COMMISSIONER OF INCOME TAXEXEMPTIONS vs. GLOBAL INSTITUTE OF TECHNOLOGY SOCIETY

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ITA/117/2018HC RajasthanRJHC02036863201805 July 2018Bench: KALPESH SATYENDRA JHAVERI,VIJAY KUMAR VYAS2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court granted permission to the appellant (Revenue) to move a rectification application before the Tribunal. The appeal was disposed of in light of this permission. The judgment does not record a decision on the merits of the substantial question of law framed by the appellant. Therefore, the ITAT's decision to delete the penalty of Rs. 19,57,310/- stands, as the High Court's appeal against it was disposed of without adjudication on the merits of the penalty deletion. The reasoning for the disposal is solely based on the procedural step of allowing a rectification application to be filed before the Tribunal. No specific finding on the bonafide nature of the claims or the alleged violations of the IT Act sections was made by the High Court in this order. The operative direction is to allow the filing of a rectification application.

What were the facts?

The appellant, Commissioner of Income Tax (Exemptions), Jaipur, has appealed against the order of the Income Tax Appellate Tribunal (ITAT). The ITAT had dismissed the department's appeal, thereby upholding a decision that deleted a penalty of Rs. 19,57,310/-. This penalty was initially imposed by the Assessing Officer (AO) and subsequently confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The dispute concerns the assessee, Global Institute of Technology Society, Jaipur, and the assessment year(s) are not explicitly stated. The core of the dispute revolves around the assessee's claims under Section 10(23C) and Sections 11 & 12 of the Income Tax Act, 1961, with allegations of non-bonafide claims and violations of Section 13(3) and Section 11(5) of the Act.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is right in deleting the penalty of Rs. 19,57,310/- imposed by the AO and confirmed by the CIT(A), ignoring that the assessee’s claim under Section 10(23C) was not bonafide and the claim of benefits under Sections 11 & 12 was also not bonafide due to violations of Section 13(3) and Section 11(5) of the IT Act, 1961? (Question of law and mixed fact and law, turning on Sections 10(23C), 11, 12, 13(3), and 11(5) of the IT Act, 1961). Assessee's Contentions: Not recorded. Revenue's Contentions: The revenue argued that the ITAT erred in deleting the penalty. The revenue contended that the assessee's claim under Section 10(23C) was not bonafide, and similarly, the claim for benefits under Sections 11 & 12 was also not bonafide. This was attributed to the assessee violating the provisions of Section 13(3) and Section 11(5) of the IT Act, 1961. The revenue referred to the Supreme Court decision in Joint Commissioner of Income Tax, Surat vs. Saheli Leasing & Industries Ltd.; 2010 (6) SCC 384.

Which sections of the Income-tax Act were involved?

Section 10(23C),Section 11,Section 12,Section 13(3),Section 11(5)

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 117/2018 Commissioner Of Income Tax Exemptions , 3Rd Floor Kailash Heights, Lal Kothi, Tonk Road, Jaipur Raj ----Appellant Versus Global Institute Of Technology Society , D-91, Ambabari, Jaipur Raj ----Respondent For Appellant(s) : Mr. Daksh Pareek for Mr. Sameer Jain For Respondent(s) : HON'BLE MR. JUSTICE KALPESH SATYENDRA JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Order 05/07/2018 By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department. Counsel for the appellant has framed the following substantial question of law:- “i) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT is right in deleting the penalty of Rs. 19,57,310/- imposed by the AO and subsequently confirmed by the ld. CIT(A) ignoring the facts that assessee’s claim u/s 10(23C) was not of bonafide nature and the claim of benefits u/s 11 & 12 was also not of bonafide nature as the assessee has violated the provisions of Section 13(3) as well as Section 11(5) of the IT Act, 1961?” However, in view of the decision of Supreme Court in case of Joint Commissioner of Income Tax, Surat vs. Saheli Leasing &

(2 of 2) [ITA-117/2018] Industries Ltd.; 2010 (6) SCC 384 which is referred by the appellant but the same was not shown to the Tribunal, therefore, he wants to move rectification application before the Tribunal. Permission is granted. The appeal stands disposed of. (VIJAY KUMAR VYAS),J (K.S.JHAVERI),J A.Sharma/86

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