Anusaya Mata Mahila Khadi & Gramodyog Sanstha, Nagpur V. The Income Tax Officer, Ward 6(1), Nagpur

ITA 90/NAG/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9662 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 19-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A C BAWANE; M MANI

Judgement Text

ITA NO. 89 & 90/NAG/2010 ANUSAYA MATA MAHILA KHADI & GRAMODYOG SANSTHA, NAGPUR IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , NAGPUR BEFORE: SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI D.T. GARASIA , JUDICIAL MEMBER ITA NO. 89 & 90 / NAGPUR / 20 10 ASSESSMENT YEAR : 200 5 - 0 6 & 2006 - 07 ANUSAYA MATA MAHILA KH ADI & GRAMODYOG SANSTHA NAGPUR VS. ITO WARD 6(1) NAGPUR (APPELLANT) (RESPONDENT) PAN NO.AABTA 7631A APPELLANT BY: SHRI M. MANI, ADVOCATE & SHRI A.C. BAWANE, ADVOCATE RESPONDENT BY: SHRI B. RAJARAM, ADDL. CIT WITH DR. MILIND BHUSARI, CIT(DR) DATE OF HEARING: 11.10.2012 DATE OF PRONOUNCEMENT: 16.10.2012 ORDER PER P.K. BANSAL, ACCOUNTANT MEMBER: - THE ONLY ISSUE INVOLVED IN BOTH THESE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 30.3.2010 , RELATE TO THE CLAIM OF THE ASSESSEE U/S 1 0(23B). THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A C HARITABLE T RUST REGISTERED UNDER THE PUBLIC CHARITABLE ACT AS WELL AS SOCIETIES ACT. THE RECEIPTS OF THE TRUST ARE LARGELY CONTRIBUTED BY THE DONATIONS, GRANTS RECEIVED FROM THE LABOUR MINI STRY, GENERAL MEMBER CONTRIBUTIONS AND INTEREST INCOME. AFTER MEETING THE EXPENSES, THE ASSESSEE HAS SURPLUS OF RS.1,00,375/ - AND RS.9,75,193/ - FOR THE ASSESSMENT YEAR 2005 - 06 AND 2006 - 07 RESPECTIVELY. THE ASSESSEE CLAIMED EXEMPTION U/S 10(23B) OF THE AC T. THE ASSESSING OFFICER , IN VIEW OF THE DIRECTIONS GIVEN BY THE JCIT RANGE - 6 NAGPUR U/S 144A , REJECTED THE CLAIM OF THE ASSESSEE AS THE ASSESSEE , ACCORDING TO HIM WAS NOT REGISTERED WITH KHADI AND VILLAGE INDUSTRIES COMMISSION (KVIC). WHEN THE MATTER WE NT BEFORE THE CIT(A), CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: ITA NO.89 & 90/NAG/2010 ANUSAYA MATA MAHILA KHADI & GRAMODYOG SANSTHA, NAGPUR 2 I HAVE CAREFULLY EXAMINED THE FACTS OF THE CASE, THE ISSUES RAISED BY THE AO AND THE JCIT, RANGE - 6, NAGPUR, AND THE GROUND OF APPEALS AS WELL AS THE WRITTEN SUBMISSI ONS OF THE APPELLANT FILED IN RESPECT OF BOTH THE ASSESSMENT YEARS. IN ORDER TO GET THE SURPLUS AMOUNTS AND OTHER ACCUMULATED AMOUNTS EXEMPTED FROM TAXATION, THE APPELLANT HAS TO NECESSARILY SATISFY THE FOLLOWING CONDITIONS: I. THAT IT EXISTS ONLY FOR THE D EVELOPMENT OF KHADI OR VILLAGE INDUSTRIES OR BOTH, AND NOT FOR THE PURPOSE OF PROFIT; SUCH INCOME IS ATTRIBUTABLE TO THE BUSINESS OF PRODUCTION, SALE OR MARKETING OF KHADI OR PRODUCTS OF VILLAGE INDUSTRIES. II. IT APPLIES ITS INCOME OR ACCUMULATES IT FOR APPLI CATION SOLELY FOR THE DEVELOPMENT OF KHADI OR VILLAGE INDUSTRIES OR BOTH. III. SUCH AN INSTITUTION IS ALSO APPROVED BY KHADI AND VILLAGE INDUSTRIES COMMISSION (KVIC). IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE CLAIM OF THE ASSESSEE THAT IT IS NOT ONLY REGIS TERED WITH BUT ALSO APPROVED BY KVIC HAS BEEN FOUND TO BE INCORRECT. IT IS RECORDED BY THE JCIT, RANGE - 6, NAGPUR, IN THE ORDERS PASSED U/S 144A OF THE I.T. ACT, THAT THE DY. DIRECTOR OF KVIC, NAGPUR, VIDE HIS LETTER DATED 29.4.2008 HAS STATED THAT THE ASS ESSEE INSTITUTE IS ONLY LISTED WITH KVIC BUT WAS NOT FOUND TO BE ELIGIBLE FOR KVIC S APPROVAL U/S 10(23B) OF THE I.T. ACT. ON THIS GROUND AND ALSO ON THE GROUND THAT THE ACTIVITIES CARRIED ON BY THE ASSESSEE WERE NOT IN ACCORDANCE WITH SECTION 10(23B) OF THE I.T. ACT, THE JCIT, RANGE - 6, NAGPUR HAS GIVEN A FINDING THAT THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION PROVIDED U/S 10(23B) OF THE I.T. ACT. ALTHOUGH THREE OPPORTUNITIES HAVE BEEN GIVEN, THE APPELLANT HAS SO FAR NOT FURNISHED ANY EVIDENCE OF THE REQU IRED APPROVAL OF KVIC U/S 10(23B) OF THE I.T. ACT. AS ALREADY STATED, THE APPROVAL OF KVIC IS A CONDITION PRECEDENT FOR CLAIMING EXEMPTION U/S 10(23B) OF THE I.T. ACT, WHICH HAS NOT BEEN FULFILLED EVEN DURING THE APPEAL PROCEEDINGS. FURTHER, APPELLANT HA S ALSO NOT ESTABLISHED THAT THE INCOME REALIZED AND REFLECTED IN SURPLUS, IS ATTRIBUTABLE TO THE BUSINESS OF PRODUCTION, SALE OR MARKETING OF PRODUCTS OF KHADI OR VILLAGE INDUSTRIES. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I HEREBY HOLD THAT TH E APPELLANT HAS BEEN RIGHTLY DENIED THE EXEMPTION CLAIMED U/S 10(23B) OF THE I.T. ACT FOR THE AYS 2005 - 06 & 2006 - 07. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE HAVE ALSO G ONE THROUGH PAGE 29 OF THE PAPER BOOK WHICH CONTAINS A LETTER DATED 9.12.1992 ISSUED BY THE KHADI & VILLAGE INDUSTRIES COMMISSION, MAGNWADI, WARDHA. THIS LETTER STATES AS UNDER: SUB: ENLISTMENT OF YOUR INSTITUTION/CO - OP. SOCIETY IN THE DIRECT LIST IN KVI C REGARDING REF: YOUR APPLICATION NO.NIL DATED 12.10.92. ITA NO.89 & 90/NAG/2010 ANUSAYA MATA MAHILA KHADI & GRAMODYOG SANSTHA, NAGPUR 3 SIR, THIS HAS REFERENCE TO YOUR APPLICATION CITED ABOVE FOR ENLISTMENT OF YOUR INSTITUTION/CO - OP. SOCIETY IN THE DIRECT LIST OF KVIC. AFTER EXAMINING THE DOCUMENT/PAPERS FURNISHED BY YO U FOR ENLISTMENT, THE UNDER - SIGNED HEREBY INFORM YOU THAT YOUR INSTITUTION/CO - OP. SOCIETY IS TAKEN IN THE DIRECT LIST OF KVIC, SO AS TO ENABLE TO UNDERTAKE KVI ACTIVITIES WITH THE TECHNICAL AND FINANCIAL ASSISTANCE FROM KVIC AS PER THE STIPULATED TERMS AND CONDITIONS INDICATED BELOW: - (IF ANY) 3. FROM THE PERUSAL OF THE SAID LETTER, IT IS APPARENT THAT THE ASSESSEE INSTITUTION HAS BEEN TAKEN IN THE DIRECT LIST OF KVIC. BUT THIS LETTER DOES NOT STATE WHETHER THE ASSESSEE HAS BEEN APPROVED BY THE KHADI & V ILLAGE INDUSTRIES COMMISSION . THE LD. A.R. POINTED OUT THAT IT IS APPLIED FOR THE APPROVAL AND THE ENLISTMENT TANTAMOUNT TO THE APPROVAL GIVEN BY THE KHADI & VILLAGE INDUSTRIES COMMISSION. 4. WE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PAR TIES, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSING OFFICER SHALL RE - DECIDE THIS ISSUE AFRESH AFTER GIVING DUE AND PROPER OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS FR EE TO SEEK THE CLARIFICATION FROM KHADI & VILLAGE INDUSTRIES COMMISSION, WHETHER THE ENLISTMENT OF THE INSTITUTION TANTAMOUNT TO THE APPROVAL FOR THE PURPOSE OF SECTION 10 (23B). THE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE THE ASSESSING OFFICER IN MAKING ENQUIRY IN THIS REGARD. 5 . IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 16.10 .20 1 2 SD/ - SD/ - ( D.T. GARASIA ) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS NAGPUR DATED 16 TH OCTOBER , 20 1 2 ITA NO.89 & 90/NAG/2010 ANUSAYA MATA MAHILA KHADI & GRAMODYOG SANSTHA, NAGPUR 4 COPY TO 1 ANUSAYA MATA MAHILA KHADI & GRAMODYOG SANSTHA, 145, JAWAHAR NAGAR, MANEWADA ROAD, NAGPUR 2 ITO WARD - 6(1), NAGPUR 3 CIT - III, NAGPUR 4 THE CIT (A) , NAGPUR 5 THE DR, ITAT, NAGPUR 6 GUARD F ILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL NAGPUR