ITO (E), New Delhi V. M/s. National Foundation Trust, New Delhi

ITA 4218/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6275 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 01-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12

Judgement Text

ITO (E) VS. NATIONAL FOUNDATION TRUST/ I.T.A.NO.421 8/DEL/2016/A.Y.2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER . . /. I.T.A NO.4218/DEL/2016 / ASSESSMENT YEAR:2012-13 ITO(E) WARD-2(4), ROOM NO. 2409, E-2, BLOCK, DR. S.P. MUKHERJEE CIVIC CENTRE, NEW DELHI. VS. NATIONAL FOUNDATION TRUST, G-36, JANGPURA EXTENSION, NEW DELHI. PAN NO. AAATN8356J APPELLANT / RESPONDENT /REVENUE BY MS. RAKHI VIMAL, SR. DR /ASSESSEE BY SHRI RAJAN BHATIA, ADV. / DATE OF HEARING: 11 .0 2 .20 20 /PRONOUNCEMENT ON 1 1 .0 2 .20 20 /O R D E R PER BHAVNESH SAINI, J.M. 1. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST TH E ORDER OF LD. CIT(APPEALS)-40 (EXEMPTION), NEW DELHI DATED 11.05. 2016 FOR ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE BY IGNORING THE FACT THAT THE ASSESSEE HAS RENDERED SERVICES BY WAY OF CONDUCTING COACHING/LEARNING CLASSES TO THE INDIVIDUALS IN THE FIELD OF SPORTS AND OTHER RELATED ACTIVITIES AND CHARGING ITO (E) VS. NATIONAL FOUNDATION TRUST/ I.T.A.NO.421 8/DEL/2016/A.Y.2012-13 2 FEES THEREUPON WHICH IS PURELY IN THE NATURE OF BUSINESS/COMMERCE/TRADE. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FIL ED RETURN OF INCOME DECLARING NIL INCOME. THE ASSESSEE PRODUCED BOOKS OF ACCOUNT AND OTHER MATERIAL BEFORE THE AO. THE AO NOTED AIMS AND OBJE CTS OF THE ASSESSEE SOCIETY IN THE ASSESSMENT ORDER. THE AO NOTICED FR OM THE INCOME AND EXPENDITURE ACCOUNT THAT IT HAS RECEIVED VARIOUS RE CEIPTS FROM SPORTS RECEIPTS, ACTIVITIES RECEIPTS, WORK EXPERIENCE RECE IPTS, RENT, MID DAY MEAL PLANNING RECEIPTS AND INTEREST RECEIPTS. THE AO CO NSIDERING THE EXPLANATION OF THE ASSESSEE FOUND THAT THE ACTIVITI ES OF THE ASSESSEE ARE BUSINESS/COMMERCE ACTIVITIES AND FIRST PROVISO TO S ECTION 2(15) OF THE ACT IS INVOKED IN THE CASE OF THE ASSESSEE. THE AO DEN IED BENEFIT OF SECTION 11 & 12 TO THE ASSESSEE AND COMPLETED THE ASSESSMENT A T RS. 74,74,420/-. 3. ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(A) AND SUBMITTED THAT ASSESSEE IS REGISTERED U/S 12AA(1) OF THE ACT ON 29.11.2006. THE MAIN OBJECT OF THE ASSESSEE IS TO PROMOTE THE EDUCATION IN SPORTS AND OTHER ALLIED EDUCATION ACTIVITIES. THE ASSESSEE HAS NOT CONDUCTED ANY TRADE, COMMERCE OR BUSINESS AND RELIED UPON THE CERTAIN DE CISIONS IN SUPPORT OF THE CONTENTION. THE LD. CIT(A) ACCEPTED THE CONTEN TION OF THE ASSESSEE AND DIRECTED THE AO TO ALLOW EXEMPTION U/S 11(1) OF THE ACT. 4. LD. DR RELIED UPON THE ORDER OF THE AO AND SUBMITTE D THAT IN THE FOLLOWING CASES, IT WAS HELD THAT IF ACTIVITIES OTH ER THAN THE AIMS AND ITO (E) VS. NATIONAL FOUNDATION TRUST/ I.T.A.NO.421 8/DEL/2016/A.Y.2012-13 3 OBJECTS ARE CARRIED OUT, PROVISO TO SECTION 2(15) W ILL APPLY AGAINST THE ASSESSEE: 1) DESHPANDE EDUCATION TRUST VS. ACIT ITAT BANGALORE 2 016 ITA NO. 1422 & 1423 (BANG.) 2016 2) MATRU KARMADHARA TRUST VS. ITO ITAT CHENNAI 2017 IT A NO. 2053/MDS/2016 3) VODITHALA EDUCATION SOCIETY VS. ADIT ITAT HYDERABAD 2007 [2008] 20 SOT 353 (HYD.) 4) YOUNG WOMENS CHRISTIAN ASSOCIATION OF MADRAS VS. J DIT ITAT CHENNAI [2014] 41 TAXMANN.COM 142 (CHENNAI TRIB.) /62 SOT 65 5) SUKHMANI SOCIETY FOR CITIZEN SERVICES VS. ACIT ITAT AMRITSAR [2018] 93 TAXMANN.COM 292 (AMRITSAR TRIB.)/171 ITD 32 (A MRITSAR TRIB.) 6) NIRMITHI KENDRA VS. DCIT ITAT COCHIN [2018] 100 TAX MANN.COM 293 (COCHIN TRIB./[2019] 174 ITD 177 (COCHIN TRIB.) 5. ON THE OTHER HAND, LD. COUNSEL FOR ASSESSEE SUBMIT TED THAT IN PRECEDING AY 2011-12 THE DEPARTMENTAL APPEAL IN THE CASE OF THE ASSESSEE WAS DECIDED BY ITAT DELHI D BENCH IN ITA NO. 59/2 016 VIDE ORDER DATED 20.05.2019 AND DEPARTMENTAL APPEAL HAS BEEN DISMISS ED. THE FINDINGS IN PARA 5 & 6 ARE REPRODUCED AS UNDER: 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE RELEVANT FACTS AND MATERIAL ON RECORD, WE FIND THAT IT IS AN UNDISPUTED FACT THAT ASSESSEE WAS GRANTED REGISTRAT ION U/S 12AA. THE AIMS AND OBJECTS OF THE ASSESSEE SOCIETY ARE AS UNDER: A) PROMOTE EDUCATIONAL RESEARCH AND STUDIES FOR QU ALITATIVE GROWTH OF THE INSTITUTION AND THE CHILD. B) EDUCATIONAL TRENDS IN THE NATURE OF ACADEMIC, C ULTURAL, ARTS AND SPORTS, STRATEGIC ENVIRONMENTS THROUGH NAT IONAL ITO (E) VS. NATIONAL FOUNDATION TRUST/ I.T.A.NO.421 8/DEL/2016/A.Y.2012-13 4 ACADEMIC INSTITUTIONS AND SCHOOL FOR COHESIVE GROWT H OF THE CHILD. C) WORK AND ORGANIZE ACADEMIC CONFERENCES, WORKSHOP S, PROJECTS AND YOUTH CAMPS WITH TRAINING COURSES FOR QUALITATIVE GROWTH OF THE FACULTY WITH THE CHILD AT THE CENTRE. 6. THE NATURE OF RECEIPTS AS SHOWN IN THE INCOME A ND EXPENDITURE ACCOUNT AND HAS ALSO BEEN NOTED BY THE LD. AO IS FLOWING FROM THE ACTIVITIES CARRIED OUT IN PURSUANC E OF THE OBJECTS FOR WHICH IT WAS GRANTED REGISTRATION U/S 1 2AA. ASSESSEE TRUST HAS BASICALLY HAS RECEIVED FEES FROM THE STUD ENTS FOR VALUE EDUCATION WORKSHOP AND GIVING COACHING FOR THE SPOR TS. SUCH AN ACTIVITY OSTENSIBLY FALLS WITHIN THE AMBIT OF CATEG ORY OF EDUCATION AND GIVING COACHING IN SPORTS IS ALSO O NE OF THE RELATED ACTIVITIES FOR THE OVERALL DEVELOPMENT OF T HE YOUTH AND THE SPORTS ACTIVITIES. THEREFORE, ANY FEES RECEIVED FROM SUCH ACTIVITIES CANNOT BE HELD TO BE IN THE NATURE OF AN Y TRADE, COMMERCE, BUSINESS ACTIVITIES. IN THIS CASE, PROVIS O TO SECTION 2(15) MAY NOT ATTRACT IN THIS CASE, BECAUSE SAID PR OVISO IS APPLICABLE ONLY WHERE A TRUST IS CARRYING OUT ADVA NCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND HER E THE ACTIVITIES OF THE ASSESSEE TRUST FALLS IN THE REALM OF ACTIVITIES OF EDUCATIONAL AND SPORTS. ACCORDINGLY, WE HOLD THAT A SSESSEE IS ELIGIBLE FOR BENEFIT U/S 11 AND 12 AND WE DO NOT FI ND ANY REASON TO DEVIATE FROM THE FINDING OF THE LD. CIT(A) AND T HE SAME IS AFFIRMED. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF IT AT DELHI BENCH FOR AY 2011-12 (SUPRA) IN WHICH ON IDENTICAL VERDICT GROUN DS OF APPEAL, THE ITO (E) VS. NATIONAL FOUNDATION TRUST/ I.T.A.NO.421 8/DEL/2016/A.Y.2012-13 5 DEPARTMENTAL APPEAL HAS BEEN DISMISSED. THOUGH THE RULE OF RESJUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS BUT RULE O F CONSISTENCY SHALL HAVE TO BE FOLLOWED BY THE INCOME TAX AUTHORITIES. IT IS ALSO WELL SETTLED LAW THAT DECISION IN THE CASE OF THE ASSESSEE IS TH E BEST PRECEDENT TO BE FOLLOWED IN SUBSEQUENT YEAR. SINCE ON IDENTICAL FA CTS, THE DEPARTMENTAL APPEAL HAS BEEN DISMISSED BY THE TRIBUNAL IN THE CA SE OF THE ASSESSEE FOR PRECEDING AY 2011-12. THEREFORE, NO DIFFERENT VIEW COULD BE TAKEN AGAINST THE ASSESSEE. FOLLOWING THE ORDER OF THE T RIBUNAL DATED 20.05.2019 (SUPRA) IN THE CASE OF ASSESSEE, WE DISM ISS THE DEPARTMENTAL APPEAL. 7. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH FEBRUARY, 2020 * KAVITA ARORA, SR. P.S. COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, ITAT: DELHI BENCHES-DELHI