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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
PER D. KARUNAKARA RAO, AM :
This appeal is filed by the Revenue against the order of CIT(A)-10, Pune, dated 15-07-2016 for the Assessment Year 2012-13.
Briefly stated, relevant facts include that the assessee is a society registered under the Societies Registration Act, 1860 and Bombay Public Trust Act, 1950. Assessee is also registered u/s.12A of the I.T. Act. Assessee filed the return of income declaring Nil income. Assessee belonged to Balaji Group of Educational Institutions and claimed its income for the year exempt u/s.11 of the Act. During the assessment proceedings, the AO noticed the payment of Rs.9.28 crores (rounded off) to its sister concern named M/s. Sri Balaji Creativities (in short ‘SBC’). AO invoked the provisions of section 40A(2)(b) of the Act r.w.s. 13(1)(c) of the Act and held the entire excess income as increased by the AO should be taxed as per the
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normal provisions denying the claim of exemption u/s. 11 of the Act. In the
assessment, the AO denied exemption to be in consistent with the earlier
assessment orders of his predecessor in the earlier assessment years
2008,09, 2009-10, 2010-11 and 2011-12. AO held in Para No.7.2 of his
order that the assessee society diverted the income of the assessee out of
the resources of the trust to SBC violating the provisions of section
40A(2)(b) of the Act.
During the First Appellate proceedings, the CIT(A) noted vide Para
No.9 that similar issue reached the Tribunal in the earlier assessment
years. The Tribunal, on similar facts and issues, raised by the Revenue,
directed for grant of exemption to the assessee society u/s.11 of the Act by
holding as under :
“9. Since, facts being identical, following appellate orders of my Ld. Predecessor for A.Y.2008-09, 2010-11 and 2011-12 which have been upheld at the level of Tribunal too, the Assessing Officer is directed to grant exemption u/s.11 of Income-Tax Act............”
Aggrieved with the said decision of CIT(A) in the year under
consideration, the Revenue is in appeal before the Tribunal with the
following grounds :
“1. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was correct in holding that the provisions of section 13(1)(c) and 13(2)(c) of the I.T. Act, 1961 were not attracted in this case despite the fact that payments were made on account of advertisement to prohibited persons? 2. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was correct in holding that the assessee was allowed to claim exemption u/s.11 of the I.T.Act, 1961 despite the fact that the payments were made to prohibited persons as defined u/s.13(1)(c) and 13(2)(c) of the I.T. Act, 1961.”
Ld. DR for the Revenue, while relying on the order of the AO,
submitted that the Ld.CIT(A) war not correct in holding that the provisions
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of section 13(1)(c) and 13(2)(c) of the Act are not attracted in this case
despite the fact that the payments were made on account of advertisement
to SBC the prohibited persons. Ld. DR prayed for reversing the order of
CIT(A) and allowing the appeal in favour of the Revenue.
On the other hand, Ld. Counsel for the assessee drew our attention
to the order of the Tribunal in assessee’s own case in ITA Nos.710 &
711/PUN/2015, dated 30-06-2017 for the A.Yrs. 2010-11 and 2011-12 and
read the contents of Para No.7 to demonstrate that the issue has been
decided in favour of the assessee and against the Revenue.
We heard both the parties on this issue of denial of exemption u/s.11
r.w.s. 13(1)(c) of the Act and find that similar issue was adjudicated in
favour of the assessee by the Tribunal in the assessee’s own case for the
A.Yrs. 2010-11 and 2011-12. For the sake of completeness, we proceed to
extract the operational para of the order of the Tribunal here as under :
“7. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to denial of exemption by invoking the provisions of sec.13(1)(c) of the Act. We find that Ld.CIT(A) while deciding the issue in favour of the assessee had relied on the decision of the Co-ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2008-09. Before us, Revenue has not placed any material on record to demonstrate that the facts in the year under appeal are distinguishable to that of earlier years. In view of the aforesaid facts and following the same reasoning of the Tribunal in assessee’s own case for A.Y. 2008-09, we find no reason to interfere with the order of Ld. CIT(A). Thus, the grounds of Revenue are dismissed.”
From the above, it is evident that the Tribunal granted gave relief to the
assessee on the similar issue of applicability of provisions of section 11
r.w.s. 13(1)(c) of the Act. It is undisputed fact that the Advertisement
expenditure were always paid by the assessee to the said SBC. In the
process, the Tribunal relied on its own order in the assessee’s own case for
the A.Y. 2008-09 as extracted in Para No.5 of the order of Tribunal.
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Considering the settled nature of the issue, we are of the opinion that the
order of the CIT(A) is fair and reasonable and it does not call for any
interference. Accordingly, the grounds raised by the Revenue are
dismissed.
In the result, the appeal of the Revenue is dismissed.
Order pronounced on this 02nd day of November, 2018.
Sd/- Sd/- (SUSHMA CHOWLA) (D.KARUNAKARA RAO) �ाियक सद� / JUDICIAL MEMBER लेखा सद� / ACCOUNTANT MEMBER पुणे / Pune; �दनांक Dated : 02nd November, 2018. Satish
आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत
अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT(A)-10, Pune 3. आयकर आयु� / The CIT(Exemption), Pune 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “A” / DR ‘A’, 5. ITAT, Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार
स�यािपत �ित //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune