Maharashtra Ex-servicemen Corporation Ltd, Pune V. Income Tax Officer Ward - 14(4), Pune, Pune

ITA 617/PUN/2022

AI Insights

The case involves Maharashtra Ex-Servicemen Corporation Ltd. (MESCO), which appealed against the orders of the National Faceless Appeal Centre, Delhi, for the assessment years 2012-13 and 2018-19. The primary issue was the denial of exemption under section 10(26BBB) of the Income Tax Act, which the AO initially denied on the grounds that MESCO was established by a government resolution and not by an act of the state. The Tribunal noted that similar issues had been addressed in previous years and had been remitted back to the AO for re-adjudication. Therefore, following the precedents, the Tribunal decided to remit the current appeals back to the AO for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137767 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-01-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 07-08-2022
• Other Referred Cases: ITA No.129/PUN/2021, ITA No.384/PUN/2019
• Laws Referred To: Companies Act, 1956, Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘A’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.617 & 618/PUN/2022 नधा रण वष / Assessment Years : 2012-13 and 2018-19 Maharashtra Ex-Servicemen Corporation Ltd., 2 nd Floor, Raigad Building, Opp. National War Memorial, Ghorpadi, Pune 411 001 Maharashtra PAN : AADCM4072C Vs. ITO, Ward-14(4), Pune/ National Faceless Appeal Centre Assessing Officer, Delhi Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP : These appeals by the assessee arise out of two separate orders dated 03-11-2021 passed by the National Faceless Appeal Centre, Delhi in relation to the assessment years 2012-13 & 2018-19. Since a common issue is raised therein, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience. 2. There is a delay of 218 days in filing the instant appeals before the Tribunal. The assessee has filed affidavit explaining Assessee by Shri Kishor B. Phadke Revenue by Shri Keyur Patel Date of hearing 17-01-2023 Date of pronouncement 17-01-2023 ITA Nos.617 & 618/PUN/2022 Maharashtra Ex-servicemen Corporation Ltd., 2 the reasons. No serious objection was taken by the ld. DR to the condonation of the delay. We are also satisfied with the reasons so stated. Therefore, the delay is condoned and the appeals are admitted for disposal of merits 3. Briefly stated, the facts of the case are that the assessee is a Maharashtra Ex-servicemen Corporation Ltd. (MESCO), a company limited by shares and registered under Companies Act, 1956, which has been set up with the sole object of welfare and economic upliftment of Ex-servicemen. The assessee is a Government company within the meaning of section 2(45) of the Companies Act and 100% equity belongs to the Government of Maharashtra. 4. For the A.Y. 2012-13, the assessee had not filed return on the premise that its income of Rs.13,72,54,058/- was eligible for exemption u/s.10(26BBB) of the Act. The case was reopened, pursuant to which the assessee furnished return declaring total income at Nil. The Assessing Officer (AO) did not accept the claim of exemption u/s.10(26BBB) for the reason that the said section applies only to income of a Corporation established by Central or State or Provincial Act for the welfare and economic ITA Nos.617 & 618/PUN/2022 Maharashtra Ex-servicemen Corporation Ltd., 3 upliftment of Ex-servicemen being a citizen of India. Since the assessee was established by the Government “Resolution” and not by the “Act” of Maharashtra State, the AO denied the benefit of exemption. This led to assessing the total income at Rs.13.72 crore. No relief was allowed in the first appeal. 5. Similar is the position for the A.Y. 2018-19 for which the AO disallowed exemption u/s.10(26BBB) amounting to Rs.15,76,50,340/- and determined the total income at this level. No succor was provided by the ld. CIT(A) for this year as well. Aggrieved thereby, the assessee has come up in appeals before the Tribunal. 6. Having heard the rival submissions and gone through the relevant material on record, it is observed that similar position prevailed for the earlier assessment years as well when the benefit of exemption u/s.10(26BBB) was denied by the AO, which got approved in the first appeal. The matter came up for consideration before the Tribunal. The Pune Bench, vide its order in ITA No.129/PUN/2021, restored the matter to the file of the AO with certain directions. Another batch of 7 appeals relating to different years of the assessee again came up for consideration ITA Nos.617 & 618/PUN/2022 Maharashtra Ex-servicemen Corporation Ltd., 4 before the Tribunal. Vide order dated 24-11-2022 in ITA No.384/PUN/2019 and others, the Tribunal, followed its earlier order, and remitted the matter to the file of the AO for re- adjudication in the light of the determination of the status of exemption by the CIT(Exemption) u/s.12A of the Act. Both the sides are in agreement that the facts and circumstances of the instant two appeals are mutatis mutandis similar. Respectfully following the above precedents, we overturn the impugned orders and remit the matter to the file of the AO for re-deciding the issue afresh as per law in conformity with the directions given by the Tribunal for earlier years. 7. In the result, both the appeals are allowed for statistical purposes. Order pronounced in the Open Court on 17 th January, 2023. Sd/- Sd/- ( S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 17 th January, 2023 सतीश ITA Nos.617 & 618/PUN/2022 Maharashtra Ex-servicemen Corporation Ltd., 5 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. The CIT(A) concerned 4. 5. The Pr. CIT concerned DR, ITAT, ‘A’ Bench, Pune 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 17-01-2023 Sr.PS 2. Draft placed before author 17-01-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *