ITO (EXEMPTIONS), NEW DELHI vs. M/S. KHETRI TRUST, JAIPUR

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ITA 84/DEL/2015Status: DisposedITAT Delhi21 June 2018AY 2010-116 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, noting that similar issues had been decided in favour of the assessee in multiple prior years by the ITAT and the Delhi High Court. The Assessing Officer also accepted similar claims in subsequent years.

What were the facts?

The Revenue appealed against the CIT(A)'s order allowing the assessee trust the benefit of Sections 11 and 12 of the Income-tax Act. The Assessing Officer had denied this benefit due to alleged violation of Section 13(1)(d).

What were the issues?

Whether the assessee trust is eligible for exemption under Sections 11 and 12 of the Income-tax Act despite alleged non-compliance with investment modes specified in Section 11(5) and potential violation of Section 13(1)(d).

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 13(1)(d)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “D” : DELHI

Before: SHRI BHAVNESH SAINI & SHRI L.P. SAHU

Hearing: 04.06.2018Pronounced: 21.06.2018

This appeal by Revenue has been directed against the order of the Ld. CIT(A)-XI, New Delhi, dated 17th October, 2014, for the A.Y. 2010-2011, on the following grounds :

1. On the facts and in the circumstances of the case and legally, the Ld. CIT(A) has erred in allowing the benefit

2 ITA.No.84/Del./2015 M/s. Khetri Trust Jaipur. u/s 11 & 12 of the Income-tax Act, 1961 by disregarding the fact the assessee trust continues to hold investment in the foreign as well as Indian companies and had not converted the same in the modes of investment specified u/s 11(5) of the I.T. Act which is in contravention of provisions of section 13(1)(d) of the Act.

2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the benefit u/s 11 & 12 of the Act in absence of element charitable activity.

3.

On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in allowing total administrative expenses of Rs.70,21,234/- ignoring this facts the same were not incurred for charitable activity.

4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the accumulated surplus of Rs.1,51,13,616/- as income of the trust ignoring this fact the assessee failed to utilized the same within the specified time.”

2.

Briefly, the facts of the case are that assessee filed return of income declaring NIL income. The assessee is registered under section 12AA of the I.T. Act. The A.O. denied

3 ITA.No.84/Del./2015 M/s. Khetri Trust Jaipur. benefit of Sections 11 and 12 to the assessee as was decided earlier by the Tribunal in A.Y. 1997-98 for violation of Section 13(1)(d) of the I.T. Act.

3. The assessee challenged the assessment order before Ld. CIT(A) and submitted that there is no violation of Section 13(1)(d) of the I.T. Act. In subsequent years, the ITAT, Delhi Bench allowed similar claim of assessee and departmental appeal have been dismissed by the Hon‘ble High Court. Copies of the orders of the ITAT and Judgment of the Hon’ble Delhi High Court were filed before Ld. CIT(A). The Ld. CIT(A) noted that the ITAT in several years allowed the claim of assessee and latest order of the Tribunal for A.Ys. 2002-2003, 2006-2007 and 2007-2008 were relied upon and Judgment of Hon’ble Delhi High Court dated 17th July, 2014 was also relied upon to show that Departmental Appeal has been dismissed by the Hon’ble High Court. The Ld. CIT(A) reproduced the Judgment of the Hon’ble jurisdictional Delhi High Court dated 17th July, 2014 in 4 ITA.No.84/Del./2015 M/s. Khetri Trust Jaipur.

the impugned order and allowed the claim of assessee. The appeal of assessee was accordingly allowed.

4.

Learned Counsel for the Assessee, at the outset, submitted that ITAT in earlier years have decided the issue in favour of the assessee. Copies of the orders of the Tribunal for A.Ys. 2001-2002 to 2009-2010 and 2012-2013 have been placed on record, in which, identical issue have been decided in favour of the assessee. Copy of the Judgment of the Delhi High Court is also placed on record, in which, the Departmental Appeal have been dismissed, as reproduced by the Ld. CIT(A) in his appellate order. The Learned Counsel for the Assessee also submitted that in subsequent A.Ys. 2013-2014 and 2014-2015, the A.O. following the orders of the ITAT and Judgment of the Hon’ble jurisdictional Delhi High Court, have allowed the claim of assessee for exemption under sections 11 and 12 of the I.T.

Act. He has, therefore, submitted that the issue is covered in favour of assessee. Copies of all these orders are supplied to the Ld. D.R. and he has not disputed the claim of assessee.

5 ITA.No.84/Del./2015 M/s. Khetri Trust Jaipur.

5. Considering the rival submissions in the light of various orders of the Tribunal and Hon’ble jurisdictional Delhi High Court in the case of same assessee, we do not find any infirmity in the order of the Ld. CIT(A) in allowing exemption under sections 11 and 12 of the I.T. Act. The issue is covered in favour of the assessee by various Orders of ITAT referred to above, and in subsequent years the A.O also accepted the similar claim of assessee. Ld. CIT(A), therefore, correctly followed the order of the ITAT and Judgment of the Hon’ble jurisdictional Delhi High Court in the case of assessee to allow exemption under sections 11 and 12 of the I.T. Act. No infirmity have been pointed-out in the order of the Ld. CIT(A). The Departmental Appeal stands dismissed.

5.

In the result, appeal of the Department is dismissed.

Order pronounced in the open Court.

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