M/s. Assisi Convent School, Noida V. ITO (Exemptions), Ghaziabad

ITA 5770/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6849 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 09-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Depreciation; Charitable institution
• Section: 143(3); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.5770/DEL/2016 ASSESSMENT YEAR : 2012-13 ASSISI CONVENT SCHOOL, A-43, SECTOR- 33, NOIDA. VS. ITO (EXEMPTIONS) WARD HAPUR CHUNGI, GHAZIABAD. PAN : AAATA 4453 H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.V.S.R. KRISHNA, ADV. RESPONDENT BY : SHRI S. K. JAIN, SR.DR DATE OF HEARING : 25-01-2017 DATE OF PRONOUNCEMENT : 31-01-2017 O R D E R PER S.V. MEHROTRA, A.M : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31.08.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, NOIDA, U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT T HE ACT) RELATING TO ASSESSMENT YEAR 2012-13. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SO CIETY HAD FILED THE RETURN OF INCOME DECLARING NIL INCOME. THE ASSESSING OFFI CER DETERMINED THE INCOME AT RS.12,04,601/- BY INVOKING PROVISIONS OF SECTION 11(6) OF THE ACT AS UNDER :- 2 ITA NO.5770/DEL/2016 ACTUAL APPLICATION INCOME AVAILABLE FOR APPLICATION TO CHARITABLE PURPOSES INCOME DECLARED APPLIED FOR CHARITABLE PURPOSES AS PER AUDIT REPORT REV: 3,63,91,745/- CAP: 55,31,228/- TOTAL: 4,19,22,973/- TOTAL RECEIPTS RS.4,82,91,236/- AVAILABLE FOR APPLICATION (85%) RS.4,10,47,550/- ACTUALLY APPLIED RS.3,98,42,949/- LESS DEPRECIATION RS.20,80,024/- BALANCE RS.12,04 ,601/- ACTUAL APPLICATION RS.3,98,42,949/ - 3. BEFORE LD. CIT(A), IT WAS SUBMITTED THAT THE ASS ESSEE WAS DULY NOTIFIED U/S 10(23C)(VI) VIDE NOTIFICATION NO.7/200 7-08/3426 DATED 20.03.2008 AND HAD EXISTED SOLELY FOR THE PURPOSES OF EDUCATION. IT WAS FURTHER SUBMITTED THAT THE PROVISIONS OF SECTION 11 WERE NOT APPLICABLE TO THE CASES COMING U/S 10(23C)(VI) AND, THEREFORE, ORDER OF THE ASSESSING OFFICER TO HOLD THE RECEIPTS OF THE ASSESSEE IN EXCESS OF 1 5% OF THE GROSS RECEIPTS AND NOT UTILIZED FOR CHARITABLE PURPOSES, TO BE THE TAXABLE INCOME OF THE ASSESSEE, WAS BAD IN LAW. LD. CIT(A) ACCEPTED THE ASSESSEES CONTENTIONS ON THIS COUNT AND, ACCORDINGLY, DELETED THE ADDITIO N MADE BY ASSESSING OFFICER BY INVOKING PROVISIONS OF SECTION 11 OF THE ACT. HOWEVER, HE OBSERVED THAT SINCE THE GROSS RECEIPTS OF THE ASSES SEE FOR ASSESSMENT YEAR UNDER CONSIDERATION WERE RS.4,82,91,236/-, THE AMOU NT BEING IN EXCESS OF THE LIMIT PRESCRIBED UNDER RULE 2BC OF THE INCOME T AX RULES, 1962, THEREFORE, THE ASSESSEE WAS NOT ELIGIBLE FOR BENEFI T OF EXEMPTION U/S 10(23C)(VI) OF THE ACT. 3 ITA NO.5770/DEL/2016 4. LD. COUNSEL REFERRED TO PARA 6 OF LD. CIT(A)S O RDER AND POINTED OUT THAT HE HAS OBSERVED THAT THE PROVISIONS OF SECTION 10(23C)(VI) OF THE ACT ARE SUBJECT TO THE PROVISIONS OF SECTION 10(23C)(IIIAB) AND SECTION 10(23C)(IIIAD) OF THE ACT AND RULE 2BC OF THE RULES . HE FURTHER POINTED OUT THAT THAT THESE OBSERVATIONS ARE COMPLETELY CONTRAR Y TO THE MANDATE OF THE ACT. HE POINTED OUT THAT SECTION 10(23C)(VI) IS AN INDEPENDENT PROVISION AND NOT SUBJECT TO CLAUSE (IIIAB) AND (IIIAD) OF SE CTION 10(23C)(VI) OF THE ACT. 5. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE RECORD OF THE CASE. SECTIONS 10(23C)(I IIAB), 10(23C)(IIIAD) AND 10(23C)(VI) ARE REPRODUCED AS UNDER :- 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS Y EAR OF ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOWING CLAUSES SHALL NOT BE IN CLUDED . (23C) ANY INCOME RECEIVED BY ANY PERSON ON BEHALF O F . (IIIAB) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITU TION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT, AND WHICH IS WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT; OR . (IIIAD) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITU TION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT IF THE AGGR EGATE ANNUAL RECEIPTS OF SUCH UNIVERSITY OR EDUCATIONAL INSTITUTION DO NOT EXCEED THE AMOUNT OF ANNUAL RECEIPTS AS MAY BE PRESCRIBED; . (VI) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTIO N EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT, OTHER THAN THOSE MENTIONED IN SUB-CLAUSE (IIIAB) OR SUB-CLAUSE (IIIAD) AND WHICH MAY BE APPROVED BY THE PRESCRIBED AUTHORITY. 4 ITA NO.5770/DEL/2016 6. A BARE PERUSAL OF SECTION 10(23C)(VI) CLEARLY SH OWS THAT IT COVERS THE UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTIN G SOLELY FOR EDUCATIONAL PURPOSES OTHER THAN THOSE MENTIONED IN SUB-CLAUSE ( IIIAB) AND (IIIAD). THE GROSS RECEIPTS OF MORE THAN RS.1 CRORE ARE RELEVANT WITH REFERENCE TO CLAUSE (IIIAD) AND NOT WITH REFERENCE TO CLAUSE (VI). ADM ITTEDLY, THE ASSESSEE WAS DULY NOTIFIED U/S 10(23C)(VI) AND, THEREFORE, THERE WAS NO BASIS FOR HOLDING THAT THE ASSESSEE WAS NOT ENTITLED TO THE BENEFIT O F EXEMPTION U/S 10(23C)(VI). IN THE RESULT, THE GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. SINCE GROUND NO.1 IS ALLOWED THE OTHER GR OUNDS HAVE BECOME ACADEMIC. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2017. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED : 31-01-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A)- 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI