ADIT (Exemptions -IV), CHENNAI V. M/s. Periyasamy Pillai Educational Trust, CHENNAI

ITA 667/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64164 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 30-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SHUKLA IRS
• Assessee Lawyers: V SUBBARAYAN IT P
• Keywords: Benefit of exemption
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIALMEMBER ITA NO.667(MDS)/2012 ASSESSMENT YEAR: 2008-09 THE ASSISTANT DIRECTOR OF INCOME-TAX(EXEMPTIONS)-IV, CHENNAI. VS. M/S.PERIYASAMY PILLAI EDUCATIONAL TRUST, 4-AISWARIYA COMPLEX, DURAISAMY ROAD, CHENNAI-600 017. PAN AAATP9255C. (APPELLANT) (RESPONDENT) APPELLANT BY : MS.ANUPAMA SHUKLA , IRS, CIT RESPONDENT BY : SHRI V.SUBBARAYAN, IT P DATE OF HEARING : 5 TH SEPTEMBER, 2012 DATE OF PRONOUNCEMENT : 5 TH SEPTEMBER, 2012 O R D E R PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER.- THIS IS AN APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-XI I, CHENNAI, DATED 20-12-2011 IN ITA NO.382/2010-11. - - ITA 667 OF 2012 2 2. THE GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED I N HOLDING THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF SEC TION 11 OF THE INCOME-TAX ACT, 1961 AND THERE IS NO VIOLATION OF S ECTION 13(1)(C) OF THE ACT. 3. THE ASSESSEE IS AN EDUCATIONAL ORGANIZATION REGISTERED UNDER SECTION 12AA OF THE ACT AND RUNNIN G A NUMBER OF EDUCATIONAL INSTITUTIONS. THE ASSESSEE FILED IT S RETURN OF INCOME CLAIMING EXEMPTION UNDER SECTION 11 OF THE A CT. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SE CTION 143(3), DENYING THE EXEMPTION UNDER SECTION 11 CLAI MED BY THE ASSESSEE ON THE GROUND THAT THERE IS VIOLATION UNDE R SECTION 13(1)(C) OF THE ACT, AS THE ASSESSEE ADVANCED ` 1 CRORE TO M/S.APOLLO COMPUTER EDUCATION AND ` 2,15,32,395/- TO M/S.APOLLO COMPUTER EDUCATION LTD. AND THE AUTHOR A ND MANAGING TRUSTEE OF THE ASSESSEE TRUST SHRI P.SUBRA MANI IS THE PROPRIETOR OF M/S.APOLLO COMPUTER EDUCATION AND IS ONE OF THE DIRECTORS IN APOLLO COMPUTER EDUCATION LTD. THEREF ORE, THE ASSESSEE BY ADVANCING THE SAID AMOUNTS TO APOLLO CO MPUTER EDUCATION AND TO APOLLO COMPUTER EDUCATION LTD. VIO LATED THE - - ITA 667 OF 2012 3 PROVISIONS OF SECTION 13(1)(C) OF THE ACT. THE ASS ESSING OFFICER STATED THAT THE MANAGING TRUSTEE OF THE ASSESSEE IS BENEFITTED BY THE ADVANCES GIVEN TO THE SAID CONCERNS, IN WHICH H E IS THE PROPRIETOR AND DIRECTOR. 4. ON APPEAL THE COMMISSIONER OF INCOME- TAX(APPEALS), CONSIDERING THE SUBMISSIONS OF THE AS SESSEE AS WELL AS THE FINDINGS OF THE ASSESSING OFFICER IN DE TAIL, HELD THAT THERE IS NO CONTRAVENTION OF PROVISIONS OF SECTION 13(1)(C) AND THEREFORE THE ASSESSEE IS ENTITLED FOR THE EXEMPTIO N UNDER SECTION 11 OF THE ACT. ON EXAMINING THE WHOLE ISSU E, THE COMMISSIONER OF INCOME-TAX(APPEALS) FOUND AS A MATT ER OF FACT THAT THE ASSESSEE HAD IN FACT OWED SUBSTANTIAL AMOU NTS TO APOLLO INSTITUTE OF HOTEL MANAGEMENT, CATERING AND FASHION TECHNOLOGY (AIHMC&FT FOR SHORT), WHICH IS A PROPRIE TARY CONCERN OF SHRI P.SUBRAMANI. THE COMMISSIONER OF I NCOME- TAX(APPEALS) ALSO CONSIDERED THE LETTER DATED 2-4-2 007 SUBMITTED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEED INGS AS WELL AS THE APPELLATE PROCEEDINGS AND THE LETTER AD DRESSED BY AIHMC&FT TO THE ASSESSEE TRUST REQUESTING THE ASSES SEE TO PAY ` 3,50,00,000/- AND ` 2,20,00,000/- TO THE CONCERNS, NAMELY, - - ITA 667 OF 2012 4 APOLLO COMPUTER EDUCATION AND APOLLO COMPUTER EDUCA TION LTD., OUT OF THE OUTSTANDING DUE OF ` 5,80,07,535/- TO AIHMC&FT BY THE ASSESSEE TRUST, IN COMING TO THE CONCLUSION THA T THERE IS NO VIOLATION OF SECTION 13(1)(C) OF THE ACT. THE COMM ISSIONER OF INCOME-TAX(APPEALS) ALSO CONSIDERED IN DETAIL THE C ONSOLIDATED POSITION OF THE TRANSACTIONS WITH ALL THESE THREE C ONCERNS AND CAME TO THE CONCLUSION THAT THE ASSESSEE HAS CLEARL Y ESTABLISHED THAT THE TRUST NEVER PAID OR ADVANCED ANY SUMS OVER AND ABOVE THE AMOUNTS THE TRUST ACTUALLY OWED AT ANY POINT OF TIME DURING THE ENTIRE FINANCIAL YEAR 2007-08 TO THE PERSONS SP ECIFIED UNDER SECTION 13(3) OF THE ACT IN VIOLATION OF THE PROVIS IONS OF SECTION 13(1)(C). THEREFORE, THE COMMISSIONER OF INCOME-TA X(APPEALS) HELD THAT NO ADVERSE INFERENCE CAN BE DRAWN FROM TH E ABOVE PAYMENTS OF ` 1 CRORE AND ` 2,15,32,395/- TO APOLLO COMPUTER EDUCATION AND APOLLO COMPUTER EDUCATION LTD. RESPEC TIVELY, AS THEY ONLY REPRESENT THE REPAYMENTS OF LOANS AVAILED BY THE ASSESSEE TRUST ON EARLIER OCCASIONS. THE COMMISSIO NER OF INCOME-TAX(APPEALS) ON EXAMINING ALL THE ASPECTS OF THE MATTER, CAME TO THE CONCLUSION THAT THERE IS NO VIOLATION O F SECTION 13(1)(C) OF THE ACT, SINCE THE PAYMENTS MADE BY THE ASSESSEE TO - - ITA 667 OF 2012 5 THE CONCERNS, IN WHICH THE MANAGING TRUSTEE IS THE PROPRIETOR AND DIRECTOR, ARE ONLY TO DISCHARGE THE LIABILITY OF TH E ASSESSEE AND THERE IS NO BENEFIT DERIVED BY THE MANAGING TRUSTEE OF THE ASSESSEE SO AS TO ATTRACT THE PROVISIONS OF SECTION 13(1)(C). IN THE CIRCUMSTANCES, WE SUSTAIN THE ORDER OF THE COMM ISSIONER OF INCOME-TAX(APPEALS) IN DIRECTING THE ASSESSING OFFI CER TO ALLOW THE BENEFIT OF EXEMPTION UNDER SECTION 11 OF THE AC T. 5. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDERS PRONOUNCED IN THE OPEN COURT AT THE TIME O F HEARING ON WEDNESDAY, THE 5 TH OF SEPTEMBER, 2012 AT CHENNAI. SD/- SD/- (DR. O.K.NARAYANAN) (CHALLA NAGENDRA PRASAD) VICE-PRESIDENT JUDICIAL MEMBER CHENNAI, DATED, THE 5 TH SEPTEMBER, 2012. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.