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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI G.S. PANNU & SHRI RAVISH SOOD
The captioned appeal by the Revenue is directed against the order of CIT(A)-1, Mumbai dated 24.08.2016, pertaining to the Assessment Year 2012-13, which in turn has arisen from the order passed by the Assessing Officer, Mumbai dated 26.03.2015 under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’).
In its appeal, Revenue has raised the following Grounds of appeal:-
“1. Whether on the facts of the case and in law the Ld. CIT(A) erred in allowing the exemption u/s 11 ignoring the fact that the assessee has violated the objects of the trust and in spite of the fact that the assessee has taken deposits and charging rent for running Bar, Restaurant & Catering Services from different parties and paid license fee for liquor, though these activities are not incidental to the attainment of the objectives of the trust. Moreover no separate books of accounts are maintained by the assessee for carrying our other leasing activities as per provision of section 11(4A) of the Income Tax Act, 1961.
2. Whether, on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in relying upon the order of his predecessor in assessee's own case for A.Y. 2006-07 & 2009-10, which subsequently upheld by the Hon'ble ITAT, without appreciating the fact that Department has not accepted the decision of Hon'ble ITAT on merit and filed appeal before Hon'ble High Court for A.Y. 2006-07, 2008-09 and 2009-10, which are pending for adjudication.
The appellant prays that the order of the Commissioner of Income Tax (Appeals)-I, Mumbai be set aside and that of the Assessing Officer be restored.”
3. In brief, the relevant facts are that the respondent-assessee is a Trust registered under Sec. 12A of the Act with the Commissioner of Income Tax, Mumbai as well as with the Charity Commissioner, Mumbai. For the assessment year under consideration, it filed a return of income declaring NIL income after claiming exemptions u/s 11/12 of the Act. The assessee-trust is engaged in the activities of sports, health club, restaurant, etc. In the assessment proceedings, the Assessing Officer held that assessee was performing business activities which were not in consonance with its objects inasmuch as assessee had taken deposits of Rs.25 lacs and Rs.6 lacs from Maharaja Catering and M/s. Supreme Hospitality respectively towards conducting of bar, restaurant and catering services. From the Income & Expenditure account, the Assessing Officer also observed that assessee had spent Rs.4,43,325/- towards liquor licence fee. For all the said reasons, the Assessing Officer concluded that assessee was not carrying out any charitable objects but was engaged in business services and, therefore, he proceeded to deny the exemption claimed by the assessee u/s 11/12 of the Act. The Assessing Officer also noted that on identical considerations in the earlier Assessment Years of 2006-07 and 2009-10 the assessing authority had disallowed the claim of exemption, but on an appeal filed by the assessee the CIT(A) had set-aside the action of the Assessing Officer. So however, the Assessing Officer noted that the Department’s appeal against the order of the CIT(A) for Assessment Years 2006-07 and 2009-10 was pending before the Tribunal and, therefore, in order to keep the issue alive, he denied the claim of exemption u/s 11/12 of the Act for the instant year also and accordingly, assessed the total income at Rs.1,79,01,320/-. The CIT(A) has since allowed the claim of the assessee and set-aside the action of the Assessing Officer by following the decision of the Tribunal in assessee’s own case for Assessment Years 2006-07, 2008-09 and 2009- 10 vide & 2459 & 2460/Mum/2014 dated 26.10.2015 as well as for Assessment Year 2007-08 vide ITA No. 8161/Mum/2010 dated 19.10.2015. As a consequence, the CIT(A) allowed assessee’s claim of exemption u/s 11/12 of the Act, against which the Revenue is in further appeal before the Tribunal.
Before us, the Revenue has not controverted the fact that the issues in dispute have been decided by the Tribunal in assessee’s own case for Assessment Years 2006-07 to 2009-10 vide orders dated 19.10.2015 (supra) and 26.10.2015 (supra). As the Grounds of appeal reveal, the only aspect raised is that the Department has not accepted the decision of the Tribunal and has filed appeals before the Hon'ble High Court, which are pending for adjudication. So however, there is no assertion that the orders of the Tribunal, which have been followed by the CIT(A), have been altered by any higher authority. Since the precedents relied upon by the CIT(A) continue to hold the field, therefore, we find no reasons to interfere with the decision of the CIT(A), which is hereby affirmed.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 3rd October, 2017.