DDIT(Exemptions), Bangalore V. M/s. Central Power Research Institute, Bangalore

ITA 379/BANG/2009

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5451 (ITAT-BANGALORE)
• Duration Of Justice: 8 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-04-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 24-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: VANI H
• Keywords: Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH, A, BANGALORE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO.1200//B ANG/2008 (ASST. YEAR 2005-06) THE ADDL. DIRECTOR OF INCOME-TAX (EXEMPTIONS), RANGE-17, BANGALORE. . APPELLANT VS. CENTRAL POWER RESEARCH INSTITUTE SIR C.V RAMAN ROAD, SADHASHIVNAGAR SUB-PO, BANGALORE. . RESPONDENT ITA NOS.379-38 2/BANG/2009 (ASST. YEARS 2001-02, 2002-03, 2003-04 & 2006-07 ) THE DY. DIRECTOR OF INCOME-TAX (EXEMPTIONS), CIRCLE-17(1), BANGALORE. . APPELLANT VS. CENTRAL POWER RESEARCH INSTITUTE SIR C.V RAMAN ROAD, SADHASHIVNAGAR SUB-PO, BANGALORE. . RESPONDENT APPELLANT BY : SHRI D SUDHAKAR RAO, CIT RESPONDENT BY : SMT. VANI H, ADVOCATE DATE OF HEARING : 25-04-2017 DATE OF PRONOUNCEMENT : 5-05-2017 ITA NO.1200 /B/08 & 379 382/B/09 2 O R D E R PER BENCH THESE ARE BUNCH OF 5 APPEALS FILLED BY THE REVE NUE WHICH ARE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE COM MISSIONER OF INCOME-TAX (APPEALS) V, BANGALORE DATED 30/6/200 8 FOR THE ASST. YEAR 2005-06 AND 27/2/2009 FOR THE ASST. YEARS 2001-02, 2002-03, 2003-04 AND 2006-07. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, FOR THE SAKE OF CONVENIENCE IT IS DISPOSED OF BY THIS COMMO N ORDER. 2. AT THE OUTSET, THE LD AR HAS DRAWN OUR ATTENTION TO THE ORDER PASSED BY THE TRIBUNAL IN THE ITA NO.364/BANG/2014 WHEREBY THE APPEAL OF THE REVENUE WAS DISMISSED BY SPEAKING ORDER OF T HE TRIBUNAL WITH THE FOLLOWING EFFECT: 4. FIRST WE TAKE UP THE CROSS OBJECTIONS OF THE ASSESSEE. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE AUTHORITIES BELOW H AVE DENIED THE CLAIM OF EXEMPTION UNDER SECTION 10(21) OF THE ACT IN VIEW OF THE CBDT LETTER F. NO.203/38/2006/ITA-II DT.28.8.2006. SHE HAS POINTED OUT THAT THE ASSESSEE CHALLENGED THE NOTIFICATION O F THE CBDT BEFORE THE HON'BLE HIGH COURT IN WRIT PETITION NO.50838 & /56636 - 56637 / 2013(T-IT). THE HON'BLE ITA NO.1200 /B/08 & 379 382/B/09 3 HIGH COURT VIDE DECISION DT.26.11.2014 SET ASIDE NOTIFICATION DT.30.1.2004 DT.28.8.2006 AND 24.5.200 7. ACCORDINGLY, THE ASSESSEE WAS DIRECTED TO APPEAR BE FORE THE CBDT AND EXPLAINED THE NATURE OF ACTIVITY BEING CARRIED OUT BY IT WHICH SHALL BE TAKEN INTO CONSIDE RATION BY THE AUTHORITIES WHILE CONSIDERING THE CASE OF TH E ASSESSEE FOR EXEMPTION. IN PURSUANT TO THE SAID DEC ISION OF THE HON'BLE HIGH COURT, THE CBDT HAS NOW ISSUED THE NOTIFICATION DT.7.4.2016 WHEREBY THE ASSESSEE H AS BEEN NOTIFIED AS SCIENTIFIC RESEARCH ASSOCIATION SU BJECT TO THE CONDITION ENUMERATED THERE ITA NO.364/BANG/2014 & C.O. NO.82/BANG/2014 UNDER. THUS THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT SINCE THE CBDT HAS ALREADY ISSUED A NOTIFICATION DT.7.4.2016 NOTIFYING THE ASSESSEE AS SCIENTIFIC RESEARCH ASSOCIATION, THEREFORE, THE ORD ERS OF THE AUTHORITIES BELOW IN DENYING THE EXEMPTION UNDER SECTION 10(21) ARE NOT SUSTAINABLE AND LIABLE TO BE SET ASIDE. 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THOUGH THE CBDT H AS ISSUED THE NOTIFICATION IN QUESTION HOWEVER EXEMPTI ON UNDER SECTION 10(21) HOWEVER, THE SAME CAN BE ALLOWED ONLY ON SATISFACTION OF VARIOUS CONDITIONS AS LISTE D IN THE SAID NOTIFICATION. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AS WELL AS CONSIDERED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ASSESSING OFFICER AS WELL AS CIT (APPEALS) HAS DENIED THE CLAIM OF EXEMPTION UNDER SECTION 10(21) OF THE ACT ONLY ON A LIMITED GROUND OF THE NOTIFICATIO N OF THE CBDT DT.28.8.2006. RELEVANT FINDING OF THE CIT (APPEALS) ARE IN PARA 4.5 AS UNDER : ' THE MATTER WAS REFERRED TO CBDT AND THE CBDT IN T HE CLARIFICATION GIVEN IN F.NO.203/38/2006/ITA-=II DAT ED ITA NO.1200 /B/08 & 379 382/B/09 4 28.08.2006 HAS HELD THAT THE BENEFIT OF SECTION 10(21) IS AVAILABLE ONLY TO A 'SCIENTIFIC RESEARCH ASSOCIATIO N' CATEGORIZED AS SUCH UNDER SECTION 35(1)(II) AND NOT AN 'INSTITUTION' AND HENCE THE APPELLANT IS, NOT ELIGI BLE FOR THE BENEFIT OF EXEMPTION ITA NO.364/BANG/2014 & C.O . NO.82/BANG/2014 U/S.10(21). CBDT DIRECTED A.O. TO TAKE REMEDIAL MEASURE IN THIS REGARD ACCORDING TO L AW.' NEITHER THE ASSESSING OFFICER NOR THE CIT (APPEALS) HAS POINTED OUT THAT THE ASSESSEE HAS CONTROVERTED THE CONDITION REQUIRED FOR ALLOWING THE EXEMPTION UNDER SECTION 10(21) OF THE ACT. EVEN OTHERWISE WHEN THE CIT (APPEALS) HAS FOUND THAT THE ASSESSEE IS EL IGIBLE FOR DEDUCTION UNDER SECTION 35(1)(II) OF THE ACT THEN THE CONDITIONS AS ENUMERATED IN THE SAID NOTIFICATION A RE FOUND TO BE SATISFIED FOR THE PURPOSE OF SECTION 35(1)(II) OF THE ACT. THUS ONCE THE ASSESSEE IS FOUND TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 35(1)(II) THEN THE CLAIM OF EXEMPTION UNDER SECTION 10(21) CANNOT BE DENIED IN VIEW OF THE FACT THE CBDT HAS ALREADY NOT IFIED THE ASSESSEE IN THE CATEGORY OF 'SCIENTIFIC RESEARC H ASSOCIATION' FROM ASSESSMENT YEAR 2003-04 ONWARDS VIDE NOTIFICATION DT.7.4.2016. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND THE NOTIFICATION DT.7.4.2016 ISSUED BY THE CBDT, WE ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 10(21) OF THE ACT. 3. IT IS SUBMITTED THAT BY THE NOTIFICATION ISSUED BY THE CBDT ON 7/4/2016 U/S 35(1)(II) RECOGNISED THE ASSESSEE AS SCIENTIFIC RESEARCH INSTITUTION FOR THE ASST. YEAR 2003-04 ONWARDS. I T WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE FACTS OF THE PRE SENT CASE ARE SIMILAR TO ITA NO.1200 /B/08 & 379 382/B/09 5 THAT OF THE EARLIER YEARS, THEREFORE, THE APPEAL FI LED BY THE REVENUE IS REQUIRED TO BE DISMISSED AS THE ISSUE OF ELIGIBILI TY OF THE ASSESSEE TO CLAIM EXEMPTION U/S 10(21) OF THE ACT BECOME INFRUC TUOUS IN VIEW OF THE CBDT CIRCULAR. 4. ON THE OTHER HAND, THE LD DR RELIED UPON THE ORD ER PASSED BY THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTION OF THE PARTIE S AND PERUSED THE RECORD, MORE PARTICULARLY ORDER PASSED BY THE CO-OR DINATE BENCH IN THE ASSESSEES OWN CASE IN ITA NO.364/BANG/2014. IN V IEW OF THE NOTIFICATION ISSUED BY THE BOARD W.E.F 7/4/2016, NO ISSUE IS REQUIRED TO BE ADJUDICATED AND, THEREFORE, THE APPEALS OF THE R EVENUE ARE REQUIRED TO BE DISMISSED. 6. WE MAY ALSO LIKE TO POINT OUT THAT LD CIT(A) FO R THE ASST. YEAR 200-02 AND 2002-013 HELD THAT THE ASSESSEE IS ELIGI BLE FOR EXEMPTION U/S 10(21) OF THE ACT RELYING UPON THE NOTIFICATION OF THE BOARD CIRCULAR BEARING NO.ITA/ 341/TRUST/CIT/2007-08 DATED 30/6/2 008. WE FIND THAT THE ACTIVITY OF THE ASSESSEE CONTINUES TO BE SAME S INCE THE ESTABLISHMENT ITA NO.1200 /B/08 & 379 382/B/09 6 OF THE INSTITUTE AND THERE IS NO CHANGE IN THE ACT IVITY OF THE ASSESSEE AND, THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U /S 10(21) OF THE ACT FOR THE ASST. YEARS 2001-02, 2002-03M 2003-04, 2005-06 AND 2006-07. 7. IN VIEW THEREOF ALL THE APPEALS OF THE REVENUE A RE DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5TH MAY, 2017 . SD/- SD/- (INTURI RAMA RAO) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEM BER BANGALORE DATED : 5/5/2017 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTR AR, ITAT, BANGALORE.