Alphores Educational Society, Hyderabad v. DDIT, Hyderabad

ITA 796/HYD/2009 | 2005-2006
Pronouncement Date: 21-05-2010 | Result: Allowed

Appeal Details

RSA Number 79622514 RSA 2009
Assessee PAN AAATA5511G
Bench Hyderabad
Appeal Number ITA 796/HYD/2009
Duration Of Justice 11 month(s) 3 day(s)
Appellant Alphores Educational Society, Hyderabad
Respondent DDIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 21-05-2010
Date Of Final Hearing 13-05-2010
Next Hearing Date 13-05-2010
Assessment Year 2005-2006
Appeal Filed On 18-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.796/HYD/2009 A.Y.: 2005-06 M/S ALPHORES EDUCATIONAL SOCIETY KARIMNAGAR. (PAN AAATA 5511 G) VS DY. DIRECTOR OF IT (E)-I HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SHRI K.V.N. CHARYA DR O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-IV HYDERABAD DATED 31/3/2009 A ND PERTAINS TO THE ASSESSMENT YEAR 2005-06. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRU ST ESTABLISHED THE INSTITUTIONS IN ALPHORES JUNIOR COLLEG ES WOMENS DEGREE COLLEGE PG COLLEGE AND GIRLS JUNIOR COLLEGE AND BEEN MAINTAINING HOSTEL FOR GIRLS. THE ASSESSEE DECLARED GROSS RE CEIPTS OF RS.3 17 29 779/- INCLUSIVE OF MAJOR CONSTITUENTS IS TUITI ON FEES AT RS.10 16 815/- TOWARDS SURPLUS ON HOSTEL MAINTENANCE AND RENT RECEIVED FOR COLLEGE BUILDING. THE ASSESSEE CLAIMED NET I NCOME AT RS.1 55 732/- AND CLAIMED EXEMPTION U/S 11. THE ASSESSIN G OFFICER DENIED THE EXEMPTION U/S 11 SINCE THERE WAS PAYMEN T MADE BY THE ASSESSEE WITHOUT DEDUCTING TDS IN VIOLATION OF PROVISIONS OF SEC.40A (IA) AND ALSO CASH PAYMENT IN CONTRAVENING OF THE PROVISIONS O F SEC.40A(3) READ WITH SEC.13(1) ( C ) OF THE IT ACT. THE ASSESSING OFFICER THEREAFTER ITA-769/HYD/2009 ALPHORES EDUCATIONAL SOCIETY KARIMNAGAR 2 2 ADDED THE SURPLUS INCOME ON HOSTEL MAINTENANCE DEPRECIAT ION AND ALSO ADDITION ON ACCOUNT PROVISION OF SEC.40A(IA) 40A (3) OF THE IT ACT. AGAINST THIS THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A). THE CIT(A) HELD THAT THE ASSESSING OFFICER IS RIGHT IN NOT GRANTING THE EXEMPTION U/S 11. AGAINST THIS ASSESSEE IS IN APPEAL BEFORE US. 3. THE AR SUBMITTED THAT THE ASSESSEE HAS ACTUALLY MADE PAYMENT DEDUCTING TDS. THE ASSESSEE HAS DEDUCTED TDS ON PAYMENT OF RENT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME AND PRAYED TO GIVE AN OPPORTUNITY TO PRODUCE RELEVANT RECORDS BEFORE THE ASSESSING OFFICER. FURTHER HE ALSO SUBMITTED THAT THE PAYME NT MADE IN CONTRAVENTION OF PROVISION OF SEC.40A(3) IS NOT TO THE EXTENT AT RS.42 17 407/. THE ACTUAL FIGURE IS MUCH LESS THAN THIS A ND ALSO THERE IS NO PAYMENT TO INTERESTED PARTIES. HE PRAYED TO GIVE A N OPPORTUNITY TO PRODUCE THE EVIDENCE BEFORE THE ASSESSING OFFICER. THE DE PARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER OF THE CI T(A) AND ALSO HE RELIED ON THE JUDGEMENT IN THE CASE OF SHRI A.K. BAB U KHAN VS. COMMISSIONER OF WEALTH TAX (102 757 ) (AP). 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. EXEMPTION U/S 11 & 12 CAN BE DEN IED PROVIDED THERE IS VIOLATION AS CONTEMPLATED IN SEC.13 OF THE ACT . U/S 13 (1 ) ( C) OF THE ACT ONLY WHERE INCOME OR PROPERTY IS USED FOR A PPLYING DIRECTLY OR INDIRECTLY FOR THE BENEFIT OF ANY PERSON LIKE AUTHOR OF THE TRUST OR THE PERSON WHO HAS MADE SUBSTANTIAL CONTRIBUTION OR ANY TRUST EE OR MANAGER OR ANY RELATIVE OF SUCH AFORESAID PERSON REFERR ED TO IN SUB SEC.3 OF SEC.13 OR FOR THE SERVICES RENDERED BY THOSE PER SONS AND WHICH IS COMMENSURATE WITH THE NATURE OF SERVICES RENDERED THE N THE BENEFIT OF SEC.11 & 12 CANNOT BE DENIED. THERE IS NO PROVISION IN THE ACT NOT TO REMUNERATE THE INTERESTED PERSON BUT SUCH REMUNERATION SHOULD BE ITA-769/HYD/2009 ALPHORES EDUCATIONAL SOCIETY KARIMNAGAR 3 3 COMMENSURATE WITH THE SERVICES RENDERED BY THEM. IF SO F OUND IT CANNOT BE SAID THAT PROVISIONS OF SEC.13 (1) (C) ARE ATTR ACTED SO AS TO DENY BENEFIT OF EXEMPTION U/S 11 & 12. 5. FURTHER IN THIS CASE THE ASSESSEE WANTS TO PRODUCE CER TAIN DOCUMENTS IN SUPPORT OF ITS CLAIM. ACCORDINGLY IN THE I NTEREST OF JUSTICE WE SET ASIDE THE ENTIRE ISSUE TO THE FILE OF ASSESSI NG OFFICER. THE ASSESSING OFFICER HAS TO EXAMINE THE ALLOWABILITY OF EXEM PTION U/S 11 INDEPENDENTLY AND IF THERE IS ANY VIOLATION OF SECTION 40A (IA) OR 40A (3) OF THE IT ACT THAT PAYMENT TO THAT EXTENT ONLY TO BE ADDED. IF THE ASSESSEE FULFILS THE CONDITIONS THE EXEMPTION U/S 11 I T IS TO BE GRANTED EVEN THOUGH THERE WAS ADDITION ON ACCOUNT OF PROVISIONS OF SEC.40A (IA) AND 40A(3). IN VIEW OF THIS THE ENTIRE ISSUE SET ASIDE TO THE FILE OF ASSESSING OFFICER FOR FRESH CONSIDERATION. 6. ACCORDINGLY THIS APPEAL OF THE ASSESSEE IS ALLOWED P ARTLY FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 21. 5:2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 21ST MAY 2010 ITA-769/HYD/2009 ALPHORES EDUCATIONAL SOCIETY KARIMNAGAR 4 4 COPY FORWARDED TO: 1. M/S S. RAMA RAO ADVOCATE FLAT NO.103 H.NO.6-3-54 2/4 INDIRADEVI NILAYAM ST.NO.7 HIMAYATNAGAR HYDERABAD . 2. DY.DIT(E)-I HYDERABAD 3. CIT(A)- IV HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP