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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA & SHRI RAVISH SOOD
Date of Hearing –02.03.2017 Date of Order – 07.03.2017 Kalyani Charitable Trust ITA no.952/Mum./2015 & Co. 149 O R D E R PER: SHAMIM YAHYA This appeal by the revenue and cross of objection by the assessee is directed against order of Ld. CIT-A, dated 27.11.2014 and pertains to assessment year 2008-09. 2. Revenue Appeal The grounds of appeal read as under: i. "That on the facts and circumstances of the case and in law, the Ld. CIT(A), erred in relying on the lease agreement between the assessee and the lessor ignoring the fact that the transaction is not at ARM'S Length and is between interested parties". ii. "That on the facts and circumstances of the case and in law, the Ld.CIT(A). failed to take in account the advance of Rs.8.68 crores to M/s Kalyani Education Pvt. LTd. Claimed to' Deposit for leased Assets' and payment of Rs. 1 crores as lease rent against a property of Rs. 31 crores which in itself proves that the lease deed is of diverting the funds of the assessee to its interested concern". iii. "The Appellant prays that the order of the Commissioner of Income-tax (Appeals)-1, Mumbai be set aside and that of the Assessing Officer be restored". iv. "The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary". 2 Kalyani Charitable Trust ITA no.952/Mum./2015 & Co. 149
3. At the outset in this case Ld. Counsel of the assessee submitted that the issue is squarely covered in favour of the assessee by this Tribunal’s decision in assessee’s own case.
4. For this proposition Ld. Counsel of the assessee referred that after discussing the issue on assessee’s reply the AO in paragraph 5.2 of his order has observed as under; The above reply has been considered in detail. The contention of the assessee is not acceptable for the reasons which has been discussed in detail in the assessment order of A.Y. 2010-11. The conclusive part of the assessment order for A.Y. 2010-11 is reproduced under.
5. Thereafter the AO has reproduced the above observations and concluded as under in 5.3 of his order; “In view of the above, the amount of Rs.1,00,00,000/-(paid during the year) is considered to have been diverted for the benefit of the excluded persons and taxed accordingly. For the A.Y. 2010-11 the assessee’s appeal was allowed by the CIT-A and the department is in second appeal before the Hon’ble Tribunal and the issue has not yet reached its finality.”
6. Thereafter Ld. Counsel of the assessee referred to the order of the Ld. CIT-A where in the Ld. CIT-A has followed the earlier order of CIT-A for A.Y. 2010-11 as under; “Further it is noticed that the facts on this issue such as –(i) that Rs. 1 crore was paid to M/s. Kalyani Education Pvt. Ltd. towards ‘deposit for leased assets’ (ii) duly supported by valid agreement, (iii) that land building Kalyani Charitable Trust ITA no.952/Mum./2015 & Co. 149 and other infrastructure assets are being utilized for the purpose of activities of the appellant have not been questioned or contradict ted by the A.O. It is also on record that the element of benefit has not been brought on record. Under the circumstances there is no reason to deviate from the decision of the CIT-A in appeal No. CIT-A-I/IT/E2/(52)/2013-14 dated 08.10.2013 referred and relied by the appellant. In view of above Ground No. 5,6 and 7 of appeal are allowed.
7. Thereafter Ld. Counsel of the assessee referred to the order of this ITAT in assessee’s own case in for assessment year 2010-11 where the order of the Ld. CIT-A for assessment year 2010-11 has been affirmed as under; We have considered rival contentions and carefully gone through the orders of the authorities below and found from record that assessee is a charitable trust engaged in promotion of education and allied activities. Assessee was running school, college of Engineering, Pharmacy, Management etc., With respect to each and every query of the AO, the CIT(A) has dealt in great detail and after giving detailed finding, reached to the conclusion that deposit of Rs.6,68,00,000 was in pursuance of valid lease agreement for the use of the premises and various other facilities and fixed asset in nature of building, ground etc., In the process of carrying out educational activities / charity, the assessee has used the premises and other leased assets for its purpose after recording detailed finding at para 4.32 -5.6, the CIT(A) reached Kalyani Charitable Trust ITA no.952/Mum./2015 & Co. 149 to the conclusion that there is no case of any benefit being diverted by the assessee trust to the interested persons. Accordingly, denial of exemption u/s.11 by the AO was not correct. Accordingly, there is no application of Section 13 of IT Act. Detailed finding recorded at para 4.32 to 5.6 has not been controverted by DR by bringing any positive material on record. The same do not warrant any interference on our part.
Referring to the above Ld. Counsel pleaded that since identical issue had been decided by the Tribunal in assessee’s own case the same may please be followed.
Per contra Ld. DR did not dispute this position that similar issue was decided in favour of the assessee by this Tribunal in assessee’s own case as referred above.
Considering the entire conspectus of the case in light of the submissions as above and perusing the records we do not find any reason to depart from the Tribunal’s order as above to which one of us the Judicial Member was a Co-author. Since in the present case Ld. CIT has followed the Ld. CIT-A order which has already been upheld by the Tribunal, adhering the doctrine of stare decisis, we uphold the order of Ld. CIT-A.
In the result this appeal filed by the revenue is stands dismissed.
Assessee’s cross objection 11. In the cross objection has raised following grounds.
Kalyani Charitable Trust ITA no.952/Mum./2015 & Co. 149 i) On the facts and circumstances of the case, the Ld. CIT-A has erred in not adjudicating legal ground no. 1,2 and 8 pertaining to validity of reassessment proceedings raised before him. ii) On the facts and circumstances of the case, the Ld. CIT-A ought to have held that reassessment proceedings and consequential assessment order Dt. 28.03.2014 passed by the AO u/s. 143(3) r.w.s. 147 of the Act are bad in law. iii) The assessee craves leave to add to, alter, amend, modify and/or delete all or any of the foregoing cross objection.
We find that in the cross objection the assessee has raised objection that issue as regards validity of reassessment proceedings were duly raised before the Ld. CIT-A, but he has not adjudicated the issue. Upon our query as to whether the Ld. Counsel of the assessee shall be pressing for this ground if the merits is decided in assessee’s favour, Ld. Counsel submitted that in order to protect the assessee’s interest he wished to pursue the same.
Accordingly, up on careful consideration we note that the issue of validity of jurisdiction was raised before the Ld. CIT-A who has not adjudicated upon the same. Hence in the interest of justice since the Ld. Counsel of the assessee is insisting upon adjudication of this issue we deem it appropriate to restore this issue to the file of Ld. CIT-A. The Ld. CIT-A is directed to consider the issue of jurisdiction/validity of reassessment as raised by the assessee before him.
Kalyani Charitable Trust ITA no.952/Mum./2015 & Co. 149 In the result the cross objection by the assessee stands allowed for statistical purpose.
Kalyani Charitable Trust ITA no.952/Mum./2015 & Co. 149 The result revenues appeal stands dismissed and the assessee is cross objection stands allowed for statistical purposes.