Shambhala Chartiable Trust, V. ITO, Ward-2, Darjeeling, Darjeeling

MA 37/KOL/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2369 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 18-08-2014
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 147; 11

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] '' # '' # '' # '' # $ $ $ $ /M. A. NOS. 35 TO 37/KOL/2014 IN $ $ $ $ /IN I.T.A NOS. 1540 TO 1542/KOL/2013 #% &' #% &' #% &' #% &'/ // / ASSESSMENT YEARS: 2007-08 TO 2009-10 SHAMBHALA CHARITABLE TRUST VS. INCOME-TAX OFFIC ER, WD-2, DARJEELING (PAN:AAAAS4619Q) ( /APPLICANT ) ()*+,/ RESPONDENT ) DATE OF HEARING: 19.09.2014 DATE OF PRONOUNCEMENT: 19.09.2014 - . /FOR THE APPLICANT: SHRI D. S. DAMLE, FCA )*+, - . /FOR THE RESPONDENT: SHRI DAVID Z.CHAWNGTHU, ACIT, SR. DR / ORDER PER MAHAVIR SINGH, JM/ , : BY THESE MISCELLANEOUS APPLICATIONS, ASSESSEE HAS P OINTED OUT THAT THERE IS MISTAKE APPARENT FROM THE RECORDS IN THE ORDER OF TRIBUNAL IN ITA NOS. 1540 TO 1542/K/2003 DATED 05.08.2014 WHEREBY THE ISSUE OF APPLICATION OF INCO ME ON ACCOUNT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION OF THE INSTITUTION BUILDING WAS NOT AD JUDICATED. THE ASSESSEE HAS STATED THAT - 1. THE PETITIONER HAD FILED 3 APPEALS FOR THE AYS, 2007-08, 2008-09 & 2009-10 AGAINST THE ORDERS PASSED BY THE CIT(A), SILIGURI WHICH WER E DISPOSED OFF BY THE HONBLE TRIBUNAL VIDE ITS ORDER DATED 05.08.2014 IN ITA NOS. 1540 TO 1542/KOL/ 2103. 2. IN ALL THE 3 APPEA1S COMMON ISSUES WERE INVOLVED AND FOR THAT REASON THE 3 APPEA1S WERE DISPOSED OFF BY THE HONBLE TRIBUNA1 BY ITS COM MON ORDER DATED 05.08.2014 AFTER CONSIDERING THE COMMON SUBMISSIONS MADE BY THE PART IES BEFORE THE HONBLE TRIBUNA1. 3. IN THE APPEA1S FILED THE FOLLOWING 3 PRINCIPA1 I SSUES WERE INVOLVED A) LEGAL VA1IDITY OF THE PROCEEDINGS OF REASSESSMENT U /S 147 OF THE ACT. (GROUND NOS. 1 TO 3). B) WHETHER THE APPELLANT WAS LEGA1LY ENTITLED TO CLAIM EXEMPTION U/S 11 OF THE ACT BEING A TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES. (GRO UND NOS. 4 TO 8). C) WHETHER THE LOWER AUTHORITIES WERE JUSTIFIED IN ASS ESSING INCOME ON ACCOUNT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION OF THE INSTI TUTION BUILDING (GROUND NOS. 9 TO 11). 2 MA NOS. 35-37/K/2014 SHAMBHALA CHARITABLE TRUST. A. YS 2007-08 2009-10 4. ON RECEIPT OF THE APPELLATE ORDER DATED 05.08.20 14 IT IS NOTED THAT WHILE DECIDING THE AFORESAID APPEALS THE HONBLE TRIBUNAL DEALT WITH O NLY GROUND NOS. 1 TO 8 INVOLVING ISSUES (A) & (B) SET OUT ABOVE WHEREAS GROUND NOS. 9 TO 11 CONCERNING THE ISSUE (C) WERE NEITHER CONSIDERED NOR DECIDED BY THE HONBLE TRIBU NAL. 5. THE PETITIONER SUBMITS THAT IN THE COURSE OF ORA L AND WRITTEN SUBMISSIONS OF THE PETITIONERS A/R, ARGUMENTS IN SUPPORT OF GROUND NOS . 9 TO 11 WERE MADE. IT WAS ARGUED THAT EVEN IF ASSESSMENT OF INCOME AS MADE BY THE AO ON ACCOUNT OF INVESTMENT IN CONSTRUCTION OF INSTITUTION BUILDING IS UPHELD EVEN THEN EXEMPTION U/S 11 IN RELATION SUCH INCOME COULD NOT BE DENIED SINCE SUCH INCOME WAS IN VESTED IN CONSTRUCTION OF AN INSTITUTION BUILDING WHICH AMOUNTED TO APPLICATION OF INCOME FOR CHARITABLE PURPOSES AND IN THAT VIEW OF THE MATTER NO ADDITION TO THE TAXAB LE INCOME COULD SURVIVE. 6. THE PETITIONER SUBMITS THAT NON ADJUDICATION OF THE GROUND NOS. 9 TO 11 IN A11 THE 3 YEARS IS A MISTAKE APPARENT FROM RECORD WHICH NEEDS TO BE RECTIFIED BY THE TRIBUNAL BY PASSING AN ORDER U/S 254(2) OF THE ACT. 7. THAT THE SUBMISSIONS MADE IN THE FOREGOING PARAG RAPHS ARE TRUE AND CORRECT. 2. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE . WE FIND FROM THE ORDER OF THE TRIBUNAL THAT THE ISSUE OF UN DISCLOSED INVESTMENT IN CONSTRUCTION OF THE INSTITUTION BUILDING RAISED BY WAY OF GROUND NOS. 9 TO 11 ARE NOT ADJUDICATED. THE RELEVANT GROUND NOS. 9 TO 11 RAISES ONLY ONE ISSUE, WHICH IS AS UNDER: WHETHER, THE AUTHORITIES BELOW WERE JUSTIFIED IN A SSESSING THE INCOME OF ASSESSEE TRUST ON ACCOUNT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION O F INSTITUTION BUILDING? AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STATED THAT THE TRIBUNAL HAS ADJUDICATED THE MAIN ISSUE ALLOWING EXEMPTION TO THE ASSESSEE TRUST U/S. 11 OF THE ACT BY HOLDING THE TRUST AS CHARITABLE TRUST, WHICH WORKING FOR ADVANCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY IN VIEW OF THE DEFINITION U/S. 2(15) OF THE ACT. FOR THIS, LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO PARA 12 OF THE TRIBUNALS ORDER, WHICH READS AS UNDER: 12. FROM THE ABOVE CASE LAW OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RAJNEESH FOUNDATION (SUPRA) THE MEANING OF WORDS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY HAS BEEN SUBJECT OF DISCUSSION AND A DJUDICATION. HONBLE HIGH COURT HAS DISCUSSED THE DEFINITION OF CHARTABLE PURPOSE U/S.2 (15) OF THE ACT INCLUDES THE WORDS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY AND ADMITTEDLY IN THE PRESENT CASE THE OBJECTS CLAIMS THE ACTIVITIES OF THE TRUST ARE FOR THE ADVANCEMENT OF OBJECTS LIKE THE TEACHINGS OF BUDDHA TO SPREAD AND FOR THAT PURPOSE THE ASSESSEE HAS CLAIMED APPLICATION OF INCOME TOWARDS CONSTRUCTION OF STUDY AND RESEARC H CENTRE FOR HIGHER BUDDHIST STUDY INCLUDING CONSTRUCTION OF BUDDHIST TEMPLE. SINCE I NCEPTION THE ASSESSEE TRUST IS PURSUING THE ACTIVITIES CONNECTED OR ASSOCIATED WITH PREACHI NG, SPREADING AND DISSEMINATING THE IDEAS, IDEALS AND THE TEACHINGS OF LORD BUDDHA. CO NSIDERING THE NEED FOR SPREADING THE IDEAS AND TEACHINGS OF LORD BUDDHA TO THE PERSONS O F EVERY WALK OF LIFE AND INSTITUTION FOR HIGHER BUDDHIST LEARNING WAS SET UP. IN THE EYES O F THE ORDINARY FOLKS, THE PLACES WHERE THE BUDDHIST DISCOURSES ARE HELD ARE REGARDED AS TO BE RELIGIOUS PLACES. SIDE BY SIDE, THE ASSESSEE TRUST ALSO CONSTRUCTED A SMALL TEMPLE AND IN PERCENTAGE TERMS THE TEMPLE AREA COMPRISED IN THE BUILDING CONSTRUCTED WAS BARELY 3. 05% OF THE TOTAL AREA. IT IS ALSO A TEMPLE AND ASSESSEE TRUST IS PERFORMING RELIGIOUS F UNCTIONS AND IT IS ESTABLISHED FOR CHARITABLE PURPOSES. THE PRESENT TRUST WAS FOR TH E HIGHER BUDDHIST STUDY AND RESEARCH CENTRE TO PROPAGATE THE BUDDHA THOUGHT AND PHILOSOP HY WHICH WOULD ADMITTEDLY BE AN 3 MA NOS. 35-37/K/2014 SHAMBHALA CHARITABLE TRUST. A. YS 2007-08 2009-10 OBJECT OF GENERAL PUBLIC UTILITY. BE IT A CONSTRUC TION OF TEMPLE WHICH IS A RELIGIOUS ACTIVITY OR CONSTRUCTION OF INSTITUTE FOR HIGHER BUDDHIST LE ARNING WHICH IS FOR THE OBJECT OF GENERAL PUBLIC UTILITY, BOTH QUALIFIES FOR EXEMPTION UNDER SECTION 11 OF THE ACT. IN VIEW OF THE ABOVE FACTS AND CASE LAWS OF HONBLE SUPREME COURT AND VARIOUS HIGH COURTS, WE ALLOW EXEMPTION U/S. 11 OF THE ACT TO THE ASSESSEE TRUST AND REVERSE THE ORDERS OF THE LOWER AUTHORITIES. 3. IN VIEW OF THE ABOVE, LD. COUNSEL FOR THE ASSESS EE STATED THAT ONCE EXEMPTION U/S. 11 OF THE ACT IS ALLOWED TO THE TRUST BY HOLDING THE SAME FOR THE PURPOSE OF CHARITABLE ACTIVITIES, THE INVESTMENT MADE IN CONSTRUCTION OF BUILDING IS A CO NSEQUENTIAL ISSUE AND THE CONSEQUENTIAL EFFECT WILL BE THAT ANY ADDITION TO THE INCOME OF T HE ASSESSEE TRUST WILL AUTOMATICALLY FALL UNDER SECTION 11 OF THE ACT FOR CLAIMING EXEMPTION. ON TH E OTHER HAND, LD. DR COULD NOT CONTROVERT THE ARGUMENTS OF THE LD. COUNSEL. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE TRIBUNAL HAS NOT ADJUDICATED THE A BOVE-NOTED ISSUE AND HENCE, THERE IS A MISTAKE APPARENT FROM RECORD. IT IS ALSO A FACT TH AT THE TRIBUNAL HAS ALLOWED EXEMPTION U/S. 11 OF THE ACT HOLDING THE TRUST AS CHARITABLE TRUST AN D IN TURN THE INVESTMENT MADE IN CONSTRUCTION OF INSTITUTION BUILDING WILL ALSO QUALIFY FOR EXEMPTIO N. THIS BEING A CONSEQUENTIAL ISSUE, WE ALLOW IN FAVOUR OF THE ASSESSEE. 5. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS ALLOWED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- , ! , (SHAMIM YAHYA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( /! /! /! /!) )) ) DATED: 19TH SEPTEMBER, 2014 01 #23 4 JD.(SR.P.S.) - )' 5 '&6- COPY OF THE ORDER FORWARDED TO: 1 . /APPLICANT SHAMBHALA CHARITABLE TRUST, BOKAR, NG EDHON, CHOEKHOR LING, DEOSI DHARI, P.O.MERIK, DIST. DARJEELING. 2 )*+, / RESPONDENT ITO, WARD-2, DARJEELING, . 3 . # ( )/ THE CIT(A) , 4. # CIT, 5 . => )# / DR, KOLKATA BENCHES, KOLKATA *' )/ TRUE COPY, #?/ BY ORDER, 3 /ASSTT. REGISTRAR .