ACIT (Exemption), Circle-1(1), New Delhi V. Construction Industry Development Council, New Delhi

ITA 916/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7169 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 06-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax
• Section: 12; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: 'BP NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NOS.- 916, 238 AND 239/DEL/2018 PER K. NARSIMHA CHARY, J.M. CHALLENGING THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-40, DELHI FOR THE ASSESSMENT Y EARS 2010-11, 2013-14 AND 2014-15 THE REVENUE PREFERRED THESE APP EALS ON THE FOLLOWING IDENTICAL GROUNDS 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN ALLOWING EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT BY IGNORING THE FACT T HAT THE ACTIVITIES OF THE APPELLANT ARE HIT BY PROVISO TO S ECTION 2(15) OF THE ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN ALLOWING THE ASSESSEE THAT NO DISALLOWANCE CAN BE MADE IN TERMS OF SECTION 40(A) (IA) OF THE ACT WHEREAS THE PAYMENTS WERE MADE WITH REFERENCE T O PROFESSIONAL/SUB CONTRACTUAL SERVICES RECEIVED FROM CIVTA. (ASS ESSMENT YEARS: 2005-06, 10-11 & 2 011-12 ) ACIT(E) VS CONSTRUCTION INDUSTRY DEVELOPMENT CIRCLE 1(1) COUNCIL, NEW DELHI, NEW DELHI. PAN: AAATC4750F & REVENUE BY SH. VIJAY KR. JIWANI, SR. DR ASSESSEE BY SH. V.K.BINDAL, CA MS. RINKY SHARMA, ITP. DATE OF HEARING 04.07.2018 DATE OF PRONOUNCEMENT 05 .07.2018 ORDER ITA NOS 916. 238 AND 239/DEL/2018 2 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR A MEND ANY GROUND OF APPEAL RISING ABOVE AT THE TIME OF HEARIN G. 2. BRIEF FACTS OF THE CASE AS COULD BE CULLED OUT FRO M THE RECORD AND AS SUBMITTED ON BEHALF OF THE ASSESSEE ARE THAT THE ASSESSEE, THE CONSTRUCTION INDUSTRY DEVELOPMENT COUNCIL, NEW DELHI IS A SOCIETY INCORPORATED BY THE PLANNING COMMISSION OF INDIA TO DEVELOP THE GROWTH OF CONSTRUCTION INDUSTRY INCLUDING ITS A LL-IMPORTANT CONSTITUENTS, THE WORKFORCE. THE MAIN ACTIVITY UNDE RTAKEN BY THE ASSESSEE WAS TO IMPART TRAINING TO THE CONSTRUCTION WORKFORCE WITH A VIEW TO EDUCATE THEM IN VOCATIONS RELATING TO CIVIL CONSTRUCTIONS SO THAT THEY ARE ABLE TO SUPPORT THEIR LIVELIHOOD. THE EDUCATION AND TRAINING PROGRAMS WERE DESIGNED FOR THE VEHICLE AND MARGINALISED SECTIONS OF THE INDIAN SOCIETY WITH A PARTICULAR FO CUS ON WOMEN, MEMBERS OF SOCIALLY CHALLENGED GROUPS, UNEMPLOYED Y OUTH AND PEOPLE LIVING BELOW THE POVERTY LINE IN TERMS OF TH E DIRECTIONS OF THE GOVERNMENT OF INDIA. 3. ASSESSEE IS OFFERING VARIOUS DIPLOMAS AND ADVANCED DIPLOMA PROGRAMS IN CIVIL/ELECTRICAL/MECHANICAL/TRENCHLESS ENGINEERING AND THE PERSON HOLDING SAID DIPLOMA CERTIFICATES WORKS AS AN ENGINEER IN DIFFERENT FIELDS OF CONSTRUCTION INDUSTRY. ASSESSEE HAS AFFILIATIONS WITH VARIOUS UNIVERSITIES LIKE ASSAM UNIVERSITY AND ALSO PERIYAR MANIAMMAN UNIVERSITY TO IMPART TO TRAINING, EDUCATI ON AND RESEARCH IN THE FIELD OF CONSTRUCTION RELATED AREAS . 4. DURING THE SCRUTINY OF THE RETURN OF INCOME SUBMIT TED BY THE ASSESSEE FOR THE ASSESSMENT YEARS YEARS 2010-11, 20 13-14 AND 2014-15, THE LD. ASSESSING OFFICER (LD. AO) ITA NOS 916. 238 AND 239/DEL/2018 RAISED A QUERY REGARDING THE DISALLOWANCE OF AMOUNT PAID TO CONSTRUCTION INDUSTRY VOCATIONAL TRAINING COUNCIL (CIVTC) IN ACC ORDANCE WITH THE PROVISIONS OF SECTION 40(A) (IA) OF THE ACT. ASSESS EE SUBMITTED THAT THE AMOUNT OF INCOME SHARED BY THE ASSESSEE WITH CIVTC IS A DEBATABLE ISSUE AND THAT THE FACTS AND THE ACTIVITIES OF THE ASSESS EE DURING THE RELEVANT PERIOD AS COMPARED TO THE EARLIER PERIODS ARE THE S AME AND HAVE ALREADY BEEN COVERED IN THE ASSESSMENT ORDERS FOR THE ASSES SMENT YEARS 2012-13 AND 2012-14. 5. HOWEVER, LD. AO DID NOT FIND SUCH AN EXPLANATION O F THE ASSESSEE SATISFACTORY AND HELD THAT THE PAYMENT MADE TO CIVT C COMES UNDER THE CATEGORY OF SECTION 194J OF THE ACT AND DISALLOWANC E UNDER SECTION 40(A)(IA) OF THE ACT WAS MADE FOR NON-DEDUCTION OF TAX AT SOURCE ON THE PAYMENTS MADE TO CIVTC UNDER CHAPTER XVII OF THE AC T. FURTHER THE LD. AO DID NOT ALLOW ANY EXEMPTION ON THE INCOME RECEIV ED ON COORDINATION BASIS WITH CIVTC SINCE THE ACTIVITIES UNDERTAKEN WE RE HELD TO BE DIFFERENT AS COMPARED TO OTHER ACTIVITIES UNDERTAKEN BY THE A SSESSEE SOCIETY AND THE SAID INCOME WAS CHARGED TO TAX AT THE MAXIMUM M ARGINAL RATE. 6. IN THE APPEAL PREFERRED BY THE ASSESSEE, LD. CIT(A ) OBSERVED THAT THE ISSUE INVOLVED FOR THESE YEARS WAS SQUARELY COV ERED BY THE ORDER DATED 30/06/2017 PASSED BY THE TRIBUNAL FOR THE ASSESSMEN T YEAR 2008-09. LD. CIT(A) WHILE FOLLOWING THE SAME IN RESPECT OF THE A SSESSMENT YEARS 2010- 11, 2013-14 AND 2014-15 ALLOWED THE APPEALS AND DIR ECTED THE LD. AO TO ALLOW THE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE AND THE DISALLOWANCES WERE DELETED. ITA NOS 916. 238 AND 239/DEL/2018 4 CHALLANING THE SAME, THE REVENUE PREFERRED THESE AP PEALS BEFORE US ON THE ABOVE-MENTIONED GROUNDS. 7. WE HAVE HEARD THE ARGUMENTS ON EITHER SIDE AND GON E THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS. ON A CAREFU L PERUSAL OF THE ORDER DATED 30/06/2017 AND THE PAPERS IN THESE APPEALS, W E FIND THAT THE FACTS AND GROUNDS OF APPEALS INVOLVED IN THESE APPEALS AR E SUBSTANTIALLY THE SAME AS IN ITA NUMBER 2130/DEL/2012 FOR THE ASSESSM ENT YEAR 2008- 09. IN THE SAID APPEAL A COORDINATE BENCH OF THIS T RIBUNAL FOUND THAT THE ACTIVITIES OF ORGANISING CONFERENCE AND SEMINARS OF VARIOUS ORNAMENT AND NON-GOVERNMENT AGENCIES ARE NOT WITH THE AIM OF EAR NING ANY PROFIT. IT WAS FURTHER HELD THAT INSOFAR AS THE APPLICATION OF INCOME FROM CONFERENCE AND SEMINARS TOWARDS THE OBJECTIVE OF TH E ASSESSEE SOCIETY IS NOT IN DISPUTE, WITHDRAWAL OF THE EXEMPTION UNDER S ECTION 11 AND 12 OF THE ACT IS NOT JUSTIFIED. THE TRIBUNAL FURTHER HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE CONTAINED IN CHAPT ER IV-D OF THE ACT DEALING WITH THE PROFIT AND GAINS OF BUSINESS AND PROFESSION AND BECOME OPERATIONAL ONLY WHEN INCOME IS ASSESSABLE U NDER THAT HEAD AND SINCE THE INCOME IS EARNED BY THE ASSESSEE HAS BEEN HELD AS EXEMPT UNDER SECTION 11 AND 12 OF THE ACT, THE RIGOURS OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE APPLIED TO THE FACTS OF THE ASSESSEE. THE TRIBUNAL, THEREFORE, DELETED THE ADDITION MADE UNDE R SECTION 40(A)(IA) OF THE ACT. 8. LD. DR ARGUED THAT NON-DEDUCTION OF TAX IN RESPECT OF PROVISION OF PAYMENT TO CIVTC ATTRACTS THE PROVISIONS UNDER ITA NOS 916. 238 AND 239/DEL/2018 5 SECTION 40(A) (IA) OF THE ACT. HE PLACED RELIANCE O N THE DECISIONS REPORTED IN PALAM GAS SERVICE VS. CIT, CIVIL APPEAL NO. 5512 OF 2017 (SUPREME COURT) AND PCIT VERSES MANZOOR AHMED WALVIR 84 TAXM ANN.COM 233 (J AND K) AND ACADEMY OF MEDICAL SERVICES VERSES CIT 9 1 TAXMANN.COM 239 (KERELA). 9. HOWEVER, ADMITTEDLY THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES THROUGH THE ASSESSMENT YEARS 2008-09, 2010- 11, 2013- 14 AND 2014-15. IN THESE CIRCUMSTANCES THERE IS NO MATERIAL BEFORE US TO DEVIATE FROM THE VIEW TAKEN BY A COORDINATE BENCH O F THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2008-09 OR TO REACH A DIFFERENT CON CLUSION. WE, THEREFORE, WHILE RESPECTFULLY FOLLOWING THE SAME FI ND THAT THE IMPUGNED ORDERS DO NOT SUFFER ANY ILLEGALITY AND IRREGULARIT Y AND DO NOT WARRANT ANY INTERFERENCE BY THIS TRIBUNAL. WE, ACCORDINGLY, DIS MISS THESE APPEALS. 11. IN THE RESULT APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.07.2018 SD/ - SD/ - (R.S. SYAL) (K. NARSIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBER DATED: 05.07.2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI ITA NOS 916. 238 AND 239/DEL/2018 6 DATE OF DICTATION 03.07.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 03.07.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 06.07.18 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 05.07.18 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 06.07.18 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 06.07.18 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 06.0 7.18 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER