ITO (E), Delhi V. DLF Qutub Enclave Complex Educational Charitable Trust, New Delhi

ITA 57/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81581 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHA KUMARI
• Keywords: Charitable institution; Rule of consistency
• Section: 12; 11

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI G. D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 57 /DEL/ 2013 (ASSESSMENT YEAR: 2009 - 10 ) ITO (E), TRUST WARD - III LAXMI NAGAR DISTT. CENTRE, DELHI VS. DLF QUTUB ENCLAVE COMPLEX EDUCATIONAL CHARITABLE TRUST, 9 TH FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI PAN:AAATD082D (APPELLANT) (RESPONDENT) APPELLANT BY : SUDHA KUMARI, CIT DR RESPONDENT BY : R. S. SINGHVI, CA O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS APPEAL PREFERRED BY THE REVENUE ARISES FROM THE ORDER OF THE LD CIT(A) - XXI, NEW DELHI DATED 23.10.2012 RELATES TO ASSESSMENT YEAR 2009 - 10. 2. THE EFFECTIVE GROUND S RAISED BY THE REVENUE ARE AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN HOLDING THAT THE ACTIVITIES OF THE ASSESSEE TRUST ARE CHARITABLE IN NATURE AND ENTITLED TO EXEMPTION OF INCOME U/S 11 AND 12 OF THE ACT PARTICULARLY WHEN THE ASSESSEE S TRUST IS CONSTRUCTING AND LETTING OUT THE PROPERTIES AND EARNING INCOME FROM THE RENT YEAR AFTER AND MAKING HUGE PROFITS WHICH ARE BEING APPLIED FOR CONSTRUCTING AND LETTING OUT THE PROPERTIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN HOLDING THAT THE ACTIVITIES OF THE ASSESSEE TRUST FALL WITHIN THE EXPRESSION OF EDUCATION READ WITH DEFINITION OF CHARITABLE PURPOSE AS PER SECTION 2(15) OF THE INCOME TAX ACT, 1961 WHEN NONE OF ITS ACTIVITIES CAN BE CA TEGORIZED AS PROVIDING EDUCATION EITHER DIRECTLY OR INDIRECTLY. 3. APROPOS SOLE GROUND REGARDING ELIGIBILITY TO CLAIM EXEMPTION U/S 11 AND 12 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT). 4. WE FIND THAT TH IS ISSUE BEFORE US IS NO LONGER RES - INTEG RA. THE CO - ORDINATE BENCH IN THE CASE OF THE ASSESSEE, FOR ASSESSMENT YEAR 1994 - 95 HAS HELD THAT THE PAGE NO. 2 ASSESSEE IS ENTITLED TO EXEMPTION U/S 11 & 12 OF THE ACT. IT WAS HELD THAT LETTING OUT THE SCHOOL BUILDING WAS AIMED AT PROVIDING ASSISTANCE IN IMPARTING E DUCATION, WHICH IS UNDISPUTABLY FOR A CHARITABLE OBJECT. IT WAS HELD THEREIN AS UNDER: - 13. IN VIEW OF THE ABOVE DECISION, THE ASSESSEE TRUST WAS JUSTIFIED IN LETTING OUT THE SCHOOL BUILDING TO THE OTHER EDUCATIONAL TRUST AND, THEREFORE, IT CAN BE SAID TH AT THE LEASING ACTIVITY AS WELL AS THE INCOME EARNED THROUGH SUCH ACTIVITY WAS IN FURTHERANCE OF THE OBJECTS AND IDEALS OF THE TRUST. THE LEASING ACTIVITY WAS ALSO AIMED AT PROVIDING ASSISTANCE IN IMPARTING EDUCATIONAL WHICH WAS UNDISPUTEDLY A CHARITABLE O BJECT. THUS, THE FINDS OF THE LD CIT(A) ARE TO BE UPHELD FROM THE THIS VIEW POINT ALSO. 14. THERE IS ANOTHER ASPECT OF THE M ATTER. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE ACCUMULATION WAS ALLOWED UNDER SECTION 11 (2) TO THE ASSESSEE IN EA RLIER YEARS AND IN SUBSEQUENT YEARS, WHICH' IS EVIDENT FROM THE CHART FILED BY THE ASSESSEE FOR AS SESSMENT YEARS 1990 - 91 TO 1998 - 99. ON THE BASIS OF THIS CHART, THE ARGUMENT OF ASSESSEE S COUNSEL WAS THAT AS PER THE RULE OF CONSISTENCY ALSO, THE CLAIM OF T HE ASSESSEE DESERVES TO BE ALLOWED. IN THE CASE OF DIRECTOR OF INCOME TAX VS. LOVELY BAL SHIKSHA PARISAD REPORTED IN 266 ITR 349, FOLLOWING THE DECISION OF APEX COURT IN THE CASE OF RADHASOAMI SATSANG VS. CIT 193 ITR 321, IT WAS HELD THAT IF THERE WAS NO C HANGE IN THE NATURE OF ACTIVITIES AND THE ASSESSEE WAS GRANTED EXEMPTION UNDER SECTION 10(22) OF THE INCOME TAX ACT NOT ONLY IN RESPECT OF EARLIER YEARS BUT SUBSEQUENT YEARS ALSO, THE ASSESSEE WAS ENTITLED TO CLAIM EXEMPTION IN ASSESSMENT YEAR UNDER CONSID ERATION I.E. ASSESSMENT YEAR 1991 - 92. IN VIEW OF TITLE OF CONSISTENCY ALSO, THE BENEFIT OF SECTION 11 SHOULD BE ALLOWED TO THE ASSESSEE AS IT WAS BEING ALLOWED IN EARLIER YEARS AND AS THE SAME HAS ALSO BEEN ALLOWED IN SUBSEQUENT ASSESSMENT YEARS. 15. IN VIEW OF THE ABOVE, WE DO NOT FIND FORCE IN THE GROUNDS OF APPEAL TAKEN BY THE REVENUE AND REJECT THE SAME. 16 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 5. THE AFORESAID VIEW WAS REITERATED IN THE CASE OF THE ASSESSEE FOR 2002 - 03 BY AN ORDE R DATED 10 TH JULY 2009 AND IT WAS HELD AS UNDER: - 11. WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF IT AT IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 1994 - 05 IN ITA. NO. 1386/DEL OF 1998 DATED 28TH JULY, 2006 WH E REIN IT HAS BEEN HELD THAT THE ASSESSEE TRUST WAS JUSTIFIED LETTING OUT THE SCHOOL BUILDING TO OTHER EDUCATIONAL TRUST AND, THEREFORE, IT CAN BE SAID THAT LEASING ACTIVITY AS WELL AS INCOME EARNED THROUGH SUCH ACTIVITY WAS IN FURTHERANCE OF OBJECTS AND IDE ALS OF THE TRUST. THE LEASING ACTIVITY WAS ALSO AIMED AT PROVIDING ASSISTANCE IMPARTING EDUCATION, WHICH UNDISPUTEDLY A CHARITABLE OBJECT. IT WAS ALSO NOTED BY THE BEDI THE ACCUMULATION WAS ALLOWED UNDER SECTION 11 (2) TO THE ASSESSEE IN PAGE NO. 3 EARLIER JI8S AND I N SUBSEQUENT YEARS. THEREFORE THE ASSESSEE WAS ENTITLED FOR BENEFIT OF SECTION 11 THE ACT. SINCE THE ISSUE IS COVERED BY THE DECISION OF ITA T IN ASSESSEE'S OWN CASE RESPECTFULLY FOLLOWING THE SAME IT IS HELD THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S 11 OF THE ACT. 6. IN THE LIGHT OF THE ABOVE DECISION OF THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE AND SINCE THE REVENUE WAS UNABLE TO BRING TO OUR NOTICE ANY CHANGE IN FACT S AND CIRCUMSTANCES IN THE CASE ON HAND , WE RESPECTFULLY FOLLOW THE ORDER THE CO - ORDINATE BENCH AND UPHOLD THE ORDER OF THE LD CIT(A) ALLOWING THE CLAIM OF EXEMPTION U/S 11 AND 12 OF THE ACT. 7. IN THE RESULT THE APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 0 . 08. 2014. - S D / - - S D / - ( G. D. AGARWAL ) (A. T. VARKEY) VIDE PRESIDENT JUDICIAL MEMBER DATED : 2 0 / 08 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI