HAPUR COMMODITY EXCHANGE LTD,HAPUR vs. ITO(EXEMPTION), GHAZIABAD

PDF · subscribers
ITA 6266/DEL/2018Status: DisposedITAT Delhi23 April 2019AY 2015-165 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that once an assessee has registration under Section 12AA, the AO must compute income under Section 11 and cannot deny exemption by invoking the proviso to Section 2(15). Cancellation of registration is the recourse for such situations.

What were the facts?

The assessee claimed exemption under Section 11 of the Income Tax Act, 1961. The Assessing Officer (AO) invoked the proviso to Section 2(15) and disallowed the exemption, which was confirmed by the CIT(A). The assessee had a valid registration under Section 12AA.

What were the issues?

Whether the AO can deny exemption under Section 11 by invoking the proviso to Section 2(15) when the assessee has a valid registration under Section 12AA. The applicability of the proviso to Section 2(15) in light of Section 12AA registration.

Which sections of the Income-tax Act were involved?

Section 2(15),Section 11,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,

Before: SHRI N.K. BILLAIYA

For Appellant: Shri Vinesh K. Maheshwari, CA
Hearing: 22.04.2019Pronounced: 23.04.2019

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:

1.

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - Ghaziabad dated 31.02.2018 pertaining to A.Y 2015-16.

2 2. The grievances of the assessee read as under:

“1. That invoking of the application of the proviso to Section 2(15) of the Income Tax Act, 1961 by the Assessing Officer and confirmation of the same by the Commissioner of Income Tax (Appeals) is contrary to facts and law and therefore the order of the Assessing Officer of invoking of the application of the proviso is unlawful and is liable to be quashed.

2.

That the addition made of Rs. 11,03,165/- by not allowing the exemption claimed u/s 11 of the Income Tax Act, 1961 on account of applicability of the provisions of proviso to Section 2(15) of the Income Tax Act, 1961 by the Assessing Officer and confirmation of the same by the Commissioner of Income Tax (Appeals) is contrary to facts and law and is liable to be deleted.

3. That the disallowance of the claim of the appellant for exemption u/s 11 by the AO and confirmation of the same by the Commissioner of Income Tax (Appeals) is bad in law in spite of the fact that the appellant was approved/registered u/s 12AA of the Income Tax Act, 1961 and such registration was neither cancelled nor any proceedings for cancellation were initiated by the department.”

3.

At the very outset, the ld. AR stated the issues have been decided by the Tribunal in for A.Y 2014-15. It is the say of the ld. AR that since there are no new facts, the same view should be taken,

4.

The ld. DR also fairly conceded to this submission of the assessee that similar issue was decided by the Tribunal in assessee's own case in A.Y 2014-15.

5.

I have carefully considered the orders of the authorities below. I find that the grounds raised in the appeal under consideration are identical to the grounds considered by the co-ordinate bench in the relevant findings of which read as under:

“Once assessee has been granted registration U/S.12AA, then it is axiomatic that computation has to be done in accordance with Section 11 to 13. The AO has to compute the income in accordance with Section 11 and cannot hold that assessee is not charitable. Accordingly, matter is restored back to the file of the Assessing Officer to strictly compute the income in accordance with section 11 and benefit cannot be denied by invoking the proviso, because if assessee’s case is hit by proviso then only Id. CIT can cancel or revoke the registration. As long as registration stands, Assessing Officer has to give consequential and legal effect as per the law. With this direction matter is remitted only for the limited purpose of computation u/s. 11 and consequently the appeal of the assessee is partly allowed for statistical purposes.”

6.

Finding parity on the facts qua the issues, I direct the Assessing Officer to decide in line with the directions given by the Tribunal in A.Y 2014-15. Grounds raised are accordingly allowed for statistical purposes.

7.

In the result, the appeal filed by the assessee in is allowed for statistical purposes. The order is pronounced in the open court on 23.04.2019.

More judgments on Section 2(15)

All 2,878 judgments and leading authorities on Section 2(15) →

Recent GST High Court judgments

Search GST case law →