UNION OF INDIA vs. M/S SAI RADHA MOTORS

THE COMMISSIONER OF INCOME-TAX EXEMPTIONS, 6TH FLOOR, UNITY BUILDING ANNEXE, MISSION ROAD, BENGALURU 560027

THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2(1), PRESENT ADDRESS, JCIT (OSD) EXEMPTIONS, CIRCLE-1, 6TH FLOOR, UNITY BUILDING ANNEXE, MISSION ROAD, BENGALURU 560027 …APPELLANTS (BY SRI. SUSHAL TIWARI N.,ADVOCATE)

The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 04.09.2019 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA No.1142/Bang/2018 for the assessment year 2008-09, raising the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, Tribunal is right in law in confirming the order of CIT(A) whereby the CIT(A) had held that assessee is entitled for exemption under section 11 of the Act even though the Trust

Whether on the facts and in the circumstances of the case, the Tribunal/CIT(A)'s orders can be said as perverse since both the authorities ignored the documentary evidences unearthed in search proceedings conducted in the case of assessee which established the fact that the income generated in the name of collection of capitalization/development fee has not been applied for its object?

Whether on the facts and in the circumstances of the case, the Tribunal and CIT(A) are correct in holding that assessee is entitled to exemption under section 11 of the Act when both the authorities sustained addition of Rs.25 crores for various reasons?

Whether on the facts and in the circumstances of the case, Tribunal and CIT(A) holding that assesse is entitled for exemption under section 11 of the Act by ignoring the evidences found in search relating to collection of capitalization/development fees, paid commission @Rs.1,75,000 to an agent for soliciting students which is surely not an object of Trust and by doing so, the assessee trust indulged into a commercial activity losing its exemption under section 11 of the Act? 5. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that assessing authority is not correct in treating assessee as Company/AOP for purpose of computation of income and as such cannot be taxed at Maximum Marginal Rate when assessing authority has rightly done the same considering the commercial activities of the assessee and also

Whether on the facts and in the circumstances of the case, the Tribunal and CIT(A) are right in law in holding that assessing authority is not correct in treating assessee as Company/AOP for purpose of computation of income and as such cannot be taxed at Maximum Marginal Rate when assessing authority has rightly done the same considering the commercial activities of the assessee and also for the reason that assessee has contravened provisions of claiming exemption?

Whether on the facts and in the circumstances of the case, the Tribunal and CIT(A) are right in deleting additions of Rs.703.00 lakhs and Rs.554.50 lakhs made by assessing authority due to violation of section 13(1)(c) for A.Y.2012-13 to 2014-15 even when the assessing authority has established the said violation with documentary evidences found in search?

Whether on the facts and in the circumstances of the case, the Tribunal and CIT(A) are right in law deleting additions of Rs.93.00 lakhs for A.Y.2012-13, Rs.4333 lakhs for A.Y 2013- 14 and Rs.476. lakhs for A.Y.2014-15 relating to payment made for non-specified purposes in cash to Contractors, other related concerns, promoters etc., even though the same is in violation of section 13(1)(c) of the Act?

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore,

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the questions of law is kept open to be adjudicated in an appropriate proceeding.