ACIT(E), New Delhi V. India HIV/AIDS Alliance, New Delhi

ITA 4484/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5360 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 22-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY GOYAL
• Keywords: Depreciation
• Section: 80G; 12A; 12AA; 73; 13; 12; 11

Judgement Text

1 ITA NO. 4484/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. NO. 4484/DEL/20 16 (A.Y. 2012-13) ACIT (E), CIRCLE 1(1), E-2 BLOCK, PRATYAKSH KAR BHAWAN, DR. SHYAMA PRASAD MUKHERJE CIVIC CENTRE, NEW DELHI 110 002. (APPELLANT) VS INDIA HIV/AIDS ALLIANCE, 6, COMMUNITY CENTRE, ZAMRUDPUR, KAILASH COLONY, EXTENSION NEW DELHI 110 048 (PAN : AABCI 2577 E) ( RESPONDENT) APPELLANT BY SHRI SANJAY GOYAL, CIT-D.R. RESPONDENT BY SHRI V. K. TULSIAN, C.A. SHRI ANJANI KR. SHARMA, C.A. ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX [APPEALS]-40 (EXEMPTION) , NEW DELHI DATED 07.06.2016 FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE EA SE AND IN LAW, LD.CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE A SSESSEE BY IGNORING THE FACT THAT EVEN THOUGH THE OBJECTS OF T HE SOCIETY MAY HAVE BEEN CHARITABLE BUT THE ACTIVITIES CARRIED OUT BY THE SOCIETY WHICH YIELDED INCOME TO THE SOCIETY WERE COMMERC.AL IN NATURE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSE SSEE BY IGNORING THE FACT THAT CARRY FORWARD AND SET OF DEFICIT IS N OT ALLOWABLE AS THE DATE OF HEARING 23.01.2020 DATE OF PRONOUNCEMENT 18.02.2020 2 ITA NO. 4484/DEL/2016 PROVISIONS OF SECTION 70, 71, 72, 73 & 74 ARE NOT A PPLICABLE IN THE CASE OF CHARITABLE ENTITIES WHOSE INCOME IS COMPUTE D IN ACCORDANCE WITH THE PROVISION OF SECTION 11, 12 & 13 OF THE I. T. ACT, 1961. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR A MEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 3. THE ASSESSEE IS A CHARITABLE ORGANIZATION AND WA S ESTABLISHED AS A NGO ON 25.02.1999 AND IS REGISTERED U/S 25 OF THE COMPA NIES ACT, 1956 AND ALSO REGISTERED U/S 12AA OF THE INCOME TAX AC, 1961 VIDE ORDER DATED 17.07.2020 AND IS ALSO ALLOWED U/S 80G OF THE INCOME TAX ACT V IDE ORDER DATED 11.09.2006. THE INCOME OF THE ASSESSEE IS EXEMPT U/ S 11 OF THE INCOME TAX ACT, THEREFORE, THE ASSESSEE FILED NIL RETURN. THE ASSESSING OFFICER DENIED EXEMPTION U/S 11 MAINLY ON THE GROUND THAT THE ASSE SSEE IS IN THE BUSINESS ACTIVITY AS THE ASSESSEE RECEIVES MANAGEMENT FEES F ROM DONOR AND THUS MADE ADDITION OF RS.4,69,02,850/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE ASSESS EE. 5. THE LD DR SUBMITTED THAT THE ASSESSING OFFICER H AS RIGHTLY DENIED THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE IS EXE MPT U/S 11 OF THE INCOME TAX AC. THE LD. DR FURTHER SUBMITTED THAT FROM THE ACTIVITIES IT CAN BE SEEN THAT THE ASSESSEE IS NOT DOING A CHARITABLE ACTIVIT IES BUT DOING A BUSINESS ACTIVITIES. THE LD DR, THEREFORE, SUBMITTED THAT TH E ORDER OF THE ASSESSING OFFICER BE SUSTAINED. 6. THE LD AR SUBMITTED THAT THE CIT(A) HAS CATEGORI CALLY MADE THE FINDING THAT THE EXEMPTION PROVISION U/S 11, 12 & 13 OF THE INCOME TAX ACT ARE INDEPENDENT PROVISION FOR THE COMPUTATION OF INCOME . THE LD AR FURTHER SUBMITTED THAT FOR ALLOWING EXEMPTION THE SAID PROV ISION HAS TO BE TAKEN INTO ACCOUNT. IN THESE PROVISIONS, THERE ARE NO PROVISIO N FOR ADJUSTMENT OF BROUGHT 3 ITA NO. 4484/DEL/2016 FORWARD LOSS OR CARRIED FORWARD CURRENT YEAR LOSS A GAINST THE ADJUSTMENT OF SUBSEQUENT YEAR INCOME OR FOR ALLOWING DEPRECIATION IN FIXED ASSET, BUT IT IS ALSO SEEN THAT THE INCOME IS TO BE COMPUTED IN COMM ERCIAL PRINCIPLE AND SUCH ADJUSTMENT OF BROUGHT FORWARD LOSS AND CARRY FORWAR D LOSS IS TO BE ALLOWED. THE LD AR FURTHER SUBMITTED THAT SINCE THE ASSESSEE IS INVOLVED IN SOCIAL WORK AND CHARITABLE ACTIVITIES AS DEFINED U/S 2(15) OF THE I NCOME TAX ACT, THE ASSESSEE IS ELIGIBLE FOR ADJUSTMENT OF CARRY FORWARD LOSS OR EX CESS EXPENDITURE AGAINST THE CURRENT YEAR INCOME. THE LEARNED AR RELIED UPON THE DECISION OF THE ASSESSEES OWN CASE FOR A.Y. 2010-11 DATED 23.01.2019 (ITA NO. 7210 & 7216/DEL/2017). THE TRIBUNAL DECIDED THIS ISSUE IN FAVOUR OF THE AS SESSEE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIALS AVAILABLE ON RECORD. IN THE PRESENT ASSESSMENT YEAR ALSO THE ASSESSEE IS REGISTERED U/S 25 OF THE COMPANIES ACT, 1956 HOLDIN G REGISTRATION U/S 12A OF THE INCOME TAX ACT AND FURTHER THE ASSESSEE ALSO EN JOYS THE BENEFIT U/S 80D OF THE INCOME TAX ACT. THE MAIN OBJECT HAS NOT CHANGED IN THE PRESENT ASSESSMENT YEAR WHICH IS TO PROVIDE RELIEF TO THE P ERSONS WHO ARE SUFFERING FROM HIV/AIDS BY PROVIDING FINANCIAL, TECHNICAL AND MANAGERIAL ASSISTANCE TO FOSTER THE CARE AND COMMUNITY SUPPORT TO THOSE SUFF ERING FROM THAT DISEASE. THE CIT(A) HAS RIGHTLY ALLOWED THE APPEAL OF THE AS SESSEE AND THE TRIBUNALS DECISION IN A.Y. 2010-11 IS APPLICABLE IN THE PRESE NT YEAR AS WELL. THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH DAY OF FEBRUARY, 2020 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 18 /02/2020 4 ITA NO. 4484/DEL/2016 PRITI YADAV, SR. PS /R.N* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 2 9 . 01 .20 20 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30 . 01 .20 20 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER .01 .20 20 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS .0 2 .2020 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .0 2 .2020 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 19 .0 2 .2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 19 .02.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19 .02.2020 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK