DCIT, BANGALORE vs. M/S RAJIV GANDHI UNIVERSITY OF HEALTH SCIENCES, BANGALORE

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ITA 885/BANG/2016Status: DisposedITAT Bangalore26 December 2017AY 2011-128 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 held that accumulation of income for charitable trusts should be calculated on gross receipts, not net income, following a Supreme Court decision. The revenue's appeal was dismissed.

What were the facts?

The assessee, a public charitable trust, filed its return declaring nil income. The Assessing Officer allowed accumulation of income at 15% of net income, contrary to the assessee's claim on gross receipts. The CIT(A) allowed accumulation on gross receipts.

What were the issues?

The primary issue was whether the accumulation of income for charitable purposes should be calculated on gross receipts or net income.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 143(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, ‘C’ BENCH, BENGALURU

Before: SHRI VIJAY PAL RAO & SHRI INTURI RAMA RAO

For Appellant: Shri C.Suman Lunkar, Advocate
For Respondent: Shri R.N.Parbat & Nambirajan (DRs), Shri C.Suman Lunkar, Advocate
Hearing: 26/09/2017Pronounced: 26/12/2017

Heard together (2 matters)

C.O.No.30/Bang/2017
ITA No.885/Bang/2016

Read from the judgment's own cause title. This page is filed under one of them.

The appeal by the revenue and cross objections by the assessee are directed against the order of the learned Commissioner of Income- & 885/Bang/2016 & CO No.30/Bang/2017 Page 2 of 8 tax (Appeals), LTU, Bengaluru [‘CIT(A)’] dated 10/02/2016 for the assessment year 2011-12. The assessee also filed cross objections in CO No.30/Bang/2017.

2.

Briefly facts of the case are as under: The respondent-assessee is a public charitable trust registered under the provisions of section 12AA of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] with the object of rendering services in Medical education. The return of income for the assessment year 2011-12 was filed on 30/03/2013 declaring nil income. After processing the return of income under the provisions of section 143(1) of the Act, the assessment was completed u/s 143(3) of the Act vide order dated 26/03/2014 at total income at ‘nil’. While doing so, the Assessing Officer allowed accumulation of income at 15% of the net income as against claim of the assessee that it should be on gross receipt.

3.

Being aggrieved, an appeal was filed before the CIT(A), who vide impugned order, had allowed the accumulation of 15% of gross receipts following the decision of Tribunal in the case of M/s.Jyothi Charitable Trust in and St.Charles Medical Society Nirmal Hospital vs. DDIT(Exemption) in ITA No.364/Bang/2015 dated 09/10/2015.

4.

Being aggrieved by this order, the revenue is in appeal before us in the present appeal raising the following grounds of appeal in : & 885/Bang/2016 & CO No.30/Bang/2017 Page 3 of 8

5.

We heard rival submissions and perused the material on record. The issue raised in the present appeal is squarely covered by the order of the co-ordinate bench of Tribunal in dated 07/04/2017 in the case of ITO vs. Shraddha Trust. The relevant paragraph is reproduced below:

“7. The other grounds of appeal relates to Whether accumulation of income should be on gross receipt or net income after deducting the expenditure, is covered by the decision of the Hon’ble Supreme Court in the case of CIT vs. Programme for Community Organisation (248 ITR 1)(SC) wherein it was held that 25% should be calculated on the gross receipts of & 885/Bang/2016 & CO No.30/Bang/2017 Page 4 of 8 income and not on the net income. Therefore, these grounds of appeal raised by the revenue are dismissed.” Respectfully following the ratio laid down in the above decision we dismiss the grounds of appeal raised by the revenue.

6.

In the result, the appeal filed by the revenue is dismissed.

7.

The assessee raised the following grounds of appeal in ITA No.805/Bang/2016: & 885/Bang/2016 & CO No.30/Bang/2017 Page 5 of 8 & 885/Bang/2016 & CO No.30/Bang/2017 Page 6 of 8 & 885/Bang/2016 & CO No.30/Bang/2017 Page 7 of 8

8.

We observe from the grounds of appeal filed by the assessee that no grievance is pointed out by the assessee. In fact, the grounds of appeal are in support of the order of the CIT(A). Hence, the appeal filed by the assessee is dismissed.

9. The cross objections filed by the assessee are in support of the order of the CIT(A). Since the appeal of revenue is dismissed, the cross objections become infructuous and hence dismissed.

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