Sri Varaha Lakshmi Narasimha Swamy Devasthanam, Visakhapatnam V. The Assistant Commissioner of Income Tax, Circle-4(1), , Visakhapatnam

ITA 75/VIZ/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2856 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 20-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Charitable institution; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 75 / VIZ /201 9 (ASST. YEAR : 20 1 0 - 11 ) M/S. SRI VARAHA LAKSHMI NARASIMHA SWAMY DEVASTHANAM, MAIN ROAD, SIMHACHALAM, VISAKHAPATNAM. V S . A CIT, CIRCLE - 4 (1), VISAKHAPATNAM. PAN NO. AAALS 1522 PURCHASE (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 16 / 0 4 /201 9 . DATE OF PRONOUNCEMENT : 12 / 0 6 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR , DATED 07 /0 2 /201 9 FOR THE ASSESSMENT YEAR 20 1 0 - 11 . 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO INCOME FROM PETROL BUNK OF RS. 17,00,220/ - . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT ON VERIFICATION OF THE RECEIPTS OF THE ASSESSEE, IT IS FOUND THAT ASSESSEE HAS SHOWN AN AMOUNT OF 2 ITA NO. 75/VIZ/2019 ( SRI VARAHA LAKSHMI NARASIMHA SWAMY DEVASTHANAM ) RS. 17,00,220/ - FROM THE PETROL BUNK WHICH IS NOT ALLOWABLE AS PER SECTION 2(15) OF THE INCOME T AX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') , S INCE THE SAME IS AMENDED BY THE FINANCE ACT, 2008 FROM THE A.Y. 2009 - 10 WHEREIN IT WAS MENTIONED THAT ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS IF THE GROSS RECEIPTS OF THE SAME IS MORE THAN THE PRESCRIBED LIMIT I.E. RS. 10.00 LAKHS . THE ASSESSING OFFICER ISSUED A SHOW - CAUSE NOTICE AS TO WHY THE SAME SHOULD NOT BE TAKEN AS A COMMERCIAL RECEIPT. I N RESPONSE TO THE NOTICE, THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT PETROL BU NK WAS AN INTEGRAL PART OF ACTIVITY, NAMELY PROVIDING PETROLEUM PRODUCTS TO PILGRIMS, WHICH CAN BE CONSIDERED A S A CHARITABLE PURPOSE SINCE THE INSTITUTION IS RELIGIOUS AND CHARITABLE INSTITUTION. THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE CAME TO A CONCLUSION TH A T THE NATURE OF SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS , T HEREFORE, THE TOTAL RECEIPTS AMOUNT ING TO RS. 17,00,220/ - FROM THE PETROL BUNK IS DISALLOWED FROM THE EXEMPTION UNDER SECTION 11(2) OF THE ACT. 3 ITA NO. 75/VIZ/2019 ( SRI VARAHA LAKSHMI NARASIMHA SWAMY DEVASTHANAM ) 3 . ON APPEAL BEFORE THE LD. CIT(A) , IT WAS SUBMITTED THAT THE ASSESSEE IS A NOTIFIED INSTITUTION UNDER SECTION 10(23C)(V) OF THE ACT AND EXEMPTION SHOULD HAVE BEEN CLAIMED INSTEAD OF SECTION 11 . THE LD. CIT(A) AFTER CONSIDERING THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS OBSERVED THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 10(23C)(V) OF THE ACT EVEN THE SAME IS ACCEPTED BY THE ASSESSING OFFICER. THE CLAIM OF THE ASSESSEE IS THAT THE PETROL BUNK BUSINESS IS INCIDENTAL TO ACHIEVE THE MAIN O BJECT OF THE TRUST APPEARS TO BE CORRECT AND ACCEPTABLE FOR THE REASON THAT THE PETROL BUNK WAS ESTABLISHED TO RUN THE VEHICLES BELONGING TO THE INSTITUTION AND SUBSEQUENTLY THE FACILI TIES WERE EXTENDED TO PILGRIMS . THE INSTITUTION BEING A RELIGIOUS ONE EXTENDING BENEFIT TO THE PILGRIMS CAN BE TREATED AS AN ACTIVITY INCIDENTAL TO ACHIEVE THE MAIN OBJECT OF THE TRUST. WITH THE ABOVE OBSERVATION, THE CLAIM OF THE ASSESSEE UNDER SECTION 10(23C)(V) CAN BE ALLOWED, HO W EVER, THE ASSESSEE HAS NO T CLAIMED EXEMPTION UNDER SECTION 10(23C)(V) OF THE ACT WHILE FILING THE RETURN OF INCOME BUT CLAIMED EXEMPTION UNDER SECTION 11 OF THE ACT. THIS CLAIM IS MADE DURING THE APPELLATE PROCEEDINGS BY RAISING ADDITIONAL GROUND. AS PER SECTION 10(23C)(V) OF TH E ACT, THE ASSESSEE IS REQUI R ED TO FILE FORM 10BB DULY SIGNED BY THE CHARTERED ACCOUNTANT. THIS IS A PRE - REQUISITE CONDITION TO CLAIM 4 ITA NO. 75/VIZ/2019 ( SRI VARAHA LAKSHMI NARASIMHA SWAMY DEVASTHANAM ) THE EXEMPTION AND TO GRANT THE SAME. IN ABSENCE OF THE CERTIFICATE, THE CLAIM CANNOT BE ENTERTAINED THOUGH THE ASSESSEES CLAIM IS ALLOWABLE . IN THE REVISED GROUND RAISED BY THE ASSESSEE IS NOT ADMITTED AND THE CONTENTION OF THE ASSESSEE WAS REJ E CTED . THE GROUND RAISED BY THE ASSESSEE IS DISMISSED AS NOT ADMITTED. 4 . O N APPEAL BEFORE US, LD . COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS A RELIGIOUS INSTITUTION AND RUNNING PETROL BUNK FOR THE PURPOSE OF RUNNING THE VEHICLES OF THE INSTITUTE AND ALSO EXTENDING THE FACILITIES TO THE PILGRIMS WHO ARE COMING TO THE TEMPLE , AND SUBMITTED THAT THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 10(23C)(V) , T HE LD. CIT(A) DENIED THE CLAIM O N THE GROUND THAT THE ASSESSEE HAS FAILED TO FILE FORM 10BB DULY SIGNED BY THE CHARTERED ACCOUNTANT AND SUBMITTED THAT THE ASSESSEE IS READY TO FULFIL PRE - REQUISITE CONDITION FOR FILING OF FORM 10BB BEFORE THE ASSESSING OFFICER , T HEREFORE, REQUESTED ONE MORE OPPORTUNITY SHO U LD BE GIVEN TO THE ASSESSEE. 5. ON THE OTHER HAND , LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTH ORITIES BELOW. 7 . IN THIS CASE, THE ASSESSEE IS RUNNING A PETROL BUNK TO FACILITATE THE VEHICLES BELONGING TO THE TEMPLE AND ALSO VEHICLES 5 ITA NO. 75/VIZ/2019 ( SRI VARAHA LAKSHMI NARASIMHA SWAMY DEVASTHANAM ) BELONGING TO THE PILGRIMS. THE INCOME EARNED FROM THE PETROL BUNK HAS BEEN CLAIMED BY THE ASSESSEE IS EXEMPT UNDER SECTION 11 OF THE ACT BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER DENIED THE CLAIM ON THE GROUND TH A T THE ACTIVITY CARRIED BY THE ASSESSEE IS NOT A CHARITABLE ACTIVITY AND IT IS A COMMERCIAL SERVICE . ON APPEAL BEFORE THE LD. CIT(A), IT WAS SUBMIT TED THAT THE ASSESSEE IS ELIGIBLE FOR CLAIM UNDER SECTION 10(23C)(V) OF THE ACT. THE LD. CIT(A) ACCEPTED THAT THE ASSESSEE IS ELIGIBLE FOR THAT, HOWEVER THE ASSESSEE HAS FAILED TO FILE FORM 10BB DULY SIGNED BY THE CHARTERED ACCOUNTANT , IT IS A PRE - REQUISI TE CONDITION TO GET EXEMPTION UNDER SECTION 10(23C)(V) OF THE ACT AND REJ E CTED THE APPEAL OF THE ASSESSEE. UNDER THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE OPINION THAT ON C E ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 10(23C)(V) OF THE ACT, ON TECHNICAL GROUND I.E. NON - FILING OF FORM 10BB SIGNED BY THE CHARTERED ACCOUNTANT , CANNOT BE DENIED. THEREFORE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND REMIT THE MATTE R BACK TO THE ASSESSING OFFICER TO ADJUDICATE THE ISSUE AFRESH KEEPING IN VIEW OF THE ORDER PASSED BY THE LD. CIT(A) IN ACCORDANCE WITH LAW. IT IS ALSO DIRECTED THE ASSESSEE TO FILE ALL THE RELEVANT MATERIAL BEFORE THE ASSESSING OFFICER FOR DECIDING THE I SSUE . THUS, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 6 ITA NO. 75/VIZ/2019 ( SRI VARAHA LAKSHMI NARASIMHA SWAMY DEVASTHANAM ) 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 2 T H DAY OF JUNE , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 2 T H JUNE , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE M/S. SRI VARAHA LAKSHMI NARASIMHA SWAMY DEVASTHANAM, MAIN ROAD, SIMHACHALAM, VISAKHAPATNAM. 2. THE REVENUE ACIT, CIRCLE - 4(1), VISAKHAPATNAM. 3. THE PR. CIT - 2, VISAKHAPATNAM. 4. THE CIT(A) - 1, GUNTUR. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.