Cummins Diesel India Foundation, Pune v. Income-tax Officer, Pune

ITA 1173/PUN/2007 | 2004-2005
Pronouncement Date: 30-11-2011 | Result: Allowed

Appeal Details

RSA Number 117324514 RSA 2007
Assessee PAN AAATC0700D
Bench Pune
Appeal Number ITA 1173/PUN/2007
Duration Of Justice 4 year(s) 2 month(s) 18 day(s)
Appellant Cummins Diesel India Foundation, Pune
Respondent Income-tax Officer, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-11-2011
Date Of Final Hearing 16-11-2011
Next Hearing Date 16-11-2011
Assessment Year 2004-2005
Appeal Filed On 11-09-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER ITA NO. 1173/PN/2007 (ASSTT. YEAR: 2004-05) CUMMINS DIESEL INDIA FOUNDATION APPELLANT 35A/1/2 ERANDAWANA PUNE 411 038 PAN: AAATC0700D V. INCOME TAX OFFICER WARD 1(1) ... RESPONDENT PMT BUILDING SHANKERSHET ROAD PUNE 411 037 APPELLANT BY : SHRI C.H. NANIWADEKAR RESPONDENT BY : MS. NEERA MALHOTRA DATE OF HEARING : 16.11.11 DATE OF PRONOUNCEMENT: .11.11 ORDER PER I.C. SUDHIR JM THE ASSESSEE HAS QUESTIONED THE FIRST APPELLATE OR DER ON THE FOLLOWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN REJECTING FORM 10 THAT IS NOTICE FOR ACCUMULATING INCOME UND ER SECTION 11(2) OF INCOME TAX ACT 1961. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE APPRECIATED THAT THE OBJECTS AS MENTION ED IN FORM 10 ARE AS PER TRUST DEED AND HENCE NOTICE FOR ACCUMULATION IS CO RRECT. ALSO THE TRUST HAS ACTUALLY UTILIZED THIS AMOUNT TOWARDS OBJECTS OF TH E TRUST IN THE SUBSEQUENT YEARS. 1. THE REASONS GIVEN FOR REJECTING NOTICE IS NOT AS PE R DECISION OF DELHI HIGH COURT IN CASE OF CIT V/S HOTEL RESTAURANT ASS OCIATION 261 ITR 190 (DELHI). ITA . NO. 1173 /PN/2007 CUMMINS DIESEL INDIA FOUNDATION A.Y. 2004-05 PAGE OF 4 2 2. THE REASONS ASSIGNED FOR REJECTING NOTICE FOR ACCUM ULATION OF INCOME ARE WRONG AND CONTRARY TO FACTS. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES. WE HAVE ALSO GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW AND MATERIAL AVAILABLE ON RECORD. 3. THE ASSESSEE TRUST OPTED FOR AVAILING THE BENEFIT O F SECTION 11(2) OF THE ACT REGARDING ACCUMULATION OF AMOUNT OF RS. 16 00 000/- . IN SUPPORT THE ASSESSEE SUBMITTED FORM NO. 10 R.W.S. RULE 17 OF THE I.T. RU LES 1962. THE REASONS FOR SUCH ACCUMULATION AS MENTIONED IN THE FORM NO. 10 ARE RE PRODUCED BELOW : A RESOLUTION PASSED BY THE TRUSTEES / GOVERNING BO DY THAT OUT OF THE INCOME YEAR(S) RELEVANT TO THE ASSESSMENT YEAR 200 4-05 SET APART TO ENABLE THE TRUSTEES/GOVERNING BODY TO ACCUMULATE SUFFICIEN T FUNDS FOR CARRYING OUT THE FOLLOWING PURPOSES OF TRUST/ ASSOCIATION/INSTIT UTION (1) EDUCATIONAL (2) AND OTHER OBJECTS OF THE TRUST DEED AS MENTIONED I N CLAUSES 5 TO 39 ETC. THE A.O. DID NOT AGREE WITH THE CAUSE SHOWN BY THE ASSESSEE. HE HELD THAT WHERE ASSESSEE SEEKS PERMISSION TO ACCUMULATE A PART OF INCOME NOT FOR ANY DETERMINATE PURPOSE(S)/ BUT FOR THE OBJECT AS ENSHRINED IN TRUS T DEED IN A BLANK MANNER SUCH ACCUMULATION IS DEFINITELY NOT IN THE CONTEMPLATIO N OF SECTION 11(2). THE LD CIT(A) HAS ALSO UPHELD THE SAME. 4. BEFORE US THE LD. A.R. WHILE REITERATING THE SUBMI SSIONS MADE BEFORE THE AUTHORITIES BELOW HAS PLACED RELIANCE ON THE FOLLOW ING DECISIONS : (I) BHARAT KALYAN PRATISHTAN VS. DIRECTOR OF INCOME TAX (EXEMPTION) (2008) 299 ITR 406 (DELHI) (II) SIR SOBHA SINGH PUBLIC CHARITABLE TRUST VS. AS STT. DIRECTOR OF INCOME TAX (EXEMPTION) (201) 79 ITD 1 (DEL.) (TM ) (III) ASSOCIATED ELECTRONIC RESEARCH FOUNDATION VS. DY DI RECTOR OF INCOME TAX (EXEMPTION) (2006) 100 TTJ (DEL.) 480 ITA . NO. 1173 /PN/2007 CUMMINS DIESEL INDIA FOUNDATION A.Y. 2004-05 PAGE OF 4 3 5. THE LD. D.R. ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITY BELOW. 6. HAVING GONE THROUGH THE ABOVE CITED DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF BHARAT KALYAN PRATISHTAN VS. DIRECTOR OF INCOME TAX (EXEMPTION) (SUPRA) RELIED UPON BY THE LD. A.R. WE FIND THAT T HE ISSUE RAISED IN THE GROUNDS BEFORE US IS FULLY COVERED BY THIS DECISION. IN THAT CASE THE TRUST WAS HAVING ITS OBJECT TO UTILIZE ITS FUNDS FOR CHARITABLE PURPOSES VIS. MEDICAL RELIEF EDUCATION AND RELIEF TO THE POOR. THE ASSESSEE SPECIFIED ALL TH ESE THREE OBJECTS IN THE APPLICATION SEEKING ACCUMULATION OF INCOME. THE MATTER TRAVELL ED UPTO THE HONBLE HIGH COURT AND THE HONBLE HIGH COURT IN THE APPEAL PREFERRED BY THE TRUST HELD THAT IT WAS NOT REQUIRED FOR THE ASSESSEE TO BE MORE SPECIFIC WITH REGARD TO UTILIZATION OF FUNDS PLURALITY OF PURPOSES IS PERMITTED AND IT WAS NOT R EQUIRED FOR THE ASSESSEE TO BE MORE SPECIFIC WITH REGARD TO UTILIZATION OF FUNDS. BENEFIT OF SECTION 11(2) OF THE ACT CANNOT BE DENIED HELD THE HONBLE HIGH COURT . THE HONBLE HIGH COURT HAS FOLLOWED SEVERAL DECISIONS IN THIS REGARD AND DISS ENTED FROM THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF DIRECTOR OF INC OME TAX (EXEMPTION) VS. TRUSTEES OF SINGHANIA CHARITABLE TRUST FOLLOWED BY THE A.O IN THE PRESENT CASE. WE FIND THAT IN THE PRESENT CASE THE LD CIT(A) HAS ACCEPTED THE OBSERVATION OF THE A.O THAT DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HOTEL AND RESTAURANT ASSOCIATION 269 ITR 190 (DEL.) IS NOT APPLICABLE I N THE PRESENT CASE. THE LD CIT(A) HAS RATHER TRIED TO DISSECT THE DECISION OF HONBL E DELHI HIGH COURT IN THE CASE OF HOTEL & RESTAURANT ASSOCIATION (SUPRA) TO THIS EXTE NT THAT HE HAS OBSERVED AS AS AGAINST USE OF THE WORD SPECIFIES IF THE LEGISLAT URE WOULD HAVE USED THE WORD MENTIONS THEN PROBABLY THE VIEW TAKEN BY DELHI H IGH COURT WOULD HAVE BEEN MORE CONVINCING. HE HAS FURTHER COMMENTED AS TH IS IS NOT THE CASE. IN FACT IT IS TRITE LAW THAT THE COURT SHALL RESORT TO INTERPRETA TION ONLY WHERE THERE IS AMBIGUITY WHICH REQUIRES TO BE CLEARED BY INTERPRETATION OF T HE COURT IN OUR VIEW THE LD CIT(A) WHILE DOING SO HAS VIOLATED THE JUDICIAL DI SCIPLINE. WE FIND THAT IN ITS ITA . NO. 1173 /PN/2007 CUMMINS DIESEL INDIA FOUNDATION A.Y. 2004-05 PAGE OF 4 4 SUBSEQUENT DECISION IN THE CASE OF BHARAT KALYAN PR ATISHTAN (SUPRA) THE HONBLE DELHI HIGH COURT HAS ALSO FOLLOWED ITS EARLIER DECI SION IN THE CASE OF CIT VS. HOTEL AND RESTAURANT ASSOCIATION (SUPRA). RESPECTFULLY F OLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT KALYAN PRATI SHTAN (SUPRA) WE HOLD THAT THERE WAS NO REASON BEFORE THE AUTHORITY BELOW TO DENY TH E CLAIMED BENEFIT U/S. 11(2) OF THE ACT. WE THUS WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW DIRECT THE A.O TO ALLOW THE CLAIMED BENEFIT U/S. 11(2) OF THE ACT TO THE APPELLANT TRUST. THE GROUNDS ARE ACCORDINGLY ALLOWED. 7. IN RESULT APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH NOVEMBER 2011. SD/- SD/- ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 30TH NOVEMBER 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT I PUNE 4. THE CIT(A)- I PUNE 4. THE D.R. B BENCH PUNE 5. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE