ITO(E), JAIPUR vs. YAZUR SHIKSHA SAMITI, JAIPUR

PER SHRI KUL BHARAT, JM.

These two appeals by the Revenue is directed against the order of Ld. CIT

(A)-III, Jaipur dated 26.09.2016 pertaining to A.Y. 2012-13 & 2013-14. Both the

appeals were taken up together for the sake of convenience and brevity.

First we take up Revenue’s appeal in ITA No. 1093/JP/2016 pertaining to the

AY 2012-13.

The revenue has raised the following grounds of appeal :-

“1. On the facts and in the circumstances of the case and in law the CIT(A) has erred in allowing excessive salary to the persons specified u/s 13(3) of the Income Tax Act and consequentially benefit of Section 11 and 12 of the IT Act, 1961. 2. On the facts and in the circumstances of the case and in law the CIT(A) has erred in allowing benefit of exemption u/s 11 addition to fixed assets which the assessee is not eligible to claim on account of disallowance of benefit of section 11 and 12A for providing benefit to the person specified u/s 13(3) of the IT Act, 1961.

2 ITA Nos. 1093 & 1094/JP/2016 M/s Yazur Shiksha Samiti,Jaipur.

exemption u/s 11 and 12 of the Act. On appeal Ld. CIT(A) allowed the benefit of

exemption u/s 11 & 12 of the Act and also the consequential relief.

Representative vehemently argued that Ld. CIT(A) was not justified in granting the

relief of the assessee. He supported the order of the AO and submitted that

Assessing Officer has categorically given a finding that the salary so paid is excessive

and therefore, the assessee had violated the provisions of section 11 & 12 of the

Act.

made in the written submissions and supported the order of the Ld. CIT(A). He

submitted that the assessee trust had specifically explained the duties and the

function of the persons to whom allegation is of payment of excessive salary. He

submitted that Dr. Anoop Singh is a Managing Director and manages the entire

affairs of the assessee trust. Moreover, the AO has not pointed out as how the

monthly salary paid to Dr. Anoop Singh is excessive by citing comparative instances,

of other trusts or institution. The AO has compared the salary to Dr. Anoop Singh

with Principal of the school, functions and duties of the Principal of school is quite

different from the functions of the Managing Director and the Administrator of the

Trust. He submitted that the Assessing Officer ought to have brought on record, the

3 ITA Nos. 1093 & 1094/JP/2016 M/s Yazur Shiksha Samiti,Jaipur.

comparative instances whereby it could be demonstrated the salary paid to specified

persons are excessive. In the absence of such material the action of the AO cannot

be sustained. Ld. Counsel has placed reliance on the judgment of the Hon’ble Delhi

High Court in the case of DIT Vs. Pariwar Sewa Sansthan 254 ITR 268 (Del.) (HC),

further reliance is placed on the decision of the Co-ordinate Bench rendered in the

case of DIT(E) Vs. N.H. Kapadia Education Trust (2012) 136 ITD 111 (Ahmd).

and gone through the orders of the authorities below. The Ld. CIT(A), after

considering the submissions has given a finding that salary paid to these persons are

comparable to earlier years with yearly increase of 10% assessment of the trust for

the assessment year 2006-07 and 2011-12 were framed u/s 143(3) wherein the

salary to these persons were

accepted. The Assessing Officer has not given any justification except saying that

the salary cannot be higher than salary of the Principal.

6.1 The Revenue has not disputed the facts that the claim of salary was allowed

in the AY 2006-07 and 2011-12. The AO has not brought any material on record

suggesting that the salary paid to the persons specified was excessive to the

similarly situated person. Under these facts, we are unable to accept the reasoning

of the AO for disallowing the claim of exemption to the assesse trust. Therefore, the

grounds raised in this appeal are dismissed.

Year 2013-14.

The Revenue has raised the following grounds of appeal.

4 ITA Nos. 1093 & 1094/JP/2016 M/s Yazur Shiksha Samiti,Jaipur.

“1. On the facts and in the circumstances of the case and in law the CIT(A) has erred in allowing excessive salary to the persons specified u/s 13(3) of Income Tax Act and consequentially benefit of Section 11 and 12 of the IT Act, 1961. 2. On the facts and in the circumstances of the case and in law the CIT(A) has erred in allowing the benefit of exemption u/s 11 addition to fixed assets which the assesee is not eligible to claim on account of disallowance of benefit of section 11 & 12A for providing benefit to the persons specified /s 13(3) of the IT Act, 1961. 3. Any other question of law as deemed fit in the facts and circumstances of the case may also be framed before the Hon’ble Tribunal in the interest of justice.”

7.1 The respective representatives of the parties have adopted the same

argument as were in ITA No. 1093/JP/2016. There is no change into facts and

circumstances are pointed out by the Revenue. We have decided the issue in favour

of the assessee by holding as under:-

“6. We have heard the rival contentions, perused the material available on record and gone through the orders of the authorities below. The Ld. CIT(A), after considering the submissions has given a finding that salary paid to these persons are comparable to earlier years with years increase of 10% assessment of the trust for the assessment year 2006-07 and 2011-12 were framed u/s 143(3) wherein the salary to these persons were accepted. The Assessing Officer has not given any justification except saying that the salary cannot be higher than salary of the Principal. 6.1 The Revenue has not disputed the facts that the claim of salary was allowed in the AY 2006-07 and 2011-12. The AO has not brought any material on record suggesting that the salary paid to the persons specified was excessive to the similarly situated person. Under these facts, we are unable to accept the reasoning of the AO for disallowing the claim of exemption to the assesse trust. Therefore, the grounds raised in this appeal are dismissed.”

5 ITA Nos. 1093 & 1094/JP/2016 M/s Yazur Shiksha Samiti,Jaipur.

7.2 Therefore, for the same reasoning, these grounds of the Revenue’s appeal is

dismissed.

1094/JP/2016 are dismissed.

Order pronounced in the open court on Wednesday, the 07th day of June 2017.

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सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत