THE DCIT(EXEMPTION), Bhopal v. M/s. Indore Education and Service Society, Indore

ITA 468/Ind/2018 | 2013-2014
Pronouncement Date: 19-11-2019 | Result: Dismissed

Appeal Details

RSA Number 46822714 RSA 2018
Assessee PAN AAATI3186K
Bench Indore
Appeal Number ITA 468/Ind/2018
Duration Of Justice 1 year(s) 6 month(s) 4 day(s)
Appellant THE DCIT(EXEMPTION), Bhopal
Respondent M/s. Indore Education and Service Society, Indore
Appeal Type Income Tax Appeal
Pronouncement Date 19-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 19-11-2019
Date Of Final Hearing 11-11-2019
Next Hearing Date 11-11-2019
Last Hearing Date 11-11-2019
First Hearing Date 20-08-2019
Assessment Year 2013-2014
Appeal Filed On 15-05-2018
Judgment Text
[ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI KUL BHARAT JUDICIAL MEMBER AND SHRI MANISH BORAD ACCOUNTANT MEMBER ITA NO.468/IND/2018 ASSESSMENT YEAR: 2013-14 DCIT (EXEMPTION) BHOPAL / VS. M / S. INDORE EDUCATION AND SERVICE SOCIETY 2 ND FLOOR INCOME TAX OFFICE METRO WALK BUILDING E-5 ARERA COLONY NEAR BITTAN MARKET BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AAATI3186K APPELLANT BY SHRI S.S. MANTRI D.R. RESPONDENT BY SHRI C.S. PADLIA A.R. DATE OF HEARING: 17.10.2019 DATE OF PRONOUNCEMENT: 19.11.2019 / O R D E R PER KUL BHARAT J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE CIT(A)-2 INDORE DATED 2.2.2018. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 2 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSM ENT AND THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT 1961 (HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER DATED 14.3.2016. WHILE FRAMING THE ASSESSMENT THE A. O. OBSERVED THAT THE ASSESSEE TRUST HAS GIVEN BENEFIT TO THE SPECIFIED PERSON. THEREFORE IT VIOLATED THE PROVIS IONS OF SECTION 13(1)(C)13(3) OF THE ACT. HENCE THE A.O. MADE ADDITION IN RESPECT OF INTEREST ON THE ADVANCES GIVEN TO THE [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 3 SPECIFIED PERSON IN SUM OF RS.4 CRORES. IT IS NOTE D BY THE A.O. THAT THE ASSESSEE TRUST MADE PAYMENT OF RS.4 CRO RES ON 14.12.2010 IN RESPECT OF AGREEMENT TO PURCHASE OF LAND ADMEASURING 124646 SQ.FT. @ RS.800/- PER SQ.FT. TO SMT. URMILA JAIN W/O PRESIDENT OF THE TRUST. IT IS FURTH ER NOTED THAT SMT. URMILA JAIN HAS DECLARED INTEREST INCOME ON T HE AMOUNT AS LOAN TO OTHER PERSONS AND THUS EARNED INTERES T INCOME. IT IS FURTHER NOTED THAT THE SALE DEED WAS NO T REGISTERED TILL 31.3.2013. HENCE THE A.O. OPINED THAT THE ASSESSEE TRUST HAD DIVERTED ITS FUND TO GIVE BENEFIT TO THE RELATED PARTIES. HENCE THE A.O. MADE ADDITION OF INT EREST WHICH WAS NOT CHARGED @ 10% PER ANNUM. 3. AGGRIEVED AGAINST THIS ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISS IONS ALLOWED THE APPEAL OF THE ASSESSEE. [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 4 4. NOW THE REVENUE IS IN APPEAL. LD. D.R. VEHEMENT LY ARGUED THAT LD. CIT(A) IS NOT JUSTIFIED IN ALLOWING TH E CLAIM OF EXEMPTION U/S 10(23C)(VI) OF THE ACT WITHOUT GIV ING OPPORTUNITY TO THE A.O. HE SUBMITTED THAT THE LD. C IT(A) FAILED TO APPRECIATE THE FACT THAT THIS IS A CLEAR CASE OF DIVERSION OF FUNDS. HE SUBMITTED THAT EXEMPTION GRAN TED U/S 10(23C)(VI) OF THE ACT IS SUBJECT TO THE CONDIT ION EMBODIED IN THE LETTER OF APPROVAL FOR GRANTING EXEMPT ION U/S 10(23C)(VI) OF THE ACT. HE SUBMITTED THAT ONE O F THE CONDITION IS THAT THE ASSESSEE TRUST WOULD APPLY ITS INCOME FOR ACCUMULATION OF ITS INCOME OR APPLICATION WHOLLY AND EXCLUSIVELY FOR THE OBJECTS FOR WHICH IT IS ESTABLIS HED AND APPLICATION OF INCOME MUST BE IN ACCORDANCE WITH THE MO DE SPECIFIED IN SUB-SECTION (5) OF SECTION 11 OF THE A CT. 5. ON THE CONTRARY LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS WHICH ARE REPRODUCED AS UNDER: [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 5 IN CONNECTION WITH APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDER OF CIT-A-II INDORE FIXED FOR HEARING ON 16.05.2019 WE BEG TO SUBMIT AS UNDER: 1. THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 19.09.2013 DECLARING TOTAL INCOME OF RS NIL AFTER APPLYING THE PROVISIONS OF SECTION 11 OF THE ACT WHILE COMPUTING THE INCOME CHARGEABLE TO TAX. FURTHER THE ASSESSEE HAS ALSO BEEN ACCORDED APPROVAL OF EXEMPTION OF INCOME U/S 10(23C ) OF THE ACT VIDE ORDER PASSED BY THE DEPARTMENT OF REVENUE CENTRAL BOARD O F DIRECT TAXES NEW DELHI VIDE ORDER DATED 23.04.2001. THEREAFTER THE SAME WA S RENEWED FROM TIME TO TIME AND THE LAST APPROVAL WAS GRANTED VIDE CCIT ORDER D ATED 06.11.2007 VIDE NO F. NO. CCIT/IND/TECH/10(23C) (VI)/15/07-08/ WHICH HAS BECOME PERPETUAL IN VIEW OF THE AMENDMENT MADE IN SECTION 10(23C) BY THE FIN ANCE ACT 2008. SINCE THERE WAS NO INCOME IN THE CASE OF THE ASSESSEE AFTER APP LYING THE PROVISIONS OF SECTION 11 OF THE ACT AT THE TIME OF SUBMITTING TH E RETURN OF INCOME THEREFORE QUESTION OF CLAIMING ANY EXEMPTION U/S 10(23(C) DOE S NOT ARISE AT THE TIME OF SUBMITTING THE RETURN OF INCOME. 2. THAT THE LEARNED A.O. WHILE MAKING THE ASSESSMEN T HAS DETERMINED THE INCOME OF THE ASSESSEE AT A TOTAL INCOME OF RS.38650573/- PRIOR TO ALLOW BENEFITS OF SECTIONS 11 AND 10(23C)(VIA) OF THE ACT TO THE ASS ESSEE FOR THE REASONS MENTIONED IN THE ASSESSMENT ORDER. AGAINST WHICH TH E ASSESSEE FILED AN APPEAL BEFORE HONOURABLE COMMISSIONER OF INCOME TAX APPEAL S-II INDORE WHO HAD DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE BY DIR ECTING THE LD. A.O. TO ALLOW THE BENEFITS OF SECTION 10(23C) (VIA) TO THE ASSESS EE FOR WHICH HE HAS BEEN ACCORDED APPROVAL FOR EXEMPTION OF INCOME EARNED BY HIM OUT OF THE EDUCATIONAL ACTIVITIES VIDE HIS ORDER DATED 02.02.2018. AGAINS T WHICH THE DEPARTMENT HAS PREFERRED APPEAL BEFORE THE HONORABLE BENCH FOR DIR ECTIONS ISSUED TO ALLOW THE BENEFITS OF SECTION 10(23C) (VIA) TO THE ASSESSEE. 3. THE DEPARTMENT SEEK THE OPINION OF THE HONOURABL E BENCH THAT WHEN IN THE OPINION OF THE LD. A.O. THAT THE ASSESSEE HAD CONTR AVENED THE PROVISIONS OF SECTION 13 OF THE ACT AS SUCH HEAT BY THE PROVISO 1 3 TO SECTION 10(23)(VI) OF THE ACT AND ALSO IN ABSENCE OF ANY CLAIM MADE FOR SUCH EXEMPTION EITHER IN THE RETURN OF INCOME OR BEFORE THE A.O. SUCH EXEMPTION WAS ALLOWED BY HONORABLE CIT-A IN THE APPEAL SO FILED BY THE ASSESSEE BEFORE HIM IN THE LIGHT OF THE DECISION OF HONOURABLE SUPREME COURT IN GOETZE (IND IA) LTD V CIT REPORTED IN 284 ITR 323. THUS THE DEPARTMENT HAS THE OBJECTIONS OF ALLOWING THE EXEMPTION TO THE ASSESSEE WHICH WAS NEITHER CLAIMED IN THE RE TURN OF INCOME NOR CLAIMED THE SAME IN THE ASSESSMENT PROCEEDINGS BEFORE THE L D. A.O. AS FINDINGS GIVEN BY THE APEX COURT OF INDIA IN THE CITED AS ABOVE. THE ASSESSEE WISH TO BRING THE FOLLOWING FACTS OF THE CASE BEFORE THE HONOURABLE B ENCH THE CIRCUMSTANCES WHICH RESTRAIN THE ASSESSEE TO CLAIM THE EXEMPTION AS ABOVE. [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 6 (I) IN THE RETURN OF INCOME FILED BY HIM THE ASSESSEE IS DULY REGISTERED AS A TRUST U/S 12AA OF THE ACT. AS SUCH THE PROVISIONS OF SECTION 11 OF THE ACT APPLIE D TO THE ASSESSEE TRUST. AT THE TIME OF FILING THE RETURN OF INCOME THE ASSESSE E HAS COMPUTED THE INCOME CHARGEABLE TO TAX BEFORE APPLYING THE PROVISIONS OF SECTION 10(23C)(VIA) OF THE ACT. AS PER THAT COMPUTATION OF INCOME THERE WA S NO INCOME EARNED BY THE ASSESSEE AFTER APPLYING THE PROVISIONS OF SECTI ON 11 OF THE ACT AS THE TRUST HAS APPLIED FULL INCOME DERIVED FROM THE PROP ERTIES OF THE TRUST TOWARDS THE OBJECT OF THE TRUST FOR WHICH IT HAS BEEN ESTAB LISHED. IN ABSENCE OF ANY INCOME TO THE ASSESSEE QUESTION OF CLAIMING SUCH IN COME FOR EXEMPTION U/S 10(23C) (VIA) OF THE ACT DOES NOT ARISE. THEREFORE UNDER THE ABOVE CIRCUMSTANCE OF THE CASE QUESTION OF CLAIMING ANY E XEMPTION DOES NOT ARISE. (II) NOT CLAIMING THE EXEMPTION BEFORE THE LD. A.O. IN ASSESSMENT PROCEEDINGS THIS OBJECTION AS RAISED BY THE DEPARTMENT IN THE G ROUNDS OF APPEAL IS NOT AS PER THE FACTS OF THE CASE. THE ASSESSEE PUT HI S CLAIM OF EXEMPTION BEFORE THE LD. A.O. IN RESPONSE TO HIS LETTER DATED 22.02.2016 THE ASSESSEE PUT HIS CLAIM OF EXEMPTION U/S 10(23C)(VI) OF THE A CT AS MENTIONED BY THE LD. A.O. IN HIS ORDER DATED 14.03.2016 AT PAGE NO 2 AND 3. BUT REJECTED THE SAME MAKING HIS OPINION THAT SINCE THE ASSESSEE HA S CONTRAVENED THE PROVISIONS OF SECTION 13 OF THE ACT THEREFORE HE DENIED THE BENEFITS OF SECTION 11 BUT HAS NOT MENTIONED THE REASON OF DEN YING THE BENEFIT OF SECTION 10(23C)(VI) OF THE ACT. NOW WE BEG TO SUBMIT BEFORE THE HONOURABLE BENCH AS UNDER IN CONNECTION WITH DIRECTIONS OF THE HONOURABLE CIT-A-II INDORE IN CON NECTION WITH ALLOWING THE EXEMPTION U/S 10(23C)(VIA) OF THE ACT IRRESPECTIVE OF THE FACTS THAT THE SAME WAS NOT CLAIMED IN THE RETURN OF INCOME. THE HONOURABLE CIT-A AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE AND RELYING ON CIRCULAR NO 14 DATED 11.04.1955 ISSUED BY CBDT IN WHICH IT HAD BEEN INSTRUCTED TO ALL THE AUTHORITIES ENGAGED IN COLLEC TING THE REVENUE TO ALLOW ALL THE BENEFITS TO THE ASSESSEE IRRESPECTIVE OF THE FACT T HAT THE SAME WAS CLAIMED BY THE ASSESSEE OR NOT. THE HONOURABLE CIT-A AFTER EMPHASI NGTHE CONTENTS OF PARA 3 OF THE ABOVE SAID CIRCULAR WHICH WERE IN NATURE OF INS TRUCTION TO ALL THE AUTHORITIES ENGAGED IN COLLECTING THE REVENUE ABOUT THE APPROAC H OF THEIR WORKING IN FAVOUR OF THE ASSESSEE. AND DEALING THE DUTIES AND RESPONSIBI LITIES OF THE ASSESSING AUTHORITIES UNDER THE INCOME TAX ACT HAS ISSUED THE DIRECTIONS TO ALLOW THE BENEFITS OF SECTION 10(23C) (VIA) OF THE ACT TO THE ASSESSEE . [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 7 THE INSTRUCTIONS AS MENTIONED IN PARA 3 OF THE ABOV E MENTIONED CIRCULAR NO 14 DATED 11.04.1955 AS ISSUED TO ALL THE AUTHORITIES ENGAGED IN COLLECTING THE REVENUE IS REPRODUCED AS UNDER FOR THE YOUR HONORS KIND CONS IDERATION. 3. OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANT AGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTIES TO ASSI ST A TAXPAYER IN EVERY REASONABLE WAY PARTICULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TA XPAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICATE THAT SOME REFUND O R RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD IN THE LONG RUN BENEFIT THE DEPARTMENT FOR IT WOULD INSPIRE CONFIDENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM T HE DEPARTMENT. ALTHOUGH THEREFORE THE RESPONSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH ASSESSEE ON WHOM IT IS IMPOSED BY LAW OFFICERS SHOULD: (A) DRAW THEIR ATTENTION TO ANY REFUNDS OR RELIEFS TO WHICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE OMITTED TO CLAIM FOR S OME REASON OR OTHER; THUS THE INTENTION OF LAW IS THAT TO ALLOW ALL THE BENEFITS TO THE ASSESSEE IRRESPECTIVE OF THE FACT WHETHER THE ASSESSEE CLAIM S IT OR NOT BUT IT IS THE DUTY OF EVERY OFFICER TO PASS ON THE BENEFITS TO THE ASSESS EE WHICH IS AVAILABLE TO THE ASSESSEE UNDER THE PROVISIONS OF LAW. AS SUCH IT IS MOST HUMBLY SUBMITTED THAT DIRECTIONS ISSUED BY THE HONORABLE CIT-A IN HIS APPEAL ORDER DATED 02.02.2018 TO THE LD. A.O . TO ALLOW THE BENEFITS OF SECTION 10(23C) (VI) TO THE ASSESSEE WHICH WERE CLAIMED BY HIM THROUGH AN APPLICATION U/S 154 OF THE ACT FILED BEFORE THE LD. A.O. IS AS PER INTENTION OF THE STATUE TO PASS ON ALL THE BENEFITS TO THE ASSESSEE WHICH ARE AVAILABL E TO HIM AS PER THE PROVISIONS OF THE LAW WHETHER FOR WHICH HE WAS IGNORANT OR NOT A FTER CONSIDERING THE VARIOUS OBSERVATIONS OF VARIOUS COURTS IN THE SUBJECT MATTE R AS UNDER: (I) SUSHIL KUMAR DAS V INCOME TAX OFFICER (2011) 11 ITR(TRIB) 17 146 TAXMAN 335 (GUJ) (II) RAJ RANI GULATI CIT CENTRAL TILAK (2012) 346 I TR 543(ALL) (III) S.R.KOSHTI V CIT 146 TAXMAN 335(GUJ) (IV) K.P.VARGHESE V ITO 131 ITR 597 (V) UCO BANK V CIT 237 ITR 889 (V) CIT BHARAT ALUMINUM LTD 303 ITR 256 (DEL) (VI) CIT V DHAMPUR SUGAR LTD 90 ITR 236 (ALL) (VII) XEROX INDIA LTD V DCIT NEW DELHI (ITA 158/201 0 ) FURTHER AFTER RELYING ON THE VALIDITY OF CIRCULAR N O 14 DATED 11.04.1955 AS EXAMINED BY HONOURABLE APEX COURT IN THE CASE OF CI T V MAKENDM MILLS REPORTED IN 234 ITR 56 IN WHICH THE HONOURABLE COURT HAS EXA MINED THE APPLICABILITY OF THE ABOVE CIRCULAR IN REGIME OF 1961 ACT. AND IT WAS OP INED THAT THE SAID CIRCULAR IS [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 8 STILL INFORCE EVEN THOUGH ISSUED PRIOR TO 1961 ACT AS THE CIRCULAR HAS NOT BEEN WITHDRAWN TILL DATE. FURTHER THE HONORABLE CIT-A AFTER GIVING HIS FINDIN GS THAT THE PROVISIONS OF SECTION 119(1) OF THE ACT REQUIRES EVERY OFFICER TO FOLLOW ORDERS INSTRUCTIONS AND DIRECTIONS OF CBDT ARE BINDING IN NATURE ON THE TAX AUTHORITIE S EVEN IF THE DIRECTIONS GIVEN BY CBDT ARE AT VARIANCE WITH THE PROVISIONS OF LAW. THE CIRCULAR IN EFFECT IS AS GOOD AS LAW. FURTHER THE HONORABLE CIT-A ALSO GIVEN HIS FINDING S THAT ARTICLE 265 OF INDIAN CONSTITUTION EMPOWERS THE GOVERNMENT TO LEVY AND CO LLECT TAX THAT IT CAN THROUGH AUTHORITY OF LAW ONLY AS SUCH TAX CANNOT BE LEGITIM ATELY COLLECTED FROM THE TAXPAYER WHICH IS COLLECTABLE AS PER THE PROVISIONS OF LAW O NLY. THE DEPARTMENT IN THE GROUNDS OF APPEAL HAS STRONGL Y RELIED UPON THE RATIO OF CASE LAW AS VERDICT BY HONOURABLE SUPREME COURT OF INDIA IN THE CASE OF GOETZE (INDIA) LTD 284 ITR 323. IN THIS REGARD IT IS SUBMITTED THA T THE DECISION OF THE APEX COURT HAS NOT LAID DOWN AS MATTER OF LAW THAT THERE IS A BAR FOR THE ASSESSING AUTHORITY TO ENTERTAIN THE CLAIM FOR DEDUCTION OTHERWISE THAN BY FILING A REVISED RETURN. THE ABOVE VIEWS HAVE BEEN TAKEN BY HONOURABLE ALLAHABA D HIGH COURT IN THE CASE OF UNIVERSAL SUBSCRIPTION AGENCY (P) LTD V JCIT REPOR TED IN 159 TAXMAN 64. THE PURPOSE AND INTENTION OF LAW IS TO MAKE THE CORRECT ASSESSMENT AND TO COLLECT CORRECT AND LEGITIMATE TAX FROM THE ASSESSEE. IF TH E RIGHTFUL DEDUCTION OR RELIEF IS NOT ALLOWED TO THE ASSESSEE THE PURPOSE AND INTENTION OF THE LAW WILL BE DEFEATED. RELIANCE IS PLACED ON THE FOLLOWING CASE LAWS. (I) CIT V JAI PARABOLIC SPRINGS LTD 172 TAXMAN 258 (DELHI) (II) CIT V DHAMPUR SUGAR LTD 90 ITR 236 (ALL) (III) BHARAT STARCH INDUSTRIES LTD V CIT (ITA NO 16 11/K/2003 (IV) THOMAS KURIAN V ACIT 108 TTJ 439 (COCHIN) (V) XEROX INDIA LTD V DCIT NEW DELHI (ITA NO 1580/ DEL/2010) IN THE CASE OF CIT V. MAHALAXMI SUGAR MILLS CO. LTD . (1986) 160 ITR 920 SC IT WAS OBSERVED THAT: THERE IS A DUTY CAST ON THE INCOME-TAX OFFICER TO APPLY THE RELEVANT PROVISIONS OF THE INDIAN INCOME-TAX ACT FOR THE PURPOSE OF DETERM INING THE TRUE FIGURE OF THE ASSESSEES TAXABLE INCOME AND THE CONSEQUENTIAL TAX LIABILITY. THUS THE ASSESSEE FAILING TO CLAIM THE BENEFIT OF A SET-OFF CANNOT ABSOLVE THE INCOME-TAX OFFICER OF HIS DUTY TO APPLY SECTION 24 IN AN APPROPRIATE CASE. [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 9 4. THAT THE DEPARTMENT IN GROUND NO 1 OF ITS APPEAL HAS RAISED THAT IN THE GIVEN FACTS OF THE CASE LD CIT-A WAS NOT JUSTIFIED IN ALL OWING THE SOCIETY BENEFITS OF THE EXEMPTION U/S 10(23C) (VIA) WHEN IT WAS FOUND BY TH E A.O. THAT THE ASSESSEE HAS CONTRA VENDED 13 TH PROVISO OF SECTION 10(23C) HENCE THE SOCIETY CANNO T BE SAID TO BE EXISTING SOLELY FOR EDUCATION PURPOSES. 13 TH PROVISO OF SECTION 10(23C) READS AS UNDER: PROVIDED ALSO THAT WHERE THE FUND OR TRUST OR INSTI TUTION OR ANY UNIVERSITY OR THE EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHE R MEDICAL INSTITUTION REFERRED TO IN SUB CLAUSE (IV) OR SUB CLAUSE (V) OR SUB-CLAUSE (VI ) OR SUB-CLAUSE (VIA) DOES NOT APPLY ITS INCOME DURING THE YEAR OF RECEIPT AND AC CUMULATES IT ANY PAYMENT OR CREDIT OUT OF SUCH ACCUMULATION TO ANY TRUST OR INS TITUTION REGISTERED UNDER SECTION 12AA OR TO ANY FUND OR TRUST OR INSTITUTION OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTIT UTION REFERRED TO IN SUB C-CLAUSE (IV) OR SUB-CLAUSE(V) OR SUB-CLAUSE(VI) OR SUB-CLAU SE(VIA) SHALL NOT BE TREATED AS APPLICATION IF INCOME TO THE OBJECTS FOR WHICH SUCH FUND OR TRUST OR INSTITUTION OR UNIVERSITY OR EDUCATIONAL INSTITUTION OR HOSPITAL O R OTHER MEDICAL INSTITUTION AS THE CASE MAY BE IS ESTABLISHED. THUS FROM THE READING OF THE ABOVE PROVISO IT IS CL EAR THAT THE PROVISO COMES INTO PLAY IF THE ELIGIBLE ASSESSEE DOES NOT A PPLY ITS INCOME TOWARDS THE OBJECTS FOR WHICH HE IS CARRYING OUT HIS ACTIVITIES AND ACCUMULATES IT THEN ANY PAYMENTS MADE OUT OF SUCH ACCUMULATION TO ANY ASSES SEE REGISTERED U/S 12AA THEN SUCH PAYMENT SHALL NOT BE TREATED AS APPLICATI ON OF INCOME TO THE OBJECTS FOR WHICH ASSESSEE CARRIES OUT HIS ACTIVITIES. WHEREAS IN THE CASE OF THE ASSESSEE WHO HAS APPLIED THE ENTIRE INCOME DURING THE YEAR ITSELF AND HAS NOT OPTED ANY ACCUMU LATION OF INCOME NOT ONLY DURING THE YEAR UNDER CONSIDERATION BUT EVEN SINCE THE INCEPTION OF THE ASSESSEE AS SUCH THERE IS NO FORCE IN THE GROUND AS RAISED B Y THE DEPARTMENT CONTRA VENDING THE PROVISO 13 OF SECTION 10(23C) OF THE AC T. IN THE LIGHT OF THE ABOVE SUBMISSIONS AND THE CIRCU LAR OF THE BOARD IT CAN BE SAFELY SAID THAT THE DEPARTMENT IS NOT PERMITTED TO IGNORE THE DUE CLAIM OF THE ASSESSEE AND FURTHER IS NOT EXPECTED TO TAKE ADVANT AGE OF THE IGNORANCE OF THE ASSESSEE AND IF ANY BENEFIT IS AVAILABLE TO THE ASS ESSEE IN ACCORDANCE WITH LAW THAT IS EXPECTED TO BE EXTENDED TO THE ASSESSEE BY THE ASSESSING OFFICER AS DIRECTED BY HONORABLE CIT-A IN HIS ORDER DATED 03.1 0.2016 AS SUCH THE SAME HAS TO BE UPHELD. 02.02.2018 FURTHER IN THE LAST BUT NOT THE LEAST IT IS SUBMITT ED THAT THE HONOURABLE BENCH HAS CONSIDERED ABOVE GROUNDS OF APPEAL IN ASSESSEES OW N CASE FOR THE A.Y. 2011-12 VIDE ITA NO 63/2017 ORDER DATED 15.03.2019 IN WHICH THE HONOURABLE BENCH HAS CONFIRMED THE DECISION OF THE HONOURABLE CIT-A GIV ING THE DIRECTIONS TO THE LD. A.O. TO ALLOW THE EXEMPTION U/S 10(23C)(VI) OF THE ACT TO THE ASSESSEE IRRESPECTIVE [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 10 OF THE FACT THAT THE SAME WAS NEITHER CLAIMED IN TH E RETURN OF INCOME NOR BEFORE THE LD. A.O. DURING THE COURSE OF ASSESSMENT PROCEE DINGS GIVING FINDINGS THAT THE HONOURABLE CIT-A AFTER FOLLOWING THE BINDING PRECED ENTS HAS ISSUED THE DIRECTIONS TO THE LD. A.O. THE COPY OF SAID ORDER IS PLACED AT PAGE NO.. OF THE PAPER BOOK. THUS THE MATTER AS RAISED BY THE DEPARTMENT IN THE PRESENT APPEAL BEFORE THE HONOURABLE BENCH IS ALREADY DECIDED ONE BY THE HONO URABLE BENCH THEREFORE THE SAME VIEW MAY BE FOLLOWED IN THE PRESENT APPEAL ALS O. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LD. COUNSEL FOR THE ASSESS EE RELIED ON THE ORDERS OF THE LD. CIT(A) AND CONTENDED THAT MERELY BECAUSE THE ASSESSEE COULD NOT MAKE CLAIM OF EXEMPTION SHOULD NOT BE A GROUND TO REJECT THE ELIGI BLE CLAIM OF EXEMPTION U/S 10(23C) OF THE ACT. IT IS TR UE THAT IT IS A SETTLED POSITION OF LAW THAT THE REVENUE AUTHORIT Y SHOULD NOT DENY CLAIM OF EXEMPTION IF IT IS AVAILABLE UNDER THE FACTS OF A PARTICULAR CASE. IN SUCH A CASE THE ASSES SEE IS REQUIRED TO DEMONSTRATE THAT HE IS ELIGIBLE FOR TH E BENEFIT AVAILABLE UNDER THE LAW. WE ARE OF THE VIEW THAT THE A .O. IS NOT EXPECTED TO ALLOW EACH AND EVERY CLAIM IN A CASUAL MANNER. FOR THE PURPOSE OF AVAILING BENEFIT OF EXEMPT ION [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 11 U/S 10(23C) OF THE ACT THE ASSESSEE IS REQUIRED TO PROVE THAT ALL THE CONDITIONS AS SET OUT IN THE LETTER GRANT ING REGISTRATION HAS BEEN FULFILLED AND ALSO THE ASSESSEE CONDUCTED ITS AFFAIRS IN ACCORDANCE WITH THE STATUTORY OBLIGATION AS MANDATED UNDER THE LAW. IN THE PRESENT C ASE THE A.O. HAS NOTICED THAT THE ASSESSEE TRUST HAD DIVERT ED ITS FUNDS FOR THE BENEFIT OF THE RELATED PERSON. AS THE ASSESSEE TRUST HAS NOT CLAIMED ANY INTEREST IN RESPECT OF THE ADVANCES GIVEN TO THE RELATED PERSON FOR PURCHASE OF HER PROPERTY THIS INFERENCE IS DRAWN ON TWO GROUND S. ONE THAT THERE IS INORDINATE DELAY FOR REGISTRATION OF SALE DEED OF THE PROPERTY AND SECONDLY IN THE INTERREGNUM PERIOD I.E. THE DATE WHEN THE ADVANCE WAS GIVEN AND SALE DEED WAS EXECUTED NO INTEREST WAS CHARGED ON THE AMOUNT SO ADVANCED. THE FACT THAT NO INTEREST WAS CHARGED ON ADVANCE MADE TO SMT. URMILA JAIN IS NOT DISPUTED BY THE ASSESSEE TRUST. WE FIND THAT THE LD. CIT(A) HAS FOLLO WED [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 12 HIS DECISION PERTAINING TO THE EARLIER YEAR I.E. FOR THE ASSESSMENT YEAR 2012-13 AND THE MATTER HAD TRAVELLED UP TO THIS TRIBUNAL AND THE TRIBUNAL HAD DISMISSED APPEAL OF REVENUE IN ITA NO.63/IND/2017. NO CHANGE INTO THE F ACTS AND CIRCUMSTANCES ARE POINTED OUT BY THE REVENUE. THEREFORE UNDISPUTEDLY A.O. IN FACT HAD NOTED THE F ACT THAT THE ASSESSEE TRUST IS REGISTERED U/S 10(23C) OF THE ACT. DESPITE HAVING RECORDED THIS FACT THE A.O. DID NOT G IVE ANY SPECIFIC FINDING AS TO WHY THE ASSESSEE WOULD NOT BE ENTITLED FOR EXEMPTION U/S 10(23C) OF THE ACT. WE THEREFORE UNDER THESE UNDISPUTED FACTS DO NOT SEE ANY REASONS TO INTERFERE INTO THE FINDING OF LD. CIT(A). THE GROUNDS RAISED IN THIS APPEAL ARE DISMISSED. [ITA NO.468/IND/2018] [M/S. INDORE EDUCATION AND SERVICE SOCIETY INDORE] 13 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 19. 11.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 19/11/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR INDORE