Children Book Trust, New Delhi V. ITO (E), Ward- 1(3), New Delhi

ITA 7219/DEL/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7542 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 04-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Charitable institution
• Section: 143(3); 12A; 10B; 143(2); 22; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 7219/DEL/20 17 (A.Y 2014-15) (THROUGH VIDEO CON FERENCING) CHILDREN BOOK TRUST 4, NEHRU HOUSE, BAHADUR SHAH ZAFAR MARG, I. P. ESTATE, NEW DELHI PAN: AAATC0127C (APPELLANT) VS ITO(E) WARD-1(3) NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER DATED 01/09/2017 PASSED BY CIT(A)-40, DELHI FOR ASSESSMENT YEAR 2014 -15. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT LD.CIT(A) HAS ERRED IN LAW AND ON FACTS I N DISALLOWING A SUM OF RS. 52,00,000/- BEING AMOUNT ACCUMULATED AND SET APART U/S 11(2) OF INCOME TAX ACT, 1961. 2. THE APPELLANT CONTENDS THAT THE CONDITIONS REQUI RED FOR ACCUMULATION U/S 11(2) HAVE BEEN SATISFIED AND THEREFORE, THE SAME SHOULD HAVE BEEN ALLOWED BY THE LD.CIT(A) APPELLANT BY SH. K. V. S. R. KRISHNA, ADV RESPONDENT BY MS. NIDHI SRIVASTAVA, CIT) DR DATE OF HEARING 20.01.2021 DATE OF PRONOUNCEMENT 22 .01.2021 3. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PR EJUDICE TO ONE ANOTHER. 4. THE APPELLANT CONTENDS THAT HE MAY BE ALLOWED TO ADD, AMEND, ALTER FORGO ANY OF THE GROUNDS AT THE TIME OF HEARING. 5. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PR EJUDICE TO ONE ANOTHER. 3. THE CHILDREN BOOK TRUST IS A REGISTERED SOCIETY UNDER THE SOCIETIES REGISTRATION ACT, 1860 VIDE CERTIFICATE DATED 7 TH MAY 1957. IT IS ALSO REGISTERED U/S 12A VIDE ORDER DATED 18 TH FEBRUARY, 1975. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2014-15 ON 30.09.2014 DECLARING NIL INCOME. THE ASSESSEE RECEIVED THE NOTICE U/S 143(2) AND THE ASSESSMENT W AS COMPLETED VIDE ORDER DATED 23.12.2016 WHEREIN THE ASSESSING OFFICER OBSE RVED THAT THE ACTIVITIES OF THE ASSESSEE ARE NO LONGER CHARITABLE IN VIEW OF PR OVISO TO SECTION 2(15). THE ASSESSING OFFICER PASSED ORDER U/S 143(3) DATED 23. 12.2016 RECEIVED BY THE ASSESSEE ON 23.12.2016. THE ASSESSING OFFICER CONCL UDED THAT THE ACTIVITIES OF THE ASSESSEE FALL UNDER THE CATEGORY OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY I.E. THE LAST LIMB OF SEC. 2(15) DEFINING THE TERM CHARITABLE PURPOSE. BY INVOKING PROVISO TO SEC. 2(15) INTRODUCED BY THE FI NANCE ACT, 2008 WITH EFFECT FROM ASSESSMENT YEAR 2009-10 THE ASSESSING OFFICER CONCLUDED THAT THE ACTIVITIES ARE COMMERCIAL IN NATURE AND THEREFORE, DOES NOT SATISFY THE DEFINITION OF CHARITABLE PURPOSE AS PER THE AMENDED DEFINITI ON. THEREBY THE EXEMPTION U/S 11 AND 12 WAS DENIED. THE ASSESSING OFFICER FUR THER OBSERVED THAT IF THE EXEMPTION U/S 11 IS RESORTED TO THE ASSESSEE ON A L ATER STAGE, THE CLAIM OF DEEMED APPLICATION OF INCOME OF RS. 84,80,669/- AS PER CLAUSE (2) OF EXPLANATION TO SEC 11(1) OF THE INCOME TAX ACT WILL NOT BE ALLOWED TO THE ASSESSEE. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE PRESENT APPEAL IS FILED FOR THE LIMITED ISSUE THAT THE CONDITIONS REQUIRED FOR ACCUMULATION U/S 1 1(2) WAS SATISFIED BY THE ASSESSEE AND THE SAME SHOULD HAVE BEEN ALLOWED BY T HE CIT(A) WHEN THE CIT(A) HAS CATEGORICALLY HELD IN THE ORDER THAT THE ASSESS EE IS ELIGIBLE EXEMPTION U/S 11 AND THE ASSESSING OFFICER THEREAFTER WAS DIRECT ED TO ALLOW THE SAME WITH ALL CONSEQUENTIAL BENEFITS. THE LD. AR FURTHER SUBMITT ED THAT THE HONBLE GUJRAT HIGH COURT IN CASE OF CIT(A) VS. MAYUR FOUNDATION 2 74 ITR 562 HAS CATEGORICALLY HELD THAT ONCE THE ASSESSEE SATISFIE S THE CONDITIONS U/S 11(2) THEN THE ASSESSEE BE GIVEN ALL THE BENEFITS RELATED TO THE SAME. THE LD. AR ALSO RELIED UPON THE DECISION OF THE HONBLE APEX COURT IN CASE OF NAGPUR HOTELS OWNERS ASSOCIATION 247 ITR 201. THE LD. AR FURTHER SUBMITTED THAT FROM NO. 10B WAS FILED BEFORE THE CIT(A) ALONG WITH THE FOR M NO. 10 AND THE RESOLUTION TO THAT EXTENT. BUT THE SAME WAS NOT AT ALL CONSID ERED BY THE CIT(A) WHICH HAVE COULD HAVE BEEN TAKEN COGNIZANCE ONCE THE CIT( A) HELD THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 11. THUS, THE APPEAL MAY BE ALLOWED 6. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS FILED REVISED AUDIT REPOR T IN FORM NO. 10B AS WELL AS THE RESOLUTION DATED 22/5/2017 DURING THE ASSESSMEN T PROCEEDINGS ITSELF. MERELY FILING FORM NO. 10 CANNOT BE HELD AS AFTERTH OUGHT. THUS, THE CIT(A) THOUGH SAYING THAT THE ASSESSEE IS ENTITLED FOR EX EMPTION U/S 11 WITH ALL THE CONSEQUENTIAL BENEFITS, THEREAFTER CANNOT RESTRICTE D THE CLAIM OF THE ASSESSEE WHICH THE ASSESSEE IS ENTITLED U/S 11 ON THE GROUND THAT FILING OF FORM NO. 10 WAS AN AFTERTHOUGHT. THEREFORE, WE DIRECT THE ASS ESSING OFFICER TO TAKE COGNIZANCE OF THE REVISED AUDIT REPORT IN FORM NO. 10B AS WELL AS THE RESOLUTION DATED 22/05/2017 AND ALLOW THE CONSEQUEN TIAL BENEFITS TO THE ASSESSEE AS ENSHRINED IN SECTION 11 OF THE ACT. TH E APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JANUARY, 2021. SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 22/01/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI