ITO, Jeypore V. Sahid Laxman Naik Charitable Trust, Koraput

ITA 55/CTK/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4439 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 21-01-2011
• Court: TRIBUNAL
• Department Lawyers: J KHANRA
• Assessee Lawyers: M R
• Keywords: Depreciation
• Section: 2; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 55/CTK/2011 / ASSESSMENT YEAR 2006 - 07 INCOME - TAX OFFICER, WARD 2, JEPORE. - - - VERSUS - SAHID LAXMANNAIK CHARITABLETRUST, SAMANTA CHANDRASEKHAR INSTITUTE OF TECHONOLOGY & MANAGEMENT,SEMILIGUDA,DIST.KORAPUT. PAN : AADTS 7984 A ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI J.KHANRA, DR / FOR THE RESPONDENT: / SHRI M.R.PANIGRAHI, AR / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER. THIS APPEAL BY THE REVENUE AGITATES THE ORDER OF THE LEARNED CIT(A) FOR NOT JUSTIFIED IN ALLOWING EXEMPTION/S.11 TO THE ASSESSEE - TRUST WHEN IT DID NOT EXIST SOLELY FOR EDUCATIONAL PURPOSE BUT A LSO FOR PROFIT THROUGH THE EDUCATION INSTITUTION RUN BY IT. THE REVENUE AGITATES THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT SINCE THE TRUST WAS REGISTERED U/S.12AA ITS INCOME WAS EXEMPT PARTICULARLY WHEN EARNING OF PROFIT WAS ONE OF THE ACTI VITIES OF THE TRUST. 2. THE LEARNED DR SUBMITTED THAT THE ASSESSEE WAS GRANTED REGISTRATION U/S.12AA WHICH WAS FURNISHED TO THE LEARNED CIT(A) AND WAS NOT BEFORE THE LEARNED ASSESSING OFFICER, HENCE THIS APPEAL. HE PRAYED THAT THE DECISION ON MERITS BE RE STORED TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION AFRESH IN THE LIGHT OF THE MATERIAL CONSIDERED BY THE LEARNED CIT(A) FOR ALLOWING THE ASSESSEES APPEAL. 3. THE LEARNED COUNSEL FOR THE ASSESSEE OPPOSED THE CONTENTION OF THE LEARNED DR BY INDI CATING THAT ONCE THE INCOME HAS BEEN HELD AS EXEMPT IN THE HANDS OF THE ASSESSEE BY WAY OF HAVING BEEN GRANTED REGISTRATION I.T.A.NO. 55/CTK/2011 2 U/S.12AA, THE ASSESSING OFFICERS ENDEAVOR TO DISALLOW EXPENSES U/S.40(A)(IA), DEPRECIATION, PETTY EXPENSES ON THE ANNUAL FUNCTION, FUEL ETC., DONATIONS RECEIVED ALONG WITH THE EXCESS OF INCOME OVER EXPENDITURE WHICH IS LESS THAN 1 5% OF THE TOTAL RECEIPT WAS NOTED BY THE LEARNED CIT(A) WAS AGAINST THE SPIRIT OF THE PROVISIONS OF SECTION 11 OF THE I.T.ACT. HE, THEREFORE, FULLY ALLOWED THE APPEAL OF THE ASSESSEE BEFORE HIM AND IT WOULD SERVE NO PURPOSE IF THE CASE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER AS PRAYED FOR BY THE LEARNED DR. 4. AFTER HEARING THE RIVAL CONTENTIONS, WE ARE INCLINED TO HOLD THAT THE LEARNED CIT HAVING GRANTED REGISTRATION/S.12AA WAS TO BE CONSIDERED FOR ASSESSMENT U/S.143(3) BY THE ASSESSING OFFICER IN THE LIGHT OF THESE FACTS WHEN THE ASSESSMENT HAS BEEN DELIBERATED UPON BY THE LEARNED CIT(A) WHO IN HIS WISDOM HAS ANALYZED THAT THE DISALLOWANCE OF DEPR ECIATION AND EXPENSES U/S.40(A)(IA) CANNOT BE SUSTAINED AS THEY HAVE BEEN INCURRED FOR THE PURPOSE FOR WHICH REGISTRATION WAS GRANTED. SIMILARLY, THE EXCESS OF INCOME OVER EXPENDITURE COMPLIES WITH THE PROVISIONS OF SECTION 11 WHEN THE ASSESSEE IS REQUIRED TO CARRY FORWARD SUCH EXCESS FOR UTILISATION BY THE TRUST FOR THE PURPOSE IT HAS BEEN ESTABLISHED. FINDING NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) ON THIS SCORE, WE DISMISS THE APPEAL OF THE REVENUE FINDING NO MERITS IN THE PRAYER OF THE LEARNED D R FOR RESTORATION OF THE ASSESSMENT TO THE ASSESSING OFFICER AGAIN . 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 28 TH APRIL, 2011 S D/ - S D/ - ( . . . ) , ( K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DATE : 28 TH APRIL, 2011 ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY. I.T.A.NO. 55/CTK/2011 3 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : INCOME - TAX OFFICER, WARD 2, JEPORE. 2 / THE RESPONDENT: SAHID LAXMANNAIK CHARITABLETRUST, SAMANTA CHANDRASEKHAR INSTITUTE OF TECHONOLOGY & MANAGEMENT,SEMILIGUDA,DIST.KORAPUT. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY