The Tribune Trust, Chandigarh V. DCIT (Exemptions), Chandigarh

ITA 499/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6488 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 17-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHISH SOOD
• Keywords: Capital asset; Charitable institution
• Section: 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 498/CHD/2017 ASSESSMENT YEAR: 2012-13 THE TRIBUNE TRUST, VS. THE ACIT (EXEMPTIONS) SECTOR 29C, CIRCLE-1, CHANDIGARH CHANDIGARH PAN NO. AAATT2141D & ITA NO. 499/CHD/2017 ASSESSMENT YEAR: 2013-14 THE TRIBUNE TRUST, VS. THE DCIT (EXEMPTIONS) SECTOR 29C, CIRCLE-1, CHANDIGARH CHANDIGARH PAN NO. AAATT2141D (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TEJ MOHAN SINGH RESPONDENT BY : SH. ASHISH SOOD DATE OF HEARING : 13.12.2017 DATE OF PRONOUNCEMENT : 13.12.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEALS HAVE BEEN PREFERRED BY THE ASSE SSEE AGAINST THE SEPARATE ORDERS DATED 2.2.2017 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS CIT(A)]-2, CH ANDIGARH. 2 2. FIRST WE WILL TAKE UP ASSESSEES APPEAL FOR ASS ESSMENT YEAR 2012-13, WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED:- 1) THAT THE LD. CIT(A)II HAS FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS THEREBY ERRED IN HOLDING THE APPELLANT TRUST AS NOT ELIGIBLE FOR EXE MPTION U/S 10(23C)(IV) OF THE INCOME-TAX ACT, 1961 ON THE GROUND THAT THE ACTIVITIES OF THE TRUST ARE HIT BY THE FIRST PROVISO TO SECTION 2(15) OF THE INCOME-TAX ACT, 196 1. 2) THAT THE LD. CIT(A)-II HAS FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS THEREBY ERRED IN DENYING AMOUNT APPLIED TOWARDS CAPITAL ASSETS AS APPLICATION OF INCOME ON THE GROUND OF DENIAL OF BE NEFIT U/S 10(23C) OF INCOME-TAX ACT, 1961. 3) THAT THE LD. CIT(A)-II HAS FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS THEREBY ERRED IN SUSTAINING ADDITION ON ACCOUNT OF PROVISIONS OF CRE DIT NOTES AS INCENTIVES TO ADVERTISERS OF RS. 1,55,92, 200/-ON THE GROUND THAT THE SAME WAS CONTINGENT LIABILITY WHICH IS WRONG AND BASED ON INCORRECT FACTS. 3. GROUND NOS. 1 & 2: THE LD. COUNSEL FOR THE ASSE SSEE HAS STATED AT BAR THAT THE ISSUES RAISED VIDE GROUND NOS. 1 & 2 A RE COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE HON'BLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. TRIBUNE TRUST VS. CIT AND OTHERS (2017) 390 ITR 547. SIMILAR ISSUE CAME UP FOR CONSIDERATION BE FORE THE CHANDIGARH BENCH OF THE TRIBUNAL IN ITA NO. 660 & 661/CHD/201 7 RELATING TO ASSESSMENT YEARS 2010-11 & 2011-12 WHEREIN THE TRIB UNAL RELYING UPON THE JUDGEMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CIT VS. TRIBUNE TRUST VS. CIT AND OTHERS, DISMISSED THE AP PEAL OF THE ASSESSEE. THE RELEVANT PART OF THE ORDER IN PARA 3 & 4 OF TH E TRIBUNAL ARE AS UNDER:- 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS A TRUST AND INVOLVED INTO PRINTING AND DISTRIBUTION O F NEWSPAPERS 3 IN THE NAME OF TRIBUNE. THE ASSESSEE TRUST HAS BEEN NOTIFIED BY CENTRAL BOARD OF DIRECT TAXES FOR EXEMPTION U/S 10(23C)(IV) VIDE NOTIFICATION NO. 60/2007 IN FILE N O. 197/67/2006-ITA-L DATED 28.02.2007 AND WAS AVAILING THE BENEFITS OF EXEMPTIONS SINCE 1984-85. THE SAID NOTI FICATION EMANATED FROM A DECISION OF THE PRIVY COUNCIL IN TH E CASE OF THE ASSESSEE HOLDING THE ASSESSEE TO BE ELIGIBLE FO R THE TAG AS A TRUST PURSUING ADVANCEMENT OF ANY OTHER OBJECT OF G ENERAL PUBLIC UTILITY. ASSESSEE HAD FILED INCOME TAX RETUR N FOR ASSESSMENT YEAR 2010-11 IN ITR-7 ON 11.10.2010 AND CLAIMED NET LOSS OF RS. 8,73,15.662/- IN THE SAID RETURN. W HILE FRAMING THE ASSESSMENT ORDER FOR A.Y. 2010-11, THE THEN ASS ESSING OFFICER ACCEPTED THE RETURNED LOSS OF RS. 8,73,15.6 62/- VIDE ORDER DATED 29.11.2012. THE LD. CIT(E), HOWEVER, OBSERVED THAT THE ASSESSIN G OFFICER HAD DECIDED THE MATTER ACCEPTING THE ASSES SEE'S CONTENTION WITHOUT GOING DEEP INTO THE ISSUES INVOL VED AND EXAMINING THE VERACITY OF THE FACTS. PURSUANT TO TH E AMENDMENT IN THE ACT IN 2009, (W,E,F. 01.04.2009 RELEVANT TO ASSTT. YEAR 2009-10 ONWARDS), PARTICULARLY IN REFERENCE TO T HE TRUSTS CLAIMING TO PURSUE 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY', IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO EXAMINE WHETHER THE ASSESSEE STILL QUALI FIED FOR BEING LABELED AS AN ENTITY PURSUING 'CHARITABLE PUR POSES' AND TO THAT EXTENT FOR EXEMPTION UNDER SECTIONS 10(23C) (IV), 11 AND 12 OF THE I.T. ACT, 1961. THE CASE REQUIRED IN DEPTH SCRUTINY AND INQUIRIES WHICH WERE NOT BROUGHT OUT F ROM THE RECORDS OF THE ASSESSMENT PROCEEDINGS. HE, THEREFOR E, EXERCISING HIS REVISION JURISDICTION U/S 263 OF THE ACT, ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE TRUST ON 30.1.201 5. THE ASSESSEE WENT TO HON'BLE PUNJAB & HARYANA HIGH COUR T IN CWP NO. 2902. THE HIGH COURT HAD STAYED THE SHOW CA USE PROCEEDINGS VIDE ORDER DATED 20.02.2015. SUBSEQUENTLY, THE HONBLE COURT HAS DECIDED THE CASE IN FAVOUR OF REV ENUE IN ITA NO. 62, DATED 23.12.2016 FOR ASSESSMENT YEAR 20 09-10 IN 4 CASE OF ASSESSEE. THE HON'BLE COURT HAS HELD THAT ASSESSEE IS ENGAGED INTO PRINTING AND DISTRIBUTION OF NEWSPAPE RS AND EARNING HUGE PROFITS FROM THE ADVERTISEMENT INCOME AND IS HIT BY THE PROVISO OF SECTION 2(15) OF I.T. ACT. EXEMPTION IS NOT ALLOWABLE IN THE CASE EVEN SINCE IT DOESN'T QUALIFY FOR BEING PURSUING 'CHARITABLE PURPOSE' EVEN THOUGH IT MAY BE PURSUING ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' BECAUSE OF ITS ACTIVITIES BEING HELD TO BE IN THE N ATURE OF TRADE, BUSINESS OR COMMERCE. IN SYNC WITH ITS OWN FINDINGS IN THE CASE RELEVANT TO ASSESSMENT YEAR 2009-10, THE HON'B LE HIGH COURT SUBSEQUENTLY VACATED THE STAY UNDER CWP NO. 2 902, DATED-24.01.2017 FOR A.Y. 2010-. FOLLOWING UP ON TH IS VACATION OF STAY ORDERS, THE LD. CIT (E) ISSUED AN OTHER SHOW CAUSE NOTICE TO THE ASSESSEE ON 9.3.2017 AND AFTER DETAILED DISCUSSION OF THE MATTER AND RELYING UPON THE DECIS ION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE O F ITA NO. 62 DATED 23.12.2016 HELD THAT THE ASSESSEE TRUST W AS NOT ENTITLED TO EXEMPTION AS ITS ACTIVATES DID NOT GET COVERED UNDER THE LABEL OF CHARITABLE PURPOSES. HE, THEREFO RE, HELD THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY SET ASIDE T HE SAME AND RESTORED THE MATTER TO THE FILE OF THE ASSESSING OF FICER FOR ASSESSMENT AFRESH. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES. THOUGH, THE LD. AR OF THE ASSESSEE HAS CON TENDED THAT THE ASSUMPTION OF JURISDICTION BY THE LD. CIT(E) WA S WRONG AND ILLEGAL, HOWEVER, WE ARE CONVINCED WITH THE ARG UMENTS OF THE LD. DR THAT THE CIT(A) HAS RIGHTLY EXERCISED HI S JURISDICTION U/S 263 IN THIS CASE. THE LD. CIT(A) H AS RELIED UPON THE VARIOUS CASE LAWS AND ALSO THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE OWN CASE OF THE ASSESSEE WHEREIN THE HON'BLE HIGH COURT HAS HELD T HAT THE ACTIVITIES OF THE ASSESSEE TRUST CANNOT BE SAID TO BE FOR CHARITABLE PURPOSES, AS PER THE PROVISIONS OF SECTI ON 2(15) OF THE ACT, THE SAME BEING HIT BY THE PROVISO TO SECTI ON 2(15) OF 5 THE ACT. HE HAS FURTHER HELD THAT THE JURISDICTION U/S 263 OF THE ACT CAN BE EXERCISED WHERE IT IS FOUND THAT TH E ASSESSMENT ORDER WAS PASSED ON WRONG ASSUMPTION OF FACTS OR IN CORRECT APPLICATION OF LAW OR WITHOUT DUE APPLICATION OF MI ND MAKING THE ORDER ERRONEOUS SO FAR AS PREJUDICIAL TO THE IN TEREST OF THE REVENUE. WE, THEREFORE, DO NOT FIND ANY MERIT IN TH IS APPEAL AND THE SAME IS ACCORDINGLY DISMISSED . THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, HAS SUBM ITTED THAT THE ASSESSEE RESERVES THE RIGHT TO CHALLENGE THE VALIDITY OF THE FINDINGS BEFORE THE HON'BLE HIGH COURT. 4. GROUND NO.1 & 2 OF THE ASSESSEE APPEAL ARE, THER EFORE, DISMISSED. 5. GROUND NO.3:- SO FAR AS GROUND NO.3 IS CONCERNED , THE LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT THE ASSESSING OFFI CER HAS FAILED TO GIVE ANY FINDINGS AS TO WHY THE DISALLOWANCE ON ACCOUNT OF T HE PROVISIONS OF CREDIT NOTE AS INCENTIVE TO ADVERTISERS WAS ATTRACTED; N O OPPORTUNITY WAS GRANTED TO THE ASSESSEE ON THIS ISSUE. HE HAS FURTHER BROUG HT OUR ATTENTION TO THE RELEVANT PART OF THE ORDER OF CIT(A) AND HAS SUBMIT TED THAT EVEN THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE OBSERVING THA T NECESSARY DETAILS AND EVIDENCE WERE NOT AVAILABLE. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, HAS PRAYED THAT HE MAY BE GIVEN AN OPPOR TUNITY TO PRESENT THE CASE OF THE ASSESSEE IN RESPECT OF GROUND NO.3 OF T HE APPEAL. THE LD. DR HAS OBJECTED TO THE ABOVE SUBMISSIONS. 6. WE HAVE HEARD THE RIVAL CONTENTIONS. WE FIND THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE TO BE CORRECT. IN OUR VIEW, THE INTEREST OF JUSTICE DEMANDS THAT THE ASSESSEE MAY BE GIVEN AN O PPORTUNITY TO PRESENT 6 HIS CASE IN RESPECT OF GROUND NO.3 AND THEREAFTER T HE ASSESSING OFFICER SHOULD DECIDE AS TO WHETHER THE SAID CLAIM WAS ALLO WABLE OR NOT. 7. IN VIEW OF THIS, IN RELATION TO GROUND NO.3, THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO DECIDE A FRESH AFT ER GIVING PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT HIS CASE. A CCORDINGLY, THIS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2012-13 IS TREATED AS PARTLY ALLOWED. 8. NOW, COMING TO THE ASSESSEES APPEAL FOR ASSESSM ENT YEAR 2013-14. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT BOTH THE GROUNDS RAISED IN THIS APPEAL ARE IDENTICAL TO THAT HAVE BE EN RAISED VIDE GROUND NOS. 1 & 2 FOR ASSESSMENT YEAR 2012-13. IN VIEW OF OUR F INDINGS GIVEN ABOVE, SINCE THE ISSUE IS SQUARELY COVERED AGAINST THE ASS ESSEE BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT (SUPRA), THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2013-14 IS HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH DECEMBER, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR