THE COMMISSIONER OF INCOME TAX vs. ISLAMIC ACADEMY OF EDUCATION

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ITA/710/2009HC KarnatakaKAHC01075051200921 August 2015Bench: B.MANOHAR,VINEET SARAN4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the first question of law was covered by a previous judgment of the same court. Consequently, the assessee's status as a Trust and its entitlement to exemptions were upheld.

What were the facts?

The Revenue appealed against an ITAT decision that confirmed the assessee's status as a Trust, allowing it to claim exemptions. The Revenue argued the assessee contravened provisions related to investment and should be treated as an AOP.

What were the issues?

Whether the assessee, despite registration under Section 12AA, should be treated as an AOP due to alleged contravention of investment provisions, thereby losing exemption under Section 11.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 11(5),Section 13(d)(i),Section 13(2)(h),Section 11

AI-generated summary — verify with the full judgment below

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.709/2009

BETWEEN

1.

THE COMMISSIONER OF INCOME-TAX C.R.BUILDING, ATTAVARA, MANGALORE.

2.

THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, C.R.BUILDING, ATTAVARA, MANGALORE. ... APPELLANTS

(BY SRI.K.V.ARAVIND , ADV. A/W E.I.SANMATHI, ADV., )

AND

ISLAMIC ACADEMY OF EDUCATION(R) NITHYANANDA NAGAR, DERALAKATTE, MANGALORE.

...RESPONDENT

(BY SRI S.PARTHASARATHI, SMT. JINITA CHATTERJI & SRI V.K.GURUNATHAN, ADVs.)

THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 12.06.2009 PASSED IN ITA NO.1393/BNG/2008 FOR THE ASSESSMENT YEAR 2000-2001 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA NO.1393/BNG/2008, DATED 12.6.09 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, MANGALORE.

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 bringing to tax a sum of Rs.5,05,14,535/- as held by the Assessing Officer?

ii. Whether the Appellate Authorities were correct in holding that a sum of Rs.76,501/- should be deleted as the status adopted by the Assessing Officer as AOP is set aside?

iii. Whether the Appellate Authorities were correct in deleting the addition made on account of donation which had not been substantiated by the assessee as having been an admissible expenditure by adducing proof and consequently recorded a perverse finding?”

3.

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.

4.

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

favour of the assessee whereby the registration of the assessee- Trust granted under Section 12AA of the Income Tax Act, 1961 would continue, the assessee would be entitled to the benefit of donation given by a Trust to another charitable trust and as such the other two questions would also stand decided in favour of the assessee and against the revenue.

Accordingly, this appeal stands dismissed. There shall be no order as to costs.

Sd/-

JUDGE

Sd/-

JUDGE TL

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