M/S MP NIJI VISHWAVIDHYALYA REGULATORY COMMISSION, Bhopal V. THE DCIT-1(1), Bhopal

ITA 510/IND/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1283 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 12-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S AMBEDKAR
• Section: 143(3); 12AA; 13; 11; 139

Judgement Text

[ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.510/IND/2016 ASSESSMENT YEAR: 2010-11 M.P. NIJI VISHWAVIDHYAL AYA REGULATORY COMMISSION 4, FLAT NO.2, BHOJ UNIVERSITY PARISAR, CHUNA BHATTI, KOLAR ROAD, BHOPAL / VS. DCIT - 1(1) BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AAAJM1732D APPELLANT BY SHRI SUM IT NEMA, SR. A.R. WITH SHRI GAGAN TIWARI, A.R. RESPONDENT BY SHRI R.S. AMBEDKAR, SR.D.R. DATE OF HEARING: 11.11.2019 DATE OF PRONOUNCEMENT: 17.12.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F LD. CIT(A)-2, BHOPAL DATED 22.2.2016 PERTAINING TO THE [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 2 ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ORDER OF THE LEARNED LOWER AUTHORITIES IS VITIATED ON SEVERAL GROUNDS, H ENCE THE SAME MAY KINDLY BE QUASHED. 2. THAT THE ORDER PASSED IS ILLEGAL, UNLAWFUL AND OPPO SED TO PROVISIONS OF LAW. 3. THAT THE LEARNED ASSESSING OFFICER ERRED AND WAS NO T JUSTIFIED IN DISALLOWING THE CLAIM OF ACCUMULATION U/S 11(2) OF RS.16,74,668/- AND THE LEARNED CIT(A) ERRED AND WAS NOT JUSTIFIED IN UPHOL DING THE ACTION OF THE LEARNED A.O. 4. THAT THE LEARNED ASSESSING OFFICER ERRED AND WAS NO T JUSTIFIED IN ALTERNATIVELY ALLOWING EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT, AND THE LEARNED CIT(A) ERRED AND WAS NOT JUSTIFIED IN UPHOL DING THE ACTION OF THE LEARNED A.O. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, SU BSTITUTE MODIFY ANY OF THE ABOVE GROUNDS ON OR BEFORE THE FINAL HEA RING. 2. BRIEFLY STATED FACTS ARE THAT CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLE D AS THE ACT) WAS FRAMED VIDE ORDER DATED 28.3.2013. THE ASSESSEE SOCIETY IS DULY REGISTERED U/S 12AA OF THE ACT. WHILE FRAMING THE ASSESSMENT, THE A.O. OBSERVED THAT DURING THE YEAR UNDER APPEAL, THE ASSESSEE HAD DECLARED INCOME FROM OTHER SOURCES OF RS.20,20,000/- AND CLAIM ED [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 3 APPLICATION OF MONEY OF RS.42,332/-. THE ASSESSEE ALSO CLAIMED RS.3,03,000/- AS THE AMOUNT SET OUT. THE ASSESSEE CLAIMED RS.16,74,668/- AS AMOUNT ACCUMULATED U/S 11(2) OF THE ACT. THE A.O. DID NOT ALLOW THIS C LAIM AND TREATED THE SAME AS INCOME OF THE ASSESSEE. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT( A), WHO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED THE APPEAL. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBU NAL. APROPOS TO GROUND NOS.1 & 2, NO ARGUMENT IS MADE ON BEHALF OF THE ASSESSEE, HENCE BOTH THE GROUNDS ARE DISMISSED. 3. GROUND NO.3 IS IN RESPECT OF DISALLOWING CLAIM OF ACCUMULATION OF FUND AMOUNTING TO RS.60,74,668/- AND GROUND NO.4 IS DISALLOWING THE CLAIM OF EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT. [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 4 4. APROPOS TO BOTH THESE GROUNDS, LD. SR. COUNSEL SHRI SUMIT NEMA ON BEHALF OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE ACTION OF THE AUTHORITIES BELOW IS NOT JUSTIF IED AND IS CONTRARY TO THE SETTLED POSITION OF LAW. LD. COU NSEL SUBMITTED THAT ON BOTH THE GROUNDS, AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACTS AND LAW IN RIGHT PERSPECT IVE. LD. COUNSEL SUBMITTED THAT EVEN THE ASSESSEE IS ENTIT LED FOR EXEMPTION U/S 10(23C) OF THE ACT. IN SUPPORT OF TH IS CONTENTION, LD. SR. COUNSEL FOR THE ASSESSEE HAS RELI ED UPON THE JUDGEMENT OF HON'BLE DELHI HIGH COURT REND ERED IN THE CASE OF COUNCIL OF INDIAN SCHOOL CERTIFICATE EXAMINATION VS. DIRECTOR GENERAL OF INCOME TAX TO BUTTRESS THE CONTENTION THAT THE ASSESSEE IS ENGAGED W HOLLY AND EXCLUSIVELY FOR EDUCATION PURPOSES. FURTHER, LD. COUNSEL SUBMITTED THAT THIS BEING THE LEGAL ISSUE OUG HT TO HAVE BEEN EXAMINED BY THE LD. CIT(A). [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 5 5. FURTHER, LD. SR. COUNSEL SUBMITTED THAT CLAIM IS REJECTED PURELY ON THE BASIS THAT THE ASSESSEE HAS NOT SUBMITTED FORM NO.10 AS PER RULE 17 OF THE INCOME TA X RULES, 1962. LD. SR. COUNSEL REITERATED THE SUBMISS IONS WHICH WERE MADE BEFORE THE LD. CIT(A). IT WAS CONTEN DED THAT THE ASSESSEE FILED ITR 7 IN WHICH BIFURCATION OF ACCUMULATED INCOME HAS BEEN SHOWN. THE MAIN OBJECT AND PURPOSE OF SUBMITTING FORM 10 IS TO PROVIDE INFORMATION RELATED TO ACCUMULATION AND PURPOSE FOR UTILIZATION OF ACCUMULATED INCOME COVERED U/S 11(2) O F THE ACT. BUT THE ASSESSEE HAS NOT SUBMITTED FORM 10 AND THE SAME DETAILS WHICH ARE REQUIRED TO BE FILLED IN FORM NO .10 WERE DULY AVAILABLE IN THE ASSESSEES ITR NO.7. MEREL Y NON- SUBMISSION OF FORM NO.10 DOES NOT MEAN THAT THE ACCUMULATION OF INCOME IS INVALID U/S 11(2) OF THE REL EVANT CASE LAWS. LD. COUNSEL FOR THE ASSESSEE PLACED RELIANC E ON THE JUDGEMENT OF THE HON'BLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. GOETZE (INDIA) LTD. (2006) 204 C TR (SC) 182. THE RELIANCE WAS ALSO PLACED ON THE JUDGEMENT OF THE HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CI T VS. NAGPUR HOTEL OWNERS ASSOCIATION (1994) 209 ITR 441 (BOM.) THE RELIANCE WAS ALSO PLACED UPON THE DECISION OF [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 6 HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF AC IT VS. STOCK EXCHANGE AHMEDABAD (TAX APPEAL NO.207 TO 213 OF 2000). 6. LD. D.R. OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LD. CIT(A) REJECTED THE C LAIM OF ACCUMULATION OF FUND U/S 11(2) OF THE ACT BY OBSERVIN G AS UNDER: [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 7 8. THE CONTENTION OF THE ASSESSEE IS THAT MERELY FURNISHING THE REQUISITE FORM BELATEDLY SHOULD NOT BE THE REASON FOR REJECTION OF CLAIM FOR ACCUMULATION OF FUNDS . IN [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 8 THIS REGARD, THE ASSESSEE HAS RELIED UPON THE JUDGEMEN T OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION (SUPRA), WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER: [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 9 9. IT IS PERTINENT TO NOTE THAT AS PER SECTION 11 OF THE ACT, THE ASSESSEE IS REQUIRED TO EXERCISE OPTION FOR ACCUMULATION OF FUNDS IN A PRESCRIBED FORMAT AS PRESCRIB ED UNDER RULE 17 OF THE INCOME TAX RULES (IN SHORT TH E RULES). THE TIME LIMIT PRESCRIBED UNDER THE RULE 17 FOR EXERCISING SUCH OPTION IS THE TIME LIMIT AS PRESCRIB ED UNDER SUB-SECTION 1 OF SECTION 139 OF THE ACT FOR FURNISH ING OF RETURN OF INCOME. ADMITTEDLY, THE ASSESSEE FAILED TO EXERCISE THIS OPTION AS PRESCRIBED UNDER THE RULE 17 . MOREOVER, THE LD. CIT(A) HAS POINTED OUT SERIOUS DISCREPANCIES IN THE RESOLUTION OF THE SOCIETY FOR S ETTING APART OF FUND. THEREFORE, THE JUDGEMENT OF THE HON'B LE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. NAG PUR HOTEL OWNERS ASSOCIATION, IN OUR CONSIDERED VIEW WOU LD NOT BE APPLICABLE AS IN THIS CASE, THE FOUNDATION OF EXERCISING THE OPTION ITSELF IS FOUND TO BE FAULTY. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN THIS FINDING OF THE [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 10 LD. CIT(A). SAME IS HEREBY AFFIRMED. GROUND NO.3 O F THE ASSESSEES APPEAL IS REJECTED. 10. GROUND NO.4 OF THE ASSESSEES APPEAL IS IN RESPEC T OF AVAILABILITY OF EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. C IT(A) OUGHT TO HAVE ALLOWED THE CLAIM OF EXEMPTION U/S 10(23 C) OF THE ACT. IN THE LIGHT OF THE JUDGEMENT OF THE H ON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF COUNCIL OF INDIAN SCHOOL CERTIFICATE EXAMINATION VS. DIRECTOR GENERAL OF INCOME TAX (2012) 20 TAXMANN.COM 505, LD. COUNSEL F OR THE ASSESSEE POINTED THAT THE FACTS ARE IDENTICAL AS WERE IN THE CASE OF COUNCIL FOR INDIAN SCHOOL CERTIFICATE EXAMINATION VS. DGIT (SUPRA). 11. ON THE CONTRARY, LD. D.R. OPPOSED THESE SUBMISSI ONS AND SUBMITTED THAT THE ASSESSEE IS ONLY CONDUCTING [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 11 EXAMINATIONS IS NOT IMPARTING EDUCATION AND IS NOT FOR FUNCTIONING WHOLLY AND EXCLUSIVELY FOR THE EDUCATION. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 5.3 AS UNDER: 5.3 UPON DUE CONSIDERATION OF THE MATTER, IT IS HE LD THAT BESIDES THE FACT THAT NO SUCH CLAIM WAS MADE IN THE RETURN OF INCOME, EXEMPTION U/S 10(23C)(IIIAD) IS AVAILABLE O NLY TO EDUCATIONAL INSTITUTIONS EXISTING SOLELY FOR THE PURPOSE OF EDUCATION AND NOT FOR THE PURPOSE OF PROFIT. THE APPELLANT I S NOT AN EDUCATIONAL INSTITUTION. IT IS ONLY A REGULATORY COMMISSION TO REGULATE THE OPERATIONS OF PRIVATE UNIVERSITIES IN THE STATE OF MADHYA PRADESH. IN VIEW OF THE ABOVE, THE GROUNDS OF APPEAL ARE DI SMISSED. 13. THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGEMENT OF THE HON'BLE DELHI HIGH COURT IN THE CAS E OF COUNCIL FOR INDIAN SCHOOL CERTIFICATE EXAMINATION VS. DGIT (SUPRA), THE HON'BLE DELHI HIGH COURT HELD AS UNDER: [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 12 [ITA NO.510/IND/2016] [M.P. NIJI VISHWAVIDHYALAYA REGULATORY COMMISSION, BHOPAL] 13 14. RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HON 'BLE DELHI HIGH COURT, WE HEREBY DIRECT THE A.O. TO GRANT EXEMPTION U/S 10(23C) OF THE ACT AND DELETE THE ADDIT ION. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17. 12.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED : 17/12/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE