DCIT, Berhampur Circle, Berhampur, Berhampur V. Sanjay Memorial Institute of Technology, Ganjam

ITA 369/CTK/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6344 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 27-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K NEB
• Assessee Lawyers: A K PADHY
• Keywords: Charitable institution
• Section: 12A; 12AA; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK . . , . . , BEFORE SHRI P.K.BANSAL , AM & SHRI D.T.GARASIA , JM ./ ITA NO S . 368 & 369 / CTK /20 1 3 ( / ASSESSMENT YEAR S : 200 5 - 06 & 2006 - 07 ) DCIT, BERHAMPUR CIRCLE, BERHAMPUR, ODISHA VS. SANJAY MEMORIAL INSTITUTE OF TECHNOLOGY, BRUNDABAN VIHAR , ANKUSHPUR, DISTRICT GANJAM ./ ./ PAN/GIR NO. : A A A JS 0276 N ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI N.K.NEB /ASSESSEE BY : SHRI A.K. P ADHY / DATE OF HEARING : 2 4 TH APRIL , 201 4 / DATE OF PRONOUNCEMENT : 0 1 / 05 /2014 / O R D E R PER BENCH : BOTH THESE APPEALS HAVE BEEN FILED AGAINST THE RESPECTIVE ORDERS OF THE CIT(A) DATED 21 - 3 - 2013 FOR THE ASSESSMENT YEAR 2005 - 06 & 2006 - 07 . IN BOTH THE YEARS THE REVENUE HAS TAKEN FOLLOWING COMMON GROUNDS OF APPEAL EXCEPT CHANGE IN THE FIGURE. BOTH THE LEARNED AR AS WELL AS LEARNED DR AGREED THAT BOTH THE APPEALS BE DECIDED ON THE BASIS OF THE GROUNDS OF APPEAL IN THE ASSESSMENT YEAR 2005 - 06. GROUNDS OF APPEAL FOR THE ASSESSMENT YEAR 2005 - 06 ARE AS UNDER : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THE SURPLUS OF INCOME OF RS. 22,12,389/ - OVER EXPENDITURE OF THE ASSESSEE WAS EXEMPT FROM TAX. 2 ITA NO S . 368 & 369 /201 3 2. ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIONS OF RS. 26,95,627/ - MADE U/S.40(I)(IA) OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN ACCEPTING THE CONTENTION OF THE ASSESSEE AND NOT ACCEPTING THE FINDINGS OF THE AO IN VIOLATION OF RULE 46A. IN THE ASSESSMENT YEAR 2006 - 07 IN GROUND NO.1, THE FIGURE IS RS. 32,63,969/ - IN PLACE OF RS.22,12,389/ - . IN GROUND NO. 2 FIGURE IS 32,40,513/ - IN PLACE OF RS. 26,95,627/ - . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A SOCIETY REGISTERED UNDER THE SOCIETIES ACT, 1960 UNDER THE EDUCATIONAL INSTITUTION. RETURN FOR THE ASSESSMENT YEAR 2005 - 06 WAS FILED BY CLAIMING EXEMPTION UNDER SECTION 10(23C ) AT NIL. THE ASSESSEE WAS NOT ALLOWED EXEMPTION U/S. 10(23C) AS THE INSTI TUTION WAS NOT APPROVED BY THE CCIT, ORISSA. THE AO MADE DISALLOWANCE UNDER SECTION 40(A )(IA) AND ASSESSED THE INCOME AT RS. 49,08,016/ - . SUBSEQUENTLY, THE ITAT CUTTACK BENCH IN ITA NO. 272/CTK/2012 VIDE ORDER DATED 25 - 6 - 2012 GRANTED REGISTRATION TO THE ASSE SSEE U/S. 12A W.E.F. 29 - 8 - 1980. WHILE APPE AL WAS PENDING BEFORE THE CIT(A) REFERRED TO THE AO VIDE ITS LETTER NO. 1049, DATED, 14 - 8 - 2012 AND ASKED HIM TO EXAMINE AS TO WHETHER THE ASSESSEE SATISFIED ALL THE CONDITIONS REQUIRED FOR GETTING EXEMPTION U/S. 11 T O 13. THE AO VIDE HIS LETTER NO. 8966, DATED 22 - 2 - 2013 REPORTED TO THE CIT(A) THAT THE ASSESSEE TRUST HAS APPLIED THE INCOME FOR CHARITABLE TRUST. ON THIS BASIS, THE CIT(A) ALLOWED THE EXEMPTION TO THE ASSESSEE AS THERE WAS NO VIOLATION OF SECTION 11 TO 3 ITA NO S . 368 & 369 /201 3 13, AND, THEREFORE, THE INCOME FOR THE EXPENDITURE AMOUNTING TO RS. 22,12,389/ - WAS EXEMPTED FROM TAX. IN RESPECT OF THE DISALLOWANCE MADE U/S. 40(A)(IA), THE CIT(A) TOOK THE VIEW THAT THE SAME IS NO LONGER SUSTAINABLE IN VIEW OF THE FACT THAT THE ASSESSEE HAS N OW BEEN GRANTED REGISTRATION U/S.12A AND THE CIT(A) DELETED THE SAME IN VIEW OF THE DECISION IN THE CASE OF M AHATMA GANDHI SEVA SIVIR, 29 TAXMANN.COM 321 (MUM) . IT WAS ALSO STATED BY THE CIT(A) IN HIS ORDER THAT SIMILAR VIEW HAS BEEN TAKEN BY THIS TRIBUNAL IN THE CASE OF SAHEE D LAXMAN NAYAK CHARITABLE TRUST , IN WHICH IT WAS HELD THAT THE PROVISION OF SECTION 40(A)(IA) IS NOT SUSTAINABLE SINCE THE INCOME OF THE TRUST HAS BEEN COMPUTED AND APPLIED AS PER BOOKS OF THE TRUST ON COMMERCIAL BASIS WITHOUT REFERENC E TO THE HEADS OF INCOME SPECIFIED IN SECTION 1 4 , NOT ON TOTAL INCOME AS PER I.T. ACT. 3 . WE HEARD RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. LEARNED DR EVEN THOUGH VEHEMENTLY RELIED ON THE ORDER OF THE AO BUT COULD NOT PRODUCE ANY EVIDENCE OR DE CISION CONTRARY TO THE DECISION WHAT HAS BEEN TAKEN BY THIS TRIBUNAL IN ITA NO. 0194/08 - 09 IN SAHEE D LAXMAN NAYAK CHARITABLE TRUST , ON WHICH THE CIT(A) HAS RELIED WHILE DELETING THE ADDITION U/S. 40(A ) (IA) . SO FAR AS THE FIRST GROUND IS CONCERNED, LEARNED DR WAS FAIR ENOUGH TO CONCEDE THAT THE ASSESSEE HAS ALREADY BEEN ALLOWED REGISTRATION U/S. 12AA AND, THEREFORE, ENTITLED FOR EXEMPTION U/S. 11 ON THE BASIS OF REPORT OF THE AO. IN VIEW OF OUR AFORESAID FINDING, WE ARE OF THE VIEW THAT THERE IS NO MERIT IN BOTH THE APPEALS OF THE REVENUE. WE ACCORDINGLY, DISMISS THE SAME. 4 ITA NO S . 368 & 369 /201 3 4 . IN THE RESULT, APPEAL S FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01/05 / 201 4 . 01/05 /2014 SD/ - SD/ - ( . . ) ( D.T.GARASIA ) ( . . ) ( P.K.BANSAL ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 01/05 /2014 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) , CUTTACK 4. / CIT , CUTTACK 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//