DCIT (EXEMPTION) - 1(1), MUMBAI V. INSTITUTE OF TECHNOLOGY & MANAGEMENT, MUMBAI

ITA 5966/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9989 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 07-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESHPANDE
• Assessee Lawyers: THOMAS KUTTY
• Keywords: Depreciation; Charitable institution; Tax effect
• Section: 143(3); 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH , JUDICIAL MEMBER ITA NOS. 596 4 & 596 6 /MUM/2016 : A.YS : 2012 - 13 & 2011 - 12 DCIT (EXEMPTIONS) - 1(1), MUMBAI (APPELLANT) VS. INSTITUTE OF TECHNOLOGY & MANAGEMENT 601, 6 TH FLOOR, CENTRE POINT BUILDING, 18 TH ROAD, CHEMBUR, MUMBAI 400 071 (RESPONDENT) PAN : AABCI4023M APPELLANT BY : SHRI SAURABH DESHPANDE RESPONDENT BY : SHRI THOMAS KUTTY DATE OF HEARING : 17/08/2017 DATE OF PRONOUNCEMENT : 30 /08/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED TWO APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST THE SAME ASSESSEE PERTAINING TO ASSESSMENT YEARS 2011 - 12 & 2012 - 13. SINCE THE APPEALS RELATE TO THE SAME ASSESSEE AND INVOLVE CERTAIN COMMON ISSUES, THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2 ITA NOS. 5966 & 5964/MUM/2016 INSTITUTE OF TECHNOLOGY & MANAGEMENT 2. APPEAL IN ITA NO. 5964/MUM/2016 PERTAINING TO ASSESSMENT YEAR 2012 - 13 IS BEING TAKEN AS THE L EAD CASE. THE SAID APPEAL IS DIRECTED AGAINST THE ORDER OF CIT(A) - 1 , MUMBAI DATED 18.7.2016 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER, MUMBAI DATED 16.6.2014 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE AC T). 3. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. WHETHER ON THE FACTS OF THE CASE AND IN LAW THE ID.CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT OF RS 7,40,59,306/ - AND ALLOWING SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS. 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT, IGNORING THE FACT THAT THERE WAS NO EXPRESS PROVISION IN THE I T A CT, 1961 PERMITTING ALLOWANCE OF SUCH CLAIM. 3. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT BY RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, IGNORING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT ON MERIT OF THE CASE, BUT DUE TO SMALLNESS OF TAX EFFECT APPEAL WAS NOT FIL ED BEFORE HON'BLE SUPREME COURT. HOWEVER, ON THIS ISSUE THE DEPARTMENT HAS FILED SLP BEFORE THE APEX COURT IN THE CASE OF MIDC (SPL (CIVIL) 9891 OF 2014) AND THE MATTER IS PENDING BEFORE THE HON'BLE SUPREME COURT. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 1, MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3 ITA NOS. 5966 & 5964/MUM/2016 INSTITUTE OF TECHNOLOGY & MANAGEMENT 4. ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE SOLITARY DISPUTE INVOLVED IN THIS APPEAL IS AGAINST THE ACTION OF THE CIT(A) IN ALLOWING THE ASSESSEE THE BENEFIT OF CARRY FORWARD OF THE DEFICIT FOR FUTURE SET - OFF. 5. IN THIS BACKGROUND, NOW WE MAY REFER TO THE RELEVANT FACTS. THE RESPONDENT - ASSESSEE IS A CHARITABLE ORGANISATION REGISTERED U/S 12A OF THE ACT AND IS ENGAG ED IN CARRYING ON ACTIVITIES OF CHARITABLE NATURE. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SHOWN RS.7,40,59,306/ - AS DEFICIT AND CLAIMED BENEFIT OF CARRY FORWARD FOR FUTURE SET - OFF. THE ASSESSING OFFICER DENIED THE BENEFIT BY OBSERVING THAT LOSS/ DEFICIT CANNOT BE DETERMINED WHILE COMPUTING INCOME U/S 11 OF THE ACT. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, 264 ITR 110 (BOM ) . 6 . BEFORE US, THE PLEA OF THE DEPARTMENT IS THAT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT ON MERITS AND ON A SIMILAR ISSUE, SLP (CIVIL) NO. 989 1 OF 2014 HAS BEEN FILED BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION (MIDC) . SO, HOWEVER THERE IS NO CONTROVERSION BY THE REVENUE TO THE FACT THAT THE DECISION OF THE CIT(A) IS IN LINE WITH THE JUDGMENT O F THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) . 4 ITA NOS. 5966 & 5964/MUM/2016 INSTITUTE OF TECHNOLOGY & MANAGEMENT 7 . WE FIND THAT THE HON'BLE BOMBAY HIGH COURT SUBSEQUENT TO THE DECISION IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) CONSIDERED A SIMILAR ARGUMENT OF THE REVENUE IN THE CASE OF M/S. MUMBAI EDUCATION TRUST, ITA NO. 11/2014 DATED 3.5.2016 AND ALLOWED THE CLAIM OF THE ASSESSEE. IN FACT, THE GROUNDS OF APPEAL URGED BY THE REVENUE BEFORE THE HON'BLE HIGH COURT, WHICH READ AS UNDER : - (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW THE CLAIM OF DEPRECIATION RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERS ONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) IGNORING THE RATIO OF HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF ESCORTS LTD. V/S. UNION OF INDIA (199 ITR 43) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NO T SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW TO CARRY FORWARD OF DEFICIT OF EARLIER YEAR S RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) WHILE THE REVENUE DID NOT FILE SLP AGAINST THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 IT R110 (BOM) DUE TO LOW TAX EFFECT?. STAND ON THE SAME FOOTING AS ARE BEING CANVASSED BEFORE US IN THE INSTANT CASE. THUS, THERE IS NO ERROR ON THE PART OF THE CIT(A) IN FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF B ANKING PERSONNEL SELECTION (SUPRA) AND ALLOWING THE STAND OF THE ASSESSEE. THE OTHER ARGUMENT TAKEN BY THE REVENUE THAT ITS SLP FILED BEFORE THE HON'BLE SUPREME COURT IS PENDING ON A SIMILAR ISSUE IS 5 ITA NOS. 5966 & 5964/MUM/2016 INSTITUTE OF TECHNOLOGY & MANAGEMENT OF NO CONSEQUENCE INASMUCH AS THE BINDING JUDGMENTS OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AS WELL AS IN THE CASE OF M/S. MUMBAI EDUCATION TRUST (SUPRA) CONTINUE TO SUBSIST. THEREFORE, IN THIS BACKGROUND, WE FIND NO MERIT IN THE GROUND RAISED BY THE RE VENUE AND THE SAME IS ACCORDINGLY DISMISSED. 8 . IN THE RESULT, APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2012 - 13 IS DISMISSED. 9 . IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE FACTS AND CIRCUMSTANCES IN ITA NO. 5966/MUM/2016 PERTAINING TO ASSESS MENT YEAR 2011 - 12 IS PARI MATERIA TO THOSE CONSIDERED BY US IN ITA NO. 5964/MUM/2016 FOR ASSESSMENT YEAR 2012 - 13, THEREFORE, OUR DECISION THEREIN SHALL APPLY MUTATIS MUTANDIS IN THE SAID APPEAL ALSO. 10 . RESULTANTLY, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 T H AUGUST, 2017 SD/ - SD/ - ( AMARJIT SINGH ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 3 0 T H AUGUST , 201 7 *SSL* 6 ITA NOS. 5966 & 5964/MUM/2016 INSTITUTE OF TECHNOLOGY & MANAGEMENT COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI