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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI Before Sh. N. K. Saini, AM and Smt. Beena A. Pillai, JM Asstt. Year : 2008-09 : Asstt. Year : 2007-08 Maruti Center for Excellence, Vs Income Tax Officer(Exemption), Plot No. 1, Nelson Mandela Road, Trust Ward-IV, Vasant Kunj, New Delhi New Delhi-110092 (APPELLANT) (RESPONDENT) PAN No. AAATM7499K ITA No. 1062/Del/2010 : Asstt. Year : 2006-07 Income Tax Officer(Exemption), Vs Maruti Center for Excellence, Trust Ward-IV, Plot No. 1, Nelson Mandela Road, New Delhi-110092 Vasant Kunj, New Delhi (APPELLANT) (RESPONDENT) PAN No. AAATM7499K Assessee by : Sh. Rohit Jain, CA & Ms. Tejasvi Jain, CA Revenue by : Sh. H. K. Chaudhary, CIT DR & Sh. Rajesh Kumar, Sr. DR Date of Hearing : 15.05.2017 Date of Pronouncement : 15.06.2017 ORDER Per N. K. Saini, AM:
The appeal by the department for the assessment year 2006-07 and the appeal by the assessee for the assessment year 2008-09 are directed against the separate orders dated 04.12.2009 and 31.01.2012 respectively passed by the ld. CIT(A)-XXI, New Delhi, while the appeal by the assessee 1017/Del/2011 & 1062/Del/2010 Maruti Center for Excellence for the assessment year 2007-08 is directed against the order dated 21.12.2010 passed by the ld. CIT(A)-XII, New Delhi.
The grievance of the department for the assessment year 2006- 07 relates to the benefits of Section 11 & 12 of the Income-tax Act, 1961 (hereinafter referred to as the Act), allowed to the assessee while the assessee in its appeals challenged the denial of exemption u/s 11 of the Act and action of the ld. CIT(A) in holding that the objects of the assessee were not charitable in nature within the meaning of Section 2(15) of the Act.
During the course of hearing the ld. Counsel for the assessee was fair enough to conceal that the registration u/s 12A of the Act already granted to the assessee was withdrawn by the ld. CIT vide order dated 22.02.2011 passed u/s 12AA(3) of the Act by observing that the assessee was not formed for the purpose of general public but for associates of Maruti (Maruti Suzuki). The ld. Counsel for the assessee furnished written submissions dated 15.05.2017 which read as under: “The captioned appeals are fixed for hearing before the Hon'ble Bench today. It is respectfully submitted as under:
1017/Del/2011 & 1062/Del/2010 Maruti Center for Excellence The assessee is a Society incorporated on 24.06.2002 under the Societies Registration Act, 1860, and is engaged in the charitable activity of imparting education and training in the field of quality, cost and technology orientation to the public at large, including its members. The assessee was granted registration under section 12A of the Act by the Director of Income Tax (Exemptions) (in short "DIT(E)"), New Delhi vide order dated 25.02.2003. The assessee was also approved under section 80G(5)(vi) of the Act for the period from 07.08.2002 to 31.03.2004 vide order dated 25.02.2003, which was subsequently extended for the period from 04.04.2004 to 31.03.2007 vide order dated 23.09.2004 and for the period from 01.04.2007 to 31.03.2010 vide order dated 31.08.2007. On the basis of registration granted under section 12A, the assessee claimed exemption under sections 11/12 of the Act in the Income Tax Return filed for assessment year 2005-06 to 2008-09. In regular assessment for assessment year 2005-06 completed vide order dated 28.12.2007 passed under section 143(3), the assessee was, for the first time, denied exemption on ground of alleged violation of provisions of section 13 of the Act. Following the said assessment order, exemption was denied to the assessee in assessment years 2006-07 to 2008-09, vide orders dated 30.12.2008, 2.12.2009 and 15.11.2010 respectively. On further appeal filed by the assessee, the CIT(A) vide orders dated 31.12.2008 and dated 04.12.2009 upheld the claim of exemption and allowed the appeal for assessment years 2005-06 and 2006-07 respectively. Further, 1017/Del/2011 & 1062/Del/2010 Maruti Center for Excellence department appeals filed against the orders passed by the CIT(A) were dismissed by the Tribunal vide orders dated 02.09.2009 and 12.05.2010 in and 1062/Del/2010 for assessment years 2005-06 and 2006-07 respectively. For assessment years 2007-08 and 2008-09, the CIT(A), however, upheld the order of the assessing officer denying exemption under sections 11/12 of the Act, by relying upon certain newspapers items/ reports to allege that the assessee was formed solely for the benefit of M/s. Maruti Suzuki and its associates and not for the benefit of public at large. Appeals filed by the assessee against the aforesaid orders for assessment years 2007-08 and 2008-09 are presently fixed for hearing before the Hon'ble Bench. Subsequently, the DIT(E) vide order dated 22.02.2011 passed under section 12AA(3), withdrew registration granted to the assessee under section 12A of the Act, observing/ holding that the assessee was not formed for the purpose of general public but for associates of Maruti Udyog (now Maruti Suzuki). Aggrieved by the aforesaid order dated 22.02.2011 passed under section 12AA(3), cancelling registration granted under section 12A of the Act, the assessee filed appeal before the Tribunal, who vide order dated 17.02.2012 in ITA No. 3048/Del/2011, set aside the aforesaid order and remanded the matter back to the DIT(E) for fresh adjudication.
1017/Del/2011 & 1062/Del/2010 Maruti Center for Excellence Subsequently, the Hon'ble Delhi High Court vide order dated 21.05.2012 allowed the appeals filed by the Revenue against the order of the Tribunal in the quantum appeal for assessment years 2005-06 and 2006-07 and restored the matter to the Tribunal for fresh adjudication. As a consequence of the aforesaid order of the Hon'ble High Court, the present appeal for assessment year 2006- 07 has now been re-fixed for hearing before the Tribunal. In the meanwhile, pursuant to the order of the Tribunal dated 17.02.2012 restoring the issue of cancellation of registration for fresh adjudication, the CIT(Exemption), New Delhi passed fresh order dated 26.2.2015 withdrawing registration granted to the assessee under section 12A of the Act since inception. Despite the fact that the assessee had a statutory right to challenge the aforesaid order before the Tribunal, the assessee, it is respectfully submitted, bonafidely decided not to file any appeal against the aforesaid order dated 26.02.2015 of the CIT(Exemption) withdrawing exemption granted to the assessee under section 12A of the Act. The aforesaid decision, it is submitted, was bonafidely taken by the assessee having regard to the fact that the assessee has been pursuing long-drawn protracted litigation for assessment years 2005-06 and 2008-09, resulting in huge loss of available limited resources, time and effort. It was, therefore, decided not to pursue such costly litigation anymore, to avoid further loss of available limited resources and to, in fact, concentrate and devote time and energies for the avowed object for which the assessee has been constituted.
1017/Del/2011 & 1062/Del/2010 Maruti Center for Excellence In view of the aforesaid, it is fairly admitted that in the absence of the assessee being registered under section 12A, the assessee is not eligible for exemption under sections 11/12 of the Act. In the light of the aforesaid, the following grounds may be decided by the Hon'ble Tribunal against the assessee and in favour of the Revenue: AY 2006-07 (Department appeal) - (a) Whether the CIT(A) was right in holding that income of the assessee is eligible for exemption under section 11 of the Income Tax Act ,1961 ("the Act") [refer ground Nos. 1 to 2]? AY 2007-08 (Assessee appeal) (a) Whether the CIT(A) was right in denying exemption under section 11 of the Income Tax Act ,1961 ("the Act") [refer ground Nos. 1 to 2]? PLACE: NEW DELHI Sd/- DATE:15.05.2017 (ASSESSEE)
4. In his rival submissions the ld. DR submitted that since the assessee is not having registration u/s 12A of the Act. Therefore, it is not eligible for exemption u/s 11 & 13 of the Act. The issue may be decided in favour of the department.
We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the registration earlier granted 1017/Del/2011 & 1062/Del/2010 Maruti Center for Excellence to the assessee was withdrawn by the ld. DIT(Exemption) vide his order dated 26.02.2015 and the assessee has not challenged the said action of the ld. CIT(A) and decided not to file any appeal against the said order dated 26.02.2015. Now, it is an admitted position that in the absence of having registration u/s 12A of the Act, the assessee is not eligible for exemption u/s 11/12 of the Act. Therefore, the issues raised before us are decided against the assessee and in favour of the department.
In the result, the appeals of the assessee are dismissed and that of the department is allowed. (Order Pronounced in the Open Court on 15/06/2017)