ITO (E) - 2(1), MUMBAI V. NANIKRAM MENGHRAJ TRUST, MUMBAI

ITA 5278/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8739 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 24-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: M A GOHEL
• Keywords: Charitable institution; Tax effect
• Section: 143(3); 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI , JUDICIAL MEMBER ITA NO. 5278 /MUM/2016 : A.Y : 201 1 - 1 2 ITO (E) - 2(1) , MUMBAI (APPELLANT) VS. NANIKRAM MENGHRAJ TRUST NAVJIVAN SOCIETY LAMINGTON ROAD MUMBAI 400 007 (RESPONDENT) PAN : AAATN2215N APPELLANT BY : SHRI RAJESH KUMAR YADAV RESPONDENT BY : SHRI M.A. GOHEL DATE OF HEARING : 3 1 / 1 0/2017 DATE OF PRONOUNCEMENT : 31 / 10 /2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 1, MUMBAI DATED 1 7 .0 6 .2016 PERTAINING TO THE ASSESSMENT YEAR 201 1 - 1 2 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 10.03.2014 UNDE R SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 . IN ITS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. 'WHETHER ON THE FACTS OF THE CASE AND IN LAW THE ID. CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT OF RS.1, 03,57,475 / - AND ALLOWING SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS.' 2 ITA NOS. 5278/MUM/2016 NANIKRAM MENGHRAJ TRUST 2. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT, IGNO RING THE FACT THAT THERE WAS NO EXPRESS PROVISION IN THE I T ACT, 1961 PERMITTING ALLOWANCE OF SUCH CLAIM.' 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FOR WARD OF THE SAID DEFICIT BY RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, IGNORING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT ON MERIT O F THE CASE.' 4. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - I , MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3. ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE SOLITARY DISPUTE INVOLVED IN THIS APPEAL IS AGAINST THE ACTION OF THE CIT(A) IN ALLOWING THE ASSESSEE THE BENEFIT OF CARRY FORWARD OF THE DEFICIT FOR FUTURE SET - OFF. 4. IN THIS BACKGROUND, NOW WE MAY REFER TO THE RELEVANT FACTS. THE RESPONDENT - ASSESSEE IS A CHARITABLE ORGANISATION REGISTERED U/S 12A OF THE ACT AND IS ENGAGED IN CARRYING ON ACTIVITIES OF CHARITABLE NATURE. THE ASSESSING OFFICER NOTICED THAT ASSESSEE H AD SHOWN RS.1,03,57,475/ - AS DEFICIT AND CLAIMED BENEFIT OF CARRY FORWARD FOR FUTURE SET - OFF. THE ASSESSING OFFICER DENIED THE BENEFIT BY OBSERVING THAT LOSS/DEFICIT CANNOT BE DETERMINED WHILE COMPUTING INCOME U/S 11 OF THE ACT. THE CIT(A) HAS SINCE ALLO WED THE CLAIM OF THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, 264 ITR 110 (BOM) . 5. BEFORE US, THE PLEA OF THE DEPARTMENT IS THAT THE DECISION OF THE HON'BLE BOMBAY HIGH COUR T IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT ON MERITS . SO, HOWEVER THERE IS NO CONTROVERSION BY THE REVENUE TO THE FACT THAT THE 3 ITA NOS. 5278/MUM/2016 NANIKRAM MENGHRAJ TRUST DECISION OF THE CIT(A) IS IN LINE WITH THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) . 6. WE FIND THAT THE HON'BLE BOMBAY HIGH COURT SUBSEQUENT TO THE DECISION IN THE CASE OF INSTITUTE OF BANK ING PERSONNEL SELECTION (SUPRA) CONSIDERED A SIMILAR ARGUMENT OF THE REVENUE IN THE CASE OF M/S. MUMBAI EDUCATION TRUST, ITA NO. 11/2014 DATED 3.5.2016 AND ALLOWED THE CLAIM OF THE ASSESSEE. IN FACT, ONE OF THE GROUNDS OF APPEAL URGED BY THE REVENUE BEFOR E THE HON'BLE HIGH COURT IN THE CASE OF MUMBAI EDUCATION TRUST (SUPRA), WHICH READ S AS UNDER : - (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW TO CARRY FO RWARD OF DEFICIT OF EARLIER YEARS RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) WHILE THE REVENUE DID NOT FILE SLP AGAINST THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR110 (BOM) DUE TO LOW TAX EFFECT?. S TAND S ON THE SAME FOOTING AS IS BEING CANVASSED BEFORE US IN THE INSTANT CASE . THUS, THERE IS NO ERROR ON THE PART OF THE CIT(A) IN FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIG H COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AND ALLOWING THE STAND OF THE ASSESSEE. THE OTHER ARGUMENT TAKEN BY THE REVENUE THAT ITS SLP FILED BEFORE THE HON'BLE SUPREME COURT IS PENDING ON A SIMILAR ISSUE IS OF NO CONSEQUENCE IN AS MUCH AS THE BINDING JUDGMENTS OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AS WELL AS IN THE CASE OF M/S. MUMBAI EDUCATION TRUST (SUPRA) CONTINUE TO SUBSIST. THEREFORE, IN THIS BACKGROUND, WE FIND NO 4 ITA NOS. 5278/MUM/2016 NANIKRAM MENGHRAJ TRUST MERIT IN THE GROUND RAISED BY THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 8 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED , AS ANNOUNCED IN THE COURT IN THE PRESENCE OF BOTH THE PARTIES ON THE CONCLUSION OF HEARING ON 31 ST OCTOBER, 2017. S D / - S D / - ( RAM LAL NEGI ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 3 1 S T OCTOBER , 201 7 KARUNA C OPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI