U.P.State Sugar Corporation Limited, Lucknow V. The Dy. Commissioner of Income Tax, Lucknow

ITA 601/LKW/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70582 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 14-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P K KARIWALA
• Keywords: Earning of tax free income; Benefit of exemption; Condonation of delay
• Section: 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 601/LKW/2013 ASSESSMENT YEAR: 2008 - 09 U.P. STATE BIODIVERSITY BOARD 3 RD FLOOR, A WIN G, PICUP BHAWAN GOMTI NAGAR, LUCKNOW V. INCOME TAX OFFICER 1(4) LUCKNOW PAN: AAAJU0265B (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. P. K. KARIWALA, C.A. RESPONDENT BY: SHRI. AJAY KUMAR, D.R. DATE OF HEARING: 01 0 7 2014 DATE OF PRONOUNCEMENT: 10 0 7 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . THE APPELLANT BOARD IS PURELY A NON - PROFIT STATE GOVERNMENT ORGANISATION EXISTING SOLELY FOR THE PURPOSE OF CONSERVATION OF BIOLOGICAL DIVERSITY , SUSTAINABLE USE OF ITS COMPONENTS AND FAIR AND EQUITABLE SHARING OF BENEFITS ARISING OUT OF THE USE OF BIOLOGICAL RESOURCES, SUSTAINABLE USE OF ITS COMPONENTS AND FAIR AND EQUITABLE SHARING OF BENEFITS. 2 . THE UP BIODIVERSITY BOARD HAS BEEN FORMED UNDER A NEW ACT UNDER SECTION 22 (1) THE BIOLOGICAL BIODIVERSITY ACT, 2002 ON SEPTEMBER 20, 2006 FOR THE PURPOSE OF CONSERVATION AND SUSTAINABLE USE OF THE BIOLOGICAL RESOURCES. 3 . THE APPELLANT BOARD HAD APPLIED FOR REGISTRATION U/S 12 A OF PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : THE INCOME TAX ACT ON 30.03.2009 AND HAS BEEN GRANTED REGISTRATION W.E.F. 1.4.2008 WHICH CORRESPONDS TO AY 2009 - 10 BECAUSE THE ACTIVITY OF THE BOARD BEING CHARITABLE, NON PROFIT SINCE THE FORMATION THE INCOME FOR THE AY 2008 - 09 SH OULD ALSO BE EXEMPT. 4 . BECAUSE THE ACTIVITIES OF THE BOARD HAVE BEEN RECOGNIZED FOR THE PURPOSE OF EXEMPTION U/S 11/12 WITH EFFECT FROM 1.4.2008. AS THERE HAS BEEN NO CHANGE IN THE ACTIVITIES FROM THE DATE OF FORMATION TILL 1.4.2008, IF THE ACTIVITIES OF THE BOARD QUALIFY FOR EXEMPTION FROM 1.4.2008 THEN THE INCOME OF PREVIOUS YEARS SHOULD ALSO QUALIFY FOR EXEMPTION 5 . BECAUSE THAT THE ACTIVITIES OF THE APPELLANT BOARD ARE SIMILAR TO THE COFFEE BOARD, RUBBER BOARD, TEA BOARD, TOBACCO BOARD ETC WHICH HAVE BEEN SE T UP UNDER THEIR RESPECTIVE ACTS AND HAVE BEEN GRANTED EXEMPTION U/S 10(29A) TO SECTION 10(29A)(G) OF THE INCOME TAX ACT AND ENJOY EXEMPTION. THE INCOME OF THE APPELLANT BOARD SHOULD ALSO QUALIFY FOR EXEMPTION. 6 . BECAUSE THE ACTIVITIES OF THE BOARD ARE CHARI TABLE IN NATURE, ESSENTIAL FOR THE SURVIVAL OF MANKIND AND NON PROFIT. TAXING THE INCOME OF THE BOARD FOR THE ASSESSMENT YEAR 2008 - 09 WOULD AMOUNT TO TAXING AN EXEMPT INCOME . 2 . DURING THE COURSE OF HEARING, IT WAS POINTED OUT THAT THERE WAS A DELAY OF 7 DAY S IN FILING OF THE APPEAL. THE SECRETARY OF THE ASSESSEE HAS MOVED AN APPLICATION FOR CONDONATION OF DELAY IN FILING OF THE APPEAL STATING THEREIN THAT HE IS THE AUTHORIZED/DESIGNATED PERSON UNDER SECTION 140 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLE D IN SHORT THE ACT') TO SIGN THE RETURN AND FORMS AND HE WAS OUT OF THE C OUNTRY DURING MOST PART OF JUNE AND JULY, 2013 AND HENCE THE APPEAL COULD NOT BE SIGNED AND FILED WITHIN THE STIPULATED TIME. KEEPING IN VIEW THE CONTENTIONS OF THE ASSESSEE, WE CON DONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : 3 . THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO THE DENIAL OF BENEFIT OF EXEMPTION UNDER SECTION 11 OF THE ACT ON THE GROUND THAT REGISTRATION UNDER SECTION 12A OF THE ACT WAS NOT AVAILABLE WITH TH E ASSESSEE AT THE RELEVANT POINT OF TIME. 4 . THE FACTS IN BRIEF ARE THAT THE ASSESSING OFFICER HAS DENIED BENEFIT OF EXEMPTION UNDER SECTION 11 OF THE ACT ON THE GROUND THAT ASSESSEE WAS REGISTERED UNDER SECTION 12A OF W.E.F. 1.4.2008 VIDE ORDER DATED 30.9.20 09. 5 . AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), BUT DID NOT FIND FAVOUR WITH HIM. 6 . NOW THE ASSESSEE IS BEFORE US WITH THE SUBMISSION THAT THE ASSESSEE IS REGISTERED UNDER SECTION 12A OF THE ACT, THEREFORE, THE BENEFIT OF SECTION 11 OF THE ACT SHOULD BE ALLOWED TO IT. 7 . DURING THE COURSE OF HEARING OF THE APPEAL, IT HAS BECOME EVIDENTLY CLEAR THAT REGISTRATION WAS GRANTED TO THE ASSESSEE BY THE LD. COMMISSIONER OF INCOME - TAX UNDER SECTION 12A OF THE ACT VIDE HIS ORDER DATED 30.9.2009 W. E.F. 1.4.2008. THE FINANCIAL YEAR INVOLVED IS 2007 - 08 RELEVANT TO ASSESSMENT YEAR 2008 - 09 AND DURING THE RELEVANT PERIOD , REGISTRATION UNDER SECTION 12A OF THE ACT WAS NOT AVAILABLE WITH THE ASSESSEE. THEREFORE, IT WAS NOT ALLOWED BENEFIT OF EXEMPTION UN DER SECTION 11 OF THE ACT. THE LD. CIT(A) HAS EXAMINED THE ISSUE IN THE LIGHT OF THESE FACTS WHILE CONFIRMING THE ASSESSMENT ORDER. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER: - 4. I HAVE CONSIDERED THE MATTER. THE APPELLANT IS A BOARD SET UP BY THE GOVERNOR OF UTTAR PRADESH U/S 22(1) OF THE BIOLOGICAL DIVERSITY ACT, 2002 ON SEPTEMBER 20, 2006 FOR THE PURPOSE OF CONSERVATION AND SUSTAINABLE USE OF THE BIOLOGICAL RESOURCES TO PROVIDE FOR THE CONSERVATION OF BIOLOGICAL DIVERSITY, S USTAINABLE USE OF ITS COMPONENTS PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : AND FAIR AND EQUITABLE SHARING OF THE BENEFITS ARISING OUT OF THE USE OF THE BIOLOGICAL RESOURCES. 4.1. THE CASE OF THE APPELLANT IS NOT COVERED BY SECTION 10(29A) OF THE ACT AS THE NAME OF THE APPELLANT IS NOT APPEARING IN THE SECTION. THE VARIOUS INCOMES REFERRED TO IN SECTION 10 ARE TO BE COMPLETELY EXCLUDED OR WHOLLY DISREGARDED FOR PURPOSES OF COMPUTATION OF INCOME UNDER THE ACT. BUT JUST AS A TAXING PROVISION HAS TO BE CONSTRUED STRICTLY, PROVISION FOR EXEMPTION, DEDUC TION OR RELIEF IS ALSO TO BE CONSTRUED STRICTLY. SINCE EXEMPTION HAS NOT BEEN SPECIFICALLY CONFERRED ON THE APPELLANT U/S 10(29A) OF THE ACT THE SAME CANNOT BE ALLOWED. 4.2. IT IS ALSO SEEN THAT THE APPELLANT HAS BEEN GRANTED REGISTRATION U/S 12A OF THE AC T W.E.F. 01.04.2008 WHICH CORRESPONDS TO AY 2009 - 10. SINCE DURING THE YEAR UNDER APPEAL THE APPELLANT WAS NOT REGISTERED U/S 12A IT CANNOT CLAIM EXEMPTION U/S 11 & 12 OF THE ACT. RELIANCE ON SECTION 2(15) OF THE ACT BY THE APPELLANT TO CLAIM EXEMPTION U/S 11 IS MISPLACED AS THE PHRASE 'PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE)' HAS BEEN INSERTED BY THE FINANCE ACT, 2009 W.R.E.F. 01.04.2009 MEANING THEREBY IT IS APPLICABLE W.E.F. 2009 - 10. THE CONTENTION OF THE APPELLANT THAT IT S ACTIVITIES ARE CHARITABLE SINCE ITS FORMATION AND SINCE THESE HAVE BEEN RECOGNIZED FOR THE PURPOSE OF EXEMPTION U/S 11 & 12 W.E.F. 01.04.2008 THE INCOME OF THE YEAR UNDER APPEAL SHOULD ALSO BE EXEMPTED HAS NO MERIT AS IN ABSENCE OF REGISTRATION U/S 12A O F THE ACT THE EXEMPTION U/S 11 & 12 CANNOT BE GRANTED. 4.3 FURTHER ONCE THE APPELLANT HAS BEEN DEPRIVED OF THE BENEFITS OF SECTION 11 ON ACCOUNT OF NON - REGISTRATION U/S 12A OF THE ACT, TAXABLE INCOME HAS TO BE COMPUTED IN THE MANNER LAID DOWN UNDER THE ACT APPLYING THE NORMAL PRINCIPLES OF ACCOUNTANCY. ON PERUSAL OF THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : INCOME AND EXPENDITURE ACCOUNT IT IS SEEN THAT THE ASSESSEE HAS RECEIVED DONATION/ ADVERTISEMENT RECEIPTS AMOUNTING TO RS.14,85,769/ - AND INTEREST FROM BANK OF RS.63,927/ - OUT OF WHICH CERTA IN EXPENSES HAVE BEEN CLAIMED RESULTING INTO SURPLUS OF RS.7,22,621/ - . THE AO IN ABSENCE OF ANY SPECIFIC PROVISION FOR EXEMPTION OF THIS SURPLUS HAS RIGHTLY BROUGHT IT TO TAX. IN VIEW OF THE ABOVE, I CONFIRM THE ACTION OF THE AO IN ASSESSING THE SURPLUS O F RS.7,22,621/ - AS INCOME OF THE APPELLANT AND SUBJECTING IT TO TAX. 8 . NOTHING HAS BEEN PLACED ON RECORD WITH REGARD TO THE AVAILABILITY OF REGISTRATION UNDER SECTION 12A DURING THE RELEVANT PERIOD. WE , THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY WE CONFIRM THE SAME. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.7.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH JU LY , 2014 JJ: 0207 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )