The ACIT, Circle-2(1)., Guntur V. M/s The Society of St Anne, Guntur

ITA 491/VIZ/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2832 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 11-12-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• Keywords: Charitable institution
• Section: 12A; 2; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH: VISAKHAPATNAM BEFORE: SRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SRI B.R. BASKARAN, ACCOUNTANT MEMBER I.T.A. NO.491/VIZAG/2007 ASSESSMENT YEAR : 2004-05 ACIT, CIRCLE-2(1) GUNTUR VS. THE SOCIETY OF ST. ANN E, GUNTUR (APPELLANT) (RESPONDENT) I.T.A. NO.544/VIZAG/2008 ASSESSMENT YEAR : 2005-06 ITO, WARD - 2(2), GUNTUR VS . THE SOCIETY OF ST. ANNE, GUNTUR PAN NO. AAATT 2378 N APPELLANT BY : SHRI SUBRATA SARKAR, DR RESPONDENT BY : SHRI NONE O R D E R PER B..R. BASKARAN, ACCOUNTANT MEMBER : THESE APPEALS OF THE REVENUE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD CIT (A) GUNTUR AND THEY RELATE TO THE ASSESS MENT YEAR 2004-05 AND 2005- 06. SINCE THE ISSUES URGED IN THESE APPEALS ARE COM MON IN NATURE, WE ARE DISPOSING THEM OFF BY THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. 2. ALL THE GROUNDS URGED UPON BY THE REVENUE GIVE R ISE TO A SINGLE ISSUE, VIZ., WHETHER THE LD CIT (A) IS JUSTIFIED IN HOLDING THAT THE ASSESSEE CAN CLAIM EXEMPTION EITHER U/S 10(23C) OR SEC.11 OF THE ACT. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT WIT H CHARITABLE PURPOSE AND ONE OF THE OBJECTIVES, BEING PROMOTING EDUCATION. THE S OCIETY WAS REGISTERED AS A CHARITABLE INSTITUTION U/S 12A OF THE INCOME-TAX AC T. DURING THESE TWO YEARS, THE ANNUAL RECEIPTS OF THE ASSESSEE SOCIETY EXCEEDED RS .1.00 CRORE. AS PER THE 2 PROVISIONS OF SECTION 10(23C) OF THE INCOME TAX ACT , IF THE GROSS RECEIPTS EXCEED RS.1.00 CRORE AND IF THE ASSESSEE SOCIETY WANTS TO AVAIL EXEMPTION U/S 10(23C)(VI), IT IS REQUIRED TO OBTAIN APPROVAL IN T HAT REGARD FROM THE PRESCRIBED AUTHORITY. THE ASSESSEE SOCIETY DID NOT OBTAIN REQ UIRED APPROVAL AS STATED ABOVE AND HENCE IT PREFERRED TO AVAIL EXEMPTION U/S 11 OF THE ACT. HOWEVER, THE AO WAS OF THE VIEW THAT THE ASSESSEE COULD NOT AVAIL E XEMPTION U/S 11, SINCE ITS ANNUAL RECEIPTS HAS EXCEEDED FROM THE PRESCRIBED LI MIT OF RS.1.00 CRORE AND THE ASSESSEE COULD ONLY AVAIL EXEMPTION U/S 10(23C(VI) OF THE ACT. SINCE THE ASSESSEE SOCIETY DID NOT HAVE REQUIRED APPROVAL OF THE PRESCRIBED AUTHORITY, THE AO BROUGHT TO TAX THE TOTAL INCOME IN THESE TWO YEA RS, BY REJECTING THE CLAIM OF EXEMPTION U/S 11 OF THE ACT. HOWEVER, THE LD CIT ( A) HELD THAT, ONCE GENUINENESS OF ACTIVITIES IS ESTABLISHED, THE ASSES SEE SOCIETY CAN CLAIM EXEMPTION EITHER U/S 10(23C) OR SEC.11. ACCORDINGLY , LD CIT (A) HELD THAT THE ASSESSEE SOCIETY CAN CLAIM EXEMPTION U/S 11 SUBJECT TO THE VERIFICATION OF FULFILLMENT OF THE CONDITION SPECIFIED UNDER THAT S ECTION. AGGRIEVED BY THE ORDER OF THE LD CIT (A), THE REVENUE IS IN APPEAL BEFORE US . 4. WE HAVE HEARD THE LD DR AND ALSO CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. A SIMILAR ISSUE WAS CONSIDE RED BY THIS BENCH IN THE CASE OF NIDAMANURU EDUCATIONAL SOCIETY, ONGOLE IN ITA NO .493/V/2007, WHEREIN THIS BENCH, VIDE ITS ORDER DATED 13.11.2009 HAS HELD AS UNDER: .. THE LD CIT (A) HAS FOLLOWED THE DECIS ION OF ITAT DELHI IN THE CASE OF SHARAK SHIKSHA SAMITI VS. CIT (16 SOT 213) (DEL. ) ) WHEREIN IT WAS HELD THAT WHEN TWO RECOURSES ARE AVAILABLE TO A PER SON UNDER A LAW IT IS FOR HIM TO CHOOSE ONE OR THE OTHER OR BOTH THE RECO URSES. IN THE CASE OF MALINENI PERUMALLU EDUCATIONAL SOCIETY, REFERRED SU PRA, THIS BENCH HAS ALSO TAKEN A SIMILAR VIEW, BY FOLLOWING TWO DECISIO NS OF ITAT HYDERABAD LISTED BELOW, WHEREIN THE TRIBUNAL HAS TAKEN A VIEW THAT THE EXEMPTION CAN BE CLAIMED EITHER U/S 11 OR SEC. (23C) OF THE A CT. A. RAJASTHAN SHIKSHA SAMITI ITA N OS. 80 & 81/HYD/08 B. DDIT VS. ST. TERESA CONVENT SOC IETY ITA NO. 234/HYD/07 3 IN VIEW OF THE ABOVE, WE ARE OF THE VIEW T HAT THE DECISION RENDERED BY LD CIT (A) IS IN ACCORDANCE WITH THE VIEW CONSISTEN TLY TAKEN UP BY VARIOUS BENCHES OF ITAT. IN VIEW OF THE ABOVE, W E DO NOT FIND ANY NECESSITY TO INTERFERE WITH THE DECISION OF THE LD CIT (A). 5. THE FACTS AND CIRCUMSTANCES OF THE INSTANT C ASE ARE IDENTICAL WITH THE CASE OF NIDAMANURU EDUCATIONAL SOCIETY DISCUSSED SUPRA. HENCE, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF LD CIT(A ). 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 2.12.2 009. SD/- SD/- (SUNIL KUMAR YADAV) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM DATE : 2 ND DECEMBER, 2009. A COPY OF THIS ORDER IS FORWARDED TO : 01 THE ACIT, CIRCLE-2(1), GUNTUR 02 THE ITO, WARD-2 (2), GUNTUR 03 THE SOCIETY OF ST. ANNE, 7 TH LINE, BHARATPET, GUNTUR 04 THE CIT (A),GUNTUR 05 THE CIT, GUNTUR 06 THE DR, ITAT, VISAKHAPAATNAM 07 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY ITAT, VISAKHAPATNAM BENCH