×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.
01-03-2019, His Holiness Dr. Sydena Taher, Section 11, 13, 28, Tribunal Mumbai
This appeal, filed by Revenue, being ITA No. 7131/Mum/2017, is directed against appellate order dated 13.09.2017 in appeal no. CIT(A)-I/IT/E(1)/(139)/2015-16, passed by learned Commissioner of Income Tax (Appeals)-1, Mumbai (hereinafter called “the CIT(A)”), for assessment year 2010-11, the appellate proceedings had arisen before learned CIT(A) from the assessment order dated 31.03.2010 passed by learned Assessing Officer (hereinafter called “the AO”) u/s 144 r.w.s. 147 of the Income-tax Act, 1961 (hereinafter called “the Act”) for AY 2010-11.
2. The grounds of appeal raised by Revenue in memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called “the tribunal”) read as under:-
―1. Whether, on the facts of the case and in law, the Ld. CIT(A) erred in allowing the carry forward of deficit of Rs. 14,30,11,390/-, and directing the Assessing Officer to allow carry forward of deficit on account of excess expenditure without appreciating the fact that this would have the effect of granting double benefit to the assessee, first as 'accumulation' of income u/s.11(1)(a) or as corpus donation u/s 11(1)(d) in earlier years/current year and then as 'application' of income u/s 11(1)(a) in the subsequent years which was legally not permissible.?
1.2 Whether, on the facts of the case and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the claim of the assessee for carry forward of the said deficit by relying upon the judgment of Hon'ble Bombay High Court in the case of Institute of Banking Personnel Selection, ignoring the fact that the Department has not accepted the said decision of the jurisdictional High Court on merit of the case, but due to smallness of tax effect appeal was not filed before Hon'ble Supreme Court, However, on this issue the department has filed SLPs in other cases before the Apex Court inclusive the case of MIDC ( SLP (Civil) 9891 of 2014) in which leave has been granted and the issue is pending for adjudication before the Hon'ble Supreme Court and the case has not reached finality.
1.3 Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the claim of the assessee for carry forward of the said deficit, ignoring the fact that there was no express provision in the I T Act, 1961 permitting allowance of such claim.
2 The appellant prays that the order of the Commissioner of Income Tax (Appeals)-I, Mumbai be set aside and that of the Assessing Officer be restored.
3 The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary.‖ 3. The brief facts of the case are that the assessee trust is registered as a Charitable Organisations with Commissioner of Income-tax(Exemption),Mumbai u/s. 12A of the 1961 Act and has accordingly claimed exemption u/s. 11 of the 1961 Act . The short question which has arisen in this appeal before us is that the assessee’s expenditure has exceeded its income by Rs. 14,30,11,390/- for impugned assessment year and we have to adjudicate whether said deficit being excess of expenditure over income for impugned assessment can be allowed to be carry forward to the subsequent years to be set off against the income/surplus of subsequent years. The assessee initially additionally claimed deduction/accumulation of 15% of the income u/s. 11(1)(a) of the 1961 Act to the tune of Rs. 1,26,43,953/- despite already having deficit of excess of expenditure over income, the AO disallowed not only the accumulation/deduction of 15% of the income u/s. 11(1)(a) of the 1961 Act to the tune of Rs. 1,26,43,953/- but also disallowed the deficit of Rs.15,56,55,343/- computed after taking into account excess of expenditure over income as also accumulation of 15% of income u/s 11(1)(a) of the 1961 Act, which was claimed to be carried forward by the assessee to the subsequent years to be adjusted against income/surplus of the subsequent years , vide assessment order dated 30.10.2015 passed by the AO u/s 144 r.w.s. 147 of the 1961 Act.
4. Aggrieved by the assessment framed by the AO vide assessment order dated 30.10.2015 passed by the AO u/s. 144 r.w.s. 147 of the 1961 Act , the assessee filed first appeal before learned CIT(A) , wherein the assessee conceded before Ld. CIT(A) that assessee is not entitled to deduction/accumulation of 15% of the income u/s. 11(1)(a) of the Act to the tune of Rs. 1,26,43,953/- owing to the fact that assessee’s expenditure has already exceeded its income by Rs. 14,30,11,390/- and this claim was foregone by the assessee itself before learned CIT(A). Thus, this claim of the assessee as to accumulation/ deduction of 15% of income u/s 11(1)(a) of the 1961