ITO, Madurai V. M/s. Mahasemam Trust, Madurai

MA 200/CHNY/2018

• Counselvise Citation: [2018] 111 COUNSELVISE.COM (IT) 1506 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: K RAGHUNATH
• Keywords: Rectification of order; Bad and doubtful debts
• Section: 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . . . , . , ! BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER MISCELLANEOUS PETITION NO.200/CHNY/2018 IN I.T.A.NOS.2919 & 2920/MDS/2016 ( / ASSESSMENT YEARS :2011-12 & 2012-13) THE INCOME TAX OFFICER, WARD II (4), MADURAI VS M/S. MAHASEMAM TRUST, NO.2/47-B, MELUR ROAD, UTHANGUDI, MADURAI 625 107. PAN: AAATM7040C ( / APPLICANT) ( / RESPONDENT) / APPLICANT BY : SHRI B. SAGADEVAN, JCIT /RESPONDENT BY : SHRI K. RAGHUNATH, ADVOCATE /DATE OF HEARING : 07.12.2018 /DATE OF PRONOUNCEMENT : 07.12.2018 / O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER: THE MISCELLANEOUS PETITION IS FILED BY THE REVENUE PRAYING FOR RECTIFICATION OF MISTAKE APPARENT ON RECORD IN THE ORDER OF THE TRIBUNAL PASSED IN I.T.A. NO.2919 & 2920/MDS/2016 DATED 09.08.2017 FOR THE ASSESSMENT YEARS 2011-12 & 2012-13. 2. THE LD.DR SUBMITTED BEFORE US THAT THE TRIBUNAL IN ITS ORDER DATED 09.08.2017 SUPRA HAS HELD THAT THE ASSESSEE TRUST WHICH IS ENGAGED IN MICRO FINANCING ACTIVITY HAS RENDERED SERVICE IN THE NATU RE OF PROVIDING RELIEF TO THE POOR AS ENVISAGED IN THE ACT AND THEREFORE ENTITLED TO THE BENEFIT OF SECTION 11 & 12 OF THE ACT WHILE AS IN THE CASE OF M/S. GRAMA VIDIYAL TRUST, THE CHENNAI D 2 MP NO.200/CHNY/2018 BENCH OF THE TRIBUNAL IN ITA NO.345/MDS/2013, 1437/ MDS/2014 AND 392/MDS/2015 FOR THE ASSESSMENT YEARS 2010-11 & 20 12-13 HAD HELD THAT MICRO INSURANCE BUSINESS IN ADDITION TO MICRO FINAN CE BUSINESS CARRIED OUT BY THE ASSESSEE BARS THE ASSESSEE FROM THE ENTITLEMENT OF EXEMPTION U/S.11 OF THE ACT. THE LD.DR FURTHER SUBMITTED THAT IN THE CA SE OF THE ASSESSEE, THE ASSESSEE OBTAINED INTEREST BEARING FUNDS FROM BANKI NG INSTITUTIONS AND THEREAFTER ADVANCED THE SAME TO ITS CLIENTS AT HIGH ER RATE OF INTEREST WHICH ESTABLISHES THE FACT THAT THE ASSESSEE IS INDULGING IN COMMERCIAL TRANSACTIONS AND THEREFORE THE ASSESSEE IS NOT ENTITLED FOR THE BENEFIT OF SECTION 11 OF THE ACT. HENCE IT WAS PLEADED THAT THE TRIBUNAL HAS NOT FOLLOWED ITS PREVIOUS ORDER AND THEREFORE THERE IS A MISTAKE IN THE ORDER OF TH E TRIBUNAL DATED 09.08.2017 IN ITA NO.2919 & 2920/MDS/2016 FOR THE ASSESSMENT YEAR 2011-12 & 2012-13 AND HENCE THE SAME MAY BE RECALLED AND RECTIFIED. 3. THE LD.AR ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDER OF THE TRIBUNAL AND PLEADED THAT THERE IS NO MISTAKE IN THE ORDER O F THE TRIBUNAL BECAUSE THE TRIBUNAL HAD ARRIVED AT THE CONCLUSION AFTER EXAMIN ING THE FACTS OF THE CASE WHICH IS DISTINCT FROM THE OTHER CASES DECIDED BY T HE TRIBUNAL AGAINST THE ASSESSEES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. FROM THE ORDER OF THE TRIBUNAL DATED 09/ 08/2017, IT IS CLEAR THAT THE ASSESSEE WAS GRANTED THE BENEFIT OF SECTION 11 & 12 OF THE ACT, BECAUSE THE ASSESSEE WAS CARRYING OUT THE ACTIVITY OF MICRO FIN ANCING FOR UPLIFTING OF THE 3 MP NO.200/CHNY/2018 DOWNTRODDEN AND THE POOR AND NEEDY IN RURAL AREAS. FURTHER THE TRIBUNAL HAS ALSO MADE AN OBSERVATION THAT IT WAS NECESSARY FOR THE TRUST TO LEND AT A HIGHER RATE OF INTEREST THAN THE BORROWING RATE OF INTERES T IN ORDER TO COVER UP THE ADMINISTRATION COST AND THE BAD DEBTS ARISING OUT O F SUCH ADVANCES. CONSIDERING THESE FACTS OF THE CASE, THE TRIBUNAL H AD CONSCIOUSLY DECIDED THAT THE TRUST WAS CARRYING OUT SERVICE TO THE POOR AND DOWNTRODDEN AS ENVISAGED UNDER THE ACT AND THEREFORE EXTENDED THE BENEFIT OF SECTION 11 & 12 OF THE ACT. IN THIS SITUATION WE DO NOT FIND ANY MISTAKE IN TO THE ORDER OF THE TRIBUNAL WHICH IS REQUIRED TO BE RECTIFIED. THE FACTS OF THE CASES RELIED BY THE REVENUE ARE NOT IDENTICAL TO THE FACTS IN THIS CASE BEFORE US. HENC E THE MISCELLANEOUS PETITION OF THE REVENUE IS DEVOID OF MERITS. 5. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH DECEMBER, 2018 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) /ACCOUNTANT MEMBER !' /CHENNAI, #$% /DATED 7 TH DECEMBER, 2018 RSR . $ () *) /COPY TO: 1. /APPLICANT 2. /RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. ),- . /DR 6. -/ /GF.