DDIT (E) I(1), MUMBAI V. MAHARASHTRA HOUSING & AREA DEVELOPMENT AUTHORITY, MUMBAI

ITA 5758/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55913 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 16-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN VARMA
• Assessee Lawyers: M SUBRAMANIAN
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B : MUMBAI BEFORE SHRI D. MANMOHAN, (VICE PRESIDENT [MZ]) AND SHRI RAJENDRA SINGH,(ACCOUNTANT MEMBER) ITA NO.5758/MUM/2010 ASSESSMENT YEAR : 2007-08 THE DY. DIRECTOR OF INCOME TAX (E)-I(1) ROOM NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL MUMBAI-12. ..( APPELLANT ) VS. MAHARASHTRA HOUSING & AREA DEVELOPMENT AUTHORITY GRIHA NIRMAN BHAVAN BANDRA (E) MUMBAI-51. ..( RESPONDENT ) P.A. NO. (AAAJM 0344 H) APPELLANT BY : SHRI PRAVIN VARMA RESPONDENT BY : SHRI M. SUBRAMANIAN DATE OF HEARING : 9.11.11 DATE OF PRONOUNCEMENT : 16 TH NOVEMBER, 2011 O R D E R PER RAJENDRA SINGH (AM). THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDE R DATED 4.3.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08. TH E ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING ALLOWABILIT Y OF EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT. 2. THE ASSESSEE IS A LOCAL AUTHORITY CREATED BY THE GOVT. OF MAHARASHTRA. EARLIER UP TO ASSESSMENT YEAR 2002-03, INCO ME OF LOCAL ITA NO.5758/M/10 A.Y:07-08 2 AUTHORITIES WAS TAXABLE UNDER THE PROVISIONS OF SECTION 10(20) AND 10(20A). HOWEVER, THE SAID PROVISIONS WERE AMENDED BY FINANCIAL YEAR 2002 AS A RESULT OF WHICH THE INCOME OF AUTHORITIE S SUCH AS MHADA AND SRA ETC. BECAME TAXABLE. SUBSEQUENTLY, THE A SSESSEE APPLIED FOR EXEMPTION UNDER SECTION 10(23C) AND FOR T HAT PURPOSE FILED APPLICATION FOR REGISTRATION UNDER SECTION 12AA AND WA S ALSO REGISTERED UNDER THE SAID SECTION BY DIT(E), MUMBAI. THE AO NOTE D THAT ISSUE OF EXEMPTION UNDER SECTION11 IN CASE OF THE ASSESSEE HAD COME UP FOR CONSIDERATION IN THE ASSESSMENT YEAR 2004-05 ALSO AND THE AO HAD DISALLOWED THE SAME HOLDING THAT THE ASSESSEE WAS NOT A V ALID TRUST AND COULD NOT CHANGE THE STATUS. FOLLOWING THE SAID DECI SION, THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY EXEMPTION UNDER SECTION 11 SHOULD NOT BE DENIED THIS YEAR ALSO. THE ASSESSEE SUBMITTE D THAT IN ASSESSMENT YEAR 2003-04 TO 2006-07, THE CLAIM HAD BEEN A LLOWED BY THE CIT(A) AND ALSO BY THE TRIBUNAL AND THEREFORE, FACTS BEING THE SAME THE CLAIM SHOULD BE ALLOWED. THE AO HOWEVER OBSER VED THAT THE TRIBUNAL HAD DISMISSED THE APPEAL OF THE DEPARTMENT ON TECHNICAL GROUND AND HAD NOT DECIDED THE ISSUE ON MERIT. THEREF ORE, AO, FOLLOWING THE ORDERS IN EARLIER YEAR DISALLOWED THE CL AIM OF THE ASSESSEE UNDER SECTION 11. IN APPEAL THE CIT(A) FOLLOWING THE DECISION IN EARLIER YEAR ALLOWED THE CLAIM OF THE ASSESSEE AGGRIEVED, BY WHI CH THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.5758/M/10 A.Y:07-08 3 2.1 BEFORE US, THE LD. AR AT THE VERY OUTSET POINTED OUT THAT THE SAME ISSUE HAD ARISEN IN CASE OF SLUM REHABILITATION AUT HORITY (SRA) IN WHICH THE TRIBUNAL HAS CONFIRMED THE ORDER OF CIT(A) A LLOWING THE CLAIM OF EXEMPTION UNDER SECTION 11 AND, THEREFORE, FO LLOWING THE SAID DECISION THE CLAIM HAS TO BE ALLOWED IN CASE OF THE ASSESSEE ALSO. THE LD. DR PLACED RELIANCE ON THE ORDER OF AO. 3. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABILITY OF DEDUCTION UNDER SECTION 11 OF THE INCOME TAX ACT IN CASE OF THE ASSESSEE. TH ERE IS NO DISPUTE THAT THE ASSESSEE HAS BEEN REGISTERED UNDER SECTION 12AA OF THE INCOME TAX ACT BY THE DIT(E) WHICH MEANS THAT CHARIT ABLE CHARACTER OF THE ASSESSEE IS NOT IN DISPUTE. THEREFORE, EX EMPTION UNDER SECTION 11 IN CASE OF THE ASSESSEE CAN NOT BE DENIED. WE ALSO FIND THAT IDENTICAL DISPUTE HAD ARISEN IN CASE OF SRA IN WHICH THE TRIBUNAL IN ITA NO.5150/MUM/2010 NOTED THAT CHARITAB LE PURPOSE INCLUDED ADVANCEMENT OF ANY OTHER JOB OF GENERAL PUBL IC UTILITY. MOREOVER THE INSTITUTION HAD ALSO BEEN REGISTERED UND ER SECTION 12A BY THE DEPARTMENT WHICH ALSO CONFIRMED ITS CHARITABLE STATU S. THE TRIBUNAL, THEREFORE, HELD THAT EXEMPTION UNDER SECTIO N 11 COULD NOT BE DENIED. THE FACTS IN CASE OF THE ASSESSEE ARE IDENTICAL, T HEREFORE, ITA NO.5758/M/10 A.Y:07-08 4 RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF SRA (SUPRA), WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) A LLOWING THE CLAIM OF EXEMPTION UNDER SECTION 11 TO THE ASSESSEE. ACCORDINGLY THE ORDER OF CIT(A) IS UPHELD. 4. IN THE RESULT, APP OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2011. SD/- SD/- (D. MANMOHAN) (RAJENDRA SINGH ) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 16.11.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.