ACIT CC 2(1), MUMBAI V. M/S LILAVATI KIRTILAL MEHTA MEDICAL TRUST, MUMBAI

ITA 627/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2803 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 27-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV HARIT
• Keywords: Business income; Cancellation of registration; Set aside
• Section: 143(3); 12A; 12AA; 13; 12

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 627/MUM/2020 (ASSESSMENT YEAR 2013-14) I.T.A. NO. 628/MUM/2020 (ASSESSMENT YEAR 2014-15 ) I.T.A. NO. 633/MUM/2020 (ASSESSMENT YEAR 2016-1 7) ACIT, CC-2(1) OLD CGO BUILDING 8 TH FLOOR, M.K. ROAD MUMBAI-400 020. VS . M/S. LILAVATI KIRTILAL MEHTA MEDICAL TRUST A-791, BANDRA RECLAMATION BANDRA-WEST, MUMBAI-50 PAN : AAATL1398Q (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI RAJEEV HARIT DATE OF HEARING 10.08.2021 DATE OF PRONOUNCEMENT 20.10.2021 O R D E R PER SHAMIM YAHYA (AM) :- THESE ARE APPEALS BY THE REVENUE. SINCE THE ISSUES ARE COMMON AND CONNECTED AND APPEALS WERE HEARD TOGETHER, THESE AR E BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THESE APPEALS FOR A.Y. 2013-14 & 2014-15 ARE AGA INST THE COMMON ORDER OF LEARNED CIT(A) DATED 17.10.2019. THE COMMO N GROUNDS READ AS UNDER :- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A)WAS JUSTIFIED IN ALLOWING THE APPEALS OF TH E ASSESSEE FOR BOTH THE AYS RELYING ON THE ORDER NO. 11 A NOS. 3377, 3378/MU M/20I8 FOR AY 2013- 14 AND 2014-15 RESPECTIVELY IN WHICH THE ITAT HAD REL IED ON THE DECISION OF THE ORDER NO. ITA NO. 2827/MUM/2014 DT. I2.6.2019 IN ASSESSEE'S OWN CASE IN WHICH THE ITAT HAD SET ASIDE THE IMPUGNED ORDER O F PRINCIPAL COMMISSIONER OF INCOME TAX FOR CANCELLATION OF REGIS TRATION OF TRUST U/S. 12A, HOWEVER, THE REVENUE HAS NOT ACCEPTED THE DECISI ON OF THE BOTH THE ABOVE ORDERS AND HAS FILED AN APPEAL AGAINST THOSE OR DERS BEFORE THE HON'BLE HIGH COURT, AND 2014-15 RESPECTIVELY IN WHICH THE ITAT HAD RELIED ON THE DECISION OF THE ORDER NO. ITA NO. 2827/ MUM/ 2014 DT. 12.6.2019 IN ASSESSEE'S OWN CASE IN WHICH THE ITAT HAD SET ASIDE THE IMPUGNED ORDER OF M/S. LILAVATI KIRTILAL MEHTA MEDICAL TRUST 2 PRINCIPAL COMMISSIONER OF INCOME TUX FOR CANCELLATI ON OF REGISTRATION OF TRUST U/S. 12A, HOWEVER, THE REVENUE HAS NOT ACCEPTED THE DE CISION OF THE BOTH THE ABOVE ORDERS AND HAS FILED AN APPEAL AGAINST THOSE OR DERS BEFORE THE HON'BLE HIGH COURT. 3. BRIEF FACTS NOTED BY LEARNED CIT(A) ARE AS UNDER : THESE APPEALS ARE PENDING FOR DISPOSAL AS PER SET A SIDE THE ORDER U/S. 254 OF THE IT. ACT, (HEREINAFTER REFERRED TO AS THE 'ACT'), PASSED BY THE ITAT 'A' BENCH, MUMBAI (HEREINAFTER REFERRED TO AS THE 'A.O. ') ON 24.07.2019 FOR AYS. 2013-14 AND 2014-15. THESE APPEALS ARE REPRESENTED BY SHRI. S. BHALLA, CA WHO FILED WRITTEN SUBMISSIONS ON VARIOUS DATES. DIR ECTIONS OF ITAT:- THESE TWO APPEALS WERE SET-ASIDE TO CIT(A) BY ITAT VIDE ITS C OMMON ORDER DATED 24.07.2019 IN ITA NOS. 3377 & 3378/MUM/2018 FOR AY 2013-14 AND 2014- 15. THE DIRECTIONS OF ITAT ARE REPRODUCED AS BELOW: - 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE, ON T HE SOLE ITA NO.3377 &3378/MUM/2018 M/S.LILAVATI KIRTILAL MEHTA MEDICAL TRU ST BASIS OF CANCELLATION OF REGISTRATION GRANTED U/S 12A OF THE I. T.ACT, 1961 BY THE CIT- CENTRAL VIDE ITS ORDER DATED 28/03/2014. WE FURTHER NO TED THAT THE ITAT, MUMBAI 'A' BENCH IN ITA NO. 2827/MUM/2014 HAS RESTOR ED REGISTRATION CANCELLED U/S 12AA(3) OF THE I.T.ACT, 1961 BY THE CIT -CENTRAL WITH EFFECT FROM AY 2001-02. NO DOUBT, ONCE THE ASSESSEE IS REGISTER ED U/S 12 A OF THE ACT , 1961, THEN IT IS ENTITLED FOR EXEMPTION U/S 11 OF THE I.T .ACT, 1961, BUT ENTITLEMENT OF EXEMPTION U/S 11 SHOULD BE EXAMINED FOR EACH ASSESSMENT YEAR IN LIGHT OF ACTIVITIES OF THE ASSESSEE AND PROVIS IONS OF SECTION 11 AND 13 OF THE ACT, 1961, IRRESPECTIVE OF THE FACT THAT THE TR UST IS REGISTERED U/S 12A OF THE I.T.ACT, 1961. IN THIS CASE, THE MAI N REASON FOR CANCELLATION OF REGISTRATION U/S 12A OF THE I.T.ACT, 1961 AS PER CIT- CENTRAL IS VIOLATIONS OF PROVISIONS OF SECTION 11 AND 13 OF I.T.ACT, 1961. IN OUR CONSIDER VIEW, ENTITLEMENT OF EXEMPTION SHOULD BE CONSIDERED IN LIGHT OF VIOLATION REFERRED TO UNDDER SECTION 11 AND 13 OF THE I.T.ACT, 1961. ALTHOUGH, THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THERE IS NO SPECIFIC INSTANCE S OF VIOLATIONS REFERRED TO U/S 11 AND 13 WAS BROUGHT OUT BY THE LOWER AUTHORITIE S IN THEIR ORDERS, BUT KEEPING IN VIEW OF THE FACT THAT REASONS FOR CANCELL ATION OF REGISTRATION U/S 12A WAS SOLELY ON THE BASIS OF VIOLATIONS REFERRE D TO U/S 11 AND 13, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE NEEDS TO BE R E-EXAMINED BY THE LD. CIT(A), IN LIGHT OF ORDER OF THE ITAT IN ITA NO.2827/ MUM2014 DATED 12/06/2019 AND PROVISION OF SECTION 11 AND 13 OF I.T.ACT, 1961. HENCE, WE SET ASIDE BOTH APPEALS TO THE FILE OF THE LD. CIT(A) AN D DIRECT HIM TO RECONSIDER THE ISSUE IN LIGHT OF OBJECTS OF ITA NO.337 7 &3378/MUM/2018 M/S.LILAVATI KIRTILAL MEHTA MEDICAL TRUST THE ASSESSEE AND ACTIVITIES CARRIED M/S. LILAVATI KIRTILAL MEHTA MEDICAL TRUST 3 OUT DURING THE YEAR TO DECIDE THE ELIGIBILITY OF EXEM PTION U/S 11 OF THE I.T.ACT, 1961 8. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE F OR BOTH ASSESSMENT YEARS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES . 4. LEARNED CIT(A) ADJUDICATED THE ISSUE AS UNDER : I HAVE CONSIDERED THE OVERALL FACTS CONTAINED IN A O'S ORDERS FOR BOTH THE YEARS FOR BOTH THE YEARS, AO HAS NOT BROUGHT OUT ANY SP ECIFIC TACTS RELATED TO VIOLATION SECTION 11 OR 13 OF THE IT. ACT. THE EXEMP TION U/S. 11 HAS BEEN DENIED SOLELY ON THE GROUND THAT CIT(C)-1 HAD CANCEL LED REGISTRATION VIDE HIS ORDER DATED 28.03.2014 U/S. 12AA(3). IN THIS REGARD A REPORT WAS CALLED FOR FROM ASSESSING OFFICER. SINCE ORDER OF CIT U/S. 12AA(3), STANDS SET ASIDE AN D REGISTRATION ORIGINALLY GRANTED U/S. 12AA ON 22.01.2019 STANDS RESTORED VIDE ITAT ORDER DATED 12.06.2019, AND NO FACT OF VIOLATION OF SECTION 11 O R 13 HAS BEEN SPECIFICALLY POINTED OUT BY AO IN THE ASSESSMENT ORDER. NEITHER HAS AO BROUGHT OUT SUCH FACT BEFORE ME, ON BEING SPECIFICALLY REQUESTED TO VE RIFY VIDE LETTER DATED 07.10.2019 THE RAISON DETRE OF DENIAL OF EXEMPTION U/S. 11 BY AO FOR BOTH THE ASSESSMENT YEARS CEASES TO EXIST. 5. THE GROUNDS FOR A.Y. 2016-17 READ AS UNDER :- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN ANR. THE L.D.CIT(A) WAS JUSTIFIED IN ALLOWING SHE APPEALS OF THE ASSESSEE RELYING ON THE DECISION OF THE ORDER NO. ITA NO.2827MUM/2014 DT. 12. 6.2019 IN ASSESSEE S OWN CASE IN WHICH THE ITAT HAD SET ASIDE THE IMPUGNED ORDER OF PRINCIPAL COMMISSIONER OF INCOME TAX FOR CANCELLATION OF REGIS TRATION OF TRUST U/S. 12A. HOWEVER, THE REVENUE HAS NOT ACCEPTED THE DECISI ON OF THE ABOVE ORDER AND HAS FILED AN APPEAL AGAINST THIS ORDER BEFORE THE HON'BLE HIGH COURT. 6. BRIEF FACTS ARE THE ASSESSEE E-FILED RETURN OF I NCOME ON 17.10-2016 DECLARING NIL INCOME AFTER CLAIMING EXEMPTION OF RS . 369,47,27,903/- U/S. 11 OF THE ACT. NOTICES U/S. 143(2)/142(1) WERE ISSUED FROM TIME TO TIME. THE AO PASSED ORDER U/S. 143(3) ON 08.12.2018 DETERMINING TOTAL INCOME AT RS. 49,17,33,830/- BY MAKING ADDITION OF RS. 49,17,33,8 30/- ON ACCOUNT OF SURPLUS INCOME SEATED AS BUSINESS INCOME. THE ASSES SEE APPEALED AGAINST THE ABOVE TO LEARNED CIT(A). 7. LEARNED CIT(A) DECIDED THE ISSUE IN FAVOUR OF TH E ASSESSEE BY HOLDING AS UNDER:- M/S. LILAVATI KIRTILAL MEHTA MEDICAL TRUST 4 THESE TWO GROUNDS CAN BE TAKEN UP TOGETHER FOR DISPO SAL AS THEY INTERCONNECTED AND RELATE TO A SINGLE ISSUE OF COMPU TATION OF INCOME AT RS. 49,17,33,830/-. ASSESSEE HAD CLAIMED EXEMPTION OF R S. 49,17,33,830/- U/S. 11. THE AO HAS DENIED THE EXEMPTION ONLY BECAUSE TH E CIT(CENTRAL)-1, MUMBAI HAD CANCELLED THE REGISTRATION GRANTED TO ASSE SSEE VIDE HIS ORDER DATED 28.03.2014 U/S. 12AA(3). AO HAS NOT BROUGHT OUT ANY OTHER SINGLE FACT REGARDING VIOLATION OF PROVISIONS OF SECTION 11 OR SE CTION 13 IN THE ASSESSMENT ORDER. THE ONLY AND SOLE REASON FOR DENIA L OF EXEMPTION U/S. 11 WAS THAT REGISTRATION U/S 12AA WAS DENIED BY CIT(CENT RAL)-1, VIDE ORDER DATED 28.03.2014. HOWEVER, SINCE THE ORDER OF CIT(C )-1, MUMBAI U/S. 12AA(3) STANDS SET ASIDE AND REGISTRATION ORIGINALLY G RANTED UNDER SECTION 12AA ON 22.1.2019 STANDS RESTORED VIDE ITAT ORDER DAT ED 12.6.2019 THE REASON FOR DENIAL OF EXEMPTION UNDER SECTION 11 BY THE ASSESSING OFFICER CEASES TO EXISTS. 8. AGAINST THE ABOVE ORDERS THE REVENUE IS IN APPEA L BEFORE US. 9. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E AND PERUSED THE RECORDS. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY AGREED THAT THE ISSUE IS COVERED BY THE ITAT ORDER IN ASSESSEES OWN CASE RE LIED UPON BY LEARNED CIT(A) IN THIS CASE. THE REVENUE ITSELF IN THE GROUND OF A PPEAL MENTIONED THAT THE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSE E BUT THAT ORDER HAS BEEN APPEALED BEFORE HON'BLE BOMBAY HIGH COURT. 10. SINCE IT IS NOT THE CASE THAT HON'BLE BOMBAY HI GH COURT HAS SET ASIDE THE ORDER OF ITAT, RESPECTFULLY FOLLOWING THE PRECE DENTS WE UPHOLD THE ORDER OF LEARNED CIT(A). 11. IN THE RESULT, REVENUES APPEALS STAND DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 20.10.2021. SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI; DATED : 20/10/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) M/S. LILAVATI KIRTILAL MEHTA MEDICAL TRUST 5 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI