COMMISSIONER OF INCOME TAX (EXEMPTION) vs. SURAJMAL MEMORIAL EDUCATION SOCIETY

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ITA/881/2016HC DelhiDLHC01290124201624 July 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH2 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court noted that the Revenue confirmed that the application of income by the assessee-society was more than 85% for Assessment Year 2012-13. Consequently, the Revenue conceded that the question of denying the exemption to the assessee under Section 11(1) of the Income Tax Act, 1961, did not arise. The Court found that the question framed by it earlier was no longer required to be answered. The impugned order of the ITAT dated May 30, 2016, was therefore maintained. The appeal was dismissed.

What were the facts?

The appeal was filed by the Commissioner of Income Tax (Exemptions) against an order of the Income Tax Appellate Tribunal (ITAT) dated May 30, 2016. The assessee, Surajmal Memorial Education Society, claimed exemption under Section 11(1) of the Income Tax Act, 1961. For Assessment Year 2012-13, the assessee contended that its application of revenue was 86.13% of its income, excluding expenditure on a statue. This percentage, it argued, satisfied the requirement of Section 11(1), precluding denial of exemption. The Revenue initially sought time to obtain instructions.

What were the issues?

1. Whether the assessee-society is entitled to exemption under Section 11(1) of the Income Tax Act, 1961, for Assessment Year 2012-13, given that its application of income was 86.13%? Assessee's Contention: The assessee argued that since the application of its revenues exceeded 85% of its income (after excluding specific expenditure), the conditions for exemption under Section 11(1) were met, and therefore, the exemption should not be denied. Revenue's Contention: The Revenue confirmed that since the application of income was more than 85%, the question of denying the exemption to the assessee did not arise.

Which sections of the Income-tax Act were involved?

Section 11(1)

AI-generated summary — verify with the full judgment below

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 33 + ITA 881/2016 COMMISSIONER OF INCOME TAX (EXEMPTIONS) ..... Appellant Through: Mr Zoheb Hossain, Senior Standing Counsel

versus

SURAJMAL MEMORIAL EDUCATION SOCIETY ..... Respondent

Through: Mr Salil Aggarwal and Mr Madh CORAM: JUSTICE S.MURALIDHAR JUSTICE PRATHIBA M. SINGH

O R D E R %

24.07.2017 1. On 9th May, 2017, the following order was passed: “2. Mr. Salil Aggarwal, learned counsel appearing for the Respondent produces before the Court a statement showing that the total application of the revenues of the Assessee-Society for the Assessment Year (AY) 2012-13 was 86.13% of its income (after excluding the expenditure incurred on the Statue of Maharaja Surajmal). Mr. Aggarwal accordingly submits that since the application of income more than 85% in terms of Section 11 (1) of the Income Tax Act, 1961, the question of denying the Assessee exemption does not arise.

3.

Mr. Zoheb Hossain, learned Senior standing counsel for the Appellant seeks time to obtain instructions.

4.

List on 24th July 2017.”

2.

Mr Zoheb Hossain, Senior Standing Counsel appearing for the Revenue, ITA 881/2016

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confirms that since the application of income was more than 85%, in terms of Section 11 (1) of the Income Tax Act, 1961, the question of denying the exemption to the Assessee does not arise.

3.

In the circumstances, the question framed by this Court on 6th December 2016, is not required to be answered. The impugned order dated 30th May, 2016 passed by the ITAT is, therefore, maintained.

4.

The appeal is dismissed.

S.MURALIDHAR, J

PRATHIBA M. SINGH, J JULY 24, 2017 rd

ITA 881/2016

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