C I T vs. M/S MAHASABHA GURUKUL

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ITA/519/2007HC Punjab & HaryanaPHHC01073226200720 August 2009Author: MR. JUSTICE ADARSH KUMAR GOEL,MRS JUSTICE DAYA CHAUDHARY3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the submission of the Revenue had no merit. The Court reasoned that once it is held that all requisite conditions for exemption under Section 11 have been met, the absence of compliance with conditions under Section 10(23C)(vi) does not create a bar to seeking exemption under Section 11. The Court distinguished the Revenue's cited judgment in American Hotel and Lodging Association Educational Institute, stating it had no application as the issue there concerned the scope of enquiry under Section 10(23C)(vi) and its proviso. The Court found that the view taken in CIT Vs. Bar Council of Maharashtra was not affected. The CIT(A) and Tribunal had categorically held that all conditions of Section 11 were fulfilled. Therefore, the High Court found itself unable to hold that any substantial question of law arose. The operative direction was to dismiss the appeal.

What were the facts?

The Revenue, Commissioner of Income Tax, Rohtak, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'A', dated April 27, 2007. The appeal pertains to assessment year 2000-01. The assessee, M/s Mahasabha Gurukul Vidyapeeth Haryana, runs an educational institution and claimed exemption under Section 11 of the Act. The Assessing Officer denied the exemption, citing the assessee's failure to file a notification under Section 10(23C)(vi). The CIT(A) upheld the assessee's claim, stating that the absence of Section 10(23C)(vi) notification was not a bar to Section 11 exemption. The ITAT affirmed this view, noting the assessee's registration under Section 12A and prior/subsequent grant of exemption for other assessment years.

What were the issues?

1. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal has erred in law in allowing the exemption of income of an Educational Society, which is not notified under section 10(23C)(vi) of the Income Tax Act, 1961? (Question of law, concerning Section 10(23C)(vi) and Section 11 of the Income Tax Act, 1961). Assessee's Contention: The judgment does not record specific arguments made by the assessee before the High Court. However, it is implied from the CIT(A) and ITAT's findings that the assessee contended that exemption under Section 11 is available even without notification under Section 10(23C)(vi), provided the conditions for Section 11 are met. The ITAT relied on CIT Vs. Bar Council of Maharashtra (1981) 130 ITR 78. Revenue's Contention: The Revenue argued that since the conditions of Section 10(23C)(vi) were not complied with, exemption could not be granted under Section 11. The Revenue relied on the judgment in American Hotel and Lodging Association Educational Institute Vs. Central Board of Direct Taxes and others (2008) 301 ITR 86.

Which sections of the Income-tax Act were involved?

Section 260A,Section 10(23C)(vi),Section 11,Section 12A

AI-generated summary — verify with the full judgment below

(1) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: 20.8.2009 Commissioner of Income Tax, Rohtak ..........Appellant Versus M/s Mahasabha Gurukul Vidyapeeth Haryana ..........Respondent Bhainswal & Khanpur Kalan District Sonepat CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Aman Bansal, Advocate for the appellant. **** ADARSH KUMAR GOEL, J. (Oral)

1.

The revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Delhi Bench 'A' dated 27.04.2007 passed in ITA No.1422 & 1423/DEL/2004 for the assessment year 2000-01, proposing to raise following substantial question of law:- “Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal has erred in law in allowing the exemption of income of an Educational Society, which is not notified under section 10(23C) (vi) of the Income Tax Act, 1961?”

2.

The assessee is running an educational institution and claimed exemption under Section 11 of the Act in respect of its income. The Assessing Officer did not accept this plea on the ground that the assessee failed to file notification under Section 10(23C) (vi). The CIT(A) upheld the stand of the assessee. It was observed that absence of registration under Section 10(23C) (vi) was no bar to exemption under Section 11. This view has been affirmed by the Tribunal relying upon the judgment of the Hon'ble (2) 1997-98, 1998-99 and 2002-03. 3. It is patent that the assessee has been granted exemption before the assessment year in question as well as after the assessment year in question.

4.

Only contention put forward by the learned counsel for the revenue is that conditions of Section 10(23C) (vi) having not been complied with, exemption could not be granted under Section 11. He relies upon the judgment of Hon'ble the Apex Court in American Hotel and Lodging Note:-Whether this case is to be referred to the Reporter .......Yes/No

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