ACIT, Circle-2(1), Sambalpur, Sambalpur V. M/s. Gayatri College of Pharmacy, Sambalpur

ITA 467/CTK/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3616 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 01-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Benefit of exemption

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ ITA NO. 4 67 / CTK /20 15 ( / ASSESSMENT YEAR : 20 1 0 - 20 1 ) ACIT, CIRCLE - 2(1), SAM BALPUR VS. M/S GAYATRI COLLEGE OF PHARMACY, AT-JAMADARPALLI, PO-AINTHAPALLI, DISTRICT-SAMBALPUR ./ ./ PAN/GIR NO. : A A ATG 7115 L ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI SUBHENDU DUT TA, CITDR /AS SESSEE BY : NONE / DATE OF HEARING : 25 / 0 7 /201 7 / DATE OF PRONOUNCEMENT 27 / 0 7 /201 7 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF CIT(A) - II , BHUBANESWAR , PASSED IN APPEAL REFERENCE NO. 0511 /201 3 - 1 4 , DATED 18.09.2014. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND S OF APPEAL : - 01. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS CORRECT IN LAW & FACTS I N GIVING FULL RELIEF TO THE ASSESSEE TRUST THOUGH THE ACTIVITIES OF THE ASSESSEE DID NOT QUALIFY TO CLAIM EXEMPTION U/S.10(23C)(VI) OF THE I.T.ACT. 02. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS CORRECT IN LAW & FACTS IN GIVING FULL RELIEF TO THE ASSESSEE TRUST THOUGH THE ACCUMULATED PROFIT IS MORE THAN 15% OF TOTAL INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETY REGISTRATION ACT, 1860 ON 9 - 9 - 1986 AND RUNS EDUCATIONAL INSTITUT ION AND IMPARTING EDUCATION OF PHARMACY AT GRADUAT ION AND POST GRADUATION LEVELS AND FILED THE RETURN OF INCOME ON 13.09.2010 DECLARING TOTAL INCOME OF RS. NIL AND T HE SOURCE S OF INCOME OF THE ASSESSEE MAINLY FROM ADMISSION FEES, SALE OF APPLICATION FORM, H OSTEL ITA NO. 467 /201 4 2 FEES, GRANT IN AID AND INTEREST ON DEPOSITS. RETURN OF INCOME WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) & 142(1 ) OF THE ACT WERE ISSUED . IN COMPLIANCE, THE LD. AR APPEARED FROM TIME TO TIME AND FURNISHED THE DETAILS AS REQUIRED BY THE AO . T HE AO VERIFIED THE FINANCIAL DOCUMENTS FILED BY THE ASSESSEE AND FOUND D URING THE CURRENT FINANCIAL YEAR THE ASSESSEE DISCLOSED GROSS RECEIPTS OF RS. 2,5,77,578/ - FROM ADMISSION FEES, SALE OF APPLICATI ON FORM, HOSTEL FEES, GRANT IN AID AND INTEREST ON DEPOSITS AND AFTER CLAIMING EXPENDITURE UNDER DIFFERENT HEADS AND DISCLOSED EX CESS OF INCOME OVER EXPENDITURE OF RS.93,26,623/ - AND CLAIMED THE SAME AS EXEMPTION U/S.10(23C)(VI) OF THE ACT. THE AO COMPARED THE INCOME AND EXPENDITURE FOR THE FINANCIAL YEAR 2007 - 08 TO 2009 - 10. THE CONTENTION OF THE AO THAT THE ASSESSEE SOCIETY IS MAKING PROFIT SYSTEMATICALLY AND CHARGING EXORBITANT FEES RESULTING TO ENORMOUS SURPLUS AND SUCH ACTIVITY CANNOT BE TREATED AS CHAR ITABLE AND RELIED ON THE JUDICIAL DECISIONS AND DEALT EXHAUSTIVELY AT PAGES 2 TO 4 OF THE ORDER AND OBSERVED THAT EXEMPTION U/S.10(23C)(VI) OF THE ACT IS AVAILABLE SOLELY FOR THE PURPOSE OF EDUCATION AND NOT FOR PROFITS AND ASSESSED THE ASSESSEE AS AOP WIT H TOTAL INCOME OF RS. 93,26,620/ - AND PASSED THE ORDER U/S.143(3) DATED 26.03.2013. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). LD. AR ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MADE BEFORE THE AO. THE LD. CIT (A) CONSIDER ED THE FINDINGS OF AO AND THE SUBMISSIONS OF THE ASSESSEE AND DISCUSSED ELABORATELY AT ITA NO. 467 /201 4 3 PAGE 3 TO 7 OF HIS ORDER ON THE GROUNDS OF JUDICIAL DECISIONS AND THE SUBMISSIONS AND ALLOWED THE APPEAL AND OBSERVED AT PARA 10 AS UNDER : - 10. EXEMPTIONS U/S.10(23C)(VI) AS WELL AS U/S.11(I)(A) R.W.S.12A ARE BOTH AVAILABLE TO THE APPELLANT FOR THIS ASSESSMENT YEAR. IN ANY EVENT, EVEN IF ANY VIOLATIONS OF APPLICABLE CONDITIONS HAVE TAKEN PLACE, THE REMEDY FOR THE AO WAS NOT UNILATERALLY LIFT THE CLAIMS OF EX EMPTION, BUT TO INFORM THE CHIEF COMMISSIONER/COMMISSIONER OF INCOME - TAX OF THE VIOLATIONS/INFRACTIONS. THAT THIS WAS NOT FOLLOWED THROUGH INDICATES IRRESPONSIBILITY, SCANT REGARD FOR THE LEGAL PROCESS AND PREMEDITATED MISUSE OF AUTHORITY. ASSESSMENTS OF T HIS NATURE SET A DAMAGING AND DANGEROUS PRECEDENT WITH WIDER ADVERSE RAMIFICATIONS FOR THE AUTHORITY, CREDIBILITY AND IMAGE OF THE DEPARTMENT AND THE GOVERNMENT. 5. BEING AGGRIEVED WITH THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. DR S CONTENTION THAT THE ASSESSEE TRUST OBJECTS DOES NOT QUALIF Y FOR BENEFIT OF EXEMPTION U/S.10(23C)(VI) OF THE ACT. THE CIT(A) HAS NOT CONSIDERED MAJOR FACTS AS OBSERVED BY THE AO AND PRAYED FOR RESTORATION TO THE LOWER AUTHORITIES . 7. NONE APPE ARED ON BEHALF OF THE ASSESSEE. 8. WE HEARD THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL ON RECORD. THE LD. CIT(A) HAS DEALT ON THE SUBMISSIONS OF THE ASSESSEE WHERE THE ASSESSEE WAS GRANTED REGISTRATION U/S.12A OF THE ACT. THE ASSESSEE HAS SUBMITTE D VARIOUS DETAILS WHICH WERE NOT DEALT IN ASSESSMENT AND THE LD. CIT(A) HAS NOT CALLED FOR THE REMAND REPORT OR COMMENTS FROM THE AO ON THE INFORMATION WHICH WAS RELIED. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF CIT(A) AND REMIT T HE ENTIRE DISPUTED ISSUE TO THE FILE OF CIT(A) TO CONSIDER AFRESH AND CALL FOR THE COMMENTS/REPORT FROM THE AO AND THE ASSESSEE SHOULD BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING BEFORE THE DISPOSAL OF THE APPEAL. ITA NO. 467 /201 4 4 9 . THUS, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 27 /07 / 201 7 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 27 / 0 7 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - ACIT, CIRCLE-2(1), SAMBALPUR 2. / THE RESPONDENT - M/S GAYATRI COLLEGE OF PHARMACY, AT-JAMADARPALLI, PO-AINTHAPALLI, DISTRICT-SAMBALPUR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//