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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ON THE 11TH DAY OF DECEMBER, 2018
BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH
AND
THE HON'BLE MR. JUSTICE K. NATARAJAN
INCOME TAX APPEAL NO.311 OF 2018
BETWEEN:
PR. COMMISSIONER OF
INCOME-TAX (EXEMPTIONS) MANGALURU.
THE ASSISTANT COMMISSIONER
OF INCOME-TAX (E), CIRCLE 1(1), MANGALURU, C.R. BUILDING,
2ND FLOOR, ATTAVAR,
MANGALURU.
...APPELLANTS (BY SRI E.I. SANMATHI, ADVOCATE)
AND:
M/S. MANGALORE URBAN
DEVELOPMENT AUTHORITY, URVA STORES, ASHOKNAGAR, MANGALURU. ... RESPONDENT
(BY SRI A. MAHESH CHOWDHARY, ADVOCATE)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 1-9-2017 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGALURU, IN APPEAL PROCEEDINGS I.T.A. NO.2157/BANG/2016 FOR ASSESSMENT YEAR 2012-13.
THIS INCOME TAX APPEAL COMING ON FOR ORDERS, THIS DAY, RAVI MALIMATH, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Heard Sri E.I. Sanmathi, learned counsel for the appellants.
The following substantial questions of law arise for consideration:
i. Whether on the facts and in the circumstances of the case the Tribunal is right in holding that the assessee is eligible for carry forward of deficit of the assessee to the subsequent years when the income of a charitable of religious trust/institution is required to be
computed by applying general commercial principles without referring to the regular provisions of Income Tax as contained under Chapter-IV and as such while arriving at the income of a charitable or religious trust/institution, various heads of income as contemplated under Section 14 and specific provisions of computation of income under respective heads as envisaged under Sections 15 to 59 are not pressed into action?.
ii. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled to carry forward of excess application without appreciating that the provisions of Sections 70 to 80 of I.T. Act are not applicable to trusts as they only deal with carry forward and set off of loss and not excess expenditure or deficit?
iii. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled for claim under Section 11 even when the assessee is hit by First proviso to sub- section (15) of Section 2 of the Act?
iv. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in allowing assessee’s claim of carry forward of loss particularly when the return of income was not filed in time prescribed under the provisions of Section 139(1) of the Act?
Learned counsel for the appellants submits that the first and the second substantial questions of law are covered by the assessee’s own case in Income Tax Appeal No.173 of 2016, disposed off on 30-8-2018. The third substantial question of law is covered by the judgment of this Court in Income Tax Appeal No.110 of 2016, disposed
off on 24-10-2017. The fourth substantial question of law does not arise for consideration.
In view of the submission made, the substantial questions of law are answered in favour of the assesee and against the Revenue. The appeal is, accordingly, disposed off.
SD/-
SD/- JUDGE
JUDGE
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