DCIT, EXEMPTION, GHAZIABAD vs. DIVYA YOG MANDIR TRUST , HARIDWAR

The relevant facts as culled from the material on records are as under :

Assessee is a Trust registered u/s 12A(a) of the Act vide order dated 27.03.1995 and has been stated to be claiming exemption in terms of Section 11, 12 & 12AA of the Act regularly. Assessee filed its return of income for A.Y. 2015-16 on 27.11.2015 declaring income of Rs.2,36,670/- after claiming exemption u/s 11 of the Act. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 27.12.2017 and the total income was determined at Rs.46,87,09,670/-. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) who vide order dated 22.03.2018 allowed the appeal of the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal before us and has raised the following grounds:

During the course of assessment proceedings, AO observed that the trust had earned profit of Rs.128,01,43,712/- and after setting off the loss incurred by the trust excess of income over expenditure was shown at Rs.46,82,82,961/-. AO was of the view that the assessee trust was running business and therefore there was no exemption available in terms of amendment to Section 2(15) of the I.T. Act. Assessee was therefore asked to show-cause as to why exemption u/s 11 & 12 be disallowed to it. Assessee made the detailed submissions and also submitted that in A.Y. 2010-11, 2011-12, 2012-13 & 2013-14, CIT(A) has decided the issue in favour of the assessee. The submissions of the assessee were not found acceptable to AO. AO noted that assessee has earned Rs.150,36,898/- on account of IPD charges from patients which according to AO was nothing but the charges recovered from accommodation facilities provided to the customers who visits the trust to attend the shivirs and participate in the various activities of trust. He also noticed that assessee had received Rs.3,75,93,461/- from patients for other than IPD being the charges for the medical facilities availed by the patients for ailment through yoga and ayurvedic medicines. He also observed that assessee had received rent of land, factory, Building and from transmissions towers of BSNL & Vodafone etc. AO was of the view that the aforesaid receipts were in the nature of either trade or fee or cess or business receipts which do not fall in the ambit of first five purposes of sub section (15) of Section 2 of the I. T. Act but fall under the purpose namely “advancement of any other objectives of general public utility”. He thereafter concluded that the activities of the trust was not charitable in nature but the activities could be said to be falling under the category of “advancement of any other objectives of general public utility”. He noted that since the income of the trust during the year exceeds Rs.25 lakh, being the ceiling stipulated in the second proviso of Section 2(15) of the Act the activities of the trust lose the categorically of being of the charitable nature. He therefore brought the entire income shown by the trust to tax after reducing the amount of application claimed by the trust. AO also noted that though CIT(A) has decided the issue in favour of the assessee for A.Y. 2010-11, 2011-12, 2012-13 & 2013-14 but Department has not accepted the order of CIT(A) and is before the Hon’ble ITAT. He thereafter determined the total income of the assessee at Rs.46,87,09,670/-.

Aggrieved by the order of AO, assessee carried the matter before the CIT(A). CIT(A) while deciding the issue noted that his predecessor while deciding the assessee’s appeal for A.Y. 2016-17 and by following the decision of Tribunal in assessee’s own case for earlier years had deleted the addition and had directed the AO to extend the exemption u/s 11 & 12 to the assessee trust. He also noted that there has been no change in the facts in the case in the year under consideration and that of earlier years. He therefore, following the decision of his predecessor, allowed the appeal of the assessee and directed the AO to extend the exemption u/s 11 & 12 of the Act. Aggrieved by the order of CIT(A), Revenue is now before us.

Before us, Learned DR supported the order of AO.

Learned AR on the other hand submitted that identical issue arose in assessee’s own case in A.Y. 2009-10 and the Delhi Bench of Tribunal had decided the issue in favour of the assessee which is reported in [2013] 37 taxmann.com 227 dated 27.08.2013. He thereafter submitted that aggrieved by the order of Tribunal, Revenue had carried the matter before the Hon’ble High Court of Uttarakhand at Nainital. The Hon’ble High Court vide order dated 27.02.2019 in has held that the AO was not justified in denying exemption u/s 11/12 of the Income Tax Act, 1961. He thereafter submitted that against the order of Hon’ble High Court of Uttarakhand, Revenue filed SLP before the Supreme Court which was dismissed on 09.08.2019. He pointed to the copies of the relevant order in the paper book. He thereafter submitted that considering the aforesaid facts, the Co-ordinate Bench of Tribunal while deciding the assessee’s appeal in A.Y. 2014-15 (in ITA No.2841/Del/2018 order dated 18.12.2020) held that AO was not justified in denying the exemption u/s 11/12 of the Act. He therefore submitted that there being no change in the facts in the case year under consideration and that of earlier years, the appeal of Revenue needs to be dismissed.

We have heard the rival submissions and perused the materials available on record. The issue in the present ground is with respect to the allowing the benefit u/s 11/12 of the Act to the assessee by CIT(A). We find that AO while deciding the case for A.Y. 2009-10 had held that the assessee was not eligible for exemption u/s 11/12 of the Act and the order of AO was upheld by CIT(A). When the matter for A.Y. 2009-10 was carried before the Tribunal, Tribunal held that AO was not justified in denying the exemption u/s 11/12 of the Act to the assessee. Thereafter, Revenue had carried the matter before the Hon’ble Uttarakhand High Court and the Hon’ble Uttarakhand High Court had upheld the order of the Tribunal. Against the order of Uttarakhand High Court, Revenue had filed SLP before the Hon’ble Apex Court which was dismissed. We also find that identical issue arose in assessee’s own case in A.Y. 2014-15 and the Co-ordinate Bench of Tribunal had dismissed the appeal of the Revenue by following the order of Co-ordinate Bench of Tribunal for A.Y. 2010-11 to 2013-14 and relying on Hon’ble Uttarakhand High Court order in assessee’s own case for A.Y. 2009-10. Since the facts in the year under consideration being identical to that of earlier years, we find no reason to interfere with the order of CIT(A). Thus the grounds of Revenue are dismissed.