ITO (E) 1 (4), MUMBAI V. KHAR GYMKHANA, MUMBAI

MA 424/MUM/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 5540 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 25-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Keywords: Benefit of exemption; Cancellation of registration; Set aside
• Section: 12A; 254(2); 13; 11

Judgement Text

1 MA.NOS.424 & 425/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI G MANJUNATHA (ACCOUNTANT MEMBER) AND SHRI RAM LAL NEGI (JUDICIAL MEMBER) M.A. NO.424 & 425/MUM/2019 (ARISING OUT OF ITA NO.5156/MUM/2015 & ITA NO. 6992 /MUM/2016) (ASSESSMENT YEARS: 2010-11 & 2012-13) ITO(E) - 1(4) ROOM NO.507, 5 TH FLOOR PIRAMAL CHAMBERS LALBAUG, MUMBAI-400 012 VS M/S. KHAR GYMKHANA 13 TH ROAD, KHAR(WEST) MUMBAI-400 052 PAN : AAATK5163C APPLICANT RESPONDENT APPLICANT BY V. VINOD KUMAR RESPONDENT BY NONE DATE OF HEARING 27.09 .2019 DATE OF PRONOUNCEMENT 01 . 10 . 2019 O R D ER PER G MANJUNATHA: AM THESE TWO MISCELLANEOUS APPLICATIONS FILED BY THE R EVENUE ARE DIRECTED AGAINST CONSOLIDATED ORDER OF THE TRIBUNAL IN ITA.NO.5156/MUM/2015 FOR AY 2010-11 AND ITA.NO.6992 /MUM/2016 FOR AY 2012-13. 2 MA.NOS.424 & 425/MUM/2019 2. THE REVEUNE HAS NARRATED FACTS AND MISTAKES STAT ED TO BE APPARENT FROM THE ORDER OF THE TRIBUNAL, DATED 26/1 2/2018. THE RELEVANT CONTENTS OF MISCELLANEOUS APPLICATION FILED BY THE REVENUE IN MA.NO.424/MUM/2019 FOR AY 2010-11 ARE REPRODUCED AS UNDER:- 1. THE ABOVE SAID APPEALS HAS BEEN TILED BY ASSESSE E AGAINST THE ORDER PASSED BY CIT(A)-1, MUMBAI ON DATED 22.09.2015 FOR A.Y. 2010-11. 2. THE ASSESSING OFFICER DURING THE COURSE OF ASSES SMENT PROCEEDING, DENIED BENEFIT OF EXEMPTION U/S 11 BY INVOKING PROVISO TO SECTION 2(150 OF THE I.T. ACT. THE AO HAS DENIED THE BENEFIT OF EXEMPTION CLA IMED U/S 11 AND COMPUTED INCOME OF THE ASSESSEE BY APPLYING THE PRI NCIPLES OF MUTUALITY, BY RELYING ON THE JUDGMENT OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF BANGALORE CLUB VS. CIT IN CIVIL APPEAL NO. 124 OF 2 007 DATED 14.01.2013 AND JUDGMENT OF HONBLE MUMBAI HIGH COUR T IN THE CASE OF CIT VS. COMMON EFFLUENT TREATMENT PLANT (THEME -BEL APUR) ASSOCIATION REPORTED AT (2010) 328 ITR 362 (BOM.) , AS THE ASSESSEE HAS EARNED MOST OF ITS INCOME FROM NON-CHARITABLE ( COMMERCIAL) ACTIVITIES SUCH AS INCOME FROM SALE OF LIQUOR, CANTEEN COMPENS ATION (ROYALTY), CARD/DAILY GAMES, GUEST FEES AND INCOME FROM BANQUE T HALL. 3. THE HON'BLE ITAT WHILE DECIDING THE MATTER FOR T HE YEARS UNDER CONSIDERATION AT PARA NO. 5 OF THE SAID ORDER HAS O RDERED AS UNDER: 'IT IS ADMITTED FACT THAT THE AO HAS DENIED THE BEN EFIT OF EXEMPTION CLAIMED U/S 11 ON THE BASIS OF NEWLY INSE RTED PROVISO TO SECTION 2( 15) W.E.F A.Y. 2009-10 AND ALSO ON THE B ASIS OF WITHDRAWAL OF REGISTRATION GRANTED U/S 12A OF THE I.T. ACT, 19 61 BY THE DIT (EXEMPTION)- IT IS ALSO AN ADMITTED FAD THAT THE IT AT HAS RESTORED REGISTRATION WHICH WAS CANCELLED BY THE DIT (EXEMPT ION). FURTHER, THE AO HAS DENIED BENEFIT OF EXEMPTION U/S 11 FOR THE FOR THE FIRST TIME FROM A. Y. 2009-10. SINCE, THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 2009-10 HAS BEEN RESTORED TO THE FILE OF THE AO TO CONSIDER THE ISSUE DENOVO IN LIGHT OF REGISTRATION GRANTED U/S 12A OF THE I.T.ACT, 1961, WE ARE OF THE CONSIDERED VIEW THAT THE APPEALS FILED B Y THE ASSESSEE FOR SUBSEQUENT YEARS, INCLUDING IMPUGNED YEARS NEED TO BE SET ASIDE TO THE FILE OF THE AO TO TAKE A VIEW IN CONSONANCE WIT H THE VIEW TAKEN BY HIM FOR A.Y. 2009-10. THEREFORE, WE SET ASIDE THE A PPEALS FILED BY THE ASSESSEE FOR A.Y. 2010-11 & 2012-13 TO THE FILE FO THE AO TO CONSIDER THEM AFRESH BY TAKING INTO ACCOUNT THE OBJECTS AND ITS ACTIVITIES AND ALSO REGISTRATION U/S 12A OF THE INCOME TAX ACT, 19 61. 4. IN THE ASSESSEE'S CASE FOR A.Y. 2009-10 THE HON' BLE ITAT IN ITA NO. 329G/MUM/2013 DATED 27.11,2013 HAS RESTORED THE FIL E TO THE RECORD OF LD.CIT(A) BECAUSE THE LD, CIT(A) HAD DECIDED THE CA SE SOLELY ON THE 3 MA.NOS.424 & 425/MUM/2019 BASIS OF REGISTRATION U/S 12A OF THE ASSESSEE WAS C ANCELLED BY THE DIT(E) WITHOUT GOING IN THE ISSUE OF APPLICABILITY OF PROV ISO TO SECTION 2(15) OF THE ACT AND THE HON'BLE ITAT HAD SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMITTED THE MATTER TO THE RECORD OF THE LD. CIT(A) TO DECIDE THE ISSUE ON MERITS AND PARTICULARLY ON THE QUESTION OF APPLICAB ILITY OF THE PROVISO TO SECTION 2(15) OF THE ACT, WHERE AS IN THE INSTANT C ASES, THE CIT(A) HAS CLEARLY DECIDED IN DETAIL THAT THE ASSESSEE IS HIT BY PROVISO TO SECTION 2(15) OF THE I.T. ACT. FURTHER, THE ORDER OF THE HON'BLE ITAT IS FACTUALLY INCORRECT TO THE EXTENT THAT THE MATTER PERTAINING TO A.Y, 20 09-10 WAS RESTORED TO THE FILE OF AO TO CONSIDER THE ISSUE DENOVO, ACTUALLY, THE FACT IS THE MATTER OF A.Y. 2009-10 HAS BEEN REMITTED TO THE RECORD OF CIT (A) TO DECIDE THE ISSUE ON MERIT AND PARTICULARLY ON THE QUESTION OF APPLIC ABILITY OF PROVISO TO 2(15) OF THE ACT. 5. ON THE FACTS AND IN THE CIRCUMSTANCES STATED ABO VE, THE RESPONDENT IN THIS CASE HUMBLY PRAY THAT HON'BLE ITAT MAY PLEASE DECID E THE ISSUE ON MERITS WITHOUT SETTING ASIDE THE APPEAL FILED BY TH E ASSESSEE TO THE FILE OF ASSESSING OFFICER, SINCE THE LD. CIT(A) HAS ALREADY DECIDED ON THE APPLICABILITY OF PROVISO TO SECTION 2(15) OF THE IN COME-TAX ACT NOT IN FAVOUR OF THE APPELLANT OR ALTERNATIVELY REMIT THE MATTER TO THE FILE OF LD, CIT(A) AS WAS ORDERED IN THE MATTER OF A.Y 2009-10 SO AS TO M AINTAIN LEGAL CONSISTENCY BY ADMITTING THE MISCELLANEOUS APPLICAT ION AND KINDLY PASS NECESSARY ORDER OF RECTIFICATION. 6. IT IS ALSO PRAY THAT OUT OF TURN HEARING KINDLY BE GRANTED IN THE AFORESAID APPEAL. 7. THE MISCELLANEOUS PETITION IS FILED AS PER THE D IRECTIONS OF CIT (EXEMPTIONS), MUMBAI (COPY OF LETTER DATED 08.07.20 19 OF CIT (E), MUMBAI, ENCLOSED). 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MISCE LLANEOUS APPLICATION FILED BY THE ASSESSEE, ALONG WITH ORDER OF THE TRIBUNAL IN ITA.NO.5156/MUM/2015 AND ITA.NO.6992/MUM/2016, DATE D 26/12/2018 AND FIND THAT THE TRIBUNAL HAS RESTORED THE ISSUE T O FILE OF THE AO TO DECIDE APPLICABILITY OF PROVISION OF SECTION 11, IN LIGHT OF CANCELLATION OF REGISTRATION WITH EFFECT FROM AY 2009-10 AND SUBSEQ UENT, RESTORATION OF REGISTRATION BY THE ITAT, BECAUSE THE LD. AO HAD DE NIED BENEFIT OF 4 MA.NOS.424 & 425/MUM/2019 EXEMPTION, ONLY FOR THE REASON THAT REGISTRATION G RANTED U/S 12A OF THE I.T.ACT, 1961, HAS BEEN WITHDRAWN WITH EFFECT FROM AY 2009-10, IN VIEW OF INSERTION OF PROVISO TO SECTION 215 OF THE I.T.A CT, 1961. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO ERROR I N THE FINDINGS RECORDED BY THE TRIBUNAL, WHILE SET ASIDE THE ISSUE TO THE F ILE OF THE AO, WHICH COULD BE RECTIFIED U/S 254(2) OF THE I.T.ACT, 1961. HENCE, WE DISMISSED MISCELLANEOUS APPLICATION FILED BY THE REVEUNE. MA.NO.425/MUM/2019:- 4. THE FACTS AND CONTENTS OF MISCELLANEOUS APPLICAT ION FILED BY THE REVENUE FOR THE AY 2012-13 ARE IDENTICAL TO FACTS A ND CONTENTS OF MISCELLANEOUS APPLICATION FILED FOR AY 2010-11. THE REFORE, FOR SIMILAR REASONS GIVEN IN PRECEDING PARAGRAPH, WE DISMISSED MISCELLANEOUS APPLICATION FILED BY THE REVENUE. 5. AS A RESULT, BOTH MISCELLANEOUS APPLICATION FILE D BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.10.2019. SD/- SD/- RAM LAL NEGI G . MANJUNATHA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 01.10.2019 THIRUMALESH, SR.PS 5 MA.NOS.424 & 425/MUM/2019 COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//