I.T.O., Ward (Exemption), Gwalior V. M/s Shaswat Eduction & Welfare Society, Gwalior

ITA 39/AGR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6345 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHIKHA SWAROOP

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH: AGRA BEFORE S HRI A. D. JAIN, JUDICIAL MEMBER I.T.A NO. 39 /AGRA/201 5 (ASSESSMENT YEAR - 20 10 - 11 ) ITO (EXEMPTION) GWALIOR. PAN NO. AA ITS2495P (ASSESSEE) V S .. SHASHWAT EDUCATION & WELFARE SOCIETY SAMITI 64C, JAWAHAR COLONY, GWALIOR. (R EVENUE ) ASSESSEE BY SHRI RAJENDRA SHARMA , AR REVENUE BY DR. SHIKHA SWAROOP, CIT. DR. ORDER THIS IS D EPARTMENT S APPEAL FOR ASSESSMENT YEAR 20 10 - 1 1, CONTENDING THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEES CASE IS COVERED U/S 10(23C) (IIIAD) OF THE I.T. ACT , WHEREAS IT HAS INVESTED THE FUNDS OF THE S OCIETY FOR THE PERSONAL BENEFIT OF THE PR ESIDENT, MEANING THAT THE TRUST IS ESTABLISHED FOR THE PURPOSE OF PROFIT. 2. THE ASSESSEE SOCIETY HAS CLAIMED EXEMPTION U/S 10(23C) (IIIAD) OF THE ACT. THIS WAS DENIED BY THE AO ON THREE GROUNDS: I) THE S OCIETY WAS NOT FORMED EXCLUSIVE LY FOR EDUCATION PUR POSES, II) THE AGGREGATE ANNUAL RECEIPTS WERE OF DATE OF HEARING 1 2 .0 4 .2017 DATE OF PRONOUNCEMENT 04 . 0 5 .2017 I.T.A NO. 39 /AGRA/201 5 2 RS. 1,57,05,172/ - , I.E., COMPRISING OF UNSECURED LOAN OF RS.12,99,000/ - AND CORPUS FUNDS RECEIPTS OF RS.27,15,172/ - , AND (III ) DIRECT AND INDIRECT BENEFITS WERE GIVEN TO THE PRESIDENT OF THE SOCIETY AND HIS FAMILY MEMBERS. IN THE REMAND REPORT BEFORE THE LD. CIT(A), THE AO CONTENDED THAT THE S OCIETY HAD GIVEN PAYMENT OF RS.25,00,000/ - TO SHRI D. K. SHARMA , PRESIDENT OF THE S OCIETY A ND SMT. SANTOSH SHARMA, WIFE OF SHRI D. K. SHARMA, IN VIOLATIO N OF THE PROVISIONS OF SECTION 13(1)(C)/13(3) OF THE I.T. ACT. IT IS ONLY TH IS THIRD ISSUE WHICH THE D EPARTMENT HAS RAISED BY WAY OF THE SOLE GROUND OF APPEAL TAKEN BEFORE ME. THE LD. CIT(A) HELD THAT THE PROVISIONS OF SECTION 13 OF THE ACT ARE NOT APPLICA BLE IN CASES, AS IN THE PRESENT ONE, WHERE EXEMPTION U/S 10(23C) (IIIAD) OF THE ACT HAS BEEN CLAIMED. 3. THE LD. DR HAS SUBMITTED THAT THE LD. CIT(A) HAS ERRONEOUSLY HELD THE ASSESSEES CASE TO BE COVERED U/S 10(23C) (IIIAD) OF THE ACT, DESPITE THE FACT THAT THE ASSESSEE S OCIETY HAD INVESTED THE FUNDS OF THE S OCIETY FOR THE PERSONAL BENEFIT OF THE PRESIDENT A ND HIS WIFE, ESTABLISHING THAT THE TRUST IS SET UP FOR THE PURPOSE OF PROFIT. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 5. I HAVE HEARD THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. SECTION 13 OF THE ACT TALKS OF NON - APPLICATION OF SECTIONS 11 AND 12 IN CERTAIN CASES. IT DOES I.T.A NO. 39 /AGRA/201 5 3 NOT EXEMPT APPLICATION OF THESE SECTIONS WHERE EXEMPTION HAS BEEN CLAIMED U/S 10(23C) (IIIAD). IT IS THIS STATUTORY POSITION WHICH THE LD. CIT(A) HAS AND, IN MY CONSIDERED OPINION, C ORRECTLY , TAKEN INTO CONSIDERATION. THE DEPARTMENT HAS NOT BEEN ABLE TO SHOW ANY PERVERSITY OR ILLEGALITY IN THE IMPUGNED ORDER. THEREFORE, FINDING NO ERROR THEREIN, THE ORDER UNDER APPEAL IS CONFIRMED. 6. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 / 0 5 /2017. SD/ - (A.D. JAIN) JUDICIAL MEMBER DATED 04 /0 5 /2017 *AKV* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR I.T.A NO. 39 /AGRA/201 5 4 DATE 1. DRAFT DICTATED (DNS) 28 .0 5 .2017 PS 2. DRAFT PLACED BEFORE AUTHOR 28 .0 5 .2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.