Income Tax Officer- II, Shahjahanpur V. M/s Ram murti Anchal Memorial Educational Society, Shahjahanpur

ITA 426/LKW/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100346 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 05-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Keywords: Charitable institution; Opportunity of being heard; Question of law
• Section: 68; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.426/LKW/2013 A.Y.:2007 - 2008 INCOME TAX OFFICER - II, SHAHJAHANPUR. VS. M/S RAM MURTI ANCHAL MEMORIAL EDUCATIONAL SOCIETY, 81, JHANDA KALAN, SHAHJAHANPUR. PAN:AADTS5691N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. P. SRIVASTAVA, D. R. RESPONDENT BY NONE DATE OF HEARING 16/12/2013 DATE OF PRONOUNCEMENT 0 7 /02/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A), BAREILLY DATED 01/03/2013 FOR THE ASSESSMENT YEAR 2007 - 08. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS ) HAS ERRED IN LAW AND ON FACTS AND ALSO NOT JUSTIFIED IN ALLOWING THE APPEAL OF THE ASSESSEE AS THE ASSESSING OFFICER HAS RIGHTLY ADDED INCOME OVER EXPENDITURE AT RS.57,41,456/ - HOLDING THAT THE ASSESSEE IS IMPARTING EDUCATION FOR EAR NING PROFIT AND NOT EN TITLED FOR EXEMPTION U/S 10( 23C ) (IIIAD) OF THE I.T,ACT,1961. 2. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY BE CANCELLED AND THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 3. ANY OTHER GROUND MAY BE TAKEN AT THE TIME OF HEARING OF APPEAL. 2 3. NONE APPEARED ON BEHALF OF THE ASSESSEE BUT SINCE DATE OF HEARING WAS PRONOUNCED IN THE OPEN COURT ON 22/10/2013 AND IN SPITE OF THIS , NONE APPEARED ON BEHALF OF THE ASSESSEE BEFORE US ON THIS DATE OF HEARIN G AND THERE IS NO REQUEST FOR ADJOURNMENT AND HENCE, WE PROCEED TO DECIDE THIS APPEAL OF THE REVENUE EX - PARTE QUA THE ASSESSEE. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED D.R. OF TH E REVENUE. THIS ISSUE WAS DECIDED BY LEARNED CIT(A) AS PER FOLLOWING PARA APPEARING ON PAGE NO. 7 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 1. I HAVE CONSIDERED THE SUBMISSIONS OF THE AR FOR THE APPELLANT AND ALSO GONE THROUGH THE VARIOUS JUDICIAL PRONOUNCEMENT CITED BY THE AR FOR THE APPELLANT. IN THE LIGHT OF CASE LAWS CITED SUPRA GIVING REFERENCE OF DECISIONS GIVEN BY HONORABLE SUPREME COURT & VARIOUS HIGH COURTS AND ITAT, WHICH HOLD THE SIMILAR VIEW, INCLUDING THE DE CISION OF THE HON'BLE ALLAHABAD HIGH COURT WHICH IS BINDING, I FIND NO JUSTIFICATION FOR THE ACTION OF THE AC) WHO HAS PASSED THE ORDER ON THE BASIS OF THE DECISION GIVEN BY THE HON'BLE HIGH COURT UTTRAKHAND WHICH IS ALTOGETHER DIFFERENT AND WHICH IS ONLY PERSUASIVE, WITHOUT GIVING HIS OWN FINDING AND REASONS AS TO HOW THE DECISIONS AND PRONOUNCEMENTS MADE BY DIFFERENT HON'BLE HIGH - COURTS AND HON'BLE APEX COURT, AND JURISDICTIONAL ALLAHABAD HIGH COURT WERE DIFFERENT AND NOT APPLICABLE IN THE ASSESSEE'S CAS E. IN THE CIRCUMSTANCES, THE ASSESSMENT AS FRAMED BY THE AO IS NOT SUSTAINABLE AND THE SAME IS ANNULLED. 5.1 IN THE ABOVE P ARA OF THE ORDER OF LEARNED CIT(A), THE DECISION IS ON THE BASIS THAT THE ISSUE IN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE BY A JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT , WHICH IS BINDING AND, THEREFORE, THERE IS NO JUSTIFICATION IN FOLLOWING THE JUDGMENT OF HON'BLE UTTR AKHAND HIGH 3 COURT RENDERED IN THE CASE OF QUEENS EDUCATIONAL SOCIETY AND ST. PAUL SR. SECONDARY SCHOOL, NAINITAL IN APPEAL NO. 103 & 104 OF 2007 DATED 24/09/2007 WHICH WERE FOLLOWED BY THE ASSESSING OFFICER. NOW WE TRY TO FIND OUT THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT AS PER WHICH THE ISSUE IN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE AS HAS BEEN STATED BY LEANED CIT (A) . THE LEARNED CIT(A) HAS REFERRED TO A JUDGMENT OF HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS LAXMI PD. AND SONS [2009] 316 ITR 330 (ALL) . IT IS MENTIONED BY LEARNED CIT(A) IN PARA 7 OF HIS ORDER THAT AS PER TH IS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT , FORCED AOP BECAUSE OF INHERITING JOINT PROPERTY UNDER A WILL OR SUCH OTHER CIRCUMSTANC ES NOT BEING VOLUNTARY WOULD NOT CONSTITUTE SUCH JOINT LEGATEES AN AOP. THIS JUDGMENT MAY BE RELEVANT REGARDING DECIDING THE STATUS OF THE ASSESSEE BUT THIS JUDGMENT DOES NOT COVER THE ISSUE ON MERIT. 5.2 THE SECOND DECISION CITED BY LEARNED CIT(A) IS TH E JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS BRIHDARANYAK MANDAL (TRUST) [2009] 319 ITR 363 (ALL). WE HAVE GONE THROUGH THIS JUDGMENT AND IN THIS CASE , THE ONLY QUESTION OF LAW REFERRED TO BEFORE THE HON 'BLE ALLAHABAD HIGH COURT WAS THIS AS TO WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE I.T.A.T. WAS JUSTIFIED IN HOLDING THAT THE INCOME OF THE ASSESSEE TRUST IS EXEMPT ON THE INTERPRETATION OF THE PROVISIONS OF SUB - SECTION (4A) OF SECTION 1 1 OF THE INCOME - TAX ACT, 196 1. HENCE, WE FIND THAT THIS JUDGMENT OF HONBLE ALLAHABAD HIGH COURT HAS NOT CONSIDERED THE PROVISIONS OF SECTION 10(23C)(IIIAD) UNDER WHICH EXEMPTION IS CLAIMED BY THE ASSESSEE IN THE PRESET CASE. THEREFORE, THIS JUDGMENT I S ALSO NOT APPLICABLE IN THE PRESENT CASE. IN ADDITION TO THESE TWO JUDGMENTS, THE LEARNED CIT(A) HAS REFERRED TO TWO MORE JUDGMENTS OF HON'BLE APEX COURT IN PARA 5 OF HIS ORDER. THESE JUDGMENTS ARE THE JUDGMENTS RENDERED IN THE CASE O F ADDITIONAL COMMISSIONER OF INCOME - TAX VS A.L.N. RAO CHARITABLE TRUST [1995] 216 ITR 697 (SC) AND IN THE CASE OF S. RM. M. CT. M. TIRUPPANI TRUST 4 VS COMMISSIONER OF INCOME - TAX [1998] 230 ITR 636 (SC) . IT IS OBSERVED BY LEARNED CIT(A) IN THE SAME PARA OF H IS ORDER THAT IT WAS HELD IN THESE TWO JUDGMENTS THAT ACCUMULATION BEYOND 25% OF THE RECEIPTS COULD BE DONE AND THE PROCEDURE LAID DOWN IN SECTION 11(2) WILL APPLY TO SUCH ACCUMULATION. BUT THE ACCUMULATION OF INCOME OF LESS THAN 25% COULD BE DONE WITHOUT FOLLOWING THE PROCEDURE LAID DOWN IN SECTION 11(2) OF THE ACT. HENCE, IT IS SEEN THAT THESE TWO JUDGMENTS ARE ALSO NOT RELEVANT ON THE ISSUE IN DISPUTE REGARDING APPLICABILITY OF PROVISION OF SECTION 10(23C)(IIIAD) UNDER WHICH EXEMPTION HAS BEEN CLAIMED BY THE ASSESSEE. 5.3 IN ADDITION TO THIS, THERE IS NO OTHER JUDGMENT OF HON'BLE APEX COURT OR HON'BLE ALLAHABAD HIGH COURT REFERRED TO BY LEARNED CIT(A) IN HIS ORDER. THE OTHER JUDGMENTS REFERRED TO ARE SOME JUDGMENTS OF HON'BLE DELHI HIGH COURT OR THE TRIBUNAL. WHEN THE JUDGMENT OF HON'BLE UTTRAKHAND HIGH COURT IS AGAINST THE ASSESSEE, AS HAS BEEN STATED BY THE A.O. AND NOT CONTROVERTED BY LEARNED CIT(A), THE TRIBUNAL DECISION REFERRED TO BY LEARNED CIT(A) CANNOT OVERRIDE THE JUDGMENT OF HON'BLE UTTRAK HAND HIGH COURT. REGARDING THE JUDGMENT S OF HON'BLE DELHI HIGH COURT NOTED BY LEARNED CIT(A) IN PARA 4 AND 6 OF HIS ORDER, WE FIND THAT THESE JUDGMENTS ARE IN RELATION TO ACCUMULATION OF INCOME U/S 11(2) OF THE ACT AND NOT IN RESPECT OF APPLICABILITY OF P ROVISION U/S 10(23C)(IIIAD) OF THE ACT AND, THEREFORE, THESE JUDGMENTS OF HON'BLE DELHI HIGH COURT ARE NOT APPLICABLE IN THE PRESENT CASE. ONE MORE JUDGMENT OF HON'BLE DELHI HIGH COURT HAS BEEN REFERRED TO BY LEARNED CIT(A) IN PARA 8 OF HIS ORDER BEING TH E JUDGMENT RENDERED IN THE CASE OF DIRECTOR OF INCOME - TAX (EXEMPTION) VS RAUNAQ EDUCATION FOUNDATION [2007] 294 ITR 76 (DEL) . IN THIS CASE, THE DECISION OF HON'BLE DELHI HIGH COURT IS THAT IF AN ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 10(22) THEN ADDITION MADE BY THE ASSESSING OFFICER U/S 68 WILL ALSO BE ELIGIBLE FOR SUCH EXEMPTION. IN THE PRESENT CASE, THE DISPUTE IS DIFFERENT AND, THEREFORE, THIS JUDGMENT IS ALSO NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. 5 5.4 AS PER ABOVE DISCUSSION, WE HAVE SEEN THAT LEARNED CIT(A) HAS DECIDED THIS ISSUE IN A CRYPTIC AND NON SPEAKING MANNER BY REFERRING TO SOME TRIBUNAL DECISIONS AND JUDGMENTS OF VARIOUS HIGH COURT AND SUPREME COURT BY STATING THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THESE JUDGMENTS BUT WE HAVE SEEN THAT THOSE JUDGMENTS ARE NOT RENDERING ANY HELP TO THE ASSESSEE ON MERIT AND LEARNED CIT(A) HAS ALSO NOT POINTED OUT AS TO HOW THE ISSUE IN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE BY THESE JUDGMENTS. THERE WAS NONE PRESENT ON BEHALF OF THE ASSESSEE BEFORE US TO REPRESENT HIS CASE. UNDER THESE FACTS, WE FEEL THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD GO BACK TO THE FILE OF LEARNED CIT(A) FOR FRESH DECISION AND HENCE, WE SET ASIDE THE ORDER OF LEARNED CIT(A) AND RESTORE THE MAT TER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION. THE CIT(A) SHOULD PASS A SPEAKING AND WELL REASONED ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. (ORDE R WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 7 T H FEBRUARY, 2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR