DDIT(E)-1(2), MUMBAI V. SHARDASHRAM VIDYAMANDIR, MUMBAI

ITA 6722/MUM/2010

• Counselvise Citation: 672219914 RSA 2010
• Duration Of Justice: 4 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 16-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 21-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: P J PARIDWALLA
• Keywords: Charitable institution
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.6722/M/2010 ASSESSMENT YEAR: 2007-08 DY. DIT(E)-I(2), R.NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI 12 VS. M/S. SHARDASHRAM VIDYAMANDIR, DR. BHAVANI SHANKAR, DADARKAR MARG, DADAR (W), MUMBAI 400 028 PAN: AABTS 6950N (APPELLANT) (RESPONDENT) CO NO.182/M/2011 ASSESSMENT YEAR: 2007-08 M/S. SHARDASHRAM VIDYAMANDIR, DR. BHAVANI SHANKAR, DADARKAR MARG, DADAR (W), MUMBAI 400 028 PAN: AABTS 6950N VS. DY. DIT(E)-1(2), R.NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI 12 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI P.J. PARIDWALLA, A.R. & MS. AA RTI SATHE, A.R. REVENUE BY : SHRI NEIL PHILIP, D.R. DATE OF HEARING : 16.06.2015 DATE OF PRONOUNCEMENT : 16.06.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL BY THE REVENUE AND THE CROSS OB JECTIONS BY THE ASSESSEE HAVE BEEN PREFERRED AGAINST THE ORDER DATE D 31.05.2010 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] ITA NO.6722/M/2010 M/S. SHARDASHRAM VIDYAMANDIR 2 RELEVANT TO ASSESSMENT YEAR 2007-08. FIRST WE TAKE UP THE APPEAL OF THE REVENUE. ITA NO.6722/M/2010 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LD. CIT (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFI CER TO GRANT EXEMPTION U/S.11 OF THE I.T. ACT, 1961 TO THE ASSESSEE WITHOU T APPRECIATING THE FACT THAT THE ASSESSEE TRUST FAILED TO SEEK A FRESH REGI STRATION WITH REGARDS TO THE AMENDED OBJECTS WITHOUT WHICH THE NEW MEMORANDU M OF ASSOCIATION IS NOT COVERED IN THE AMBIT OF SECTION OF THE I.T. ACT, 1961. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMIS SIONER OF INCOME- TAX (APPEALS)-I, MUMBAI BE SET ASIDE AND TH AT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT AND HAS ALSO B EEN REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT AS CHARITABLE INSTITUTION . THE ASSESSEE IS ENGAGED IN CARRYING ON EDUCATION ACTIVITIES. THE MAIN OBJE CTS OF THE ASSESSEE, BEFORE ITS AMENDMENT DURING THE FINANCIAL YEAR UNDER CONSIDERA TION, WERE AS UNDER: III THE OBJECTS OF THE VIDYAMANDIR SHALL BE : (I) TO START, CONDUCT, AFFILIATE, MANAGE AND TAKE O VER EDUCATIONAL INSTITUTIONS OF ALL TYPES PREPRIMARY, P RIMARY, SECONDARY, COLLEGIATE, TECHNICAL, INDUSTRIAL ETC. F OR THE BENEFIT OF ALL STUDENTS IRRESPECTIVE OF DISTINCTION OF SEX, CASTE, RELIGION AND LOCALITY. (II) TO HELP PROMOTING THE INTELLECTUAL DEVELOPMENT OF PEOPLE BY (A) OPENING LIBRARIES AND READING ROOMS. (B) BY ORGANIZING LECTURES (C) BY PUBLICATION OF SUITABLE LITERATURE AND (D) BY ENCOURAGING STUDIES OF SOME IMPORTANT PROBLEMS CONNECTED WITH INDIAN LIFE ITA NO.6722/M/2010 M/S. SHARDASHRAM VIDYAMANDIR 3 (III) TO PROMOTE THE WELFARE PRIMARILY OF THE RESI DENTS OF THE LOCALITY AND OTHERS IN THE CITY OF BOMBAY AND SUBURBS IN THE FIELD OF EDUCATION. (IV) WITH THESE OBJECTS IN VIEW (A) TO SECURE FUNDS .. (B) TO RAISE LOANS .. (C) TO ACQUIRE BY . (C-I) TO SELL PART (D) TO ERECT. (E) TO ORGANIZE.. (F) AND GENERALLY 4. HOWEVER, DURING THE ASSESSMENT YEAR UNDER CONSID ERATION, THE ASSESSEE AMENDED CLAUSE (III) OF THE ABOVE OBJECTS AND THE A MENDED CLAUSE READ AS UNDER: (III) TO PROMOTE THE WELFARE OF THE STUDENTS, ESTA BLISH INSTITUTIONS ANYWHERE IN MAHARASHTRA IN THE FIELD OF EDUCATION/SPORTS/VOCATI ONAL GUIDANCE. INSTITUTIONS-SCHOOLS, COLLEGES, HOSTELS, LIBRARIES, LABORATORIES ETC. 5. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO A S THE AO), DURING THE ASSESSMENT PROCEEDINGS, OBSERVED THAT THE ASSESSEE TRUST HAD AMENDED ITS OBJECTS AS MENTIONED ABOVE AND HAS ADDED THE TERMS SPORTS AND VOCATIONAL GUIDANCE AND ESTABLISHING INSTITUTIONS ANYWHERE IN MAHARASHTRA WHICH WERE NOT FORMING PART OF THE ORIGINAL OBJECTS OF THE TRU ST WHEN IT WAS REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT. HE FURTHE R OBSERVED THAT IT WAS MANDATORY ON THE PART OF THE TRUST TO SEEK A FRESH REGISTRATION WITH REGARD TO THE AMENDED OBJECTS WITHOUT WHICH IT COULD NOT BE S AID TO BE COVERED WITHIN THE AMBIT OF SECTION 11 OF THE I.T. ACT. HE, THERE FORE, COMPUTED THE INCOME OF THE ASSESSEE AS A COMMERCIAL ORGANIZATION WITHOU T GIVING THE EXEMPTION UNDER SECTION 11 OF THE ACT. AGGRIEVED BY THE ORDE R OF THE AO, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). 6. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, ITA NO.6722/M/2010 M/S. SHARDASHRAM VIDYAMANDIR 4 OBSERVED THAT THROUGH THE AMENDMENT IN CLAUSE (III) OF THE OBJECTS THE ASSESSEE TRUST HAD MERELY EXTENDED THE AREA OF OPER ATION TO THE OBJECTS OF THE TRUST TO ANYWHERE IN MAHARASHTRA RATHER THAN THE CI TY OF MUMBAI AND ITS SUBURBAN AREA. HOWEVER, THERE WAS NO CHANGE IN THE OBJECTS OF THE TRUST WHICH WAS TO PROVIDE EDUCATION. HE HELD THAT THE T RUST WAS HAVING A VALID REGISTRATION UNDER SECTION 12A OF THE ACT AND THE A O WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF EXEMPTION UNDER SECTION 11 O F THE ACT. HE, THEREFORE, DIRECTED THE AO TO GRANT EXEMPTION TO THE ASSESSEE TRUST UNDER SECTION 11 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS COME IN APPEAL BEFORE US. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT BY AMENDING CLAUSE (III) OF THE OBJECTS THE ASSESSEE TRUST HAS NOT MADE ANY CHANGE IN THE MAIN OBJECTS OF THE TRUST. IT HAS ONLY EXTENDED TH E AREA OF ITS ACTIVITY. WE FURTHER FIND FROM CLAUSE (I) OF THE OBJECTS THAT TH E OBJECTS AS PROVIDED UNDER THE AMENDED CLAUSE (III) OF THE OBJECTS ALREADY TO A LARGE EXTENT EXIST IN CLAUSE (I) OF THE OBJECTS WHEREIN THE ACTIVITY TO START, C ONDUCT, AFFILIATE, MANAGE AND TAKEOVER EDUCATIONAL INSTITUTIONS, INCLUDING TECHNI CAL AND INDUSTRIAL ETC. FOR THE BENEFIT OF ALL STUDENTS IRRESPECTIVE OF DISTINC TION, SEX, CAST, RELIGION AND LOCALITY HAS BEEN PROVIDED. BY AMENDING CLAUSE (II I), THE ASSESSEE TRUST HAS JUST ELABORATED ITS ACTIVITIES AND IT CANNOT BE ASS UMED THAT THE ASSESSEE TRUST HAS STARTED ANY DIFFERENT ACTIVITY. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHILE DIRECTING THE AO TO GRANT EXEMPTION TO THE ASSESSEE TRUST UNDER SECTION 11 OF THE ACT. THERE IS NO MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. NOW WE TAKE UP THE ASSESSEES CROSS OBJECTION. CO NO.182/M/2011 8. THE ASSESSEE HAS TAKEN THE FOLLOWING CROSS OBJEC TIONS: ITA NO.6722/M/2010 M/S. SHARDASHRAM VIDYAMANDIR 5 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT C ONSIDERING THE SUBMISSION OF THE RESPONDENT THAT THE RESPONDENT IS AN EDUCATION INSTITUTION EXISTING SOLELY FOR THE EDUCATION PURPO SES AND NOT FOR THE PURPOSE OF PROFIT AND IS SUBSTANTIALLY FINANCED BY THE GOVERNMENT AND INCOME OF THE RESPONDENT IS EXEMPT UNDER SEC.10 (23 ) (III AB) OF THE ACT. 2. THE RESPONDENT CRAVES LEAVE TO ADD TO, AMEND, AL TER OR AMPLIFY THE GROUNDS OF CROSS-OBJECTION. THIS ISSUE/GROUND WAS TAKEN BY THE ASSESSEE BEFORE THE LD. CIT(A). 9. THE LD. A.R. OF THE ASSESSEE HAS NOT SUBSTANTIAT ED THE ISSUE RAISED IN THE ABOVE CROSS OBJECTIONS WITH RELEVANT EVIDENCES AND HAS ALSO NOT ADDRESSED ANY ARGUMENT ON THIS ISSUE. EVEN, OTHERWISE, THIS GROUND WAS TAKEN BY THE ASSESSEE BEFORE THE LD. CIT(A) AS WITHOUT PREJUDICE GROUND TO THE MAIN GROUNDS OF APPEAL. MOREOVER, THE ASSESSEE BEFORE T HE AO HAD CLAIMED EXEMPTION UNDER SECTION 11 OF THE ACT AND NOT UNDER SECTION 10(23C)(III AB) OF THE ACT. EVEN WE HAVE ALREADY UPHELD THE DECISI ON OF THE LD. CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 11 OF THE ACT. THIS CROSS OBJECTION OF THE ASSESSEE IS, THEREFORE, DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS OBJECTION OF THE ASSESSEE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.06.2015. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 08.10.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI ITA NO.6722/M/2010 M/S. SHARDASHRAM VIDYAMANDIR 6 THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.