M/s Rajajinagar Parents Education Society, Bangalore V. DDIT, Bangalore

ITA 737/BANG/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7254 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 18-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI JT BENGALURU
• Assessee Lawyers: A R VIVEK
• Keywords: Charitable institution
• Section: 234B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 737/BANG/2015 ASSESSMENT YEAR : 2011 - 12 M/S. RAJAJINAGAR PARENTS EDUCATION SOCIETY, CA-2V BLOCK, RAJAJINAGAR, BANGALORE 560 010. PAN: AAATR 5640K VS. THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS), CIRCLE 17(2), BANGALORE. APP ELLANT RESPONDENT APP ELLANT BY : SHRI A.R. VIVEK, ADVOCATE RESPONDENT BY : SMT PADMA MEENAKSH I, JT.CIT(DR)(ITAT), BENGALURU DATE OF HEARING : 07.11.2017 DATE OF PRONOUNCEMENT : 10 .11.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF THE DDIT(EXEMPTIONS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSE SSED AT RS,32,51,084/ - AS AGAINST THE RETURNED NIL INCOME IN THE RETURN OF INCOME ON THE FACTS AND CIRCUMSTANCE OF CASE. ITA NO.737/BANG/2015 PAGE 2 OF 4 2. THE ORDER OF ASSESSMENT AND THE APPELLATE ORDER HAVE BEEN PASSED WITHOUT APPRECIATING THE FACTS AND CIRCUMSTA NCE OF THE CASE, INCORRECT INTERPRETATION OF LAW. 3. THE APPELLATE AUTHORITY FAILED TO APPRECIATE TH AT, THE DEFINITION OF INCOME UNDER SECTION 2(24) INCLUDE AL L THE INCOME ACCUMULATED TO THE ASSESSEE, THE APPELLATE AUTHORIT Y HAS ADDED A FRICTION BY RESTRICTING THE DEFINITION TO NET INCOM E IN COMPUTING TOTAL ACCUMULATED INCOME WHICH IS CONTRARY TO THE I NTENT AND PURPOSE OF SECTION 11 OF THE ACT. 4. THE ASSESSING OFFICER AND THE APPELLATE AUTHORI TY FAILED TO FOLLOW THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS PROGRAMME FOR COMMUNITY ORGANISATION REPORTED IN 11 6 TAXMAN 608(SC) ON THE FACTS AND CIRCUMSTANCE OF THE CASE. 5. THE ASSESSING OFFICER AND THE APPELLATE AUTHORI TY FAILED TO FOLLOW THE CLARIFICATION ISSUED TO CIRCULAR 5-P(LXX -6) AND APPLY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE ASSESSING OFFICER AND THE APPELLATE AUTHORI TIES FAILED TO APPRECIATE THAT SECTION 11 USES THE WORD INCOME AND NOT THE TERM NET INCOME, HENCE THE INCOME TO BE TAKEN FOR CALCUL ATING ACCUMULATION HAS TO BE ALL THE RECEIPTS TO THE ASSE SSEE AND NOT THE NET OF THE INCOME AS COMPUTED BY THE ASSESSING OFFI CER AND CONFIRMED BY THE APPELLATE AUTHORITY. 7. THE APPELLANT DENIES ITSELF LIABLE TO PAY INTER EST UNDER SECTION 234B OF THE ACT ON THE FACTS AND CIRCUMSTAN CES OF THE CASES. 8. THE APPELLANT CRAVE LEAVE TO ADD AND ALTER THE G ROUNDS OF APPEAL DURING THE COURSE OF HEARING. 2. THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO AN ISSUE WHETHER ACCUMULATION OF INCOME PROVIDED AFTER THE A PPLICATION OF INCOME FOR CHARITABLE PURPOSES U/S. 11(1)(A) SHOULD BE WIT H REFERENCE TO GROSS OR NET INCOME. IN THIS REGARD, THE LD. COUNSEL FOR TH E ASSESSEE HAS CONTENDED THAT THIS ISSUE IS SQUARELY COVERED BY THE ORDERS O F THE TRIBUNAL IN THE CASE OF JYOTHI CHARITABLE TRUST V. DCIT, ITA NO.662/BANG/20 15 AND SOCIETY OF ITA NO.737/BANG/2015 PAGE 3 OF 4 THE SERVANTS OF THE HOLY SPIRIT V. DCIT, ITA NO.975 /BANG/2015 OF THIS BENCH IN WHICH IT HAS BEEN HELD THAT ASSESSEES CLA IM FOR ACCUMULATION U/S. 11(1)(A) COULD NOT HAVE BEEN RESTRICTED AND WAS ELI GIBLE FOR ACCUMULATION OF 15% OF GROSS RECEIPT FROM ALL STREAMS OF ITS INCOME . COPIES OF THE ORDERS OF THE TRIBUNAL ARE PLACED ON RECORD. 3. THE LD. DR PLACED RELIANCE UPON THE ORDER OF THE CIT(APPEALS). 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTH ORITIES BELOW AND THE ORDERS OF THE TRIBUNAL REFERRED TO BY THE PARTI ES, WE FIND THAT UNDISPUTEDLY THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE ORDERS OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF JYOTHI CHARITABLE TRUST (SUPRA) AND SOCIETY OF THE SERVANTS OF THE HOLY SPIRIT (SUPRA) IN WHICH IT HAS BEEN CATEGORICALLY HELD THAT ASSESSEES CLAIM FOR A CCUMULATION U/S. 11(1)(A) OF THE ACT COULD NOT HAVE BEEN RESTRICTED AND WAS E LIGIBLE FOR ACCUMULATION OF 15% OF GROSS RECEIPTS FROM ALL STREAMS OF INCOME . IN THE LIGHT OF THESE FACTS, WE SET ASIDE THE ORDER OF THE CIT(APPEALS) A ND DIRECT THE AO TO ALLOW THE ACCUMULATION @ 15% OF GROSS RECEIPTS FROM ALL S TREAMS OF ITS INCOME. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF NOVEMBER, 2017. SD/- SD/- ( A.K. GARODIA ) ( SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 10 TH NOVEMBER, 2017. / D ESAI S MURTHY / ITA NO.737/BANG/2015 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.