 - 07 ARISING FROM THE RESPECTIVE ORDERS OF THE CIT(A), MUMBAI. COMMON GROUNDS HAVE BEEN RAISED BY THE REVENUE IN THESE APPEALS. THE GROUNDS RAISED FOR THE ASSESSMENT YEAR 2004 - 05 ARE AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE REOPENING THE ASSESSMENT WAS BAD IN LAW ON THE BASIS OF THE DECISION O F THE HON'BLE ITAT FOR A Y 2003 - 04, WHEN THE ASSESSMENT FOR A Y 2003 04 WAS REOPENED AFTER 4 YEARS AND WHE REAS IN THE CONCERNED YEAR, THE CASE WAS ASSESSED U/S 143(1) AND ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 2 OF 14 THERE WAS NO REQUIREMENT OF SHOWING ANY FAILURE TO DISCLOSE MATERIAL FACTS FULLY AND TRULY. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C/T(A) ERRED IN HOLDING THAT THE REOPENING THE ASSESSMENT WAS BAD IN LAW ON THE GROUND THAT THE A O HAS NOT DEALT WITH THE OBJECTIONS TO REOPENING, RAISED BY THE ASSESSEE, WHEN THE DEFECTS ARE CURABLE AND NOT FATAL TO THE RE - ASSESSMENT. 3. THAT ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE AO TO ALLOW EXEMPTION U/S 10(23C)(III AB) OF THE ACT, WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS NEITHER WHOLLY NOR SUBSTANTIALLY FINANCED BY THE GOVERNMENT IN VIEW OF THE EXPLANATIO N TO SUBSECTION (1) OF SECTION 14 OF THE COMPTROLLER AND AUDITOR GENERALS (DUTIES, POWERS AND CONDITIONS OF SERVICE) ACT, 1971 AS THE TOTAL GOVERNMENT GRANT DURING THE YEAR IS LESS THAN 75% OF THE TOTAL EXPENDITURE OF THE ASSESSEE. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) I, MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 2. THE ASSESSEE IS AN ED UCATIONAL INSTITUTION EXISTING FOR THE PURPOSE OF EDUCATION AND SUBSTANTIALLY FINANCED BY THE GOVERNMENT. THE INSTITUTION IS IN EXISTENCE FOR OVER 60 YEARS AND WAS FORMED WITH THE OBJECT OF PROVIDING EDUCATION IN VARIOUS FIELDS IN GENERAL AND IN SOCIAL SC IENCE IN PARTICULAR. THE ASSESSEE - INSTITUTION IS NOTIFIED AS DEEMED UNIVERSITY VIDE NOTIFICATION DATED 29/4/1964 ISSUED BY THE GOVERNMENT OF INDIA. THE ASSESSEE IS ALSO REGISTERED UNDER THE SOCIETIES REGISTRATION ACT AS WELL AS BOMBAY PUBLIC TRUST ACT. THE ASSESSEE WAS ALSO GRANTED REGISTRATION U/S 12A OF THE IT ACT, 1961 ( THE ACT FOR SHORT) AS A PUBLIC CHARITABLE TRUST FOR EDUCATION PURPOSE. THE ASSESSEE HAS BEEN CLAIMING EXEMPTION U/S 10(23C)(IIIAB) OF THE ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 3 OF 14 ACT AND THE SAME HAS BEEN ALLOWED FOR MORE THAN A DECADE. FOR THE ASSESSMENT YEAR 2007 - 08, THE AO TOOK A VIEW THAT SINCE THE TOTAL GOVERNMENT GRANT FOR THE YEAR CONSTITUTED LESS THAN 75% OF TOTAL EXPENDITURE, THE INSTITUTION IS NOT SUBSTANTIALLY FINANCED BY THE GOVERNMENT. THE AO RELIED ON T HE PROVISIONS OF SEC.14(1) OF THE COMPTROLLER AND AUDITOR GENERAL S (DUTIES, POWERS AND CONDITIONS OF SERVICES) ACT, 1971 AND DENIED THE ASSESSEE S CLAIM OF EXEMPTION U/S 10(23)(IIIAB) OF THE ACT. A SIMILAR VIEW WAS TAKEN BY THE AO FOR THE ASSESSMENT YEAR 2003 - 04 AND THE CASE WAS REOPENED U/S 147. CONSEQUENTLY, THE AO DISALLOWED THE CLAIM U/S 10(23C)(IIIAB) OF THE ACT IN THE RE - ASSESSMENT U/S 143(3) R.W.S. 147. 3. ON APPEAL, THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2003 - 04 . THE CIT(A) HAS ALSO HELD THAT THE REOPENING OF ASSESSMENT BY THE AO IS ALSO NOT SUSTAINABLE AND BY FOLLOWING THE FINDING OF THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2003 - 04, THE SAME WAS H ELD TO BE BAD. 4. BEFORE US, THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER OF THE CIT(A) ON BOTH THE GROUNDS I.E. (I) REOPENING OF THE ASSESSMENT AS WELL AS THE EXEMPTION ALLOWED U/S 10(23C)(IIIAB). 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPR ESENTATIVE AS WELL AS THE LEARNED AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOT THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEE S OWN CASE ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 4 OF 14 FOR THE ASSESSMENT YEAR 2003 - 04 AS WELL AS FOR ASSES SMENT YEAR 2007 - 08 VIDE TWO SEPARATE ORDERS BOTH DATED 26/9/2012. THE ISSUE OF REOPENING WAS CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2003 - 04 IN ITA NO.5685/MUM/2011 IN PARAGRAPHS 10 TO 19 AS UNDER: 1 0 . W E H A V E H E A R D T H E A R G U M E N T S A ND H A VE P E R U S ED T HE O RD E R S O F T H E R E V E N U E A U T H O R I T I ES. W E F I N D T H A T T HE AO UN D E R TO O K R E A S S E SS M E N T P R O CEE D IN G S UN D E R S E C T I O N 14 8 O N 1 9 . 0 3 . 2 0 1 0 O N A N A S S ESS M E NT F R A M E D UN D E R S E C T I O N 1 4 3 ( 3 ) , I . E . M UCH A F T E R T H E E X P I R Y O F F O U R Y E A R S , W H I C H E X P I R E D O N 31 . 03 . 2 0 0 8 . T O C O R R E C T LY R E O P E N T HE PR O CE E D I N G S U N D E R S E C T I O N 14 8 O N A R E G U L A R A SS E SS M E N T , A T T E N T I O N H A S T O B E P A I D , T H A T T HE F O U N D I N G I SSUE H A S N O T B EEN D E A LT W I T H IN T H E R E G U L A R A S S E S S M E N T . I F, T H E ISS U E H A S B E E N D E A L T W I T H B Y T H E AO I N R E G UL A R A SSESS M E NT T H E N T H E O NLY B A SIS F O R R E O P E NING C A N B E T H A T T HE A O M U S T H A VE E VI D E N C E , T O P R O VE T H A T T HE MA T E R I A L F A C T W A S N O T MA D E A V A IL A B LE T O T H E A O . I N T H E P R E S E NT S E T O F CI R CU M S TA NCES, T H E R E W A S N O MA T E R I A L F A C T , W HICH W A S N O T A V A I L A B L E W I T H T HE AO I N T H E R E G U L A R A SS E SS M E N T P R O CEE D IN G S, O R W H ICH H A D N O T B E E N D E A LT W I T H B Y T H E AO IN T H O S E P R O CEE D IN G S. I N O UR O P IN I O N, T H E R A T I O I N T HE C A SE O F C I T VS. K E L VIN A T O R O F I N D I A , R E P O R T E D IN 32 0 I T R 56 1 (S C ) W ILL S Q U A R E LY A PP L Y O N T H E I SSUE A T H A N D . T HE H O N ' B LE S U PR E M E C O U R T IN T H E J U D G M E N T A T P AG E 5 6 4 H E L D , H O W E V ER , O N E N E EDS T O G I V E S C H E M A T IC I N T ERPR E T A T I O N T O T H E W O R D S R E A S O N T O B E L I E V E F A I L I N G W H I C H , W E A R E A F R A I D , S E CT I ON 1 4 7 W O U LD G I V E A R B I T R A R Y P O W E RS T O TH E A SS E S S I N G O F F I C E R T O R E OP E N A S S ES S M E N T S O N T H E B A S I S OF M ER E C H A N G E O F O P I N I O N , W H I C H C A N N O T BE P E R S E , R E A SO N T O REOP E N . W E M U S T A L S O K E EP I N M I N D T H E C O N C E P T UA L D I F F E RE NC E B E T W EE N P O W E R T O RE V I E W A N D P O W E R T O R E A SS E S S . T H E A SS E SS I N G O FF I C E R H A S N O P O W E R T O R E V I E W ; H E H A S TH E P O W E R T O R E A SS E S S . B U T R E A S S ES S M E N T H A S T O BE B A S E D O N F U L F I L M E N T O F C E R T A I N P R E C O N D I T I O N S A N D I F T H E C O N C E P T O F C H A N G E OF O P I N I O N I S R E M O VE D , A S C O N T E N D E D ON B EH A L F OF T H E D E P A R T M E N T , TH E N , I N TH E G A RB OF REO P E N I N G TH E A S S E S S M E N T , R E V I E W W O U L D T A KE P L A C E . O N E M U S T T R E A T T H E C O N C E P T O F CH A NG E OF OP I N I O N A S A N I N - B U I LT T E S T T O CH E C K A B U SE ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 5 OF 14 O F P O W E R B Y T H E A S S E S S I N G O F F I C E R . H E N C E , A F T ER 1 S T A P R I L, 1 9 8 9 , TH E A S S E SS I N G O F F I C E R HA S P O W E R T O R E O P E N , PRO V I DED T H ERE I S T A N G I B L E M A T ER I A L T O C O M E T O TH E C O NC L U S I O N T H A T TH ERE I S E S C A P E M E N T OF I N C O M E F R O M A SS E S S M E NT . R E AS O N S M U S T H A VE A L I VE L I N K WI T H TH E F O R M A T I O N OF T H E B E L I E F . 1 1 . H O N B L E B O MB A Y HI G H C O U R T I N T HE C A SE O F A V E N T I S P H A RM A L T D . V S A C I T , R E P O R T E D IN 32 3 I T R 5 7 0 , H E L D , O N F A C T S , T H E S U B M I S S I ON W H I C H HA S BE E N U R G E D O N B E H A L F OF T H E A S S E SS E E I S T H A T A F U L L D I S C L OS U RE W A S M A D E I N TH E R E TU R N OF I N C O M E . P U R S U A N T TH ER E T O , T H E A S S E SS I N G O F F I C ER P A S SE D A N O R D E R O F A SS E S S M E N T U N D E R SE CT I ON 1 4 3 ( 3 ) . IT W A S U R G E D T H A T T H E A S S E S S I N G O F FI C E R A P P LI E D H I S M I N D SPE C I F I C A L L Y T O B O T H TH E A S P E C T S O F TH E C A S E N O T E D E A R L I ER A N D T O T H E EXP L A N A T I O N F U R N I S H E D B Y T H E A S S ES S EE D U R I N G T H E C O U RSE OF A SS E S S M E N T PRO C E E D I N G S . I T H A S B EE N U R G ED T H A T T H ERE W A S N O T AN G I B L E M A T E R I A L B E F O RE TH E A S S E S S I N G O FF I C E R O N T H E B A S I S O F W H I C H H E C O U LD H A V E F O R M ED A R E A S O N T O B E L I E VE T H A T I N C O M E C H A R G E A B L E T O T A X H A D E S C A P E D A S S E S S M E NT . C O N S E Q U E NT L Y, I T H A S BE E N U R G ED T H A T TH E A SS E S S M E N T I S SO U G H T T O BE R E OP E N ED ON A M ER E CH A NG E O F O P I N I O N , W H I C H I S N O T PE R M I SS I B L E . D U R I N G TH E C O U R S E O F S U B M I SS I O N , C O UNS E L A PP E A R I N G O N BE H A L F O F T H E A SS E S S EE A SS I S T E D TH E C O U R T I N PE R U S I N G T H E E N T I RE R E C O R D B E F O RE TH E C O U R T , I NC L U D I N G I N P A R T I CU L A R TH E D I S C L OS U RES W H I C H W E R E M A D E D U R I N G TH E C O U R S E OF A S SE S S M E N T . I N OR DER T O OB V I AT E A R E P E T I T I O N I T W O U L D BE P R OPER T O RE F ER T O TH E R E L E V A N T A S P E C T S O F TH E R E C O RD W H IL E D E A L I N G W I T H T H E S U B MI S S I O N S W H I C H H A VE BE E N U R G ED O N BE H A L F O F T H E A S S E SS EE . . 1 2 . T HE H O N B L E B O MB A Y HI G H CO U R T , I N T HIS C A S E , H E LD ( H E A D N O T E ) , T H E P O W E R T O R E OP E N A N A S S ES S M E N T I S C O N D I T I O N A L O N TH E F O R M A T I O N O F A R E A SO N T O B E LI E V E TH A T I NC O M E C H A R G E A B L E T O T A X H A S E S C A P E D A S S E S S M E NT . T H E P O W E R I S N O T A K I N T O A R E V I E W . T H E E X I S T E N C E O F T A N G I B L E M AT ER I A L I S N E C E S S A R Y T O E N S U RE A G A I N S T A N A R B I T R A R Y E X E R C I S E O F P O W E R . ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 6 OF 14 1 3 . T H E SE JU D G M E N T S , A L O N G W I TH O T H E R CI T E D JU D G M E N T S , W H E N T A K EN I N T O C O NSI D E R A T I O N, W ILL O NLY L E A D T O O NE C O NCLUSI O N T H A T T H E AO E RR E D IN I N I T I A T I N G T HE R E A S S E SS M E NT P R O CE E D I N G S . 1 4 . E XA M I NING T HE I S SUE F R O M T HE O T H E R A N G L E , I . E . W H E T H E R , I N T HE G I V E N S E T O F CI R CU M S T A N CE S, T HE AO W A S C O R R E C T I N IN I T I A TING R E A SS E SS M E N T P R O CEE D IN G S, A F T E R T H E E X P I R Y O F F O U R Y E A R S. T HE F A C T IS, T H A T B E C A U S E T H E R E G U L A R A S S E SS M E NT UN D E R S E C T I O N 1 4 3 ( 3 ) H A D B E E N F R A M E D O N T HE A S S E S S EE , T HE AO H A D T HE LE G ISL A T I V E L E V E R A G E O F A N O T H E R T W O Y E A R S, I . E . A TO T A L O F S I X Y E A R S. T H I S E XT E N D E D P E R I O D O F T W O F U R T H E R Y E A R S IS SU B J E CT T O T HE C O N D I T I O N S L A ID D O W N IN T HE F I R S T P R O V I SO T O S E C T I O N 1 4 7 , W HICH R E A D S A S U N D E R : P RO V I D E D T H A T W H ERE A N A S SE S S M E N T U N DER S U B - S E C T I O N ( 3 ) O F S E C T I O N 1 4 3 OR T H I S S E C T I O N H A S BE E N M A D E F OR T H E R E L EV A N T A S S ES S M E N T Y E A R , N O AC T I O N S H A LL BE T A K E N UN DER T H I S SE CT I O N A F T ER T H E E X P I R Y O F F O U R Y E A R S F R O M TH E E N D OF T H E R E LE V A N T A SS E S S M E N T Y E A R , UN L E S S A N Y I N C O M E C H A R G E A B L E T O T A X H A S ES C A PED A S S E S S M E N T F OR S U C H A S S ES S M E N T Y E A R B Y R E A S O N OF TH E F A IL U RE ON TH E P A R T O F T H E A SS ES S E E T O M A KE A R E T U R N U N D E R S E C T I O N 1 3 9 OR I N RE S PO N SE T O A N O T I C E I S S U E D U N D E R S U B - S E C T I O N ( 1 ) OF SE C T I O N 1 4 2 O R SE C T I O N 14 8 O R T O D I S C L OS E F U L LY A N D T R U LY A LL M A T ER I A L F A C T S N E C E S S A R Y F O R H I S A S S ES S M E N T , F O R TH A T A S S E S S M E N T Y E A R : ( C ) W H E RE A N A S SE S S M E N T H A S BE E N M A D E , B U T ( I ) I NC O M E C H A R G E A B LE T O T A X H A S BE E N U N DER A S S ES S ED ; O R ( II ) S U C H I N C O M E H A S B EE N A S S E SS E D A T T O O L O W A R A T E ; O R ( I II ) S U C H I N C O M E H A S BE E N M A D E TH E S U B J E C T OF E X C E S S I V E R E L I E F U N D E R T H I S A CT ; O R ( I V ) E X C E S S I V E L O SS OR D E PR E C I A T I O N A L L O W A NC E OR A N Y O TH ER A L L O W A N C E U N D E R T H I S A C T H A S B E EN C O M P U T E D ; ] 1 5 . IN C A S E W H E R E T H E R E I S IN E X IS T E N C E O F A R E G U L A R A S S E SS M E N T , T H E P E R I O D O F SIX Y E A R S B E C O M ES A V A I L A B LE T O T H E AO O NLY IN A C A SE W H E R E T H E R E IS A F A IL U R E O N T H E P A R T O F T H E A SS E S S EE T O FULLY A ND T R U L Y D ISC L O SE A LL M A T E R I A L F A C T S . I F IN C A S E , T HE R E A S O NS B E ING R E C O R D E D A ND R E L I E D U P O N B Y T HE AO H A S B E E N D E A LT W I T H IN T HE R E G UL A R A SS E SS M E N T , T HE P E R I O D A V A I L AB LE IS O N LY F O U R Y E A R S ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 7 OF 14 A S P E R EX P L A N A T I O N T O S E C T I O N 1 4 9 ( 1 ) R E A D W ITH CL A USE (C) T O EX P L A N A T I O N 2 T O S E CT I O N 1 4 7 . T HE R E L E V A NT P R O VISI O NS A R E : 149 ( 1 ) NO N O T I C E U N D E R SE C T I O N 1 4 8 S H A LL BE I S S U E D F OR TH E R E L E V A N T A S S ES S M E N T Y E A R, [ ( A ) I F F O U R Y E A RS H A VE E L A P S E D F R O M T H E E N D O F TH E R E L E V A N T A S S E S S M E N T Y E A R , U N L E SS T H E C A S E F A LL S U N DER C L A U S E ( B ) E X P L A N A T I O N . I N D E T E R M I N I N G I NC O M E C H A R G E A B L E T O T A X W H I C H H A S E S C A PED A S S E S S M E N T F O R TH E P U RP O SES O F T H I S S U B - S E C T I O N , T H E P R OV I S I O N S OF EXP L A N A T I O N 2 OF S E C T I ON 1 4 7 S H A LL A P P L Y A S TH E Y A PP LY F O R T H E P U R POS E S OF T H A T S E C T I O N . E X P L A N A T I O N 2 T O S EC T I O N 14 7 EX PL A N A T I O N 2 . F OR T H E P U RPO S ES OF T H I S S E CT I O N , T H E F OL L O W I N G S H A LL A L S O BE D EE M E D T O BE C A S E S W H E RE I NC O M E C H A R G E A B LE T O T A X H A S E S C A P E D A S SE S S M E NT , NA M E LY : ( A ) W H ERE N O R E T U RN OF I N C O M E H A S B E E N F U R N I S H ED B Y TH E A S S E S S EE A L T H O U G H H I S T O T A L I NC O M E OR T H E T O T A L I N C O M E O F A N Y O TH ER P E RS O N I N R E SP E C T O F W H I C H H E I S A S S E S S A B L E U N D E R T H I S A C T D U R I N G TH E P R E V I O U S Y E A R EX C E E D E D TH E M A X I M U M A M O UN T W H I C H I S N O T C H A RG E A B L E T O I N C O M E - T A X ; ( B ) W H E RE A R E TU R N OF I N C O M E H A S BE E N F U R N I S H E D BY T H E A S S E SS E E B U T N O A S SE S S M E N T H A S BE E N M A D E A N D I T I S N O T I C E D B Y T H E A S S E SS I N G O FF I C E R T H A T T H E A S S E SS E E H A S UN DER S T A T E D TH E I N C O M E OR H A S C L A I M E D E X C E SS I V E L O SS , DE D UC T I O N , A LL O W A NC E O R R E LI EF I N TH E R E T U R N ; ( B A ) W H E RE TH E A S SE S SEE H A S F A I LED T O F U R N I S H A R E PO R T I N R E SP E C T O F A N Y I N T E R N A T I O N A L T R A N S A C T I O N W H I C H H E W A S SO RE Q U I R E D U N DER S E C T I O N 92 E ; ( C ) W H ERE A N A SS E S S M E N T H A S B EE N M A D E , B U T ( I ) I N C O M E C H A R G E A B L E T O T A X H A S BE E N U N D ER A S S E S SE D ; O R ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 8 OF 14 (I I ) S UC H I NC O M E HA S B E E N A S S ES S ED A T T OO L O W A R A T E ; O R (I II ) S U C H I N C O M E H A S BE E N M A D E TH E S U B J E C T O F E X C ESS I VE R E L I EF U N D E R T H I S A C T ; O R ( I V ) E X C E SS I V E L O S S O R D E PR E C I A T I O N A LL O W A N C E O R A N Y O T H E R A LL O W A N C E U N D E R T H I S AC T H A S BE E N C O M P U T E D ; ] ( D ) W H E RE A P E RS O N I S F O UN D T O H A VE A N Y A SSE T ( I N C L U D I N G F I N A N C I A L I N T E R E S T I N A N Y E N T I T Y ) L O C A T ED O U T S I D E I N D I A . 1 6 . IN T H E I N S T A N T C A S E , A SS E SS M E N T UN D E R S E C T I O N 1 43 ( 3 ) W A S F R A M E D O N 2 8 . 0 2 . 2 0 06 . T HE A O, T H E R E F O R E , C O ULD ISSUE T HE N OT I C E U N D ER S E C T I O N 1 4 8 O NLY U P T O 3 1 . 03 . 2 00 8 , A S P E R T HE P R O V I SI O NS O F S E C T I O N 1 49 ( 1 )( A ) . B UT T H E N OT IC E , H A VING B E ING R E C E I V E D A F T E R 31 . 0 3 . 2 00 8 , I N T H E PR E S E NT SET O F CI R CU M S TA NC E S, B E C O M E S V O I D . T HE L E A R N E D A. R . H A D P L A C E D R E LI A N C E O N T H E F O LL O W ING D E C I S I O N S : C A L C UTT A D I S C O U N T C O . L T D . VS . I TO : 4 1 I TR 1 9 1 ( S C ) H I N D U S T A N L EV E R L T D . V S . R . B. W A D K A R : 2 6 8 I TR 3 3 9 ( B O M H C ) H I N D U S T A N P E T R O L EU M C O R PO R A T I O N L T D . V S . D C I T : 1 9 2 T A X M A N 17 8 ( B O M ) M I S T R Y L A L J I N A RS I D EV E L O P M E N T C O R P . V S . A C I T : 3 2 3 I TR 1 9 4 ( B O M ) 3 I I N F O T E C H L T D . VS . A C I T : 1 9 2 T A X M A N 13 7 ( B O M ) H A R Y A N A A C R YL I C M A N U F A C TU R I N G C O . V S . C I T : 3 0 8 I TR 3 8 ( D E L H C ) S T E R L I T E I N D U S T R I E S ( I ) L T D. V S. A C I T : 3 0 5 I TR 3 3 9 ( C A L H C ) A N IL K U M A R B H A N D A R I VS . J C I T : 2 9 4 I TR 2 2 2 ( C A L H C ) C I T & A N R . V S . S A I P E M S PA : 3 0 0 I TR 1 3 3 ( U T T A R A K H A N D ) C I T V S R A J A S T H A N P A T R I K A L T D . : 2 5 8 I TR 3 0 0 ( R A J . ) N I K H I L K O T A K VS . M A H E S H K U M A R , A .O . : 3 1 9 I TR 4 4 5 ( G U J . ) O F T HE F O LL O W ING D E CI S I O N S, W E W O ULD L I K E T O MA K E M E N T I O N O F T HE L AT E ST O F T H E S E J U D G M E N T S IN T HE C A S E O F M I S T R Y LA L JI N A R SI D EV E L O P M E NT C O R P . V S A C I T , 32 3 I T R 19 4 , T HE H O N B L E BO M B A Y HI G H CO U R T I N A S I M I L A R CI R CU M S TA NC E , A S N O T E D , T H A T T HE A S S ESS M E NT W A S C O MP L E T E D U / S 1 4 3 ( 3 ) , T A K ING I N T O A CC O UNT T HE CL A IM O F D E D U C T I O N U / S 8 0 I B ( 10 ) . IN T H I S C A S E , T H E S O LE I S SUE O N W HICH T HE R E A S S E SS M E NT PR O CE E D I N G S W E R E I N I T I A T E D W E R E T H A T C O MM E NC E M E NT C E R T I F I C A T E H A D B EEN I SSU E D O N 2 4 . 07 . 1 9 9 3 , W H E R E A S A D E D UC T I O N UN D E R T HE PR O VIS I O N I S P E R M ISS I B LE O NLY W H E N T H E U N D E R T A K ING H A S C O MM E NC E D C O NS T R UC T I O N , H E NCE T H E D E D UC T I O N W A S W R O N G L Y TA K E N. T H E H O N B L E HI G H CO U R T C O N C L U D E D , S I G N I F I C A NT L Y , TH E R E A SO N S W H I C H H A VE BE E N R E C O R D E D B Y T H E A S S E S S I N G O F F I C E R F O R R E OP E N I N G TH E A S SE SS M E N T S H O W T H A T R E LI A N C E ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 9 OF 14 I S PL AC E D O N A C O M M E N C E M E N T C E R T I F I C AT E W H I C H I T I S N O W C O M M O N G RO U N D B E F ORE T H E C O U R T W A S A L R E A D Y O N RE C O RD BE F O RE TH E A SS E SS I N G O F F I C ER W H E N T H E O R I G I N A L O R DER U N D E R S E C T I O N 1 4 3 ( 3 ) W A S P A S SE D . T H E R E A SO N S D I S C L O SE D T O T H E A S SE S S E E S TAT E T H A T C O P I E S O F TH E C O M M E N C E M E N T C E R T I F I C A T E S W E R E M A D E A V A I L A B L E B Y TH E J O I N T C O M M I S S I O N E R O F I N C O M E - T A X S U BSE Q U E N T T O TH E ORD E R O F A S SE S S M E N T U N DER S E C T I O N 1 4 3 ( 3 ) . S I N C E TH E D O C U M E N T S ON T H E B A S I S O F W H I C H A S S E S S M E N T W A S SO U G H T T O B E RE O PE N E D H A D A L R E A D Y B E EN F U R N I S H E D T O TH E A S S E S S I N G O FF I C E R I N TH E C O U R S E O F TH E P R O C E E D I NG S U N D E R S E C T I O N 14 3 ( 3 ) , I T C A N N O T P OSS I BL Y BE C O N T E N D E D T H A T T H E A SS E S SEE H A D F A IL E D T O D IS C L OSE D O C U M E NT S O R T H E M A T ER I A L F A C T S . MOR E OV ER , I T I S A L S O C O M M ON G RO UN D B E F O R E TH E C O U R T TH A T A DE D U C T I O N H A S B E E N G R A NT ED U N D E R S E C T I O N 8 0 I B ( 1 0 ) T O TH E A SS E S S EE F OR TH E A S S ES S M E N T Y E A R 20 02 - 0 3 . T H I S S T AT E M E N T OF F A C T B Y TH E C O U N S E L A P P E A R I N G ON B E H A L F O F T H E A S S E S S EE H A S N O T B E EN C O N T RO V E R T E D B Y C O U N S E L F OR T H E R E V E NU E D U R I N G TH E C O U R S E O F S U B M I S S I O N S . WE W O U L D , W H ILE C O N C L U D I N G O N C E A G A I N C L A R I F Y T H A T I N T H E P R E S E N T C A S E , W E A R E N O T C O N C E R N ED W I T H T H E Q U ES T I O N A S T O W H E TH E R A D E D UCT I O N U N D E R S E C T I O N 8 0 I B ( 1 0 ) W A S V A L I D LY G R A N T E D S I NC E T H E O N L Y Q U E S T I O N T H A T F A L LS F O R C O N S I D ER A T I O N I S W H E TH E R A C A S E I S M A D E O U T F O R RE O P E N I N G OF T H E A S S E SS M E N T U N DER TH E P O W E R S C O N F ER R ED B Y S E C T I O N 148 . F OR T H E R E A SO N S A F OR E M E N T I O N E D , W E A RE OF TH E V I E W TH A T R E C O U R S E T O T H E PR OV I S I O N S OF S E CT I ON 1 4 8 R E A D W I T H S E C T I O N 1 4 7 C AN N O T BE S U S T A I N E D . 1 7 . IT MA Y B E S E E N T H A T T HE J U R IS D IC T I O N A L H I G H C O U R T A T BO M B A Y H A S V E R Y C A T E GO R I C A L L Y C O NC L U D E D T H A T N OT I C E W A S ILL E G A L . 1 8 . I N T HE I N S T A N T C A S E , A S M E N T I O N E D E A R L I E R , IN T H E A S S E SS M E NT F R A M E D U / S 1 43 ( 3 ) , T HE I SS U E O F 1 0 ( 2 3 C ) ( III A B ) H A D B E E N GO N E IN T O A ND T HE A O , O N LY IN I T I A T E D T HE R E A S S E SS M E NT P R O CEE D IN G S, B E C A U S E HE H A D T AK E N A D I V E R G E N T VI E W O N T HE A LL O WAB I LI T Y O F E X E MP T I O N. SI N C E T H E I SS U E W A S D ISCUSS E D I N R E G U L A R A S S E SS M E NT P R O CE E D IN G S A ND T HE AO D ID N O T S T U M B LE U P O N A N Y E V I D E N C E / M A T E R I A L , W H I CH W A S N O T P L A C E D B E F O R E H I M , T HE I N I T I A T I O N C A N N O T B E SUS T A I N E D . I N A NY C A S E , T H E I NI T I A T I O N C A N N O T SU R V I VE, B E C A U S E E V E N T H E B A S I S O F IN I T I A T I O N H A S ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 10 OF 14 B EEN D E L E T E D B Y US IN I T A NO . 4 3 94 / M U M / 2 0 1 1 . 1 8 . G O ING IN T O T HE F A C T S A ND CI R CU M S TA NC E S O F T HE C A SE A ND R E L YING O N E A CH O F C A T E NA O F D E CISI O NS, A S M E N T I O N E D A B O VE W E , R E S P E C T F U L L Y F O LL O W I N G T HE R A T I O D E CI D E D IN T H E S E C E LE B R A T E D JU D G M E N T S , H O LD T H A T T HE INI T I AT I O N O F R E A S S E SS M E NT PR O C E E D I N G S H A D B E E N BA D IN L A W A ND H E N CE V O I D . I N T H E CI R CU M S TA NC E S, W E H A VE NO H E SI TA T I O N T O H O LD T H A T C O N S E Q UE N T I A L O R D E R P A SS E D B Y T HE AO W A S B A D I N L A W , A S H E L D B Y T HE C I T ( A ) , W H O SE O RD ER W E S U S T A I N . 1 9 . SINCE W E T O O H A VE A N N ULL E D T H E R E A S S E S S M E NT P R O CE E D I N G S, W E D O N O T IN T E ND T O G O I N T O T H E I S S U E INV O L V E D I N T H E G R O UN D S , INV O K I N G T H E M E R I T S . 6. W E FIND THAT THE FACTS AND CIRCUMSTANCES ARE IDENTICAL F O R THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE CIT(A) HAS DECIDED THE ISSUE OF VALIDITY OF REOPENING BY FOLLOWING THE ORDER OF THIS TRIBUNAL IN THE ASSESSEE S OWN CASE . ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE CIT(A) QUA THIS ISSUE. THE SAME IS UPHELD. 7. AS REGARDS THE ISSUE OF CLAIM OF EXEMPTION U/S 10(23C)(IIIAB) OF THE ACT, THE SAME HAS BEEN CONS IDERED AND DECIDED BY THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2007 - 08 IN PARAS.14 TO 23 IN ITA NO.4394/MUM/2011 DATED 26/9/2012 AS UNDER: 1 4 . W E H A V E H E A R D T H E A R G U M E N T S A ND P E R US E D T H E O R D E R S O F B OT H T H E R E V E N U E A U T H O R I T I E S . T HE ISSUE B E F O R E US IS W H E T HER T H E E X E M P T I O N U N D E R S E C T I O N 1 0 ( 2 3 C ) ( III A B ) W O U L D B E A V A IL A B LE T O T H E A S S E S S E E . S E C T I O N 1 0 ( 2 3 C )( I II A B ) R E A D S A S U N D E R : A N Y UN I VER S I T Y O R O TH E R E D UC A T I O N A L I N S T I T U T I O N EX I S T I N G S O L E LY F O R ED UC A T I ON A L P U RPOS E S AN D N O T F O R P U RPO S ES O F PRO F I T , A N D W H I C H I S W H O L L Y ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 11 OF 14 OR S U B S T A N T I A L L Y F I N AN C E D B Y TH E G O V E R N M E N T . 1 5 . F R O M T H E F A C T E M E R G ING F R O M T HE A SS E SS M E NT O RD E R I S T H A T T HE A SS E S S E E B E I NG A R E G IS T E R E D S O CI E T Y, IS D EV OT ING I T S O B J E C T S T O W A R D S S O CI A L S E R VI C E S A N D R E S E A R CH I N S T I T U T I O N . I N T HE Y E A R U N D E R C O NS I D E R AT I O N A SS E S S EE R E C E I V E D G O V E R N M E NT G R A N T T O T HE T UNE O F R S. 1 2 , 7 9 , 1 3 , 23 3 / - A ND I T I N C U R R E D E X P E N S E S T O T HE T U N E O F R S. 2 2 , 4 9 , 72 , 5 8 4 / - . A CC O R D I N G T O T HE AO SIN C E T H E G R A NT R E C E I V E D F R O M T H E G O VE R N M E N T W A S L E S S T H A N 7 5 % , W H I C H , A CC O R D ING T O T HE AO SH O ULD B E R S. 1 6 , 8 7 , 29 , 438 / - , W O ULD N O T C O M E W I T H I N T H E P A R A M E T E R S O F S U B S T A N T I A LLY F I N A N C E D B Y T HE G O V E R N M E N T , H E N C E , T H E E X E M P T I O N W O ULD N O T B E A V A I L A B L E T O T HE A SS E S S E E . 1 6 . IN T H E A S S E SS M E N T O RD E R , T H E AO H A S T A K EN R E F U G E O F S E C T I O N 14 ( 1 ) O F T HE C O MP T R O LL E R A N D A U D I T O R G E N E R A L S ( D U T I E S , P OW E R S A ND C O N D I T I O NS O F S E R V I C E ) AC T , 1 9 7 1 , W HICH D E F I N E S T H E E X PR E SS I O N S U B S T A N T I A L LY F I N A N CE D A ND W H I CH W O ULD M E A N, GR A N T O R L O A N I S N O T L E S S T H A N 7 5 % O F T H E T O T A L EX P E ND I T U R E . F O R IM P O R T ING T HE L E G ISL AT I V E M E A NING F R O M A N OT H E R L E G I S L A T I O N , IT B E C O M ES I M P E R A T I V E T H A T N O T O N L Y T H E M E A NING O F T H E E N T I R E S E C T I O N IS R E A D A ND U N D E R S TOO D A S A W H O L E , B UT D UE C O G NIZ A NCE B E G IV E N T O T HE M E A N I N G . T HE A O , T H R O U G H R E F E RR E D T O S E C T I O N 1 4 ( 1 ) O N L Y , B UT W H E N W E R E A D T H E E N T I R E S E C T I O N, A L O N G W I TH S UB S E C T I O NS ( 2 ) & ( 3 ) , W H A T W E G AT H E R F R O M R E A D ING O F T H E E N T I R E S E C T I O N, IS T H A T SU B - S E C T I O N ( 3 ) A L L O W S T HE A U D IT F O R A F U R T H E R P E R I O D O F T W O Y E A R S, M E A NING T H E R E B Y, T H A T IN C A SE T H E A S S E S S E E O R A N Y P E R SO N , W H O H A D A V A IL E D GO V E R N M E NT G R A NT A ND IS R E Q UI R E D T O H A V E I T S A CC O UN T S A U D I T E D B Y C AG I N T HE F I R S T Y E A R A ND IN SU B SE Q U E NT Y E A R O R Y E AR S T HE F I N A N C I A L A SSIS T A NCE F A LL S B E L O W T HE S T I P UL A T E D 75% , C AG W I L L S T ILL C O N T INUE T O C O N D U C T T HE A U D I T . I F T H E S T R I CT IN T E R P R E TA T I O N O F T HE A O S O RD E R IS T O B E C O NSI D E R E D , T H E N T H E M O M E NT F I N A N C I A L A SSIS T A N CE F R O M T HE G O V E R N M E N T GO E S B E L O W 7 5 % , T HE S O C I E T Y O R A N Y P E R S O N , IS O UT O F T H E P A R A M E T E R S O F C A G . 1 7 . A C C O R D I N G T O US, T HIS C O ULD N E V E R H A V E B EEN T H E IN T E N T I O N O F T HE C A G . W E C A NN O T SU B SC R I B E T O T H E O B S E R V AT I O N O F T HE AO, W HEN HE D E F I N E S T H E E X PR ESS I O N , S U B S T A N T I A LL Y F IN A N C E D B Y T H E G O V ER N M E N T T O M E A N N E AR E R T O 1 0 0 % O R B Y R E L YIN G O N E X P L A N A T I O N T O S E C T I O N 1 4 ( 1 ) T O B E N O T L E S S T H A N 7 5 % . 1 8 . L OO K ING F R O M A N O T H ER A N G L E , T H A T TO O , S T R IC T LY F O LL O W I NG T HE P R O V I S I O N S O F T HE AC T , T H A T T O CL A IM ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 12 OF 14 E X E MP T I O N UN D E R S E C T I O N 1 0 ( 2 3 C )( I I I A B ) , A S P E R CL A USE (VI) O F S E C T I O N 1 0 ( 2 3 C ) , A N A PP R O V A L H A S T O B E S O U G HT F R O M T H E P R E SC R I B E D A U T H O R I T Y ( I . E . C C I T O R D G I T ). I F A T A LL T H E CL A IM O F T HE A S S E SS EE W A S Q U E S T I O N A B L E , E V E N M I N U T E L Y , T H E A P P R O V A L W O ULD N E V E R B E G I V E N. ON T H E OT H E R H A N D , A O S I M P LI E D A R G U M E NT T H A T A L L E D UC A T I O N A L INS T I T U T I O NS A N D UNIV E R SI T I E S C O V E R E D UN D E R S E C T I O N 10 ( 2 3 C ) ( II I A B ) A R E R E Q U I R ED T O H A VE T H E I R A CC O UN T S A U D I T E D F R O M C AG, C A NN O T B E A CC E P T E D , B E C A USE, H A D T H E R E B E E N A NY IN T E N T I O N O F T HE G O V E R N M E NT T O C O V E R A L L I NS T I TU T I O NS, S E E K I N G E X E M P T I O N S U N D E R S E C T I O N 1 0 ( 2 3 C )( I I I A B ) A ND OT H E R C O RR E S P O N D I NG S EC T I O N S , W O UL D , A U T O M A T I C A LL Y G E T C OV E R E D B Y C AG R UL E S, A ND IN T H A T C I R C U M S T A N CE , A PP L IC A T I O N O F CL A USE ( VI) W O ULD B E A T O T I O S E . 1 9 . IN T H A T S E N S E, W E C A NN O T A CC E P T T H E R E A S O N I NG G I VEN B Y T HE AO T O I MP O R T T H E P R O V I SI O NS O F S E C T I O N 1 4 O F C O MP T R O L L E R A ND A U D I T O R G E N E R A L ( D U T I E S , P O W E R S A ND C O N D I T I O NS O F S E R V I C E ) AC T , 1 97 1 . W E , T H E R E F O R E , H O L D T H A T T HE AO E R R E D I N I M P O R T I NG T HE S E C T I O N O F A N O T H E R L E G I S L A T U R E , T H A T T O O P A R T LY, T O N E GA T E T HE E X E MP T I O N U N D E R S E C T I O N 1 0 ( 2 3 C )( I II A B ) . 2 0 . C O M ING B A CK T O T HE E X PR ESS I O N, S U B S T A N T I A LL Y F INAN C E D B Y T H E G O V ER N M E N T A ND W H A T E X A C T LY IT S H O U L D M E A N, SO F A R A S, I NC O M E T A X A C T I S C O NC E R N E D . T HE C I T ( A ) IN T H E I M P U G N E D O R D E R H A S R E F E RR E D T O T H E C A S E O F H O N ' B L E K A R N A T A K A H I G H C O U R T IN N A T I O N A L E D UC AT I O N S O CI E T Y, I T A N O . 80 8 O F 2 0 0 9 , W H E R E IN T H E H O N ' B LE H I G H C O U R T H E L D : P A RA 4 T H E W OR D S U B S T A N T I A L H A S N O T BE E N DE F I N ED U N D E R TH E I NC O M E T A X A C T . H O W EV E R , I T H A S BE E N TH E S U B J E C T M A T T ER OF I N T ER P R E T A T I O N B Y V A R I O U S C O U R T S I N V A R I O U S C O N T E X T S . T H E A UT H OR I T I ES I N D E C I D I N G W H A T C O N S T I TU T E S A S U B S T A N T I A L P OR T I O N O F T H E F I N A N C E H A VE T A K E N N O T E OF T H E S T A TU T O R Y PR O V I S I O N S C O NT A I N ED I N T H E B A N K I N G R E GU L A T I O N A C T , 1 9 4 9 , W H ER E , A P E R S ON H A S B E N E F I C I A L I N T E RE S T OF M O RE T H A N 1 0 % OF T H E T O T A L C A P I T A L S U B S C R I B E D B Y A L L TH E P A R T N E RS OF T H E F I R M H A S BE E N H E L D T O BE H A V I N G S U B S T A N T I A L I N T E R E S T . P A RA 5 I N TH E C A SE O F A S S E SS E E I T S E L F W H E N T H E G R A N T W A S M O RE T H AN 5 0 % , EX E M P T I O N H A S B EE N EX T E N DED T O TH E A S SE S S EE . I T I S I N T H I S C O N T E X T , I N T H E A B S E N C E O F A N Y DE F I N I T I O N F OR TH E W O R D, S U B S T A N T I A L I N TH E A C T , W H A T I S T O BE SE E N I S W H A T I S T H E T O T AL R ECE I PT S A N D F R O M W H A T S O U R C E . I N W H A T C O N T E X T WE H A V E T O F I N D O U T W HE T HE R T H E ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 13 OF 14 G RA N T O F 36 . 4 2 % O F T O T AL R ECE I PT S C O N S T I T U T E S SUBS TA N T I AL BY T H E G O V E R N M E N T . P A RA 6 V I E W E D F R O M T H A T A N G L E , A F T E R EX C L U D I N G F E E S RE C E I V E D F R O M TH E S T U D E N T S , W H E N W E L O OK A T TH E A M O U N T R E C E I V E D B Y W A Y OF D O N A T I O N F R O M O TH ER S , W H E N C O M P A R E D T O TH E A M O UN T G R A N T E D B Y T H E G OV ER N M E N T , TH E G R A N T O F 3 6 . 42 % O F T H E T O T A L R E V E N U E D O C O N S T I T UT E S U B S T A N T I A L F I N A NC I A L A I D F R O M TH E G O V E R N M E N T AN D T HU S T H E I N S T I T U T I O N A S S E SS E E I S E N T I T LED T O T H E B E N E F I T OF TH E A F O R E S A I D PR O V I S I O N . I T I S P ER T I N E N T T O N O T E T H A T TH E S A I D A P P E A L I S I N W H I C H TH E A BO V E O BS ERV A T ION H A D B E E N M A D E W A S D I S M I SS E D B Y TH E K A R N A T A K A H I G H C O U R T A T TH E S T A G E OF A D M I S S I O N I T SE L F I . E . TH E H I G H C O U R T D I D N O T F I N D A N Y S U B S T A N T I A L Q U ES T I O N OF L A W I N T H E M A TT E R . T H I S D E C I S I O N W A S F OL L O W E D B Y TH E K A R N A T A K A H I G H C O U R T I N CI T VS. I N D I AN I N S T I T U T E O F M A N A G E M E N T ( I T A N O. 5 2 9 O F 20 0 8 ) R E P O R T E D I N 196 T A X M A N 2 7 6 . 2 1 . W E F I N D T H A T IN T H E C A S E O F N A T I O N A L E D UC A T I O N S O CI E T Y, T HE C O U R T A CCE P T E D 3 6 . 42 % T O T HE SU B S TA N T I A L F I N A N CE W HICH E N T I T LES T H E A S S E S S EE T O T HE B E N E F I T O F T H E PR O VISI O NS O F S E C T I O N 10 ( 23 C ) ( I I I A B ) . E V E N IN T HE C A S E O F I I M T HE G R A NT E Q U A L T O 36 . 4 2 % W A S H E LD T O B E SU B S T A N T I A L F I N A N C E B Y T H E G O V E R N M E N T . 2 2 . IN T H E I N S T A N T C A S E , T HE G R A NT A V A IL A B LE WA S 56 . 86 % , M UCH H I G H E R T H A N T HE G R A N T S A C C E P T E D T O B E SU B S T A N T I A L B Y T H E H O N ' B L E K A R N A T A K A H I G H C O U R T . 2 3 . W I T H T H E S E O B S E R V AT I O NS A ND R E S P EC T F U L LY F O LL O W I NG T HE D E CIS I O NS O F T H E H O N ' B L E K A R N A T A K A H I G H CO U R T , W E D O N O T I N T E ND T O D IS T U R B T HE F I N D I N G S O F T HE C I T ( A ) , W H I CH W E S U S T A I N A ND A S A C O NS E Q U E N C E T H E R E O F , R E JECT T H E A PP E A L O F T HE R E V E N U E . 8. THE TRIBUNAL HAS CONSIDERED THE GRANT OF MORE THAN 50% AS SUBSTANTIAL FINANCE BY GOVERNMENT. THERE IS NO DISPUTE THAT THE ASSESSEE RECEIVED GOVERNMENT GRANT OF MORE THAN 50% OF THE EXPENDITURE DURING THE YEAR. THEREFORE, T HIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THIS TRIBUNAL IN THE ITA NO S . 3660 & 3661/MUM/2013 TATA INSTITUTE OF SOCIAL SCIENCE. PAGE 14 OF 14 ASSESSEE S OWN CASE. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(A) QUA THIS ISSUE. 9. IN VIEW OF THE ABOVE, THE APPEALS FILED B Y THE REVENUE ARE DEVOID OF ANY MERITS. ACCORDINGLY, THE APPEALS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 1 6 TH SEPTEMBER , 2015. S D / - S D / - (N.K.BILLAIYA) (VIJAY PAL RAO) ACCOUNANT MEMBER JUDICIAL MEMBER EKSRINIVASULU, SR.PS COPY TO: 1. A PPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, MUMBAI. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL MUMBAI