ITO (EXEMPTIONS), NEW DELHI vs. M/S. INDIAN ISLAMIC CULTURAL CENTRE, NEW DELHI

PER SUDHANSHU SRIVASTAVA, J.M.: This appeal is preferred by the department against order

passed by the Ld. CIT (Appeals) - 40, New Delhi for

assessment year 2010-11 wherein Ld. CIT (Appeals) has held

that the restaurant/coffee shop run by the assessee society in

the premises of the assessee does not tantamount to assessee

being involved in trade, commerce or business.

2 ITA NO. 3636/Del/2015 (India Islamic Cultural Centre)

under the Societies Registration Act, 1860 and is also

registered u/s 12AA of the Income Tax Act 1961 (hereinafter

called the ‘Act’). The assessee also enjoys benefit of Section

80G. The main object of the assessee is to promote Indian art

and culture and communal harmony etc. The assessee had

been enjoying exemption u/s 11(1) since the grant of

registration u/s 12AA w.e.f. 1982. However, this exemption

was denied for the first time in assessment year 2009-10 by

invoking the mischief of Proviso to Section 2(15) on the ground

that assessee was involved in trade, commerce or business as

there was a restaurant run by Saleem Restaurant Pvt. Ltd. in

the name of Dilli Dastarkhan in the premises of the assessee

and the assessee was receiving income from the restaurant.

The assessee’s appeal against the denial of exemption was

allowed by the Ld. CIT (Appeals)-21, New Delhi vide order

dated 30.05.2012 and the department’s appeal against the

order of Ld. CIT (Appeals) for assessment year 2009-10 was

dismissed by the ITAT vide order dated 30.07.2014 in ITA no.

4127/Del/2012. A similar view was taken by the AO by

denying exemption u/s 11(1) in assessment year 2011-12 also

and here also the Ld. CIT (Appeals) allowed the assessee’s

3 ITA NO. 3636/Del/2015 (India Islamic Cultural Centre)

appeal and the department’s appeal was dismissed by the

ITAT vide order dated 22.01.2018 in ITA no. 4443/Del/2015.

2.1 During assessment year 2010-11, i.e. present year, the

AO had again invoked the mischief of proviso to Section 2(15)

and again denied the benefit of exemption u/s 11(1). The

assessee’s appeal was allowed by the Ld. CIT (Appeals)-40 vide

the impugned order and the department is now before the

ITAT challenging the action of the Ld. CIT (Appeals).

the order of the Assessing Officer and submitted that the

principle of res judicata were not applicable in this case as

each assessment year is a separate assessment year for the

purposes of levy of Income Tax.

orders in assessee’s own case for assessment years 2009-10

and 2011-12 and submitted that there was no change in the

facts and circumstances in this year as compared to

assessment years 2009-10 and 2011-12 and, therefore, the

revenue’s appeal deserved to be dismissed.

the material on record. We find that the issue is squarely

covered in favour of the assessee by the earlier orders of the

4 ITA NO. 3636/Del/2015 (India Islamic Cultural Centre)

Tribunal for assessment year 2009-10 and 2011-12 in

assessee’s own case as aforementioned as the department

could not point out any distinguishing reason or change in the

facts of the present year as compared to assessment years

2009-10 and 2011-12. It is not in dispute that the assessee

has not generated any profit from its activities as a charitable

institution and it is also not in dispute that the aims and

objects of the society are objects of general public utility

inasmuch as the attempt to promote understanding amongst

various sections of the society and establish communal

harmony are its objects. It is also a matter of fact that the

facilities of the restaurant/cafetaria are provided for the

members of the assessee society and the surplus so generated

is utilized for achieving the aims and objects of the society and

does not get distributed amongst the members. The assessee

society continues to enjoy registration u/s 12AA of the Act as

well as the approval u/s 80G and the department has not

made any attempt to cancel the said registration. Thus, there

being no change in the facts of the case, respectfully following

the orders of the ITAT in assessee’s own case for assessment

years 2009-10 and 2011-12, we find no illegality or perversity

5 ITA NO. 3636/Del/2015 (India Islamic Cultural Centre)

in the impugned order and we dismiss the grounds raised by

the department.

dismissed.

Order pronounced in the open court on 09.01.2019.

Sd/- Sd/- (G.D.AGRAWAL) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER

Dated: 09.01.2019 *BR*