ITO (E) -1 (3), MUMBAI vs. GLOBAL VIPASSANA FOUNDATION, MUMBAI

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ITA 6689/MUM/2019Status: DisposedITAT Mumbai30 August 2022AY 2014-153 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal. It found that the tax effect of the appeal was below the monetary limit prescribed by CBDT circulars for appeals to the Tribunal.

What were the facts?

The Revenue appealed against an order allowing the assessee trust to accumulate 15% of its income under Section 11(1)(a) despite having a negative income. The Revenue argued this was contrary to law and precedent.

What were the issues?

Whether the assessee trust can claim accumulation of income under Section 11(1)(a) when it has a deficit. Whether the Revenue's appeal is maintainable based on the tax effect and CBDT circulars.

Which sections of the Income-tax Act were involved?

Section 11(1)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: SHRI PRASHANT MAHARISHI & SHRI SANDEEP SINGH KARHAIL

For Appellant: Shri Nitesh Joshi
For Respondent: Smt. Mahita Nair

The present appeal has been filed by the Revenue challenging the impugned order dated 19/08/2019, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by learned Commissioner of Income Tax (Appeals)–3, Mumbai, [“learned CIT(A)”], for the assessment year 2014–15.

2. In its appeal, the Revenue has raised following grounds:

“1. Whether, on the facts and in circumstances of the case and in law, the Ld CIT(A) Mumbai has erred in allowing 15% accumulation u/s 11(1)(a) of the IT Act, inspite of the assessee trust having negative income, thereby increasing the deficit, which is contrary to the law.

Global Vipassana Foundation ITA No.6689/Mum./2019

2. Whether, on the facts and in circumstances of the case and in law, the LA CITIAL Mumbai has erred in not following the judgement of Hon'ble ITAT, Mumbai in the case of Dawat Institute of Dawoodi Bohra Community v/x ITO(E) dated 30.04.2013, wherein it is held that when the assessee is having deficit the accumulation of 15% u/s 11(1)(a) of the LT Act cannot be allowed.

3. The appellant prays that the order of the Commissioner of Income Tax (Appeals)-1, Mumbai be set aside and that of the Assessing Officer be restored.”

2.

At the outset, the learned A.R., appearing for the assessee, by referring to column 10 of Form No. 36 filed by the Revenue submitted that the tax effect relating to the grounds of appeal raised by the Revenue is below the revised monetary limit of Rs.50 lakh, applicable to appeals before the Tribunal, as per CBDT Circular no.17 of 2019, dated 08/08/2019. Further, he submitted, none of the exceptions provided in CBDT Circular no.3 of 2018, dated 11/ 07/2018 r/w circular F. no.279/Misc./142/2007– ITJ–(Pt) dated 20/08/2018, would apply to Revenue’s appeal. Thus, the learned A.R. submitted that Revenue’s appeal being covered under the aforesaid Circulars is not maintainable.

3.

The learned Departmental Representative could not produce any material before us to controvert the submission so made on behalf of the assessee.

4.

Having considered the submissions and perused the material available on record, we are of the view that the tax effect relating to the grounds of appeal raised by the Revenue in the present appeal is below the revised monetary limit of Rs. 50 lakh as per CBDT Circular no.17/2019, dated Page | 2

Global Vipassana Foundation ITA No.6689/Mum./2019 08/08/2019, r/w CBDT Circular no.3/2018, dated 11/07/2018, r/w Circular F. no.279/Misc./142/ 2007–ITJ–(Pt) dated 20/08/2018. In view of the aforesaid, Revenue’s appeal deserves to be dismissed. However, the Revenue is given liberty to seek recall of this order if, at a later point of time, it is found that the appeal falls under any of the exceptions provided in the Circulars referred to above.

5.

In the result, appeal by the Revenue appeal is dismissed. Order pronounced in the open court on 30/08/2022

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