Patel Education and Social Welfare Trust, GHARSANA V. ITO, SURATGARH

ITA 395/JODH/2014

• Counselvise Citation: 39523314 RSA 2014
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 03-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Section: 12AA; 147; 11

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JODHPUR BENCH: J ODHPUR ( BEFORE SHRI H ARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ) I.T.A. NO. 395 /JODH/2014 (A.Y. 200 8 - 09 ) PATEL EDUCATION AND SOCIAL WELFARE TRUST VS. THE ITO NAI M ANDI, GHARSANA SURATGARH PAN NO. AA BTP 4023 B (APPELLANT) (RESPONDENT) ASSESSEE BY: - SHRI SURESH OJHA DEPARTMENT BY : - SHRI JAI SINGH, CIT - D.R. DATE OF HEARING : 2 6 /0 8 /201 4 DATE OF PRONOUNCEMENT : 28 / 08 /2014 O R D E R P E R HARI OM MARATHA, J.M. : THIS APPEAL OF THE ASSESSEE - TRUST FOR A.Y. 200 8 - 0 9 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) , BIKANER DATED 2 2 /0 4 /2014. 2. BRIEFLY STATED, THE FACTS OF THIS CASE ARE THAT THE ASSESSE E - TRUST FILED ITS RETURN OF INCOME [ROI] FOR A.Y. 2008 - 09 ON 30.9.2008, CLAIMING EXEMPTION OF ITS TOTAL INCOME U/S 11 OF THE INCOME - TAX ACT, 1961 ['THE 2 ACT' FOR SHORT] WHICH WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE A.O ISSUED A NOTICE U/ 148 OF THE ACT DATED 07.04.2010. THE ASSESSEE ASKED FOR A COPY OF REASONS FOR ISSUING THIS NOTICE; WHICH WAS SUPPLIED. THE ASSESSEE TRUST WAS REGISTERED VIDE DEED DATED 16.11.2006 BY SUB - REGISTRAR, GADSANA AND ALSO REGISTERED WITH ASSTT. COMMISSIONER, DEVASTHANA DEPTT, BIKANER VIDE ORDER DATED 26.2.2007. THE ASSESSEE TRUST RUNS A B.ED COLLEGE IN THE NAME OF PATEL CO - EDUCATION TEACHER TRAINING COLLEGE . THE TOTAL RECEIPTS OF THE TRUST FOR THIS YEAR ARE RS. 13,24,000/ - WHICH HAS BE EN CLAIMED AS EXEMPT U/S 11 OF THE ACT. SINCE THE ASSESSEE TRUST WAS NOT REGISTERED U/S 12AA OF THE ACT, THE A.O HAS DENIED THIS CLAIM AND HAS ADDED THIS ENTIRE AMOUNT. IN THE ALTERNATIVE, THE ASSESSEE TRUST HAD CLAIMED EXEMPTION U/S 10(23C) OF THE ACT O F RS. 12,62,006/ - AND THIS WAS ALSO DENIED, BECAUSE THE ASSESSEE TRUST DID NOT HAVE ANY INCOME DURING THE RELEVANT YEAR FROM THE EDUCATIONAL INSTITUTION. THE A.O HAS ADDED A SUM OF RS. 17,600/ - BEING INTEREST INCOME. 2.1 AGGRIEVED, THE ASSESSEE FILED APP EAL AND THE LD. CIT(A) ALSO DENIED RELIEF AND THAT IS WHY THIS SECOND APPEAL. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 3 1. THAT THE ORDER PASSED BY THE A.O AND SUSTAINED BY THE LD. CIT(A) IS ILLEGAL AND AGAINST THE LAW. 2. THAT THE ACTIVITY OF THE TRUST IS WELL WITHIN THE CHARITABLE NATURE. 3. THAT THE TRUST IS ENTITLED FOR EXEMPTION U/S 10(23)(C) OF THE ACT. 4. THAT THE ACTION TAKEN U/S 147 BY THE A.O AND SUSTAINED BY THE LD. CIT(A) IS ILLEGAL. 5. THAT THE ADDITION MADE BY THE A.O AND SUSTAI NED BY THE LD. CIT(A) IS ILLEGAL AND AGAINST THE LAW. 2.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. BOTH THE PARTIES HAVE REITERATED THEIR STANDS. THE UNDENIABLE FAC T S OF THIS CASE ARE THAT THE ASSES SEE TR UST HAS BEEN CREATED FOR RUNNING EDUCATIONS INSTITUTIONS AS STATED ABO V E. THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE BUT IT WAS NOT REGISTERED U/S 12AA IN THE YEAR. INITIALLY, THE APPELLANT CLAIMED EXERTION U/S 11 OF THE ACT. BUT WHILE REPLY ING TO THE NOTICE ISSUED U/S148 OF THE ACT, THE ASSESSEE HAD TAKEN THE STAND THAT THE BENEFICIAL PROVISIONS OF SECTION 10(23C) OF THE ACT ARE APPLICABLE TO THE FACTS OF THIS CASE. THE A.O AS WELL AS LD. CIT(A) HAVE AGREED IN PRINCIPLE THAT 4 THIS BENEFIT OF SECTION 10(23C) IS AVAILABLE TO THIS ASSESSEE, NEVERTHELESS, BOTH HAVE REFUSED TO GRANT THIS BENEFIT ON THE PREMISE THAT THE ACTIVITIES OF THE TRUST SEEMS TO BE NOT CHARITABLE IN NATURE . THE A.O HAS ALSO MENTIONED THAT NO RECEIPT COULD BE ATTRIBUTED T O THE EDUCATIONAL ACTIVITIES AS THE REQUISITE PERMISSION TO START B.ED COLLEGE HAD NOT BEEN GRANTED DURING THE RELEVANT PERIOD. 2.3 THE CONTENTION OF THE ASSESSEE IS THAT BEFORE THE A.O ITSELF THE ASSESSEE HAD CLAIMED BENEFIT OF SECTION 10(23C). WE ARE IN AGREEMENT WITH THIS SUBMISSION OF THE LD. A.R AS THIS IS EVIDENT FROM THE A.OS ORDER AS WELL AS LD. CIT(A)S ORDER. THE OBJECT S OF THE ASSESSEE - TRUST ARE UNDENIABLY CHARITABLE IN NATURE. THEREFORE, THE RECEIPT IS EXEMPT U/S 10(23C) OF THE ACT AND CANNO T BE DENIED. ON TRIVIAL IRREGULARITIES, T HE JUDGMENTS OF THE HON'BLE SUPREME HIGH COURT IN THE CASE OF SHREE MEENAKSHI MILLS LTD. VS. CIT, MADRAS REPORTED IN 63 ITR 207 [SC] AND THAT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ASSOCIATES OF F INANCIAL PLANNERS DATED 11.7.2011 ARE RELEVANT AND SUPPORT OUR ABOVE FINDING. ACCORDINGLY, WE ALLOW THE APPEAL AND SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW. 5 3 . IN THE RE SULT, THE APPEAL OF THE ASSESSEE - TRUST IN ITA NO. 395/JU/2014 FOR A.Y. 2008 - 09 STANDS ALLOW ED. ORDER PRONOUNCED IN THE COURT ON 28 TH AUGUST , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH AUGUST , 2014 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR SENIOR PRIVATE SECRETARY ITAT, JODHPUR