INCOME TAX OFFICER(EXEM.)-(1), MUMBAI vs. M/S BANK OF INDIA RETIRED EMPLOYEES MEDICAL ASSISTANCE SCHEME, MUMBAI

These are the four cross appeals for A.Y. 2010-11 and 2013-14 involving similar grounds of appeal and identical facts, therefore, disposed off by this common order.

The learned Assessing Officer has raised following grounds of appeal: -

The brief fact of the case is that Assessee is a trust governed by and administered under Bank of India retired employees medical assistance scheme, formulated by the Bank. It is registered with Charity Commissioner, Mumbai. It applied for registration under Section 12A of the Act, which was rejected by learned DIT (Exemption) vide its order dated 22nd February, 2011. However, when assessee preferred an appeal against that order, the co- ordinate Bench vide order dated 3rd January, 2018, in directed the learned DIT to grant registration to the assessee. Thus, Assessee was registered u/s 12 A of the Act. Therefore, assessee is eligible for claiming benefit under Section 11 and 12 of the Income-tax Act, 1961 (the Act).

For this Assessment year assessee filed its return of income on 26th October 2010, at a total income of ₹3,73,429/-. The return of income was accepted as it is.

Later on, on 30th March 2017, the notice under Section 148 of the Act was issued for the reason that by that time assessee was not found to be registered under Section 12AA of the Act, though in the return of income it claimed benefit of Section 11 and 12 of the Act.

Accordingly, on reopening of the case, the assessment was framed under Section 143(3) of the Act on 27/11/2017 assessing total income at ₹3,22,74,579/-. In nutshell, the assessee was denied benefit of Section 11 and 12 of the Act.

Assessee preferred the appeal before the National Faceless e- Assessment Centre. The appellate order was passed on 2nd May, 2023. The learned CIT (A) though accepted that now because of the order of ITAT, assessee is eligible for benefit under Section 11 and 12

At the time of hearing, the learned Authorized Representative submitted that the issue in the appeal of the Revenue is covered against the learned Assessing Officer by the order of the co-ordinate Bench as it was has held that when the registration under Section 12A of the Act is now available to the assessee, the benefit of Section 11 and 12 of the Act cannot be denied. With respect to the appeal of the assessee, assessee submitted that the expenditure incurred on the object of the trust is necessary to be allowed to the assessee as application as assessee is now registered under Section 12A of the Act.

The learned Departmental Representative submitted that the learned Assessing Officer has not accepted the order of the ITAT granting registration to the assessee under Section 12A of the Act, it is challenged at higher judicial forum and therefore, assessee is correctly denied the benefit of Section 12A of the Act.

We have carefully considered the rival contentions and perused the orders of the lower authorities. After the order of the ITAT in dated 3rd January, 2018, the assessee has been granted registration under Section 12A of the Act. As soon as the assessee is registered under Section 12A of the Act, there is no

Coming to the appeal of the assessee, we find that when the assessee is entitled to the benefit of section 11 and 12 of the Act, application of such income by incurring the expenses for the object of the trust are necessary to be allowed to the assessee. The learned CIT (A) is not correct in holding that same does not arise from the assessment order. The assessment order has completely denied the benefit of Section 11 and 12 of the Act. Therefore, the application of the income of the trust is also part of Section 11 and 12 of the Act. Therefore, to that extent, the order of the learned CIT (A) is reversed and learned Assessing Officer is directed to grant the deduction of application of income being expenses incurred on the object of the trust. In the result, the appeal of the assessee is allowed.

In the result, the appeal filed by the learned Assessing Officer is dismissed and the appeal filed by the assessee is allowed.

Coming to A.Y. 2013-14, the learned Assessing Officer in and assessee in ITA No.2190/Mum/2023, has preferred the appeal against the order of the learned CIT (A) dated 2nd May, 2023, wherein the appeal filed by the assessee against the assessment order passed under Section 143(3) read with section 147 of the Act dated 30th November, 2017, was partly allowed. Therefore, both the parties are aggrieved with the appellate order and are in appeal before us, raising identical grounds as were raised in A.Y. 2010-11.

The assessee filed its return of income on 28th September, 2020, at ₹ nil. The return was accepted as it is. However, as the assessee was

On appeal before the learned CIT (A), the assessee was allowed benefit of Section 11 and 12 of the Act, however, the learned CIT (A) did not direct the learned Assessing Officer to allow the application of income by way of various expenditures, holding that the application of income does not arise from the assessment order. Thus, identical orders of assessment and appeal were passed in this year also as compared to A.Y. 2010-11. Therefore, both the parties are in appeal before us.

Both the parties confirmed that facts and circumstances of the case and the issue involved in this appeal are identical to the appeals of both the parties for A.Y. 2010-11.

On careful consideration, we find that the issues are identical in this year also as compared to the facts and circumstances for A.Y. 2010- 11. The assessee is entitled to benefit under Section 11 and 12 of the Act, as it is now registered under Section 12AA of the Act. Further, the amounts applied by way of expenditure towards the object of the trust are necessarily to be granted to the assessee as deduction from the income under Section 11 of the Act. The only reason the learned Assessing Officer is contesting this appeal is that the learned Assessing Officer has not accepted the order of the ITAT for registration to the assessee under Section 12A of the Act. It was stated that same is challenged before the Hon'ble High Court. However, at present, the assessee is entitled to benefit to section 11 and 12 of the Act, consequently, necessarily deduction of expenditure incurred as application of the income is allowable . In view of this, we do not find any merit in the appeal of the learned Assessing Officer and hence, we dismiss the same. The appeal of the assessee

In view of this all these four appeals are disposed off.