THE COMMISSIONER OF INCOME TAX V. M/S.GARDEN CITY EDUCATION TRUST,

ITA/269/2007

AI Insights

The appeals involve the Commissioner of Income Tax and the Assistant Director of Income Tax (Exemptions) as appellants against M/s. Garden City Education Trust as the respondent. The core issue revolves around the entitlement of the respondent to certain tax exemptions under Sections 10(22) and 10(23C)(vi) of the Income Tax Act, 1961, for various assessment years. The Tribunal's initial decision, which upheld the exemptions granted by the Commissioner of Income Tax (Appeals), was challenged by the appellants. The High Court found that the Tribunal did not independently consider the basis for the exemptions and thus remanded the case for a thorough re-evaluation.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 746279 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 24-02-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: S PARTHASARATHI; MALLHA RAO
• Assessee Lawyers: K V ARAVIND
• Keywords: Assessment Year; Exemption; Income tax appeal; Income tax appellate tribunal; Garden City Education Trust
• Section: 10(23C)(vi); 260-A; 10(22)

Judgement Text

" - 1 - IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 24TH DAY OF FEBRUARY 2014 PRESENT THE HON’BLE MR.JUSTICE DILIP B.BHOSALE AND THE HON’BLE MR.JUSTICE B.MANOHAR I.T.A.NO.269/2007 C/W I.T.A.NOS.270 TO 277/2007 & I.T.A.NO.499/2007 I.T.A.NO.269/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) - 2 - This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.3127/Bang/2004 for the Assessment year 1997- 98 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.3127/Bang/2004 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. I.T.A.NO.270/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.3126/Bang/2004 for the Assessment year 1996- 97 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the - 3 - order passed by the ITAT, Bangalore, in ITA No.3126/Bang/2004 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. I.T.A.NO.271/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.2926/Bang/2004 for the Assessment year 2001- 2002 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.2926/Bang/2004 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. - 4 - I.T.A.NO.272/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.2925/Bang/2004 for the Assessment year 2000- 2001 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.2925/Bang/2004 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. - 5 - I.T.A.NO.273/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.2924/Bang/2004 for the Assessment year 1999- 2000 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.2924/Bang/2004 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. - 6 - I.T.A.NO.274/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.1301/Bang/2003 for the Assessment year 1998- 1999 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.1301/Bang/2003 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and - 7 - confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. I.T.A.NO.275/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.1300/Bang/2003 for the Assessment year 1997- 1998 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.1300/Bang/2003 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. - 8 - I.T.A.NO.276/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.1298/Bang/2003 for the Assessment year 1995- 1996 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.1298/Bang/2003 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. - 9 - I.T.A.NO.277/2007: BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 11.08.2006 passed in ITA No.1299/Bang/2003 for the Assessment year 1996- 1997 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.1299/Bang/2003 dated 11.08.2006 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. - 10 - I.T.A.NO.499/2007 BETWEEN: 1. The Commissioner of Income Tax, Central Circle, C R Building, Queens Road, Bangalore. 2. The Assistant Director of Income Tax (Exemptions), Circle – 17(1), C R Building, Queens Road, Bangalore. …APPELLANTS (By Sri K.V.Aravind, Adv.) AND: M/s.Garden City Education Trust, No.628/C, 11th Cross 1st Stage, Indiranagar Bangalore-560 038 Bangalore. ...RESPONDENT (By Sri S Parthasarathi, Adv. alongwith Sri Mallharao, Adv.) This appeal is filed under Section 260-A of I.T.Act, 1961, arising out of order dated 12.01.2007 passed in ITA No.2709/Bang/2004 for the Assessment year 1995- 1996 praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore, in ITA No.2709/Bang/2004 dated 12.01.2007 and confirm the order passed by the Appellate Commissioner and confirm the order passed by the Asst. Director of Income Tax (Exemptions), Circle-17(1), Bangalore. These appeals coming on for admission this day, DILIP B.BHOSALE J, delivered the following:- - 11 - PC: These income tax appeals are directed against the common order dated 11.8.2006 rendered by Income Tax Appellate Tribunal, Bangalore Bench `B’ (for short `the Tribunal’) in ITA Nos.1298/Bang/2003 to 1301/Bang/2003, 2924/Bang/2004 to 2926/Bang/2004, 3126/Bang/2004 and 3127/2004 pertaining to the assessment years1995-96 to 1997-98. 2. The appeals before the Tribunal were arising from three orders dated 1.8.2003, 29.7.2004 and 16.8.2004. The order dated 1.8.2003 was passed by the Commissioner of Income Tax (Appeal) (for short “CIT(A)”) in ITA Nos.1, 2, 3 and 7/Exemp/CIT(A)- V/2003-04. The second order dated 29.7.2004 was passed in ITA Nos.4 to 6/Exemp/CIT(A)-V/2003-04 and the order dated 16.8.2004 was passed in ITA Nos.38 and 39/Exemp/CIT(A)-V/2003-04. The Tribunal by its order dated 11.8.2006 confirmed the findings recorded by the CIT(A) vide its orders dated 1.8.2003, 29.7.2004 and 16.8.2004. The CIT(A) vide its order dated 1.8.2003 directed the Assessing Authority to grant the - 12 - respondent/assessee the benefit of exemption under Section 10(22) of the Income Tax Act, 1961 (for short “the Act”). While the order dated 29.7.2004, the CIT(A) allowed the appeal and granted exemption under Section 10(23C)(vi) of the Act. Similarly vide order dated 16.8.2004, the CIT(A) granted exemption to the respondent/assessee under Section 10(22) of the Act. 3. We have perused the common order dated 11.8.2006 and we find that the Tribunal has not independently considered as to why the respondent/ assessee is entitled for benefit/exemption either under Section 10(22) or under Section 10(23C)(vi) of the Act. In view thereof, learned counsel for the parties have fairly stated that all these appeals may be remanded to the Tribunal to consider them afresh and, in particular, whether and why the respondent/assessee is entitled to benefit/exemption under Sections 10(2) and 10(23C)(vi) of the Act. Hence, we pass the following: ORDER The common order dated 11.8.2006 passed by the Tribunal is set aside. - 13 - The Income Tax Appeals No.1298/Bang/2003 to 1301/Bang/2003, 2924/Bang/2004 to 2926/Bang/2004, 3126/Bang/2004 and 3127/2004 are restored to file. The Tribunal shall consider these appeals afresh and record its findings on the question whether the respondent/assessee is entitled for benefit/exemption under Sections 10(22) and 10(23C)(vi) of the Act. All contentions of the parties are kept open It is needless to mention that the parties will be at liberty to file additional evidence/material, if they so desire, before the Tribunal in support of their case. It is made clear that we have not examined merit of the case. With these observations, the appeals are disposed of. No cost. ITA No.499/2007: This income tax appeal is directed against the order dated 12.1.2007 passed against the very same - 14 - respondent/assessee pertaining to the assessment year 1995-96 in ITA No.2709/Bang/2004. The order passed by the Tribunal reads thus: “The revenue has filed this appeal for the asst. year 1995-96 on the ground that the learned CIT(A) was not justified in holding that the assessee trust is entitled for exemption u/s 10(22) of the I.T.Act. 2. After hearing both the sides, we find that the issue is already covered by the decision of the Tribunal in assessee’s own case for the asst. years 1995-96 to 2001-02. A copy of the order passed by the Tribunal in ITA Nos.1298 to 1301, 2924 to 2926, 3126 and 3127/Bang/03 and 04 dated 11.8.2006 has been placed before us. From the said order, we find that the present appeal is squarely covered by the aforesaid decision of the Tribunal in assessee’s own case, in favour of the assessee. In view of the circumstances above, the present appeal is dismissed. In the result, the appeal is dismissed.” From perusal of the order passed by the Tribunal, it is clear that this order is passed in view of the order dated 11.8.2006 for the assessment year 1995-96 to 1997-1998. In view thereof and for the reasons recorded while disposing of ITA No.269/2007 c/w ITA Nos.270 to 277/2007, this appeal is also allowed. The - 15 - order dated 12.1.2007 passed by the Tribunal is set aside and ITA No.2709/Bang/2004 is restored to file. The Tribunal shall consider and decide the appeal afresh in the light of the observation made in the order passed in ITA Nos.269 to 277/2007, on merit in accordance with law. Appeal is accordingly disposed of. No costs. Sd/- JUDGE Sd/- JUDGE bkm. "