COMMISSIONER OF INCOME TAX, (EXEMPTIONS), vs. DHANPATMAL VIRMANI EDUCATION TRUST & MANAGEMENT SOCIETY

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ITA/501/2017HC DelhiDLHC01228322201726 July 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH3 pages
AI SummaryDismissed

What did the High Court hold?

The ITAT correctly held that the CIT's order under Section 263 was unsustainable as the amendment to Section 11(6) was not applicable to the assessment year in question, and the CIT had merely taken a different view without sufficient grounds.

What were the facts?

The Revenue appealed against an ITAT order that held the CIT's order under Section 263 unsustainable. The assessee, a trust registered under Section 12A, had its assessment completed under Section 143(3) accepting returned income.

What were the issues?

Whether the CIT's order under Section 263 was justified when the Assessing Officer's view was in accordance with the law applicable at the time, and whether the amendment to Section 11(6) had retrospective effect.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 12A,Section 80G,Section 11

AI-generated summary — verify with the full judgment below

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$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 6 + ITA 501/2017 COMMISSIONER OF INCOME TAX, (EXEMPTIONS) ..... Appellant Through: Mr Rahul Kaushik, Senior Standing Counsel

versus

DHANPATMAL VIRMANI EDUCATION TRUST & MANAGEMENT SOCIETY

..... Respondent

Through: None CORAM: JUSTICE S.MURALIDHAR JUSTICE PRATHIBA M. SINGH

O R D E R %

26.07.2017 CM 24201/2017 (exemption) 1. Allowed, subject to all just exceptions.

ITA 501/2017 2. The challenge in this appeal by the Revenue is to the order dated 30th November, 2016 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 2988/Del/2016 for the Assessment Year (‘AY’) 2011-12.

3.

The question urged is whether the ITAT was correct in holding that the order passed by the Commissioner Income Tax (‘CIT’) under Section 263 of the Income Tax Act, 1961 (‘Act’) was unsustainable in law.

4.

In the impugned order, the ITAT has noted that the assessment of the Respondent-Assessee for the AY in question was completed under ITA 501/2017

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Section 143(3) of the Act on 30th August, 2013 by accepting the returned income. The Assessee had been registered under Section 12A of the Act by order dated 3rd December, 1975. It was also granted certification under Section 80G (5) (vi) of the Act by an order dated 15th June, 2010 from AY 2009-10 onwards. The question that arose was whether for the purposes of Section 11 of the Act as it stood at the relevant time, the income of the Assessee should have been applied for charitable or religious purposes only in the year in which the income has arisen?

5.

The CIT, in the order under Section 263 of the Act, while disagreeing with the findings of the Assessing Officer (‘AO’) on the issue, did not undertake any enquiry as such. The ITAT took note of the fact that the amendment to Section 11(6) was with effect from 1st April, 2015 and did not apply to the AY in question. Therefore the view taken by the AO was in accordance with law. It was held that there was no requirement under Section 11 (1) (a) prior to its amendment, that the income should have been applied for charitable or religious purposes only in the year in which the income had arisen. Following the dictum of the Supreme Court in Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC), the ITAT came to the conclusion that the CIT had merely taken a different view. This was insufficient for invoking the power under Section 263 of the Act.

6.

Having heard the learned Senior Standing Counsel for the Revenue and having perused the orders of the AO, the CIT and the ITAT, the Court is of the view that the impugned order of the ITAT does not suffer from any legal ITA 501/2017

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infirmity and no substantial question of law arises for consideration therefrom.

7.

The appeal is accordingly dismissed, but in the circumstances, with no orders as to costs.

S. MURALIDHAR, J

PRATHIBA M. SINGH, J JULY 26, 2017 rd

ITA 501/2017

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