The ITO, Ward-2(2), Guntur V. M/s Southern Institute of Medical Sciences, Guntur

ITA 543/VIZ/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6997 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 27-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR CIRDR
• 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.543/VIZAG/2008 ASSESSMENT YEAR : 2005-06 ITO WARD-2(2), GUNTUR VS. SOUTHERN INSTITUTE OF MEDICAL SCIENCES, GUNTUR (APPELLANT) (RESPONDENT) PAN NO. AACTS 57862 C APPELLANT BY : SHRI SUBRATA SARKAR, CIR(DR) RESPONDENT BY : NONE O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER : THE APPEAL OF THE REVENUE IS DIRECTED A GAINST THE ORDER DATED 28.7.2008 PASSED BY THE LD CIT (A) GUNTUR AND IT RE LATES TO THE ASSESSMENT YEAR 2005-06. NONE APPEARED ON BEHALF OF THE ASSESS EE THOUGH THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE. HENCE WE PROCEED TO DECIDE THE APPEAL EX-PARTE, QUA THE ASSESSEE. 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 HOLDIN G 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 AND IS RUNNING EDUCATIONAL INSTITUTIONS. THE SOCIETY WAS REGISTERE D AS A CHARITABLE INSTITUTION U/S 12A OF THE INCOME-TAX ACT. DURING THE YEAR UNDE R CONSIDERATION, 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 WA NTS TO AVAIL EXEMPTION U/S 10(23C)(VI), IT IS REQUIRED TO OBTAIN APPROVAL IN THAT REGARD FROM THE PRESCRIBED AUTHORITY. THE ASSESSEE SOCIETY DID NOT OBTAIN REQUIRED APPROVAL AS STATED ABOVE AND HENCE IT PREFERRED TO AVAIL EXE MPTION U/S 11 OF THE ACT. HOWEVER, THE AO WAS OF THE VIEW THAT THE ASSESSEE C OULD NOT AVAIL EXEMPTION U/S 11, SINCE ITS ANNUAL RECEIPTS HAS EXC EEDED FROM THE PRESCRIBED LIMIT OF RS.1.00 CRORE AND THE ASSESSEE COULD ONLY AVAIL EXEMPTION U/S 10(23C(VI) OF THE ACT. SINCE THE ASSESSEE SOCI ETY DID NOT HAVE REQUIRED APPROVAL OF THE PRESCRIBED AUTHORITY, THE AO BROUGH T TO TAX THE TOTAL INCOME BY REJECTING THE CLAIM OF EXEMPTION U/S 11 OF THE A CT. HOWEVER, THE LD CIT (A) HELD THAT, ONCE GENUINENESS OF ACTIVITIES IS ES TABLISHED, THE ASSESSEE SOCIETY CAN CLAIM EXEMPTION EITHER U/S 10(23C) OR S EC.11. ACCORDINGLY, LD CIT (A) HELD THAT THE ASSESSEE SOCIETY CAN CLAIM EX EMPTION U/S 11 SUBJECT TO THE VERIFICATION OF FULFILLMENT OF THE CONDITION SP ECIFIED UNDER THAT SECTION. AGGRIEVED BY THE ORDER OF THE LD CIT (A), THE REVE NUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE LD DR IN THIS REGARD. A SIMIL AR ISSUE WAS CONSIDERED BY THIS BENCH IN THE CASE OF NIDAMANURU EDUCATIONAL SOCIETY, ONGOLE IN ITA NO.493/V/2007, WHEREIN THIS BENCH, VI DE 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 AVA ILABLE TO A PERSON UNDER A LAW IT IS FOR HIM TO CHOOSE ONE OR T HE OTHER OR BOTH THE RECOURSES. IN THE CASE OF MALINENI PERUMALLU ED UCATIONAL SOCIETY, REFERRED SUPRA, THIS BENCH HAS ALSO TAKEN A SIMILAR VIEW, BY FOLLOWING TWO DECISIONS OF ITAT HYDERABAD LISTED BE LOW, WHEREIN THE TRIBUNAL HAS TAKEN A VIEW THAT THE EXEMPTION CA N BE CLAIMED EITHER U/S 11 OR SEC. (23C) OF THE ACT. 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 THAT THE DECISION RENDERED BY LD CIT (A) IS IN ACCORDANCE WITH THE VI EW CONSISTENTLY TAKEN UP BY VARIOUS BENCHES OF ITAT. IN VIEW OF THE ABOVE, WE 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 SU PRA. HENCE, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF LD CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 29-03-2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE :29 TH MARCH, 2010. A COPY OF THIS ORDER IS FORWARDED TO : 01 THE ITO WARD-2(2), GUNTUR 02 SOUTHERN INSTITUTE OF MEDICAL SCIENCES, GUNTUPAL LI NAGAR, MANGALAGIRI ROAD, GUNTUR 03 THE CIT (A), GUNTUR 04 THE CIT, GUNTUR 0 5 THE DR, ITAT, VISAKHAPAATNAM 06 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY ITAT, VISAKHAPATNAM BENCH