Andhra Pradesh State Civil Supplies Corporation Ltd., Hyd, Hyderabad v. DCIT, Circle-1(1), Hyd, Hyderabad

ITA 752/HYD/2016 | 2005-2006
Pronouncement Date: 28-10-2016 | Result: Allowed

Appeal Details

RSA Number 75222514 RSA 2016
Assessee PAN AABCA7164R
Bench Hyderabad
Appeal Number ITA 752/HYD/2016
Duration Of Justice 5 month(s) 9 day(s)
Appellant Andhra Pradesh State Civil Supplies Corporation Ltd., Hyd, Hyderabad
Respondent DCIT, Circle-1(1), Hyd, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-10-2016
Date Of Final Hearing 20-12-2016
Next Hearing Date 20-12-2016
Assessment Year 2005-2006
Appeal Filed On 19-05-2016
Judgment Text
ITA NOS 751 AND 752 OF 2016 AP STATE CIVIL SUPPLIES CORPN LTD HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN ACCOUNTANT MEMBER ITA NOS.751 & 752/HYD/2016 (ASSESSMENT YEARS: 2004-05 & 2005-06) ANDHRA PRADESH STATE CIVIL SUPPLIES CORPORATION LTD HYDERABAD PAN: AABCA 7164 R VS DY. COMMISSIONER OF INCOME TAX CIRCLE 1(1) HYDERABAD FOR ASSESSEE : SHRI D.V. ANJANEYULU & SHRI P. PRAVALLIKA FOR REVENUE : SMT. G. APARNA RAO CIT (DR) O R D E R PER SMT. P. MADHAVI DEVI J.M. THESE ARE ASSESSEES APPEALS FOR THE A.YS 2004-05 & 2005-06 RESPECTIVELY. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CORPORATION ESTABLISHED BY THE GOVT. OF ANDHRA PRAD ESH BY A GOVERNMENT ORDER. THE MAIN OBJECT OF THE ASSESSEE I S TO BRING DOWN THE PRICES OF THE ESSENTIAL COMMODITIES AND FO R EQUITABLE DISTRIBUTION OF THE ESSENTIAL COMMODITIES AT A CONT ROLLED PRICE TO THE PEOPLE LIVING AT OR BELOW THE POVERTY LINE. THE ENTIRE ACTIVITIES OF THE ASSESSEE FROM THE STAGE OF PROCUREMENT TILL THE STAGE OF DISTRIBUTION TO THE PEOPLE WERE CONTROLLED BY THE S TATE GOVT. DURING THE A.YS 1983-84 THE QUESTION HAD ARISEN WHE THER THE ACTIVITIES CARRIED ON BY THE ASSESSEE ARE CHARITABL E WITHIN THE DATE OF HEARING : 20.10.2016 DAT E OF PRONOUNCEMENT : 28.10.2016 ITA NOS 751 AND 752 OF 2016 AP STATE CIVIL SUPPLIES CORPN LTD HYDERABAD PAGE 2 OF 4 MEANING OF 2(15) OF THE INCOME TAX ACT. THE SPECIAL BENCH OF THE ITAT REPORTED IN 37 ITD 1 HAS HELD THE ASSESSEE TO BE A CHARITABLE INSTITUTION. DURING THE A.YS 1994-95 TO 2 001-02 THE QUESTION AROSE AS TO WHETHER THERE IS ANY VIOLATION OF SECTION 11(2) OF THE I.T. ACT. THE ASSESSEE HAD MADE CAPITAL INVE STMENT IN A JOINT VENTURE COMPANY. ACCORDING TO THE AO AND THE CIT (A) THE CAPITAL INVESTMENT MADE BY THE ASSESSEE IN PROMOTIO N OF A JOINT VENTURE COMPANY FOR ACHIEVEMENT OF ITS OBJECT OF CH ARITABLE PURPOSES AMOUNTS TO INVESTMENT IN SHARES OF THE CO MPANY OTHER THAN THE GOVT. COMPANY THEREFORE THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE ACT. THEREAFTER THE ASSESS EE HAS BEEN DENIED EXEMPTION U/S 11 OF THE ACT CONTINUOUSLY. DU RING THE RELEVANT A.Y ALSO THE ASSESSEE WAS HELD TO BE NOT E LIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. DURING THE APPELLATE P ROCEEDINGS BEFORE THE CIT (A) THE ASSESSEE HAS RAISED AN ADDI TIONAL GROUND OF APPEAL CLAIMING DEDUCTION U/S 11 OF THE ACT ON THE BASIS OF THE DECISION OF THE APEX COURT IN THE CASE OF DIT VS. W ORKING WOMENS FORUM REPORTED IN (2015) 379 ITR 35 (S.C) BY WHICH THE HON'BLE SUPREME COURT HAS REJECTED THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AND AFFIRMED THE DECISION OF THE HON'BLE MADRAS HIGH COURT REPORTED IN (2014) 365 ITR 353 (MAD.) THAT THE DENIAL OF EXEMPTION U/S 11 SHOULD B E ONLY TO THE EXTENT OF INCOME WHICH IS VIOLATIVE OF SECTION 13(1 )(D) AND NOT TOTAL DENIAL OF EXEMPTION U/S 11 OF THE ACT. THE CIT (A) HOWEVER DECLINED TO ADMIT THE ADDITIONAL GROUND OF APPEAL O N THE GROUND THAT IT IS NOT EMANATING FROM THE ASSESSMENT ORDER. AGAINST THIS ORDER OF THE CIT (A) THE ASSESSEE IS IN APPEAL BEF ORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE FACTS NARRATED ABOVE AND SUBMITTED THAT THE DECISIO N OF THE ITA NOS 751 AND 752 OF 2016 AP STATE CIVIL SUPPLIES CORPN LTD HYDERABAD PAGE 3 OF 4 HON'BLE SUPREME COURT PASSED IS AFTER ANALYZING THE PROVISIONS OF SECTION 13(1)(D) AND SECTION 11 OF THE ACT AND IT I S ONLY AFTER THE DECISION OF THE HON'BLE SUPREME COURT DATED 18.09.2 015 WHEREBY THE ORDER OF THE HON'BLE MADRAS HIGH COURT DATED 3.2.2014 IS CONFIRMED THAT THE ASSESSEE COULD HAVE MADE THE CLAIM BY FILING THE ADDITIONAL GROUND OF APPEAL BEF ORE THE CIT (A). HE SUBMITTED THAT SINCE THE DECISION OF THE HON'BLE SUPREME COURT IS BINDING ON ALL THE SUBORDINATE COURTS AND TRIBUNALS AS IT IS THE LAW OF THE LAND THE AO IS REQUIRED TO ALLOW THE DEDUCTION U/S 11 OF THE ACT IN RESPECT OF THE INCOME WHICH IS APPLIED FOR CHARITABLE PURPOSES AND ONLY SUCH AMOUNT WHICH IS I N VIOLATION OF SECTION 13(1)(D) CAN BE DENIED EXEMPTION U/S 11 OF THE ACT. THEREFORE ASSESSEE PRAYED THAT THE ADDITIONAL GROU ND SHOULD HAVE BEEN ADMITTED AND REMANDED TO THE AO FOR COMPU TATION OF THE INCOME IN ACCORDANCE WITH SUCH DECISION. THE LE ARNED DR HOWEVER SUPPORTED THE ORDERS OF THE CIT (A). 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD WE FIND THAT IN THE EARLIER YEARS THE O NLY ISSUE BEFORE THE ITAT WAS WHETHER THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 13(1)(D) AND THE ITAT HAS CONFIRMED THE DIS ALLOWANCE AND HAS HELD THAT THE ASSESSEE IS NOT ENTITLED TO DEDUC TION U/S 11 ON ITS ENTIRE INCOME. BUT THE HON'BLE SUPREME COURT IN THE CASE OF WORKING WOMENS FORUM (CITED SUPRA) HAS GIVEN A FIND ING THAT THE ASSESSEE SHALL NOT BE DENIED EXEMPTION OF THE E NTIRE INCOME U/S 11 OF THE ACT AND THE DENIAL SHALL BE ON SUCH A MOUNT INVESTED IN VIOLATION OF SECTION 13(1)(D). THE DEC ISION OF THE HON'BLE SUPREME COURT BEING THE LAW OF THE LAND TH E ASSESSEE IS ENTITLED TO MAKE THE CLAIM EVEN FOR THE ASSESSMENTS WHICH ARE APPEALS PENDING BEFORE THE LOWER AUTHORITIES. WE TH EREFORE DEEM ITA NOS 751 AND 752 OF 2016 AP STATE CIVIL SUPPLIES CORPN LTD HYDERABAD PAGE 4 OF 4 IT FIT AND PROPER TO ADMIT THE ADDITIONAL GROUND OF APPEAL FILED BY THE ASSESSEE BEFORE THE CIT (A) AND REMAND THE ISSU E OF COMPUTATION OF THE ASSESSEES INCOME TO THE FILE OF THE AO IN ACCORDANCE WITH THE ABOVE JUDGMENT. IN VIEW OF THE SAME ASSESSEES APPEALS ARE TREATED AS ALLOWED FOR STATI STICAL PURPOSES. 5. IN THE RESULT ASSESSEES APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2016. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 28 TH OCTOBER 2016. VINODAN/SPS COPY TO: 1 M/S ANJANEYULU & CO. CAS 30 BHAGYALAKSHMI NAGAR GANDHINAGAR HYDERABAD 500080 2 DY. COMMISSIONER OF INCOME TAX CIRCLE 1(1) HYDER ABAD 3 CIT (A)-1 HYDERABAD 4 PR.CIT 1 HYDERABAD 5 THE DR ITAT HYDERABAD 6 GUARD FILE BY ORDER