Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
ORDER
Per N. K. Saini, AM:
This is an appeal by the department against the order dated 21.09.2016 by ld. CIT(A)-40, Delhi.
The only effective ground raised
in this appeal reads as under: “1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the claim of carry forward of losses disregarding the fact that set-off and carry forward of losses are dealt with by the provisions of section 70 to 74 of the Income Tax Act.”
3. Facts of the case in brief are that the assessee filed the return of income on 30.09.2012 declaring Nil income which 2 Subros Educational Society was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act). Later on, the case was selected for scrutiny. The AO framed the assessment at a deficit of Rs.13,03,12,250/- but did not allow the carry forward the said deficit.
Being aggrieved the assessee carried the matter to the ld. CIT(A) who allowed the claim of the assessee by following the order dated 10.12.2014 of the ITAT Bench ‘G’, New Delhi in for the assessment year 2008-09 in assessee’s own case. The relevant findings have been given by the ld. CIT(A) in paras 4.3 to 4.5 which read as under: “4.3 In an appeal filed by the Department, the Hon'ble ITAT Bench "G" in ITA No. 1566/Del/20l2, vide order dated 10.12.2014 for the assessment year 2008-09 in the appellant's own case has held as under: "Ground No. 2: On the issue raised in this ground, the Learned CIT(Appeals) has followed the ratios laid down by the Hon'ble Rajasthan High Court in the case of CIT vs. Maharana of Mewar Charitable Foundation - 164 ITR 439 (Raj.). In that case, it was held by the Hon'ble Rajasthan High Court that excess of expenditure in earlier years should be treated as application for charitable purpose against income of subsequent year so, the net deficit of the year under consideration should be allowed to be carried forward for adjustment in subsequent year as claimed by the appellant in its return of income. In view of the ratios laid down in this decision, we are of the view that the 3 Subros Educational Society Assessing Officer was not justified in not allowing the carry forward of net deficit in the present case. The Learned CIT (Appeals) was thus justified in directing the Assessing Officer to allow carry forward of deficit. The same is upheld. The ground no. 2 is accordingly rejected." 4.4 The then Ld. CIT(A)-XXI, in his order dated 28.10.2014 has held as under: "3.2 I have considered the order of the AO and the submissions of the assessee and I do not find any merit in the submissions of the assessee. The AO has denied the carry forward of deficit/loss but the AO has not cited any reasons for his decision. However, It is seen that the exemption provisions u/s 11, 12, 12A, 12AA & 13 are independent provisions for the computation of income and for allowing exemption in the case of charitable or religious institutions and in these provisions there are no provisions for adjustment or set off of loss against income of the current year (Section 70) or adjustment of brought forward loss against the current year's income or carry forward of current year's loss against the adjustment of the subsequent year's income or for allowing depreciation in fixed assets which are applicable in the case of business concerns only. But it is also seen that the various High Courts have taken a view in favour of the assessees that the income is to be computed in commercial principles and as such adjustment of brought forward loss/ deficit and carry forward of loss/ deficit is to be allowed and the several case laws are as under:- i) CIT vs. Maharana of Mewar Charitable Foundation, 164 ITR 439 (Raj) 1987.
4 Subros Educational Society ii) CIT vs. Shri Plot Swetamaber Murti Pujak Jain Mandal, 211 ITR 293 (Guj) 1995. (in) CIT vs. Matrisewa Trust, 242 ITR 20 (Mad) 2000 (iv) Govindu Naicker Estate vs. ADIT, 248 ITR 110 (Bom) 2003. (v) CIT vs. Institute of Banking, 264ITR 110 (Bom) 2003. (vi) DIT vs. Raghuvanshi Charitable Trust, 197 Taxmann 170 (Delhi) 2011 vii) CIT vs. Gujarat Samaj, 349 ITR 559 (MP) 2012 3.3 After considering all the facts and circumstances of the case, I am of the view that even though there is no merit in the submissions of the assessee as there is no specific provisions u/s 11, 12, 12A, 12AA & 13 for allowing the carry forward or adjustment of deficit or loss etc. but keeping in view the decisions of the various Hon'ble High Courts in favour of the assessee on the same issue and also the appellate order of the Ld CIT(A) for the A. Y 2008-09, the same is followed to maintain the principle of consistency and accordingly the AO is directed to allow the benefit of carry forward of the deficit/ loss and as such the appeal of the assessee is allowed." 4.5 Keeping into consideration all the facts of the case and respectfully following the decisions of the various Hon'ble High Courts in favour of the appellant assessee, the decision of the Hon'ble ITAT in appellant's own case and the decision of the then Ld. CIT(A)-XXI for the assessment year 2010-11, the Assessing Officer is directed to allow the benefit of carry forward of the deficit/loss. This ground of appeal is allowed.”
5. Now the department is in appeal. The ld. DR although supported the order of the AO but could not rebut the findings given by the ld. CIT(A).
5 Subros Educational Society 6. In his rival submissions, the ld. Counsel for the assessee submitted that the order dated 10.12.2014 of the ITAT Delhi Bench ‘G’, New Delhi in assessee’s own case which was followed by the ld. CIT(A) has been confirmed by the Hon’ble Jurisdictional High Court in vide order dated 23.09.2015 (copy of the said order was furnished which is placed on record).
We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is an admitted fact that the ld. CIT(A) followed the order dated 10.12.2014 of the Tribunal in assessee’s own case and the said order of the ITAT has been affirmed by the Hon’ble Jurisdictional High Court. We, therefore, do not see any merit in this appeal of the department.
In the result, the appeal of the department is dismissed. (Order Pronounced in the Court on 09/11/2017)