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Income Tax Appellate Tribunal, DELHI BENCH: ‘A, NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI O.P. KANT
ORDER PER O.P. KANT, A.M.: This appeal by the Revenue has been filed against order dated 06/02/2015 passed by the Ld. Commissioner of Income- tax (Appeals)-40, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2011-12 raising following grounds:
On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the claim of carry forward of losses disregarding the facts that set-off and 70,71,72,73, & 74 of the Income-tax Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the claim of carry forward of losses disregarding the facts that the provisions of the Act are not applicable in the cases who are claiming exemption u/s 11 & 12 of the Income Tax Act, 1961/ 3. That the appellant craves to be allowed to add any fresh grounds of appeal and/or deleted or amend any of the grounds of appeal.
2. Briefly stated facts of the case are that the assessee society is registered under section 12A of the Income-tax Act, 1961 (in short ‘the Act’) vide order dated 15/01/2001. The society is an international non-governmental nonsectarian organization dedicated to promoting community health, human rights and integrated development worldwide. For the year under consideration, the assessee filed return of income declaring nil income on 30/12/2011. The case was selected for scrutiny and notice under section 143(2) of the Act was issued and complied with. In the assessment completed under section 143(3) of the Act the Assessing Officer denied set off of the deficit/excess expenditure of earlier assessment year. On further appeal, the Ld. CIT(A) allowed the claim of the assessee in view of the decision of the various high Courts. Aggrieved with the finding of the Ld. CIT(A), the Revenue is in appeal before the Tribunal, raising the grounds as reproduced above.
Before us, the Ld. DR relied on the order of the Assessing Officer and submitted that the assessee is not entitled for adjustment of brought forward losses or deficit. 4. On the contrary, none appeared on behalf of the assessee despite notifying through registered post on earlier two occasions.
The last notice issued dated 30/10/2018 for today’s hearing sent by the registered post returned back with the remark that party left. In view of the circumstances, we proceeded ex-parte, qua the assessee.
We have heard the submission of the Ld. DR and perused the order of the Ld. CIT(A). The issue in dispute is whether the set-off of excess expenditure of earlier years can be allowed to the assessee in the year underconsideration. We find that Ld. CIT(A) has decided the issue in view of the finding of the various high Courts. The relevant finding of the Ld. CIT(A) is reproduced as under:
“4.2 I have considered the order of the AO and the submissions of the assessee and I personally do not find any merit in the submissions of the assessee. However, It is seen that the exemption provisions u/s 11, 12, 12A, 12AA & 13 are independent provisions for the computation of income in the case of NGOs, Trust or societies etc. and for allowing exemption in the case of charitable or religious institutions and in these provisions there are no provisions for adjustment or set off of deficit or loss against income of the current year (Section 70) or adjustment of brought forward loss against the current year's income or carry forward of current year's loss against the adjustment of the subsequent year's income or for allowing any depreciation in fixed assets which are applicable in the case of business concerns only. But it is also seen that the various High Courts have taken a view in favour of the assessees that the income is to be computed in commercial principles and as such adjustment of brought forward loss or deficit and carry forward of loss/ deficit is to be allowed and the several case laws are as under:- i) CIT vs. Maharana of Mewar Charitable Foundation, 164 ITR 439 (Raj) 1987. ii) CIT vs. Shri Plot Swetamaber Murti Pujak Jain Mandal, 211 ITR 293 (Guj) 1995. (iii) CIT vs. Matrisewa Trust, 242 ITR 20 (Mad) 2000 Govindu (iv) Naicker Estate vs. ADIT, 248 ITR 110 (Bom) 2003. (v) CIT vs. Institute of Banking, 264 ITR 110 (Bom) 2003. (vi) DIT vs. Raghuvanshi Charitable Trust, 197 Taxmann 170 (Delhi) 2011 (vii) CIT vs. Gujarat Samaj, 349 ITR 559 (MP) 2012 4.3 After considering all the facts and circumstances of the case, I am of the view that even though there is no merit in the submissions of the assessee as there is no specific provisions u/s 11, 12, 12A, 12AA & 13 for allowing the benefit of carry forward or adjustment of deficit or loss etc. but keeping in view the High Courts in favour of the assessee on the same issue, the same is followed to maintain the judicial discipline and accordingly the AO is directed to allow the benefit of carry forward of the deficit or loss and as such the appeal of the assessee is allowed.”
In view of the above, we do not find any infirmity in the order of the Ld. CIT(A) and accordingly, we uphold the same. The grounds of the appeal are dismissed.
In the result, appeal of the Revenue is dismissed.
Order is pronounced in the open court on 16th January, 2019.