THE COMMISSIONER OF INCOME TAX vs ISLAMIC ACADEMY OF EDUCATION

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 21ST DAY OF AUGUST, 2015

PRESENT

THE HON'BLE MR. JUSTICE VINEET SARAN

AND

THE HON’BLE MR. JUSTICE B.MANOHAR

ITA NO. 712 / 2009

BETWEEN

1 THE COMMISSIONER OF INCOME TAX

C R BUILDING, ATTAVARA, MANGALORE

2 THE ASSISTANT COMMR. OF INCOME TAX

CENTRAL CIRCLE, C R BUILDING

ATTAVARA, MANGALORE

... APPELLANTS

(BY SRI.K V ARAVIND & SRI E I SANMATHI, ADV.)

AND

ISLAMIC ACADEMY OF EDUCATION ® NITHYANANDA NAGAR, DERALAKATTE MANGALORE

...RESPONDENT

(BY SRI S PARTHASARATHI, ADV.)

THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 12.6.2009 IN ITA 1396/Bang/2008 FOR THE ASST. YEAR 2003-04 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER

PASSED BY THE ASST. COMMR. OF INCOME TAX, CENTRAL CIRCLE I, BANGALORE.

THIS ITA COMING ON FOR HEARING THIS DAY, VINEET SARAN J. DELIVERED THE FOLLOWING:

JUDGMENT

Heard Sri K.V.Aravind, learned counsel for the appellants and Sri S.Parthasarthi, learned counsel for the respondent and perused the record. 2. This appeal has been ADMITTED on the following questions of law:

“i. Whether the Appellate Authorities were correct in holding that the assessee was to be treated in the status of Trust as the assessee had been granted registration under Section 12AA of the Act without appreciating that the assessee has contravened the provisions of Section 11(5) r.w.s.s 13(d)(i) and 13(2)(h) of the Act and therefore not exempted u/s.11 of the Act and should be treated as AOP and permitting carry forward of depreciation loss as held by the Assessing Officer?

ii. Whether the Appellate Authorities were correct in holding that a sum of Rs.2,14,21,029/- treated as the income of the assessee as unaccounted donations (Rs.2,02,17,525/-) disallowance of fines (Rs.5,77,498/-) disallowance of PF (Rs.6,26,006/-) u/s. 43 B of the Act, after allowing depreciation and expenditure after deducting

admitted income worked out the depreciation loss to be carried forward of Rs.1,51,51,332/- by the Assessing Officer was liable to be set aside?”

Learned counsel for the parties have jointly submitted that the first question involved in this appeal is covered by the decision of this Court in the case of Commissioner of Income Tax –vs- M/s.Islamic Academy of Education in ITA No.805/2008 decided on 09.09.2014.

For the reasons given in the aforesaid judgment, the first question of law is decided in favour of the assessee and against the revenue.

As regards the second question, what we find is that the figures given in the question are not correct and the matter involves an amount of Rs.2,02,17,525/- only, that is, to the extent of unaccounted donations for the year in question.

Learned counsel for the parties do not dispute the fact that the second question has been decided by the Tribunal

without considering the facts of the case on hand but the same has been done basing it on some other order adjudicating cancellation of registration under Section 12A of the Income Tax Act, 1961 (for short ‘the Act’). Learned counsel for the parties thus submits that the second question of law raised in this appeal may be remanded back to the Tribunal for fresh adjudication after hearing it as de novo. As such, without expressing any opinion with regard to question No.2, it is directed that the Tribunal shall reconsider the said issue and pass fresh orders in accordance with law without being influenced by the order passed with regard to grant of registration under Section 12A of the Act.

The appeal stands disposed of.

Sd/-

JUDGE

Sd/-

JUDGE TL

THE COMMISSIONER OF INCOME TAX vs. ISLAMIC ACADEMY OF EDUCATION