National Safai Karamcharis Finance And Development Corporation, New Delhi V. ITO(E), Ward- 2(4), New Delhi

ITA 6907/DEL/2018

• Counselvise Citation: [2019] 113 COUNSELVISE.COM (IT) 6397 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Appeal Filed On: 31-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KAMLESH KUMAR CHAURASIYA
• Keywords: Set aside
• Section: 143(3); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.6907/DEL/2018 ASSESSMENT YEAR: 2015-16 NATIONAL SAFAI KARAMCHARIS FINANCE AND DEVELOPMENT CORPORATION, 3 RD FLOOR, E-BLOCK, NTSC, NSIC, OKHLA INDUSTRIAL ESTATE PHASE-III, NEW DELHI 110020 (PAN : AAATN 1964 A) VS INCOME TAX OFFICER (E), WARD 2(4), ROOM NO.2409, 24 TH FLOOR, BLOCK E-2, CIVIC CENTRE, NEW DELHI 110 002. APPLICANT RESPONDENT ASSESSEE BY SHRI KAMLESH KUMAR CHAURASIYA, C.A. REVENUE BY MS. PRAMITA M. BISWAS, CIT-D.R. ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 02.08.2018 IN APPEAL NO. 246/2017- 18 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS)-40, DELHI (LD. CIT(A)), FOR THE ASSESSMENT YEAR 2015-16, NA TIONAL SAFAI KARAMCHARIS FINANCE AND DEVELOPMENT CORPORATION(TH E ASSESSEE) PREFERRED THIS IS AN APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, N ATIONAL SAFAI KARAMCHARIS FINANCE AND DEVELOPMENT CORPORATION IS A GOVERNMENT OF INDIA UNDERTAKING UNDER THE MINISTRY OF SOCIAL JUST ICE AND EMPOWERMENT DATE OF HEARING 19.11.2019 DATE OF PRONOUNCEMENT 20.11.2019 2 WHICH WERE INCORPORATED UNDER SECTION 25 OF THE COM PANIES ACT, 1956 AS A COMPANY NOT FOR PROFIT FOR THE PURPOSE OF SOCI O-ECONOMIC UPLIFTMENTTO TARGET GROUP OF SAFAIKARAMCHARIS& MANU AL SCAVENGERS WHO BELONG TOSCHEDULED CASTE, SCHEDULED TRIBE OR OTHER BACKWARD CLASSES WHO ARE THE POOREST OF THE POOR IN THE SOCIETY AND MANY PERSONS IN THE TARGET GROUP ARE INVOLVED IN INHUMANE PRACTICE OF S CAVENGING AND OTHER SANITATION ACTIVITIES, AND PRIMARILY BELONG TO VALM IKI OR SIMILAR COMMUNITIES WHICH ARE CATEGORIZED UNDER SCHEDULED C ASTE. 3. FOR THE ASSESSMENT YEAR 2014-15, THE ASSESSEE FI LED THEIR RETURN OF INCOME SHOWING NIL INCOME AND ALSO CLAIMING THE BENEFITS OF SECTION 10(26B) OF THE ACT. ASSESSMENT U/S 143(3) OF THE AC T WAS COMPLETED WITH ADDITION OF RS.8,85,94,931/- BY DENYING THE EXEMPTI ON U/S 10(26B) OF THE ACT. LEARNED ASSESSING OFFICER DENIED THE EXEMP TION ON THE GROUND THAT THE ASSESSEE COULD NOT CERTIFY THAT THE BENEFI CIARIES OF THE ASSESSEE ARE LIMITED OR RESTRICTED TO THE SCHEDULED CASTE, S CHEDULED TRIBE OR OTHER BACKWARD CLASSES. ACCORDING TO THE ASSESSING OFFICER, THE BASIS OF THE EXEMPTION SECTION 10(26B) OF THE ACT IS A CASTE AND NOT THE ACTIVITIES OF THE TARGET GROUP. 4. AGGRIEVED BY THE ACTION OF THE ASSESSING OFFICER , ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A). LEAR NED CIT(A) HAS UPHELD VIEW OF THE ASSESSING OFFICER AND FOR THE ID ENTICAL REASONS HE CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER A ND DISMISSED THE APPEAL. 5. ASSESSEE IS, THEREFORE, IN THIS APPEAL BEFORE US CONTENDED THAT THE ORDERS OF THE AUTHORITIES BELOW ARE NOT IN CONFORMI TY WITH LAW. IT IS THE 3 SUBMISSION OF THE LEARNED AR THAT THE LEARNED AO HA S RESTRICTED THE INTERPRETATION OF SECTION 10(26B) OF THE ACT BY IGN ORING THE PRIMARY OBJECTS OF THE CONSTITUTION OF INDIA WHILE PASSING THE ASSESSMENT ORDER. ACCORDING TO HIM, SECTION 10(26B) HAS TO BE INTERPR ETED IN SUCH A WAY AS TO PROMOTE THE SCHEMES UNDERTAKEN FOR AMELIORATING THE LOT OF THE MEMBERS OF THE SCHEDULE CASTES OR THE SCHEDULED TRI BES OR OTHER BACKWARD CLASSES IN THE LIGHT OF THE PROVISION OF T HE CONSTITUTION OF INDIA IN ARTICLE 46 & 47. HE FURTHER SUBMITTED THAT THE S TATE CHANNEL AGENCY WHICH IS GOVERNED BY THE STATE CORPORATION WILL BE FINANCING THE VARIOUS CATEGORIES, AS PER THE DIRECTION OF THE STATE, BUT THE FUNDS OF THE ASSESSEE TRANSFERRED TO THE STATE CHANNEL AGENCY AR E BEING EXCLUSIVELY CHANNELIZED FOR THE BENEFIT OF THE TARGET GROUP OF THE ASSESSEE, NAMELY, SAFAIKARAMCHARIS (SK) AND MANUAL SCAENGERS (MS), WH O PRIMARILY BELONG TO SCHEDULED CASTE, SCHEDULED TRIBE OR OTHER BACKWA RD CLASSES. SINCE THE STATE CHANNEL AGENCY AND THE ASSESSEE ARE SEPAR ATE BODIES WORKING FOR ACHIEVING THEIR INDEPENDENT OBJECTIVES, JUST BE CAUSE THE NAME OF THE STATE CHANNEL AGENCY HINTS THAT IT IS SERVING COMMU NITIES OTHER THAN SC, ST AND OBC IT SHALL NOT BE ASSUMED THAT THE ASSESSE E IS ALSO SERVING ANY COMMUNITY OTHER THAN SC, ST AND OBC.HE FURTHER SUBM ITTED THAT THEY HAVE PRODUCED SUCH CERTIFICATE ISSUED BY THE DY. GE NERAL MANAGER OF THE ASSESSEE CORPORATION AND ALSO THE COPY OF THE LETTE R DATED 23.08.2000 ADDRESSED BY THE DELHI SCHEDULED CASTES FINANCIAL & DEVELOPMENT CORPORATION LTD. TO THE MANAGING DIRECTOR OF THE AS SESSEE CORPORATION TO SHOW THAT A GENERAL AGREEMENT WAS DULY SIGNED BY THE MANAGING DIRECTOR OF THE STATE AGENCY FOR AVAILING OF FINANC E FROM THE ASSESSEE FOR THE BENEFIT OF SC COMMUNITY ONLY INHABITING IN DELH I HAVING SC CERTIFICATE ISSUED BY DY. COMMISSIONER OF AREA CONC ERNED OF DELHI. 4 6. PER CONTRA, IT IS THE SUBMISSION ON BEHALF OF TH E REVENUE THAT BECAUSE THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE WHATSOEVER TO SHOW THAT THE ASSESSEE IS EXCLUSIVELY WORKING FOR P ROMOTION OF THE INTEREST OF THE MEMBERS OF THE SCHEDULE CASTES OR T HE SCHEDULED TRIBES OR OTHER BACKWARD CLASSES OR ANY TWO OR ALL OF THEM , THE AUTHORITIES BELOW ARE JUSTIFIED IN DENYING THE BENEFIT OF SECTI ON 26B, AND IN THE LIGHT OF THE LETTER DATED 22.03.2000, IT IS CLEAR THAT TH E FINANCE PROVIDED BY THE ASSESSEE TO THE STATE AGENCY HAS EXCLUSIVELY BEEN U SED FOR THE BENEFIT OF SC COMMUNITY ONLY INHABITING THE DELHI HAVING SC CE RTIFICATE ISSUED BY THE DY. COMMISSIONER OF AREA CONCERNED OF DELHI. 7. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSION ON EITHER SIDE. THE REQUIREMENT OF SECTION 10(26B) IS THAT A CORPORATION ESTABLISHED BY A CENTRAL OR STATE ACT, WHOLLY FINAN CED BY THE GOVERNMENT AND WORKING FOR THE PROMOTION OF INTERES T OF THE MEMBERS OF SCHEDULE CASTES OR THE SCHEDULED TRIBES OR OTHER BACKWARD CLASSES IS ENTITLED TO CLAIM THE BENEFIT OF SECTION 10(26B) AN D INCOME SHALL NOT BE INCLUDED IN TOTAL INCOME. IT IS AN ADMITTED FACT BY BOTH THE AUTHORITIES BELOW HELD THAT THE ASSESSEE IS A SECTION 25 COMPAN Y FULLY OWNED BY THE GOVERNMENT OF INDIA. AS ITS NAMES SUGGESTS THE ASSE SSEE HAS BEEN ENGAGED IN THE WORK OF DEVELOPMENT OF THE NATIONAL SAFAIKARAMCHARIS WHO ARE INVOLVED IN THE UPLIFTMENT OF SAFAIKARAMCHA RIS& MANUAL SCAVENGERS WHO BELONG TOSCHEDULED CASTE, SCHEDULED TRIBE OR OTHER BACKWARD CLASSES AND ALSO IN THE INHUMANE PRACTICE OF SCAVENGING AND OTHER SANITATION ACTIVITIES. SAFAIKARAMCHARIS& MANU AL SCAVENGERS ARE THE POOREST OF THE POOR IN THE SOCIETY AND IT DOES NOT REQUIRE ANY CERTIFICATE TO KNOW THE SAID FACT. FURTHER, SECTION 10(26B) CLEARLY SAYS 5 THAT THE TARGET GROUP COULD BE THE MEMBERS OF THE S CHEDULE CASTES OR THE SCHEDULED TRIBES OR OTHER BACKWARD CLASSES OR A NY TWO OR ALL OF THEM. IT, THEREFORE, MAKES THE THINGS CLEAR THAT IF AN ENTITYIS A CORPORATION ESTABLISHED BY A CENTRAL OR STATE ACT I S ENGAGED IN THE UPLIFTMENT OF SC OR ST OR OBC OR A MIX OF THEM IS E NTITLED TO CLAIM BENEFIT U/S 10(26B). AS WE HAVE OBSERVED ABOVE, IT COULD BE SAID THAT ANY CATEGORY OF MEMBERS IN THE ACTIVITY OF MANUAL S CAVENGERS OR SAFAI WORK COULD FALL IN ANY OF THESE THREE CATEGORIES. S ECTION 10(26B) CONTEMPLATES NOT ONLY THE CASTE BUT ALSO CLASS. 8. FURTHER, THE LETTER DATED 22.03.2000 CLINCHES TH E ISSUE WHEREIN THE STATE AGENCY CLEARLY STATED THAT THE FINANCES F ROM THE ASSESSEE TO THE STATE AGENCY WAS EXCLUSIVELY FOR THE BENEFIT OF SC COMMUNITY INHABITING THE DELHI AREA AND POSSESSING THE CERTIFICATE TO SU CH AN EFFECT. IT ALSO STATED THEREIN THAT A GENERAL AGREEMENT WAS ON THIS ASPECT BETWEEN THE ASSESSEE AND STATE AGENCY. THESE CIRCUMSTANCES DO N OT ADMIT OF ANY DOUBT AS TO THE ENTITLEMENT OF THE ASSESSEE TO CLAI M THE BENEFIT UNDER SECTION 10(26B) AND WITH THAT VIEW OF THE MATTER WE FIND IT DIFFICULT TO AGREE WITH THE VIEW OF THE AUTHORITIES BELOW. WE, T HEREFORE, SET ASIDE BOTH THE ORDERS AND DIRECT THE LEARNED ASSESSING OF FICER TO ALLOW THE ASSESSEE TO BENEFIT OF SECTION 10(26B) OF THE ACT. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOV, 2019. SD/- SD/ - (R.K. PANDA) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20 TH NOV, 2019 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 19.11.2019 DRAFT PLACED BEFORE AUTHOR 20.11.2019 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 20.11.2019 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 20.11.2019 APPROVED DRAFT COMES TO THE SR.PS/PS 20.11.2019 KEPT FOR PRONOUNCEMENT ON 20.11.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S 2 1 . 1 1 . 2 0 1 9 DATE OF UPLOADING ORDER ON THE WEBSITE 21.11.2019 FILE SENT TO THE BENCH CLERK 21.11.2019 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.