COMMISSIONER OF INCOME TAX-(EXEMPTIONS) vs. ASIAN CENTRE FOR ORGANISATION RESEARCH & DEVELOPMENT

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ITA/1058/2017HC DelhiDLHC01496981201724 November 2017Bench: CASES PERTAINING TO SPL.DIVISION BENCHES4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT's confinement to the question of reassessment was not an error of law, especially since the CIT(A) had also considered the merits. The court noted the assessee's long-standing benefit under Section 12A.

What were the facts?

The Revenue appealed against the ITAT's confirmation of the CIT(A)'s order, which had set aside reassessments for the years 2005-06 and 2006-07. The assessee, an organization with registration under Section 12AA, claimed benefits of Section 12AA from 2009-10, granted in 2008.

What were the issues?

Whether the ITAT erred by confining its inquiry to the validity of reassessment proceedings when the CIT(A) had also decided on the merits of the case.

Which sections of the Income-tax Act were involved?

Section 143(1)(A),Section 147,Section 148,Section 12AA,Section 13(3),Section 12A

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'/ $~15& 16 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on; 24.11.2017 + ITA 1057/2017 COMMISSIONER OF INCOME TAX-(EXEMPTIONS) Appellant versus ASIAN CENTRE FOR ORGANISATION RESEARCH & DEVELOPMENT Respondent + ITA 1058/2017 COMMISSIONER OF INCOME V TAX-(EXEMPTIONS) Appellant ' versus . ' ASIAN CENTRE FOR ORGANISATION RESEARCH & DEVELOPMENT Respondents Advocates who appeared in this case: For the Appellant(s) ; . Mr. Zoheb Hossain, Sr. Standing Counsel For the Respondent(s) : None. CORAM:- HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K. GAUBA RAVINDRA BHAT. J. rOPEN COURTS 1. The Revenue urges in these two appeals that the ITAT fall into ITA 1057/2017 1058/2017 p^ge j of4 Digitally Signed By:AMULYA Signature Not Verified

error in confirming the CIT(A)'s order. The appellant-Commissioner had set aside the re-assessment for the years 2005-06, 2006-07. The assessee's returns were framed and filed under Section 143(1) (A) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') which claimed the benefit ofSection 12(AA) from the year 2009-10 - which had been granted on 14.10.2008. The assessee's activities included as elaborated inMemorandum ofRules and Regulations were : "5.2 To conduct, organize, participate in and otherwise: associate with seminars, discussions conferences, courses, teams training and educational programmes pertaining to matters of interest to the developmepit of. industrial, rural and health organizations. : :; . 3.3 To write, design & publish books, video-films, cassettes, manuals, journals, and other literature or audio-visual aidsfor thefurtherance oftheobjects. 3.4 To render assistance and advise on scientific methods of managemmt. of men, m^ machinery, money and other , resources, and or, operations. 3.5 To do all other things and such other lawful things as may be conducive to the\ attainment of the above object or objects identical thereto, but not to engage in business as such. 3.6 To utilize the income ofthe society towards the promotion and aims and objectsofthe society.'" ITA 1057/2017 & 1058/2017 Pagt 2 of4 \

2.

The assessment for the concerned years were sought to be re opened on two grounds; firstly, that the activities which yield an income were not charitable and that they amounted to canying on a provision - commercial activities and secondly, that the provision of Section 13(3) were violated because of the link with Ms. Kiran Wadhera. 3. The additions made during the re-assessment were set aside primarily on the ground that notice under Section 147 &148 was not justified. However, the CIT(A) considered the merits and was of the opinion that the assessee had enjoyed the benefit uninterruptedly for 27 years and that the income yielded and reported to the Revenue could not be characterized as commercial. So far as the connection with Ms. Kiran Wadhera was concerned, the CIT(A) noticed that she was afull time employee and therefore did not fall within the mischief of Section 13(c). The ITAT affirmed the opinion of the CIT(A) but confined its discussion to the question ofreassessment. 4. The Revenue urges that the ITAT ought to have appreciated the circumstances that the assessment in this case was not completed on scrutiny basis but under Section 143(1) (A). Thus, the reassessment could not be upheld by the ITAT. Learned counsel also cited the decision taken in ''Commissioner ofIncome Tax Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd.(2008) 14 SCC 408(SC), in support of the submissions. A 1(58/2017 r _____

5.

It is evident in appeal that the CIT(A) went into the legality of the reassessment of notice as well as merits of the case. Had the Appellate-Commissioner confined his inquiry to the issu^ of reassessment, the revenue might have been justified in its appeal. Given that the CIT(A) returned the findings on merits as to the permissibility ofthe receipt within the four comers ofSection 1ZA of the Income Tax Act, the complaint that the ITAT confined its hiquiry to the validity of the reassessment in the circumstances of the case, according to us, does not result into aquestion of law - much less a substantial one. The Gourt also notices that the assesses had continuously enjoyed the benefit of Section 12A for about 27 years. 6. In view of the forgoing discussion, it is held that the appeals have no merit. They are accordingly dismissed. BEAT NOVEMBER 24, 2017 'rs' /TA 1057/20/7 & 1058/2017 S. RAVINDRA (JUDGE) (JUDGE) Page 4 of4 %

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