×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
29-11-2019, Thiagarajar Mills, Section 129, 124, 120, Tribunal Chennai
The captioned appeals have been filed at the instance of the assessee against the respective orders of the Commissioner of Income Tax (Appeals)-1, Vadodara (‘CIT(A)’ in short), dated 05.04.2017 & 08.12.2016 arising in the assessment orders both dated 23.03.2015 passed by the Assessing Officer (AO) under s. 143(3) and 143(3) r.w.s. 147 of the Income Tax Act, 1961 (the Act) concerning AYs. 2012-13 & 2011-12.
2. Both the captioned appeals relates to identical controversy namely eligibility of exemption under s.11 of Income Tax Act. Accordingly, both the matters were heard together and disposed of by this common order.
3. The appeal filed by the assessee was found to be belated by 238 days in preferring the appeal before the Tribunal. The assessee has filed affidavit giving explanation for delay and seeking condonation thereof. The assessee has explained the inadvertent lapse on the part of the tax consultant and thereby the order of the CIT(A) could not be communicated properly. A reading of the consequence of the event is pointed out in the affidavit gives an impression of bonafide lapse. The delay in filing the appeal is thus condoned.
4. For the sake of convenience, the relevant grounds of appeal raised by the assessee in relation to AY 2011-12 in ITA No. 712/Ahd/2017 is reproduced hereunder:
“1. The L'd CIT(A)-2 has erred in sustaining / upholding the action of L'd AO to withdraw exemption U/s 11 of the IT Act claimed by the appellant Trust and thereby treating surplus of Rs. 19,86,737/- generated from conducting safety training programme and activities as income from activities in the nature of trade / commerce or business by incorrectly interpreting provisions of Section 2(15) of the Income Tax Act 1961.
It is prayed that the exemption U/s 1 1 of Rs. 19,86,737/- be allowed.
2. The L'd CIT(A)-2 has wrongly confirmed disallowance of prior period expenses of Rs. 4,905/-. It is prayed that the disallowance of Rs. 4,905/- be deleted.”
5. Ground No.1 concerns eligibility of exemption under s.11 of the Act.
6. Briefly stated, the assessee is a public charitable trust stated to be registered under the Bombay Public Trust Act, 1950 and is also registered under s.12(A)(a) of the Income Tax Act, 1961. Consequently, the assessee trust is eligible for exemption of its income in terms of Section 11 of the Act. The assessee trust filed its return of income claiming exemption under s.11 of the Act. The return of income so filed was selected for scrutiny in the course of the scrutiny assessment. The AO raised question of eligibility of exemption claimed under s.11 (1) of the Act r.w. provision of Section 2(15) of the Act The AO eventually held the surplus of Rs.19,86,737/- to be non-charitable in nature and consequently, taxable under the normal provisions of the Act.
7. Aggrieved by the denial of exemption claimed under s.11 of the Act, the assessee trust preferred appeal before the CIT(A) without any success. The relevant operative para of the order of the CIT(A) denying exemption to the assessee is reproduced hereunder:
“4. I have carefully considered the facts on records and submission of the Ld. Authorized Representative. Ground No. 1 pertains to disallowance of exemption claimed u/s, 11 amounting to Rs.19,86 737/-. Undisputedly, the appellant is engaged in the activities of conducting safety training programmes, workshops, seminars, conferences and creating safety awareness among workers/staff/executives working in industries and also for people commuting on roads. Accordingly it was claimed by the appellant that such activities are in the nature of education within the meaning of Section 2(15). To support its contention, the appellant has relied upon two decisions. In the first decision in the case of Sabarmati Gaushala Trust (supra), I find that issue was not relating to educational activities and hence the same is distinguishable on facts. The second decision relied upon by the appellant is of The institute of Chartered Accountants of India (supra), wherein Hon'ble Delhi High Court has very clearly held that activities of institute of Chartered Accountant of India were not in the nature of education as defined in section 2(15) of the Act. Therefore, the ratio laid down in this decision is also of no help to the appellant.