The ACIT,, Bhopal v. M/s. Society for promotion of ECO Friendly Sustainable Development, Bhopal

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NOS.153 TO 155/IND/2010 A.YS. 1999-00 TO 2001-02 ACIT-1(1) BHOPAL APPELLANT VS M/S. SOCIETY FOR PROMOTION OF ECO FRIENDLY SUSTAINABLE DEVELOPMENT BHOPAL PAN AACTS 1454 N RESPONDENT APPELLANT BY : SH. PRADEEP KUMAR MITRA SR. DR RESPONDENT BY : SH. B.C. JAIN CA O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THESE APPEALS ARE BY THE REVENUE AGAINST THE COMMON ORDER OF THE LEARNED CIT(A)-I BHOPAL DATED 22.12.2009 ON T HE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DIREC TING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 11 OF THE ACT TO THE ASSESSEE RELYING ON THE DECISION OF THE TRIBUNAL DATED 16.2.2009 (ITA N O.445/IND/2008) 2 ESPECIALLY WHEN THE SAID DECISION WAS CHALLENGED BY THE DEPARTMENT BEFORE THE HON'BLE HIGH COURT AND THE SAME IS PENDI NG. 2. DURING HEARING OF THESE APPEALS THE LD. SR. DR SHRI PRADEEP KUMAR MITRA ADVANCED HIS ARGUMENTS WHICH ARE IDENTI CAL TO THE GROUND RAISED. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE TRIBUNAL HAS ALREADY DIRECTED THE LD. COMM ISSIONER TO GRANT REGISTRATION U/S 12AA OF THE ACT FROM THE DATE OF T HE CREATION OF THE ASSESSEE SOCIETY THEREFORE THERE IS NO INFIRMITY IN THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ORIGINAL ASSESSMEN TS IN THESE IMPUGNED YEARS WERE COMPLETED ON 31.3.2005 THAT TOO U/S 143( 3) OF THE ACT. SUBSEQUENTLY IT WAS NOTICED BY THE LD. COMMISSIONE R THAT REGISTRATION U/S 12AA WAS GRANTED TO THE ASSESSEE W.E.F. 1.4.200 2 THEREFORE DEDUCTION U/S 11 WAS NOT AVAILABLE TO THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEARS CONSEQUENTLY ASSESSMENTS SO FRA MED WERE SET ASIDE U/S 263 OF THE ACT. THIS ORDER WAS CARRIED IN APPEAL BEFORE THE TRIBUNAL WHEREIN VIDE ORDER DATED 16.2.2009 (ITA NO .445/IND/2008) THE LD. COMMISSIONER WAS DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE FROM THE DATE OF ITS CREATION I.E. 5.1.1998. BEFORE COMI NG TO ANY CONCLUSION THE CONCLUSION DRAWN IN THE IMPUGNED ORDER AS CONTA INED IN PARA 6 (PAGE 7) IS REPRODUCED HEREUNDER: 3 6. I HAVE CAREFULLY CONSIDERED SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE AS RECORDED IN THE ASSESSMENT ORDERS. THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM FOR EXEMPTION U/S 11 TO THE APPEAL IN THESE ASSESSMENT YEARS ON THE GROUND THAT THE APPELLANT SOCIETY WAS NOT REGISTERED U/S 12AA FOR THESE YEARS AS THE REGISTRATION U/S 12AA WAS GRANTED BY THE CIT BHOPAL EFFECTIVE FROM 1.4.2002. HOWEVER SUBSEQUENTLY IN THE APPEAL FILED BY THE APPELLANT THE HONBLE I.T.A.T. INDOR E VIDE THEIR ORDER DATED 16.2.2009 IN ITA NO.445/IND/2008 DIRECTED THE CIT BHOPAL TO GRANT THE REGISTRATION TO THE APPELLANT FROM THE DATE OF ITS CREATION. ACCORDINGLY THE CIT BHOPAL REVISED HIS ORDER U/S 12AA AND REGISTRATION WAS MADE EFFECTIVE FROM 5.1.1998. THUS THE GROUND ON WHICH THE EXEMPTION U/S 11 WAS DENIED TO THE APPELLANT NO MORE SURVIVES AND HENCE THE APPELLANT BECOMES ENTITLED FOR EXEMPTION U/S 11 FOR THESE ASSESSMENT YEARS. IT IS ALSO NOTICED THAT EVEN IF DISALLOWANCE S MADE BY THE ASSESSING OFFICER ARE CONSIDERED THE APPLICATION OF FUNDS FOR CHARITABLE ACTIVITIES WAS MORE THAN THE SPECIFIED LIMIT U/S 11 AND THUS THE APPELLANT SOCIETY WAS ELIGIBLE FOR DEDUCTION U/S 11 OF THE ACT. THEREFORE THE ASSESSING OFFICER IS DIRECT ED TO ALLOW DEDUCTION U/S 11 OF THE ACT TO THE APPELLA NT IN THESE ASSESSMENT YEARS AFTER VERIFYING THAT THE APPELLANT FULFILLS ALL THE OTHER CONDITIONS LAID DO WN U/S 11 TO 13 AND THAT THERE WAS NO VIOLATION OF PROVISIONS OF SECTION 13 OF THE ACT. 4. IF THE AFORESAID UNCONTROVERTED FINDING IS KEPT IN JUXTAPOSITION WITH THE FACTS AND THE ARGUMENTS ADVANCED BY THE RE SPECTIVE PARTIES SINCE THE ORDER OF THE TRIBUNAL IS VERY MUCH IN OPE RATION THEREFORE THERE IS NO MERIT IN THE APPEALS OF THE REVENUE BECAUSE T HE BASIS OF ADDITION WAS THAT SINCE THE REGISTRATION U/S 12A OF THE ACT WAS EFFECTIVE FROM 1.4.2002 THEREFORE EXEMPTION U/S 11 IS NOT AVAILA BLE. HOWEVER SINCE 4 THE REGISTRATION WAS MADE EFFECTIVE FROM THE DATE O F THE CREATION OF THE SOCIETY THEREFORE SUCH GROUND IS NO MORE IN EXIST ENCE FOR DENIAL OF EXEMPTION. AS FAR AS THE ARGUMENTS OF THE LD. SR. D R THAT THE ORDER OF THE TRIBUNAL HAS BEEN CHALLENGED BEFORE THE HON'BLE HIG H COURT U/S 260A OF THE ACT WE ARE OF THE VIEW THAT THE HON'BLE COURT HAS NOT STAYED THE OPERATION OF THE ORDER THEREFORE THE ORDER OF THE TRIBUNAL IS VERY MUCH IN EXISTENCE AS ON DATE. EVEN OTHERWISE THE LD. CI T(A) HAS CLEARLY DIRECTED THE LD. ASSESSING OFFICER TO ALLOW DEDUCTI ON U/S 11 OF THE ACT AFTER FULFILLMENT OF OTHER CONDITIONS LAID DOWN U/S 11 TO 13 THEREFORE WE DO NOT FIND ANY INFIRMITY IN SUCH DIRECTIONS CONSE QUENTLY THESE APPEALS OF THE REVENUE ARE HAVING NO MERIT THEREFORE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 14 TH FEBRUARY 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14.2.2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE !VYAS!