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Income Tax Appellate Tribunal, DELHI BENCH: BP NEW DELHI
Before: SHRI R.S. SYAL & SHRI K.N. CHARY
ORDER PER K. NARSIMHA CHARY, J.M.
Challenging the orders of the learned Commissioner of Income Tax (Appeals)-40, Delhi for the assessment years 2010-11, 2013-14 and 2014-15 the revenue preferred these appeals on the following identical grounds 1. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing exemption under section 11 and 12 of the Act by ignoring the fact that the activities of the appellant are hit by proviso to section 2(15) of the Act, 1961.
On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in allowing the assessee that no disallowance can be made in terms of section 40(a) (ia) of the Act whereas the payments were made with reference to professional/sub contractual services received from CIVTA.
. 238 and 239/Del/2018 3. The appellant craves leave to add, to alter or amend any ground of appeal rising above at the time of hearing.
2. Brief facts of the case as could be culled out from the record and as submitted on behalf of the assessee are that the assessee, the Construction Industry Development Council, New Delhi is a society incorporated by the Planning Commission of India to develop the growth of construction industry including its all-important constituents, the workforce. The main activity undertaken by the assessee was to impart training to the construction workforce with a view to educate them in vocations relating to civil constructions so that they are able to support their livelihood. The education and training programs were designed for the vehicle and marginalised sections of the Indian society with a particular focus on women, members of socially challenged groups, unemployed youth and people living below the poverty line in terms of the directions of the government of India.
Assessee is offering various diplomas and advanced diploma programs in civil/electrical/mechanical/trenchless engineering and the person holding said diploma certificates works as an engineer in different fields of construction industry. Assessee has affiliations with various universities like Assam University and also Periyar Maniamman University to impart to training, education and research in the field of construction related areas.
During the scrutiny of the return of income submitted by the assessee for the assessment years years 2010-11, 2013-14 and 2014-15, the Ld. Assessing Officer (Ld. AO) . 238 and 239/Del/2018 raised a query regarding the disallowance of amount paid to Construction Industry Vocational Training Council (CIVTC) in accordance with the provisions of section 40(a) (ia) of the Act. Assessee submitted that the amount of income shared by the assessee with CIVTC is a debatable issue and that the facts and the activities of the assessee during the relevant period as compared to the earlier periods are the same and have already been covered in the assessment orders for the assessment years 2012-13 and 2012-14.
However, Ld. AO did not find such an explanation of the assessee satisfactory and held that the payment made to CIVTC comes under the category of section 194J of the Act and disallowance under section 40(a)(ia) of the Act was made for non-deduction of tax at source on the payments made to CIVTC under chapter XVII of the Act. Further the Ld. AO did not allow any exemption on the income received on coordination basis with CIVTC since the activities undertaken were held to be different as compared to other activities undertaken by the assessee society and the said income was charged to tax at the maximum marginal rate.
In the appeal preferred by the assessee, Ld. CIT(A) observed that the issue involved for these years was squarely covered by the order dated 30/06/2017 passed by the Tribunal for the assessment year 2008-09. Ld. CIT(A) while following the same in respect of the assessment years 2010- 11, 2013-14 and 2014-15 allowed the appeals and directed the Ld. AO to allow the exemption under section 11 and 12 of the Act to the assessee and the disallowances were deleted. . 238 and 239/Del/2018 Challaning the same, the revenue preferred these appeals before us on the above-mentioned grounds.
We have heard the arguments on either side and gone through the record in the light of the submissions. On a careful perusal of the order dated 30/06/2017 and the papers in these appeals, we find that the facts and grounds of appeal
s involved in these appeals are substantially the same as in ITA number 2130/Del/2012 for the assessment year 2008-
09. In the said appeal a coordinate bench of this Tribunal found that the activities of organising conference and seminars of various ornament and non-government agencies are not with the aim of earning any profit. It was further held that insofar as the application of income from conference and seminars towards the objective of the assessee society is not in dispute, withdrawal of the exemption under section 11 and 12 of the Act is not justified. The Tribunal further held that the provisions of section 40(a)(ia) of the Act are contained in chapter IV-D of the Act dealing with the “Profit and Gains of Business and Profession” and become operational only when income is assessable under that head and since the income is earned by the assessee has been held as exempt under section 11 and 12 of the Act, the rigours of provisions of section 40(a)(ia) of the Act cannot be applied to the facts of the assessee. The Tribunal, therefore, deleted the addition made under section 40(a)(ia) of the Act.
8. Ld. DR argued that non-deduction of tax in respect of provision of payment to CIVTC attracts the provisions under . 238 and 239/Del/2018 section 40(a) (ia) of the Act. He placed reliance on the decisions reported in Palam Gas Service vs. CIT, Civil Appeal No. 5512 of 2017 (Supreme Court) and PCIT verses Manzoor Ahmed Walvir 84 taxmann.com 233 (J and K) and Academy of Medical Services verses CIT 91 taxmann.com 239 (Kerela).
However, admittedly there is no change in the facts and circumstances through the assessment years 2008-09, 2010- 11, 2013- 14 and 2014-15. In these circumstances there is no material before us to deviate from the view taken by a coordinate bench of this Tribunal for the assessment year 2008-09 or to reach a different conclusion. We, therefore, while respectfully following the same find that the impugned orders do not suffer any illegality and irregularity and do not warrant any interference by this Tribunal. We, accordingly, dismiss these appeals.
In the result appeals of the revenue are dismissed.