DEPUTY COMMISSIONER OF INCOME-TAX, (EXEMPTIONS), CIRCLE,, PUNE vs. MAHARATTA CHAMBER OF COMMERCE INDUSTRIES AND AGRICULTURE,, PUNE

At the outset, the ld. DR submitted that the tax effect in the appeal for A.Y. 2013-14 is less than Rs.50.00 lakh.

The CBDT has issued circular No.17/2019 dated 08-08-2019 revising upward the monetary limits for filing of appeals by the Department in Income-tax Cases before various appellate forums.

The earlier circular No.03/2018 dated 11-07-2018 fixed monetary limit for filing of appeals by the Revenue before the Tribunal at Rs.20.00 lakh. Such limit has now been enhanced in the Circular dated 08-08-2019 to Rs.50.00 lakh. Since tax effect in the instant appeal is less than the revised monetary limit of Rs.50.00 lakh, we are not inclined to entertain this appeal.

At this juncture, it is pertinent to note that the CBDT vide F.No.279/Misc/M-13/2018-ITJ dated 20-08-2019 has clarified that the revised monetary limits so mentioned in Circular No.17/2019 are applicable to all pending appeals. In view of the foregoing discussion, we dismiss the appeal filed by the Revenue. However, it is made clear that if the tax effect in this appeal is found by the AO to be more than the prescribed monetary limit of Rs.50.00 lakh or the case(s) is found to be covered by an exception, it will be open to the Revenue to move the Tribunal for recalling the order.

The Revenue in this appeal is aggrieved by the direction of the ld. CIT(A) in allowing the benefit of exemption u/s.11 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’)

Succinctly, the facts of the case are that the assessee is a Chamber of Commerce, Industries & Agriculture. Return was filed declaring Nil income after claiming the benefit of exemption u/s 11 of the Act. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee had receipts amounting to Rs.5.71 crore in the nature of Membership Fees, Program Fees, Publication Revenue, Certificate of Origin, Other activities, Activities and Prize Fund, Entrance Fees, Life Membership Fees and Use of facilities etc. He opined that such activities were hit by the proviso to section 2(15) defining ‘charitable purpose’ as these involved carrying out the activity in the nature of Trade, Commerce or Business etc. He, therefore, denied the benefit of exemption claimed by the assessee and determined total income at Rs.2,85,88,680/-. The ld. CIT(A), following his view taken for earlier years, overturned the assessment order on this point.

Having heard the rival submissions and gone through the relevant material on record, it is found that the ld. CIT(A) has followed his orders for earlier years in order to allow the benefit to the assessee. Earlier years’ orders passed by the ld. first appellate authority came up for consideration before the Tribunal. Vide order dated 08-09-2017, the Tribunal for the assessment years 2010-11 and 2011-12 has countenanced the action of the ld. CIT(A) in restoring the benefit of exemption as claimed in the returns. Once again, similar issue travelled to the Tribunal for the assessment years 2009-10 and 2012-13. Vide order dated 30-07-2018, the Tribunal has re-affirmed such decision and dismissed the appeals filed by the Revenue. In view of the fact that the issue raised in this appeal is squarely covered in favour of the assessee by the orders passed in the assessee’s own case for earlier years, respectfully following the precedents, we uphold the impugned order.

In the result, both the appeals are dismissed. Order pronounced in the Open Court on 09th May, 2022.