CIT CHANDIGARH vs. M/S PUNJAB ENERGY DEVELOPMENT AGENCY

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ITA/57/2010HC Punjab & HaryanaPHHC01093517201023 February 2010Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE JITENDRA CHAUHAN3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that both questions of law raised by the Revenue had already been decided against it by this Court. Specifically, the first question concerning grants-in-aid not being voluntary contributions for the purpose of Sections 11 and 12 was answered against the Revenue in the case of Commissioner of Income Tax, Chandigarh-II v. M/s Punjab State Sports Council (ITA No. 190 of 2008, decided on 12.12.2008). The second question regarding the exemption of interest income under Section 11 was also decided against the Revenue in Commissioner of Income Tax, Chandigarh-II v. M/s Punjab Energy Development Agency (ITA No. 666 of 2008, decided on 31.7.2009). This precedent was further followed in a subsequent decision involving the same assessee. Consequently, the appeals were found to have no merit and were dismissed.

What were the facts?

The Revenue (Commissioner of Income Tax-II, Chandigarh) filed two appeals, ITA Nos. 57 and 58 of 2010, against a common order dated June 24, 2009, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'B'. These appeals pertain to Assessment Years 2003-04 and 2004-05, respectively, concerning the assessee, M/s Punjab Energy Development Agency, Chandigarh. The appeals were filed under Section 260-A of the Income-tax Act, 1961, challenging the ITAT's decision on two specific questions of law. The High Court noted that these questions had already been decided by it against the Revenue in previous cases.

What were the issues?

The High Court was asked to decide two questions of law: 1. Whether on the facts and in the circumstances of the case, and in law, the ITAT was correct in holding that the receipts of grants-in-aid by the assessee from Central/State Government are not voluntary contributions for the purpose of Section 11 read with Section 12 of the Income Tax Act and are thus, not required to be taken into account as income of the assessee for the purpose of ascertaining the amount expended or the amount to be accumulated? 2. Whether on the facts and the circumstances of the case, and in law, the ITAT was right in holding interest income to be exempt under Section 11 of the Income Tax Act, 1961? The Revenue argued that grants-in-aid should be considered voluntary contributions and thus part of income for accumulation purposes under Sections 11 and 12. The Revenue also contended that interest income should not be exempt under Section 11. The Assessee's arguments are not explicitly recorded, but the Revenue's contentions are presented as the basis for the appeal. The High Court noted that both questions had been previously answered against the Revenue.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 11,Section 12

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Date of Decision: February 23, 2010 I.T.A. No. 57 of 2010 (Assessment Year 2003-04) Commissioner of Income Tax-II, Chandigarh …Appellant Versus M/s Punjab Energy Development Agency, Chandigarh …Respondent I.T.A. No. 58 of 2010 (Assessment Year 2004-05) Commissioner of Income Tax-II, Chandigarh …Appellant Versus M/s Punjab Energy Development Agency, Chandigarh …Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JITENDRA CHAUHAN Present: Ms. Urvashi Dhugga, Advocate, for the appellant.

1.

To be referred to the Reporters or not?

2.

Whether the judgment should be reported in the Digest? M.M. KUMAR, J. This order shall dispose of ITA Nos. 57 and 58 of 2010, which have been filed by the revenue under Section 260-A of the Income-tax Act, 1961 (for brevity, ‘the Act’) against the common order dated 24.6.2009, passed by the Income Tax Appellate Tribunal, Chandigarh Bench ‘B’, Chandigarh, in ITA Nos. 302 and 303/Chd/2009, in respect of Assessment Years 2003-04 and 2004-05 in the case of the assessee-respondent. The revenue has raised the following questions of law for determination of this Court:- “(i). Whether on the facts and in the circumstances of the case, and in law the ITAT was correct in holding that the receipts of grants-in-aid by the assessee from Central/State Govt. are not voluntary contributions for the purpose of section 11 read with 12 of the Income Tax Act and are thus, not required to be taken into account as income of the assessee for the purpose of ascertaining the amount expended or the amount to be accumulated? ii. Whether on the facts and the circumstances of the case, and in law the ITAT was right in holding interest income to be exempt under section 11 of the Income Tax Act, 1961?” Learned counsel for the appellant at the outset very fairly states that both the aforesaid questions of law have already been answered by this Court against the revenue. Question No.1 has been answered against the revenue by this Court in the case of Commissioner of Income Tax, Chandigarh-II v. M/s Punjab State Sports Council (ITA No. 190 of 2008, decided on 12.12.2008). The second question has been decided against the revenue by this Court in case of Commissioner of Income Tax, Chandigarh- II v. M/s Punjab Energy Development Agency (ITA No. 666 of 2008, decided on 31.7.2009). The view taken in the aforementioned cases has further been followed by a Division Bench of this Court in ITA No. 588 of 2009 (Commissioner of Income Tax-II, Chandigarh v. M/s Punjab Energy Development Agency, Chandigarh), decided on 1.12.2009, which was filed by the revenue against the order dated 29.4.2009 passed by the Tribunal in the case of the assessee-respondent, in respect of Assessment Year 2005-06. In view of the aforesaid factual position, we find no merit in these appeals as both the questions of law have already been decided against the revenue by this Court. Dismissed. A photocopy of this order be placed on the file of connected appeal. (M.M. KUMAR) JUDGE (JITENDRA CHAUHAN) February 23, 2010 JUDGE Pkapoor 3

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