MMTIS EDUCTION & RESEARCH TRUST, MUMBAI V. DDIT (E) I(2), MUMBAI

ITA 5866/MUM/2015

AI Insights

The case involves MMTI's Education & Research Trust, which appealed against the orders of the Commissioner of Income-tax (Appeals) for the assessment years 2011-12, 2012-13, and 2013-14. The primary issue was the denial of exemption under section 11 of the Income Tax Act, 1961, due to alleged violations of section 13 concerning payments made to 'specified persons' (trustees) and the reasonableness of these payments. The Tribunal consolidated the appeals for convenience, given the identical grounds and facts across the years. The Tribunal found that the Assessing Officer had not adequately verified the reasonableness of the payments and rents, leading to the decision to remand the matter back for a detailed examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123186 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 13-06-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 30-12-2015
• Other Referred Cases: National Thermal Power Company Ltd. v. CIT, CIT Vs Seshasayee Industries Ltd., Bharat Sanchar Nigam Ltd. vs Union of India, CIT Vs Seshasayee Industries Ltd., Ace Investments (P) Ltd Vs. CIT, Kikabhai Premchand Vs. CIT, Karim Thanvi Estate Ltd. Vs. CIT, CIT(Exemption) v. Krupannidhi Education Trust
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Fair market value; Set aside
• Section: 12AA; 13(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI VIKAS AWASTHY (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 5866/MUM/2015 Assessment Year: 2011-2012 MMTI’s Education & Research Trust, New Excel House, 2 nd floor, 41-B, Azad Nagar Road No. 2, Off. Veera Desai Road, Behind ICICI Bank, Andheri (West), Mumbai-400053. Vs. The Dy. Director of Income- tax(Exemption)-I(1), 5 th floor, Piramal Chambers, Parel, Lalbaug, Mumbai-400012. PAN No. AABTM 2192 E Appellant Respondent ITA No. 2974/MUM/2017 Assessment Year: 2012-2013 MMTI’s Education & Research Trust, New Excel House, 2 nd floor, 41-B, Azad Nagar Road No. 2, Off. Veera Desai Road, Behind ICICI Bank, Andheri (West), Mumbai-400053. Vs. ITO(E)-2(1), Income-tax Office, Piramal Chambers, Parel, Mumbai- 12. PAN No. AABTM 2192 E Appellant Respondent ITA No. 451/MUM/2019 Assessment Year: 2013-2014 MMTI’s Education & Research Trust, Victor House, 2 nd floor, End of Veera Desai Road, Next to Chitralekha House, Andheri (W), Mumbai-400053. Vs. ITO(E)-2(1), Income-tax Office, Piramal Chambers, Parel, Mumbai- 12. PAN No. AABTM 2192 E Appellant Respondent Assessee by Revenue by Date of Hearing Date of pronouncement PER OM PRAKASH KANT, AM These appeals by the assessee are directed against separate orders dated 21.10.2015 ; 18.01.2017 and 26.11.2018 by the Ld. Commissioner of Income CIT(A)’] for assessment year 2011 respectively. As identical grounds have been raised in these appeals arising from same set of facts and circumstances were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts. 2. Firstly, we take up the appeal of the assessee for assessment year 2011-12. The grounds raised by the assessee are reproduced as under: 1. In the facts and circumstances of the case and in law, the Ld. CIT(A) erred in 1.1 upholding the action of the AO cancelling the exemption us. 11 of the Act granted to the appellant by invoking provisions of section 13(1)(c)(li) and 13(2)c) in relation to payments made to "Specified Persons" u/s. 13(3) without considering evidences and s these payments made were for the purpose of attainment of MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & : Ms. Arati Vissanji, Adv & Mr. AmodPrabhudesai, : Mr. Manish Ajudiya, Date of Hearing : 14/06/2023 Date of pronouncement : 23/06/2023 ORDER PER OM PRAKASH KANT, AM These appeals by the assessee are directed against separate orders dated 21.10.2015 ; 18.01.2017 and 26.11.2018 by the Ld. Commissioner of Income-tax (Appeals)-1, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2011-12, 2012-13 and 2013 ely. As identical grounds have been raised in these appeals arising from same set of facts and circumstances were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts. we take up the appeal of the assessee for assessment 12. The grounds raised by the assessee are reproduced In the facts and circumstances of the case and in law, the Ld. CIT(A) erred in- upholding the action of the AO cancelling the exemption us. 11 of the Act granted to the appellant by invoking provisions of section 13(1)(c)(li) and 13(2)c) in relation to payments made to "Specified Persons" u/s. 13(3) without considering evidences and submissions which proves that these payments made were for the purpose of attainment of MMTI’s Education & Research Trust 2 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 Ms. Arati Vissanji, Adv & Mr. AmodPrabhudesai, These appeals by the assessee are directed against separate orders dated 21.10.2015 ; 18.01.2017 and 26.11.2018 by the Ld. 1, Mumbai [in short ‘the Ld. 13 and 2013-14 ely. As identical grounds have been raised in these appeals arising from same set of facts and circumstances ,therefore same were heard together and disposed off by way of this consolidated we take up the appeal of the assessee for assessment 12. The grounds raised by the assessee are reproduced In the facts and circumstances of the case and in law, upholding the action of the AO cancelling the exemption us. 11 of the Act granted to the appellant by invoking provisions of section 13(1)(c)(li) and 13(2)c) in relation to payments made to "Specified Persons" u/s. 13(3) without ubmissions which proves that these payments made were for the purpose of attainment of objects of the appellant and same were fair and reasonable and not in excess of what may be reasonably paid for such services. 1.2 directing the AO to disallow those exp expenses of Rs. 42.64,392/ not having been incurred for earning of income without appreciating the fact that said expenses were incurred for the purpose of the objects of the appellant and hence, allowable as deduction in their entirety. 2. It is humbly prayed that the reliefs as prayed for here above and/ or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted. 3. The assessee has also raised additional ground vide letter dated 22.01.2019 and submitted that same might be admitted in view of the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. v. CIT 229 ITR 383 (SC). The said additional ground raised by the assessee is reproduced as under: On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have held that the appellant is eligible for exemption U/s. 11 of the Act and consequently eligible for statutory deducti and eligible for carry forward of deficit for the year, if any, to subsequent year(s) for future set 4. We have heard rival submission of the parties on the issue of admissibility of the additional ground. Since, being legal in nature and no investigation of the fresh facts is required , therefore, same is admitted for adjudication in view of the MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & objects of the appellant and same were fair and reasonable and not in excess of what may be reasonably paid for such directing the AO to disallow those expenses out of total expenses of Rs. 42.64,392/-incurred by the appellant, as not having been incurred for earning of income without appreciating the fact that said expenses were incurred for the purpose of the objects of the appellant and hence, s deduction in their entirety. It is humbly prayed that the reliefs as prayed for here above and/ or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted. see has also raised additional ground vide letter dated 22.01.2019 and submitted that same might be admitted in view of the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. v. CIT 229 ITR 383 (SC). The l ground raised by the assessee is reproduced as On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have held that the appellant is eligible for exemption U/s. 11 of the Act and consequently eligible for statutory deduction of 15% of gross income Us. 11(1)(a) and eligible for carry forward of deficit for the year, if any, to subsequent year(s) for future set-off. We have heard rival submission of the parties on the issue of admissibility of the additional ground. Since, the ground raised is being legal in nature and no investigation of the fresh facts is therefore, same is admitted for adjudication in view of the MMTI’s Education & Research Trust 3 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 objects of the appellant and same were fair and reasonable and not in excess of what may be reasonably paid for such enses out of total incurred by the appellant, as not having been incurred for earning of income without appreciating the fact that said expenses were incurred for the purpose of the objects of the appellant and hence, It is humbly prayed that the reliefs as prayed for here-in- above and/ or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the see has also raised additional ground vide letter dated 22.01.2019 and submitted that same might be admitted in view of the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. v. CIT 229 ITR 383 (SC). The l ground raised by the assessee is reproduced as On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have held that the appellant is eligible for exemption U/s. 11 of the Act and consequently eligible on of 15% of gross income Us. 11(1)(a) and eligible for carry forward of deficit for the year, if any, We have heard rival submission of the parties on the issue of the ground raised is being legal in nature and no investigation of the fresh facts is therefore, same is admitted for adjudication in view of the decision of the Apex Court in the case of National Thermal Power Company Ltd. (supra). 5. Briefly stated, facts of the case are that that the assessee trust is registered as a charitable institution with the Income Department in terms of section 12AA of the Income (in short ‘the Act’) dated 09.09.2004. assessee trust was engaged in the activity of running institute for short term courses for shipping cadets. For the year under consideration, the assessee filed return of income on 26.11.2011 declaring nil income along with audited Expenditure account, BalanceS return of income filed by the assessee statutory notices under the Act were issued and complied with. During the course of the assessment, the Assessing Officer notice violation of the provisions of section 13(3) of the Act for denial or withdrawal found that assessee has extended benefit to the specified persons i.e. trustee or their relatives or funds have been di the specified persons of the trust. The Assessing Officer notice during the year under consideration, the assessee has paid consultation fee and rent to three trustees and also modular courses, office two of the common trustees. The Assessing Officer denied exemption u/s 11 of the Act and MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & decision of the Apex Court in the case of National Thermal Power Company Ltd. (supra). stated, facts of the case are that that the assessee trust is registered as a charitable institution with the Income Department in terms of section 12AA of the Income (in short ‘the Act’) dated 09.09.2004. During relevant year, t ee trust was engaged in the activity of running institute for short term courses for shipping cadets. For the year under consideration, the assessee filed return of income on 26.11.2011 declaring nil income along with audited account, BalanceSheet along with schedules return of income filed by the assessee was selected for scrutiny and statutory notices under the Act were issued and complied with. During the course of the assessment, the Assessing Officer notice tion of the provisions of section 13(3) of the Act, or withdrawal of exemption u/s 11 of the Act in case it is found that assessee has extended benefit to the specified persons i.e. trustee or their relatives or funds have been diverted specified persons of the trust. The Assessing Officer notice during the year under consideration, the assessee has paid and rent to three trustees and also courses, office rent and bus rent to another trust having two of the common trustees. The Assessing Officer denied exemption u/s 11 of the Act and computed the income of the MMTI’s Education & Research Trust 4 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 decision of the Apex Court in the case of National Thermal Power stated, facts of the case are that that the assessee trust is registered as a charitable institution with the Income-tax Department in terms of section 12AA of the Income-tax Act, 1961 During relevant year, the ee trust was engaged in the activity of running a training institute for short term courses for shipping cadets. For the year under consideration, the assessee filed return of income on 26.11.2011 declaring nil income along with audited Income heet along with schedules etc. The selected for scrutiny and statutory notices under the Act were issued and complied with. During the course of the assessment, the Assessing Officer noticed , which provides of exemption u/s 11 of the Act in case it is found that assessee has extended benefit to the specified persons verted in favour of specified persons of the trust. The Assessing Officer noticed that during the year under consideration, the assessee has paid and rent to three trustees and also paid for fee for rent to another trust having two of the common trustees. The Assessing Officer, accordingly computed the income of the assessee under the head ‘income from other sources’ but also disallowed claim of certain expenses manner, the Assessing Officer computed the total income of the assessee at Rs.68,57,820/ “5. Subject to the discussion as above, the total income of the assessee is computed as under: Income from other sources Gross Receipts from the various Educational Course Less: Allowable expenditure incurred to earn income Less: Expenses disallowed as per para 4.13 Total Income Rounded off u/s 288A 6. On further appeal, the Ld. CIT(A) allowed part relief to the assessee. The Ld. CIT(A) upheld the disallowance of exemption u/s 11 of the Act in view of the violation of the provisions of section 13 of the Act, however, on th Rs.42,64,392/- of various expenses, the Ld. CIT(A) directed the Assessing Officer to verify the nature of the expenses and disallowed only those expenses which were not incurred for earning of the income. Aggrieved Tribunal by way of raising grounds reproduced above. 6.1 As regards, the ground No. 1.2 of the assessee submitted that the Assessing Officer has after verification in the effect giving o MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & assessee under the head ‘income from other sources’ but also disallowed claim of certain expenses of Rs.42,64,392/ manner, the Assessing Officer computed the total income of the assessee at Rs.68,57,820/- as under: Subject to the discussion as above, the total income of the assessee is computed as under: Amount (Rs.) Income from other sources Gross Receipts from the various Educational Course Allowable expenditure incurred to earn 2,88,61,990 Less: Expenses disallowed as per 42,64,392 Total Income ......... off u/s 288A ......... On further appeal, the Ld. CIT(A) allowed part relief to the assessee. The Ld. CIT(A) upheld the disallowance of exemption u/s 11 of the Act in view of the violation of the provisions of section 13 of the Act, however, on the issue of the disallowance of of various expenses, the Ld. CIT(A) directed the Assessing Officer to verify the nature of the expenses and disallowed only those expenses which were not incurred for earning of the income. Aggrieved, the assessee is in appeal before the Tribunal by way of raising grounds reproduced above. As regards, the ground No. 1.2 of the appeal, the Ld. Counsel of the assessee submitted that the Assessing Officer has after verification in the effect giving order has already allowed relief to the MMTI’s Education & Research Trust 5 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 assessee under the head ‘income from other sources’ but also of Rs.42,64,392/-. In this manner, the Assessing Officer computed the total income of the Subject to the discussion as above, the total income of the Amount (Rs.) Amount (Rs.) 3,14,55,417 68,57,819 68,57,820” On further appeal, the Ld. CIT(A) allowed part relief to the assessee. The Ld. CIT(A) upheld the disallowance of exemption u/s 11 of the Act in view of the violation of the provisions of section 13 e issue of the disallowance of of various expenses, the Ld. CIT(A) directed the Assessing Officer to verify the nature of the expenses and disallowed only those expenses which were not incurred for earning the assessee is in appeal before the Tribunal by way of raising grounds reproduced above. the Ld. Counsel of the assessee submitted that the Assessing Officer has after rder has already allowed relief to the assessee and therefore that ground was not pressed before the Tribunal. Accordingly, the ground No. 1.2 of the appeal of the assessee is dismissed as infructuous. 7. In ground No. 1.1, the assessee is aggrieved for wi denial of the exemption u/s 11 of the Act of section 13(1)(c)(ii) and 13(2)(c) made to specified persons u/s 13(3) of the Act. 7.1 The facts qua the issue in dispute are that under consideration, the assessee trust made payment of consultancy fee at Rs.6,00,000/ trustees namely Shri Shri Capt. M.V. Naik trustees also rented out building of training institute to the trust alongwith land appurtenant to the building. The office building , workshop , swimming pool and Playground etc facilities were built on 2.5 acre land and balance assessee has paid rent for the building per annum to each Further, the trust paid rent for workshop building amounting to Rs.6 lakhs per annum to each Further, trust paid rent for use of the Rs.2.4 lakhs to each for swimming pool @ 4.2 lakhs MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & assessee and therefore that ground was not pressed before the Tribunal. Accordingly, the ground No. 1.2 of the appeal of the assessee is dismissed as infructuous. In ground No. 1.1, the assessee is aggrieved for wi the exemption u/s 11 of the Act on the ground of violation of section 13(1)(c)(ii) and 13(2)(c) of the Act in relation to payments made to specified persons u/s 13(3) of the Act. The facts qua the issue in dispute are that during under consideration, the assessee trust made payment of consultancy fee at Rs.6,00,000/- per annum each to the three namely Shri Capt. C.L. Dubey, Capt.; Sh O. P. Capt. M.V. Naik, totaling to Rs.18 lakhs. Further, the also rented out building of training institute to the trust alongwith land appurtenant to the building. The office building , workshop , swimming pool and Playground etc facilities were built on 2.5 acre land and balance 7.5 acre was barren land assessee has paid rent for the building at the rate of Rs each of the three trustees, totaling to Rs.54 lakhs. paid rent for workshop building amounting to Rs.6 lakhs per annum to each of trustees totaling to paid rent for use of the playground Rs.2.4 lakhs to each of trustees totaling to Rs.7.20 lakhs and rent @ 4.2 lakhs per annum to each MMTI’s Education & Research Trust 6 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 assessee and therefore that ground was not pressed before the Tribunal. Accordingly, the ground No. 1.2 of the appeal of the In ground No. 1.1, the assessee is aggrieved for withdrawing / n the ground of violation in relation to payments during the year under consideration, the assessee trust made payment of per annum each to the three Capt.; Sh O. P. Yadav and . Further, the three also rented out building of training institute to the trust alongwith land appurtenant to the building. The office building , workshop , swimming pool and Playground etc facilities were built 7.5 acre was barren land . The at the rate of Rs.18 lakhs totaling to Rs.54 lakhs. paid rent for workshop building amounting to trustees totaling to Rs.18 lakhs. playground for training @ trustees totaling to Rs.7.20 lakhs and rent each of trustees totaling to Rs.12.60 lakhs per annum. Further, Officer observed that payment lakhs perannum, Bus premises at Andheri of Rs.13.75 lakhs was paid to another trust namely research trust, in which two of the trustees of the assessee trust namelysh CL Dubey and Sh OP Yadav were 7.2 Regarding the consultancy charges paid to the Assessing Officer observed that consultancy charges that payments made to trustees for consultancy charges were fixed irrespective of their performance in the trust and were unreasonably high when compared to other consult payments were not fixed and dependent upon their performance. The Assessing Officer paid to trustees. He appearing in the list of the faculty number of hours of Capt C L Dubey cost of consultancy in the case of Sh OP Yadav cost of consultancy was Rs. 16,666/ per hour. Accordingly, he held that the consultan trustee was unreasonable and excessive. MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & totaling to Rs.12.60 lakhs per annum. Further, Officer observed that payment for‘modular course fees Bus rent of Rs.1.15 lakhs and rent for office premises at Andheri of Rs.13.75 lakhs, totaling to Rs.55.86 lakhs another trust namely ‘Tara Meera n which two of the trustees of the assessee trust sh CL Dubey and Sh OP Yadav were representing as Regarding the consultancy charges paid to the Assessing Officer observed that same constitute 32.72% of the total paid. Further, the Assessing Officer observed that payments made to trustees for consultancy charges were fixed irrespective of their performance in the trust and were high when compared to other consult payments were not fixed and dependent upon their performance. The Assessing Officer also computed per hour cost of consultancy paid to trustees. He observed that trustee M/s M.V. appearing in the list of the faculty members ,therefo of hours of consultancy was Nil, whereas in the case of cost of consultancy was Rs, 21, 428/ in the case of Sh OP Yadav cost of consultancy was Rs. 16,666/ Accordingly, he held that the consultan trustee was unreasonable and excessive. MMTI’s Education & Research Trust 7 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 totaling to Rs.12.60 lakhs per annum. Further, the Assessing modular course fees’ of Rs.40.96 rent of Rs.1.15 lakhs and rent for office totaling to Rs.55.86 lakhs Meera Education and n which two of the trustees of the assessee trust representing astrustees. Regarding the consultancy charges paid to the trustees, the 32.72% of the total . Further, the Assessing Officer observed that payments made to trustees for consultancy charges were fixed irrespective of their performance in the trust and were high when compared to other consultants whose payments were not fixed and dependent upon their performance. also computed per hour cost of consultancy observed that trustee M/s M.V. Naik was not therefore in his cse whereas in the case of was Rs, 21, 428/- per hour and in the case of Sh OP Yadav cost of consultancy was Rs. 16,666/- Accordingly, he held that the consultancy fees paid to 7.3 Regarding the rent for building, workshop and play ground, the Ld. Assessing Officer rejected the contention of the assessee that the rent per sq. ft that rent for the area admeasuring to 2. per sq. ft. per month which is and therefore it was a 7.4 Regarding the modular fees, the Assessing Officer rej contention of the assessee that said payment is not covered u/s 13(3) of the Act and held that Shri Yadav were trustees of conducting modular fund of trust to the specified persons. 7.5 Before the Ld. CIT(A), the assessee contended that all the three trustees are highly experience and they alongwith teach after the entire management activity of the trust. It was further submitted that if each of th the job outside as consultant minimum income by way of consultancy to the tune of Rs.3.5 Lakhs to Rs. 4 lakhs per month, consultancy of Rs.6 lakhs which is far below considering their teaching expertis knowledge, experience and MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & Regarding the rent for building, workshop and play ground, the Ld. Assessing Officer rejected the contention of the assessee the rent per sq. ft was of only Rs. 1.80 per month and observed that rent for the area admeasuring to 2.5 acre comes to Rs.84.29 per sq. ft. per month which is unreasonable, high and unwarranted it was a diversion of the fund to specified persons. Regarding the modular fees, the Assessing Officer rej contention of the assessee that said payment is not covered u/s 13(3) of the Act and held that Shri Capt CL Dubey and Capt OP Yadav were trustees of Tara Meera Education Trust and they were conducting modular courses, therefore, this being divers fund of trust to the specified persons. Before the Ld. CIT(A), the assessee contended that all the three trustees are highly experience retired captains of maritime and they alongwith teaching at the training institute ter the entire management activity of the trust. It was further submitted that if each of those three trustees happened consultant in maritime, each could have minimum income by way of consultancy to the tune of Rs.3.5 Lakhs month, however the assessee trust consultancy of Rs.6 lakhs per annum or Rs.50,000/ considering their teaching expertis experience and multiple services rendered by them. It MMTI’s Education & Research Trust 8 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 Regarding the rent for building, workshop and play ground, the Ld. Assessing Officer rejected the contention of the assessee 1.80 per month and observed acre comes to Rs.84.29 and unwarranted the fund to specified persons. Regarding the modular fees, the Assessing Officer rejected the contention of the assessee that said payment is not covered u/s Capt CL Dubey and Capt OP Trust and they were therefore, this being diversion of the Before the Ld. CIT(A), the assessee contended that all the three retired captains of maritime ships at the training institute, also looked ter the entire management activity of the trust. It was further happened to take up could have earned minimum income by way of consultancy to the tune of Rs.3.5 Lakhs the assessee trust has only paid Rs.50,000/- per month, considering their teaching expertise, competence, services rendered by them. It was further submitted that assessee trust has paid consultancy fee to three nonrelated qualified professors during the year and payment made to them was more than the payment trustees. It was submitted that experience knowledge of the professors, therefore. t to each trustee was justified. 7.6 It was further submitted reasonableness of the payment made to three trustees by the Assessing Officer in assessment year 2010 view of Rule of the consistency justified in changing his opinion the facts and circumstances as compared to assessment year 2010 11. 7.7 It was further submitted for rent to trustees was justified in view of the huge infrastructure and campus provided to enable the trust to carry on its educational activity. Further, the payment for modular course fees to Tara Meera education and Research quantum of payments Government Regulatory Authority 7.8 The contentions Ld. CIT(A) observing as under: MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & was further submitted that assessee trust has paid consultancy fee to three nonrelated qualified professors during the year and payment made to them was more than the payment trustees. It was submitted that experience, competence knowledge of the trustees, was being far more than those , therefore. the payment of Rs.6 lakhs per annum was justified. It was further submitted before the ld CIT(A) that reasonableness of the payment made to three trustees by the Assessing Officer in assessment year 2010-11 view of Rule of the consistency the Assessing Officer is now not justified in changing his opinion without there being any change in the facts and circumstances as compared to assessment year 2010 It was further submitted before the ld CIT(A) that for rent to trustees was justified in view of the huge infrastructure ded to enable the trust to carry on its educational activity. Further, the payment for modular course fees to Tara and Research trust was also justified in view of quantum of payments fixed by DG Shipping, which is gulatory Authority. s of the assessee however, were rejected by the Ld. CIT(A) observing as under: MMTI’s Education & Research Trust 9 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 was further submitted that assessee trust has paid consultancy fee to three nonrelated qualified professors during the year and payment made to them was more than the payment made to three competence and r more than those per annum made efore the ld CIT(A) that reasonableness of the payment made to three trustees was accepted 11, therefore, in the Assessing Officer is now not without there being any change in the facts and circumstances as compared to assessment year 2010- that the payment for rent to trustees was justified in view of the huge infrastructure ded to enable the trust to carry on its educational activity. Further, the payment for modular course fees to Tara trust was also justified in view of DG Shipping, which is the Central of the assessee however, were rejected by the “5.2. I have considered the facts and circumstances of the case, gone through the assessment order of the A.O and the submissions of the a with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided here in under: i. With regard to Ground No. 1, 2 & 3 i.e. denial of exemption u/s. 11, appellant has stated made are reasonable and hence it is not hit by the provisions of section 13(1)(c) and 13(2)(c) and 13(3). In this regard it is mentioned that in the show cause notice as quoted above, the assessing officer has invoked the provisi where "reasonableness" of any payment is not required to be considered since this word does not find mention therein.Also, in the said provision it is mentioned that where the income of the Trust is applied 'directly or indirectly' referred to in section 13(3), exemption u/s. 11 would not be allowable. Accordingly, this contention of the appellant is not acceptable. ii. In the submissions it was mentioned that the recipients of consultation fee (Trustees) could earn m lakhs if they take a job outside. However this fact is not supported by any documentary evidence hence no cognizance of the same can be taken. Further it is noted that as mentioned by AO in the order, out of the total consultancy fee, 33% is paid to the trustees which by no stretch of imagination can be said to be reasonable. iii. The appellant contended that in A.Y. 2010 issue was raised by the AO and same has been accepted. In this regard it is mentioned that the legal pos and clear that 'Rule of Consistency' / res applicable and each assessment year is a separate proceedings, as also affirmed in the decision of the Apex Court in Bharat Sanchar Nigam Ltd. vs Union of India (S.C) 282 IT. In another case of CIT Vs Seshasayee Industries Ld. (Mad) 242 ITR 691, it was further held that 'the fact that its claim was not questioned in earlier years does not entitle the assessee to contend that the law should not be applied during the current A.Y. Furt Vs. CIT (Mad) 244 IT 166 it was held that facts can be MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & 5.2. I have considered the facts and circumstances of the case, gone through the assessment order of the A.O and the submissions of the appellant and also discussed the case with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided here in i. With regard to Ground No. 1, 2 & 3 i.e. denial of exemption u/s. 11, appellant has stated that the rates of payments made are reasonable and hence it is not hit by the provisions of section 13(1)(c) and 13(2)(c) and 13(3). In this regard it is mentioned that in the show cause notice as quoted above, the assessing officer has invoked the provisions of section 13(1)(c) where "reasonableness" of any payment is not required to be considered since this word does not find mention therein.Also, in the said provision it is mentioned that where the income of the Trust is applied 'directly or indirectly' for the persons referred to in section 13(3), exemption u/s. 11 would not be allowable. Accordingly, this contention of the appellant is not In the submissions it was mentioned that the recipients of consultation fee (Trustees) could earn more than Rs. 38 to 40 lakhs if they take a job outside. However this fact is not supported by any documentary evidence hence no cognizance of the same can be taken. Further it is noted that as mentioned by AO in the order, out of the total consultancy fee, 33% is paid to the trustees which by no stretch of imagination can be said to be reasonable. . The appellant contended that in A.Y. 2010- issue was raised by the AO and same has been accepted. In this regard it is mentioned that the legal position is settled and clear that 'Rule of Consistency' / res-judicata is not applicable and each assessment year is a separate proceedings, as also affirmed in the decision of the Apex Court in Bharat Sanchar Nigam Ltd. vs Union of India (S.C) 282 IT. other case of CIT Vs Seshasayee Industries Ld. (Mad) 242 ITR 691, it was further held that 'the fact that its claim was not questioned in earlier years does not entitle the assessee to contend that the law should not be applied during the current A.Y. Further in the case of Ace Investments (P) Ltd Vs. CIT (Mad) 244 IT 166 it was held that facts can be MMTI’s Education & Research Trust 10 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 5.2. I have considered the facts and circumstances of the case, gone through the assessment order of the A.O and the ppellant and also discussed the case with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided here in i. With regard to Ground No. 1, 2 & 3 i.e. denial of exemption that the rates of payments made are reasonable and hence it is not hit by the provisions of section 13(1)(c) and 13(2)(c) and 13(3). In this regard it is mentioned that in the show cause notice as quoted above, the ons of section 13(1)(c) where "reasonableness" of any payment is not required to be considered since this word does not find mention therein.Also, in the said provision it is mentioned that where the income of for the persons referred to in section 13(3), exemption u/s. 11 would not be allowable. Accordingly, this contention of the appellant is not In the submissions it was mentioned that the recipients of ore than Rs. 38 to 40 lakhs if they take a job outside. However this fact is not supported by any documentary evidence hence no cognizance of the same can be taken. Further it is noted that as mentioned by AO in the order, out of the total consultancy fee, 33% is paid to the trustees which by no stretch of imagination . The appellant contended that in A.Y. 2010-11 no such issue was raised by the AO and same has been accepted. In ition is settled judicata is not applicable and each assessment year is a separate proceedings, as also affirmed in the decision of the Apex Court in Bharat Sanchar Nigam Ltd. vs Union of India (S.C) 282 IT. other case of CIT Vs Seshasayee Industries Ld. (Mad) 242 ITR 691, it was further held that 'the fact that its claim was not questioned in earlier years does not entitle the assessee to contend that the law should not be applied during her in the case of Ace Investments (P) Ltd Vs. CIT (Mad) 244 IT 166 it was held that facts can be reconsidered in later year and record different finding for earlier year not conclusive.' .Also the legal position is settled that 'each assessment y (KikabhaiPremchand Vs. CIT 24 IT (SC) and the income of the assessee is to be determined and computed for the purpose of taxation under the Income Tax Law as per the provisions and Law applicable for the particular year (Karim Thanv Estate Ltd. 60 IT (SC). Hence the contention is not acceptable. iv.It was stated that Tara Meera Education Trust is not covered by the definition of specified persons as given in section 13(1)(c). In this regard it is mentioned that the assessing off modular courses are conducted by Mr. C L Dubey and Mr.O.P.Yadav in Tara Meera Education Trust and they are also the trustees in the said trust who are common in both trusts. This fact has not been denied by the submissions during appellant proceedings. Accordingly the payment is covered by the provisions of section 13(3). Contention of the appellant, being factually incorrect, is not acceptable. v. The appellant argued that the provision are at par the provisions of section 13(1)(c) and hence exemption cannot be denied. In this regard it is mentioned that in the provisions of section 40A(2)(b) it is mentioned that disallowance is to be made where payment is made to t relative party if such expenditure is excessive or unreasonable "having regard to the fair market value of the goods, service or facilities". As against this, no such words are appearing in the provisions of section 13(1)(c), invoked by the assessing of and hence the argument of the appellant is misplaced. Accordingly, in view of the discussion as above, Ground Nos. 1, 2 & 3 of appeal are dismissed. vi. With regard to Grounds No. 4, 5 & 6, appellant submitted that the A0 has disallowed the expenses show cause on the same and without any discussion with material finding to justify the disallowance. It was stated that the disallowance is arbitrary being 100% of the expenses. This contention of the appellant is correct since in the assessment order the AO has simply mentioned that these expenses are not incurred for earning of income, therefore, MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & reconsidered in later year and record different finding for earlier year not conclusive.' .Also the legal position is settled that 'each assessment year is a separate unit' (KikabhaiPremchand Vs. CIT 24 IT (SC) and the income of the assessee is to be determined and computed for the purpose of taxation under the Income Tax Law as per the provisions and Law applicable for the particular year (Karim Thanv Estate Ltd. 60 IT (SC). Hence the contention is not acceptable. iv.It was stated that Tara Meera Education Trust is not covered by the definition of specified persons as given in section 13(1)(c). In this regard it is mentioned that the assessing officer has clearly mentioned in his order that the modular courses are conducted by Mr. C L Dubey and Mr.O.P.Yadav in Tara Meera Education Trust and they are also the trustees in the said trust who are common in both trusts. This fact has not been denied by the appellant even in the submissions during appellant proceedings. Accordingly the payment is covered by the provisions of section 13(3). Contention of the appellant, being factually incorrect, is not v. The appellant argued that the provisions of section 40A(2)(b) are at par the provisions of section 13(1)(c) and hence exemption cannot be denied. In this regard it is mentioned that in the provisions of section 40A(2)(b) it is mentioned that disallowance is to be made where payment is made to t relative party if such expenditure is excessive or unreasonable "having regard to the fair market value of the goods, service or facilities". As against this, no such words are appearing in the provisions of section 13(1)(c), invoked by the assessing of and hence the argument of the appellant is misplaced. Accordingly, in view of the discussion as above, Ground Nos. 1, 2 & 3 of appeal are dismissed. vi. With regard to Grounds No. 4, 5 & 6, appellant submitted that the A0 has disallowed the expenses without issuing any show cause on the same and without any discussion with material finding to justify the disallowance. It was stated that the disallowance is arbitrary being 100% of the expenses. This contention of the appellant is correct since in the ssessment order the AO has simply mentioned that these expenses are not incurred for earning of income, therefore, MMTI’s Education & Research Trust 11 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 reconsidered in later year and record different finding- Finding for earlier year not conclusive.' .Also the legal position is ear is a separate unit' (KikabhaiPremchand Vs. CIT 24 IT (SC) and the income of the assessee is to be determined and computed for the purpose of taxation under the Income Tax Law as per the provisions and Law applicable for the particular year (Karim Thanvi Tea Estate Ltd. 60 IT (SC). Hence the contention is not acceptable. iv.It was stated that Tara Meera Education Trust is not covered by the definition of specified persons as given in section 13(1)(c). In this regard it is mentioned that the icer has clearly mentioned in his order that the modular courses are conducted by Mr. C L Dubey and Mr.O.P.Yadav in Tara Meera Education Trust and they are also the trustees in the said trust who are common in both the appellant even in the submissions during appellant proceedings. Accordingly the payment is covered by the provisions of section 13(3). Contention of the appellant, being factually incorrect, is not s of section 40A(2)(b) are at par the provisions of section 13(1)(c) and hence exemption cannot be denied. In this regard it is mentioned that in the provisions of section 40A(2)(b) it is mentioned that disallowance is to be made where payment is made to the relative party if such expenditure is excessive or unreasonable "having regard to the fair market value of the goods, service or facilities". As against this, no such words are appearing in the provisions of section 13(1)(c), invoked by the assessing officer and hence the argument of the appellant is misplaced. Accordingly, in view of the discussion as above, Ground Nos. vi. With regard to Grounds No. 4, 5 & 6, appellant submitted without issuing any show cause on the same and without any discussion with material finding to justify the disallowance. It was stated that the disallowance is arbitrary being 100% of the expenses. This contention of the appellant is correct since in the ssessment order the AO has simply mentioned that these expenses are not incurred for earning of income, therefore, same are disallowed.No further reasons have been recorded by the AO.Accordingly, AO is directed to verify the nature of these expenses item disallow only those expenses which are not incurred for earning of income. These grounds of appeal are, therefore, partly allowed. 8. Before us, the Ld. Counsel of the containing pages 1 to 12 under have been filed as additional evidence as same could not be submitted before the lower authorities: 1. Certificate issued by ICRA Ltd. for assigning Grade to the courses conducted by the appellant 2. Certificate from Dynacom Tankers Management Ltd. ; Shipping Company certifying average salary earned by Captain of foreign going ship 3. Leave & License Agreement dated 01.04.2010 entered into between M/s Tara Meera Education Trust (Licensee) 4. Letter dated 16.12.2010 issued by the Directorate General of Shipping, Mumbai to “Tara Meera Education Trust” for shifting of modular course to new premises 5. Ledger account of Bus Hire charges in the books of the appellant for the year ended 31 st March 2011 8.1 The Ld. Counsel of the assessee submitted that additional evidences filed by the assessee might be admitted. 8.2 He further submitted that for invoking section 13(1)(c) of the Act theLd AO is required payment made to specif materia with section 1 required to ascertain whether the payments made were exceeding the fair market value of the services rendered. The Ld. Counsel MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & same are disallowed.No further reasons have been recorded by the AO.Accordingly, AO is directed to verify the nature of these expenses item-wise and after recording a finding, disallow only those expenses which are not incurred for earning of income. These grounds of appeal are, therefore, partly allowed.” Before us, the Ld. Counsel of the assessee file containing pages 1 to 123 and submitted that certain documents as under have been filed as additional evidence as same could not be the lower authorities: Certificate issued by ICRA Ltd. for assigning Grade to the courses conducted by the appellant Certificate from Dynacom Tankers Management Ltd. ; Shipping Company certifying average salary earned by Captain of foreign going Leave & License Agreement dated 01.04.2010 entered into between M/s Tara Meera Education Trust (Licensee) ated 16.12.2010 issued by the Directorate General of Shipping, Mumbai to “Tara Meera Education Trust” for shifting of modular course Ledger account of Bus Hire charges in the books of the appellant for the March 2011 The Ld. Counsel of the assessee submitted that additional evidences filed by the assessee might be admitted. He further submitted that for invoking section 13(1)(c) of the is required to justify the reasonable to specified persons. The section 13(1)© is materia with section 140A(2)(b) of the Act and therefore, he was required to ascertain whether the payments made were exceeding the fair market value of the services rendered. The Ld. Counsel MMTI’s Education & Research Trust 12 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 same are disallowed.No further reasons have been recorded by the AO.Accordingly, AO is directed to verify the nature of ise and after recording a finding, disallow only those expenses which are not incurred for earning of income. These grounds of appeal are, therefore, filed a Paper Book 3 and submitted that certain documents as under have been filed as additional evidence as same could not be Certificate issued by ICRA Ltd. for assigning Grade to the courses Certificate from Dynacom Tankers Management Ltd. ; Shipping Company certifying average salary earned by Captain of foreign going Leave & License Agreement dated 01.04.2010 entered into between M/s ated 16.12.2010 issued by the Directorate General of Shipping, Mumbai to “Tara Meera Education Trust” for shifting of modular course Ledger account of Bus Hire charges in the books of the appellant for the The Ld. Counsel of the assessee submitted that additional He further submitted that for invoking section 13(1)(c) of the to justify the reasonableness of the . The section 13(1)© is peri 0A(2)(b) of the Act and therefore, he was required to ascertain whether the payments made were exceeding the fair market value of the services rendered. The Ld. Counsel further referred to page 16 and 17 of the Paper Book and submitted that the Assessing Officer and Ld. CIT(A) has merely compared consultancy fees paid to trustees with the total fees paid for the year and they have not given due experience, duties and responsibilities of the trustees vis consultants employed by the assessee. He submitted that other consultants employed by the assessee were teaching, while trustees responsible for management trust for attainment of its pages. The Ld. Counsel referred that Mr. M X Correra and Mr. whom fees were paid only of the fees paid to them and fees paid to the trustees relevant. The Ld. Counsel further submitted that identical amount of salary paid for assessment year 2010 Assessing Officer. The Ld. Counsel further submitted t Assessing Officer businessmen/institution for deciding the amount of expenditure support of his contention Karnataka High Court in the case of CIT(Exemption) v. KrupannidhiEducation Trust in 441 ITR 154. 8.3 Regarding reasonableness of rent paid to trustees for the building, workshop,playground referred to page 14 of the Paper Book and submitted that MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & ed to page 16 and 17 of the Paper Book and submitted that the Assessing Officer and Ld. CIT(A) has merely compared paid to trustees with the total fees paid for the year and they have not given due weightage to the qualification and responsibilities of the trustees vis employed by the assessee. He submitted that other consultants employed by the assessee were not only involved in while trustees were not only engaged in teaching but were esponsible for management and administration activities of the trust for attainment of its pages. The Ld. Counsel referred that Mr. Mr. Dayanand Shirsathwere visiting facult paid only for part of the year and hence compa of the fees paid to them and fees paid to the trustees The Ld. Counsel further submitted that identical amount of salary paid for assessment year 2010-11 has been allowed by the Assessing Officer. The Ld. Counsel further submitted t Assessing Officer cannot sit in armchair of a businessmen/institution for deciding the amount of expenditure support of his contention, he relied on the decision of Hon’ble Karnataka High Court in the case of CIT(Exemption) v. ion Trust in 441 ITR 154. Regarding reasonableness of rent paid to trustees for the ,playground of the institute, the Ld. Counsel referred to page 14 of the Paper Book and submitted that MMTI’s Education & Research Trust 13 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 ed to page 16 and 17 of the Paper Book and submitted that the Assessing Officer and Ld. CIT(A) has merely compared paid to trustees with the total fees paid for the the qualification and responsibilities of the trustees vis-à-vis other employed by the assessee. He submitted that other only involved in were not only engaged in teaching but were administration activities of the trust for attainment of its pages. The Ld. Counsel referred that Mr. were visiting faculty, to part of the year and hence comparison of the fees paid to them and fees paid to the trustees was not The Ld. Counsel further submitted that identical amount 11 has been allowed by the Assessing Officer. The Ld. Counsel further submitted that the chair of a businessmen/institution for deciding the amount of expenditure. In he relied on the decision of Hon’ble Karnataka High Court in the case of CIT(Exemption) v. Regarding reasonableness of rent paid to trustees for the the Ld. Counsel referred to page 14 of the Paper Book and submitted that old premises of the institute ha owned by trustees located District, Raigarh, after due approval Ministry of Shipping referred to page 36 of the Paper paid to trustees for the lower than the rent which was paid to the earlier landlord namely M/s Mountview Club and Resort Pvt. Ltd. He submitted that rent paid per annum for use of Resort Pvt. Ltd. was annum for use of the existing building is only The Ld. Counsel accordingly submitted that comparison of rent computed by the Assessi comparative instances. According to the Ld. Counsel, rent paid to trustees of the assessee party. Further Regarding rent paid to M/s Tara Trust for office premises ( submitted that rent paid by the assessee to Tara Trust was lower as compared to the rent paid by M/s Tara Education Trust to unrelated party. He submitted that the Assessing Officer has not brought on r instance to demonstrate that payment to M/s Tara Education Trust is unreasonable. Regarding the Modular Course fees paid to M/s Tara MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & premises of the institute have been shifted to the current owned by trustees located atvillage Kalote, Taluka after due approval /confirmation from the Ministry of Shipping Transport and Highways, Mumbai. He further referred to page 36 of the Paper Book and submitted that the rent paid to trustees for the current premises of the institute lower than the rent which was paid to the earlier landlord namely M/s Mountview Club and Resort Pvt. Ltd. He submitted that rent per annum for use of the building of M/s Mountview Club and Resort Pvt. Ltd. was Rs. 42.66 per squ. feet, whereas rent per annum for use of the existing building is only Rs. The Ld. Counsel accordingly submitted that comparison of rent computed by the Assessing Officer is without any basis or comparative instances. According to the Ld. Counsel, rent paid to trustees of the assessee was lower than rend paid to unrelated party. Further Regarding rent paid to M/s Tara Meera Trust for office premises (Rs. 13,75, 000/-) the Ld. Counsel submitted that rent paid by the assessee to Tara Meera Trust was lower as compared to the rent paid by M/s Tara Education Trust to unrelated party. He submitted that the Assessing Officer has not brought on record any comparative instance to demonstrate that payment to M/s Tara Education Trust is unreasonable. Regarding the Modular Course M/s Tara Meera Education Trust of Rs.40,90,000/ MMTI’s Education & Research Trust 14 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 current premises Taluka Khalapur, confirmation from the Transport and Highways, Mumbai. He further Book and submitted that the rent premises of the institute was much lower than the rent which was paid to the earlier landlord namely M/s Mountview Club and Resort Pvt. Ltd. He submitted that rent Mountview Club and whereas rent per Rs. 8.18 per sq. ft. The Ld. Counsel accordingly submitted that comparison of rent ng Officer is without any basis or comparative instances. According to the Ld. Counsel, rent paid to lower than rend paid to unrelated Meera Education ) the Ld. Counsel Meera Education Trust was lower as compared to the rent paid by M/s Tara Meera Education Trust to unrelated party. He submitted that the ecord any comparative instance to demonstrate that payment to M/s Tara Meera Education Trust is unreasonable. Regarding the Modular Course Education Trust of Rs.40,90,000/-,the Ld. CIT(A) referred to the invoices raised by Tara Trust on the assessee the Paper Book and submitted that rate charged by the Tara Education Trust was outsider. Regarding the bus rent paid to M/s Ta Trust of Rs.1,15,000/ the bus hire charges in the books of the assessee filed as additional evidence Ld. Counsel submitted that bus rent paid to M/s Tara Education Trust was party. He further submitted that the Assessing Officer has not brought on record any comparati payment of bus rent to M/s Tara unreasonable. In view of the above arguments, the Ld. Counsel of the assessee submitted that there is no violation on the part of the trust for satisfying the conditi the order of the Ld. CIT(A) on the issue in dispute might be set aside and exemption u/s 11 of the Act should be restored to the assessee. Regarding additional ground raised the Ld. Counsel of the assessee submitted that the same are being consequent upon granting relief in Ground No. 1.1 of the appeal. 9. The Ld DR on the authorities. MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & Ld. CIT(A) referred to the invoices raised by Tara Meera Trust on the assessee , which are available on page 110 and 111 of the Paper Book and submitted that rate charged by the Tara was lower as compared to rate charged to the outsider. Regarding the bus rent paid to M/s Tara Meera Trust of Rs.1,15,000/-, the assessee referred to ledger account of charges in the books of the assessee, additional evidence before us (Paper Book page 114). The Ld. Counsel submitted that bus rent paid to M/s Tara was lower as compared bus rent paid to unrelated party. He further submitted that the Assessing Officer has not brought on record any comparative instance to demonstrate that payment of bus rent to M/s Tara Meera Education Trust was unreasonable. In view of the above arguments, the Ld. Counsel of the assessee submitted that there is no violation on the part of the the conditions specified u/s 13 of the Act and order of the Ld. CIT(A) on the issue in dispute might be set aside and exemption u/s 11 of the Act should be restored to the assessee. Regarding additional ground raised the Ld. Counsel of the assessee the same are being consequent upon granting relief Ground No. 1.1 of the appeal. 9. The Ld DR on the other hand relied on the order of lower MMTI’s Education & Research Trust 15 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 Meera Education available on page 110 and 111 of the Paper Book and submitted that rate charged by the Tara Meera compared to rate charged to the Meera Education the assessee referred to ledger account of which has been before us (Paper Book page 114). The Ld. Counsel submitted that bus rent paid to M/s Tara Meera lower as compared bus rent paid to unrelated party. He further submitted that the Assessing Officer has not ve instance to demonstrate that Education Trust was unreasonable. In view of the above arguments, the Ld. Counsel of the assessee submitted that there is no violation on the part of the ons specified u/s 13 of the Act and order of the Ld. CIT(A) on the issue in dispute might be set aside and exemption u/s 11 of the Act should be restored to the assessee. Regarding additional ground raised the Ld. Counsel of the assessee the same are being consequent upon granting relief other hand relied on the order of lower 10. We have heard rival submission of the parties on the issue in dispute and perused the releva officer initially issued show cause doubting the charitable nature of activity of the assessee as to whether the activity falls under term “formal education”, however finally no finding has been given on that issue, neither anything brough on record that registration u/s 12AA of the Act has been withdrawn by the appropriate so that issue is not before us. before us is whether by way of making payment rent for the building trustees of the assessee trust and payment for office rent at Andheri, for modular course fee and bus rent to another trust namely M/s Tara Meera trustees are common to the 13 of the Act. The section 13(1)(c)(ii) of the Act prescribe that if any part of income of the trust is applied directly or indirectly for the benefit of the persons specified in section 13(3) of th include trustees, the assessee will not be eligible for the benefit of section 11 of the Act. The Section 13(2)(c) prescribe that if any amount paid by the salary or allowance otherwise to the specified persons ( i.e. which include trustees) trust which is in excess of what may be reasonably paid for such services. Therefore, in the case of the assessee, we have to examine whether any benefit has been passed on to the trustees by way of MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. officer initially issued show cause doubting the charitable nature of activity of the assessee as to whether the activity falls under term ”, however finally no finding has been given on ther anything brough on record that registration u/s 12AA of the Act has been withdrawn by the appropriate that issue is not before us. The only issue in dispute in the case is whether by way of making payment of ‘consultancy fee for the building and play ground and workshop etc. to the trustees of the assessee trust and payment for office rent at modular course fee and bus rent to another trust Meera Education Trust in which two of the e common to the assessee trust,is in violation of section The section 13(1)(c)(ii) of the Act prescribe that if any part of income of the trust is applied directly or indirectly for the benefit of the persons specified in section 13(3) of th include trustees, the assessee will not be eligible for the benefit of section 11 of the Act. The Section 13(2)(c) prescribe that if any amount paid by the salary or allowance otherwise to the specified persons ( i.e. which include trustees) out of the resources of the trust which is in excess of what may be reasonably paid for such services. Therefore, in the case of the assessee, we have to examine whether any benefit has been passed on to the trustees by way of MMTI’s Education & Research Trust 16 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 We have heard rival submission of the parties on the issue in nt material on record. The assessing officer initially issued show cause doubting the charitable nature of activity of the assessee as to whether the activity falls under term ”, however finally no finding has been given on ther anything brough on record that registration u/s 12AA of the Act has been withdrawn by the appropriate authority, issue in dispute in the case consultancy fee’, workshop etc. to the trustees of the assessee trust and payment for office rent at modular course fee and bus rent to another trust Education Trust in which two of the ,is in violation of section The section 13(1)(c)(ii) of the Act prescribe that if any part of income of the trust is applied directly or indirectly for the benefit of the persons specified in section 13(3) of the Act , which include trustees, the assessee will not be eligible for the benefit of section 11 of the Act. The Section 13(2)(c) prescribe that if any amount paid by the salary or allowance otherwise to the specified out of the resources of the trust which is in excess of what may be reasonably paid for such services. Therefore, in the case of the assessee, we have to examine whether any benefit has been passed on to the trustees by way of payments made or the consul what could have reasonably 10.1 Regarding the ‘consultation fee Officer has worked out per hour fee paid to the trustees but similar analysis of payment made per hour to visiting faculties been made out before the Ld CIT(A) submitted such an analysis for first time. Re reproduced as under: 10.2 We find that this analysis is not supported by any documentary evidence and thus it need verification at the end of the MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & payments made or the consultancy fee / rent paid what could have reasonably been paid for such services. consultation fee’ paid to trustees Officer has worked out per hour fee paid to the trustees but similar analysis of payment made per hour to visiting faculties before the Ld CIT(A). Before us the assessee has submitted such an analysis for first time. Relevant analysis is reproduced as under: We find that this analysis is not supported by any documentary evidence and thus it need verification at the end of the MMTI’s Education & Research Trust 17 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 rent paid is in excess of paid for such services. paid to trustees, the Assessing Officer has worked out per hour fee paid to the trustees but similar analysis of payment made per hour to visiting faculties was not Before us the assessee has levant analysis is We find that this analysis is not supported by any documentary evidence and thus it need verification at the end of the Assessing Officer. Further, t has submitted that the trustees management and administration also been brought in record. not carried out sufficientexerci of consultancy services properly. The Assessing Officer to examine and ascertain services rendered by the three trustees in the light of the documentary evidence submitted by the assessee and then decide the arm’s length price of the consultancy fees paidto trustees of the assessee. 10.3. Regarding the rent paid to the trustees for building/workshop/playground etc. also the Assessing Officer has made comparison with rent can be made with similar property in same area only and services of expert should have been utilised. Assessing Officer should have referred the matter officer for ascertaining rent. Similarly, rent paid for office for M/s Tara Trust also should have been referred to a valuation officer. Regarding the bus rent, the assessee has furnished additional evidence ledger account of M/s Tara wherein it is claimed that M/s Tara paid lower amount for bus rent. The Ld. Counsel of the assessee was asked to furnish invoices issued by the relevant party. MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & Assessing Officer. Further, though the Ld. Counsel of the assessee has submitted that the trustees have rendered services of management and administration also but no such evidences have been brought in record. In our opinion, the Assessing Officer has sufficientexercise for finding out arm’s length price services properly. The Assessing Officer ascertain services rendered by the three trustees in the light of the documentary evidence submitted by the assessee he arm’s length price of the consultancy fees trustees of the assessee. Regarding the rent paid to the trustees for building/workshop/playground etc. also the Assessing Officer has with that of old premises only. The compariso rent can be made with similar property in same area only and services of expert should have been utilised. In our opinion, the Ld. Assessing Officer should have referred the matter to the valuation ing reasonableness or fair mark rent. Similarly, rent paid for office for M/s Tara Meera Trust also should have been referred to a valuation officer. Regarding the bus rent, the assessee has furnished additional ledger account of M/s Tara Meera Education Trust wherein it is claimed that M/s Tara Meera Education Trust has paid lower amount for bus rent. The Ld. Counsel of the assessee was asked to furnish invoices issued by the relevant party. MMTI’s Education & Research Trust 18 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 hough the Ld. Counsel of the assessee rendered services of no such evidences have In our opinion, the Assessing Officer has for finding out arm’s length price services properly. The Assessing Officer was required ascertain services rendered by the three trustees in the light of the documentary evidence submitted by the assessee he arm’s length price of the consultancy fees Regarding the rent paid to the trustees for building/workshop/playground etc. also the Assessing Officer has The comparison of rent can be made with similar property in same area only and In our opinion, the Ld. to the valuation reasonableness or fair market value of the Meera Education Trust also should have been referred to a valuation officer. Regarding the bus rent, the assessee has furnished additional Education Trust Education Trust has paid lower amount for bus rent. The Ld. Counsel of the assessee was asked to furnish invoices issued by the relevant party. However, same were Regarding the modular course fee also the Assessing Officer required to analyze and ascertain the reasonableness of additional evidence submitted by the assessee and the Assessing Officer was required to carry out comparison of office decide the issue of violation of section 13(1)(c ) and 13(2) of the Act. 10.4 In the facts and circumstances and discussion above, we it appropriate to restore this issue Assessing Officer for deciding afresh. to file all the necessary documentary evidence in support of its claim that payments made are at arm’s length price between independent part evidence submitted by the assessee if the Assessing Officer is of the opinion that further inquiries are required then he inquiries as deemed fit in the facts and circumstances of the case. The ground No. 1.1 of the appeal of the assessee is accordingly allowed for statistical purposes. Since, the additional ground is consequential, therefore purposes. 11. As far as ground raised and facts and circumstances for th assessment year 2012 identical to grounds raised in AY 2011 MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & were not readily available with Regarding the modular course fee also the Assessing Officer required to analyze and ascertain the reasonableness of additional evidence submitted by the assessee and the Assessing Officer was required to carry out exercise for determining arm’s le office rent, modular fee, bus rent decide the issue of violation of section 13(1)(c ) and 13(2) of the Act. In the facts and circumstances and discussion above, we it appropriate to restore this issue back to the file of the Ld. Assessing Officer for deciding afresh. The assessee shall be at to file all the necessary documentary evidence in support of its claim that payments made are at arm’s length price between independent parties. After examination of the documentary evidence submitted by the assessee if the Assessing Officer is of the opinion that further inquiries are required then he as deemed fit in the facts and circumstances of the case. No. 1.1 of the appeal of the assessee is accordingly allowed for statistical purposes. Since, the additional ground is consequential, therefore, same is also allowed for statistical As far as ground raised and facts and circumstances for th assessment year 2012-13 and 2013-14 are concerned, same are to grounds raised in AY 2011-12 ,therefore, the grounds MMTI’s Education & Research Trust 19 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 available with ld Counsel. Regarding the modular course fee also the Assessing Officer was required to analyze and ascertain the reasonableness of additional evidence submitted by the assessee and the Assessing Officer was arm’s length price for bus rent etc., and then decide the issue of violation of section 13(1)(c ) and 13(2) of the Act. In the facts and circumstances and discussion above, we feel back to the file of the Ld. shall be atliberty to file all the necessary documentary evidence in support of its claim that payments made are at arm’s length price i.ea transaction ies. After examination of the documentary evidence submitted by the assessee if the Assessing Officer is of the opinion that further inquiries are required then he may carry out as deemed fit in the facts and circumstances of the case. No. 1.1 of the appeal of the assessee is accordingly allowed for statistical purposes. Since, the additional ground is , same is also allowed for statistical As far as ground raised and facts and circumstances for the concerned, same are therefore, the grounds raised in assessment year 2012 mutatis mutandis. 12. In the result, the appeals of the assessee are statistical purposes. Order pronounced in the open Court on Sd/ (VIKAS AWASTHY JUDICIAL MEMBER Mumbai; Dated: 23/06/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// MMTI’s Education & Research Trust ITA Nos. 5866/M/2015, 451/M/2019 & raised in assessment year 2012-13 and 2013-14 are decided In the result, the appeals of the assessee are allowed partly for nounced in the open Court on 23/06/2023. Sd/- Sd/ VIKAS AWASTHY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai MMTI’s Education & Research Trust 20 ITA Nos. 5866/M/2015, 451/M/2019 & 2974/M/2017 14 are decided allowed partly for /06/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai