M/S AL-AMEEN CHARITABLE TRUST,BANGALORE vs DY.DIT, BANGALORE

Income Tax Appellate Tribunal, BANGALORE BENCH ‘A’ BANGALORE

For Appellant: Shri S Sukumar, Advocate

For Respondent: Dr P K Srihari, Addl CIT-DR

ORDER PER BENCH:

These five appeals, instituted at the instance of the assessee-trust, are directed against the consolidated order of the CIT (A)-LTU, Bangalore dated 29.09.2014. The relevant assessment years are 2007-08, 2008-09, 2009-10, 2010-11 and 2011-12.

The assessee-trust, in its grounds of appeals for all the assessment years under dispute, had raised the issues in an elaborate and illustrative manner. For the sake of clarity, they are reproduced, in a concise manner, as under:

I. 1545, 1546 & 1547/B/14 – Ays. 2007-08, 08-09, 09-10 & 10-11: (i) that the ld. CIT (A) for having noticed that the assessee-trust had been granted exemption u/s 10(23C)(vi) vide order dated 22.6.2009 for thep eriod 2005-06

M/s Al Ameen Charitable Fund Trust onwards, ought to have held that the trust was even otherwise eligible for exemption; & (ii) that the ld. CIT (A) erred in upholding the disallowances of depreciation of Rs.2,53,46,700/-, Rs.2,56,82,269/-,Rs.2,41,28,101/-, and Rs.2,42,51,707/- for the AYs. 2007-08, 08-09, 09-10 and 2010-11 respectively. II. – AY 2011-12: (i) that the ld. CIT (A) for having noticed that the assessee-trust had been granted exemption u/s 10(23C)(vi) vide order dated 22.6.2009 for the period 2005-06 onwards ought to have held that the trust was even otherwise eligible for exemption; (ii)that the ld. CIT (A) erred in upholding the disallowances of depreciation of Rs.2,66,05,593/-; (iii) that the CIT (A) erred in confirming the stand of the AO in computation of application with reference to net receipts u/s 11(1)(a) of the Act as against the gross receipts; & (iv) Denial of carry forward of deficit of current year to the subsequent year.

As the issues raised in these appeals being more or less identical and pertaining to the same assessee-trust, they were heard and considered together and disposed of, for the sake of convenience and clarity, in this common order.

Briefly stated, the facts of the issues are as under:

The assessee - trust was established as a charitable trust on 16.3.1979 with the main objective was to establish educational institutions in the field of medicine and supportive hospitals and to provide for clinical facilities for the medical and dental students. The assessee – trust was granted registration u/s 12AA of the Act vide order 13.2.1997 by the CIT, K-II, Bangalore. Later on, i.e., on 7.10.2002, the assessee – trust was granted exemption u/s 10(23C) (vi) of the Act by the DGIT (Exemption), Kolkatta for the AYs. 2002-03, 2003-04 and 2004-05. Consequently, based on the provisions of s. 10(23C)

M/s Al Ameen Charitable Fund Trust (vi) introduced by the Finance Act, 1998 and on an application of the assessee – trust in Form 56D for the subsequent three assessments years from 2005-06, the CCIT, Bangalore-1, Bangalore had, vide his order in F.No.CC-I/Tech-I/10(23C)/121/07- 08/33&52(6) dated 22.06.2009, accorded approval to the assessee – trust for purpose of said section for the assessment year 2005-06 and onwards (Refer: Page 11 of the P.B – A.R). Even though in the assessment orders for all the AYs under consideration, the AOs have duly mentioned the approval u/s 10(23C)(vi) of the AYs. 2002-03 to 2004-05 by the DGIT (E) and also approval by the CCIT-I, Bangalore-I to the assessee-trust for the AY 2005-06 and onwards u/s 10(23C)(vi) of the Act, no exemption was granted to the assessee.

Aggrieved, the assessee-trust took up the issue, among others, before the CIT (A)-LTU, Bangalore. The CIT (A)-LTU had also duly mentioned the exemptions granted u/s 10(23C)(vi) of the Act to the assessee-trust by the DGIT (E) for the AYS 2002- 03 to 2004-05 and also approval for the purpose u/s 10(23C) (vi) of the Act for the AY2005-06 and onwards by the CCIT, B-I, Bangalore, vide his order dt.22.6.2009. However, the CIT(A)-LTU had not recorded her findings explicitly as to whether the assessee was entitled for exemption u/s 10 (23C) of the Act for the AYs under consideration.

Aggrieved, the assessee-trust has come up before us with the present appeals. During the course of hearing, the learned AR reiterated more or less what has been represented before the first appellate authority. The sum and substance of the argument of the learned AR was that the CIT (A)-LTU had failed to consider the grant of exemption u/s 10(23C) of the Act. On the other hand, the learned DR supported the M/s Al Ameen Charitable Fund Trust stand of the authorities below on the issue and pleaded that the findings of the CIT (A) required to be sustained in toto.

We have carefully considered the rival submissions, perused the relevant case records and also the documentary evidences produced by the learned AR in the form of a paper book. As seen from the relevant records, we find that the assessee – trust was granted exemption u/s 10(23C) (vi) of the Act by the DGIT (E), Kolkattavide order F. No. DGIT / KT3/10(23C) (vi)/2002 dated 7.10.2002 for the assessment years 2002- 03 to 2004-05. Subsequently, based on the provisions of s. 10(23C) (vi) introduced by the Finance Act, 1998, the assessee-trust furnished an application in Form 56D on 18.08.2005 for the succeeding three assessment years i.e., 2005-06, 2006-07 and 2007-08. Acting on the assessee-trust’s application dated 18.8.2005 and 3.6.2008, the CCIT, Bangalore – 1, vide his order dated 22.06.2009 accorded approval to the assessee – trust for purpose of s. 10(23C) (vi) of the Act for the assessment year 2005-06 and onwards [Source: P 11 of P.B – A.R]. It appears that the assessee –trust had not contravened any of the conditions as prescribed in the CCIT’s order (supra) warranting non-exemption of its entire income u/s 10(23C)(vi) of the Act. It is seen from the order of the CIT (A)-LTU under consideration, even though she had mentioned about the availability of the order of exemption to the assessee – trust, her finding was silent as to whether the assessee-trust was entitled to avail exemption of its entire income u/s 10(23C)(vi) of the Act or otherwise for the AYs under consideration. Moreover, when the provisions of s. 10(23C) of the Act were in force, all the receipts from educational institutions were entitled for exemption and, thus, the assessment orders of this nature were irrelevant. Neither the AOs nor the CIT (A)-LTU have considered the contentions of the assessee – trust that the provisions of s. 10(23C) were in force in its case. We are, 4

M/s Al Ameen Charitable Fund Trust therefore, of the view that the matter needs to be remanded back to the AO to examine as to whether the receipts were from educational activities of the assessee – trust and if so, the asssessee – trust was entitled to exemption u/s 10 (23C) of the Act. To facilitate the AO to carry out the above direction, the issue for all the AYs under consideration is restored on the file of the AO. While doing so, the AO shall afford a reasonable opportunity to the assessee –trust of being heard. It is ordered accordingly.

We have since remanded back the main issue raised by the assessee – trust to the AO for fresh consideration, the other issues raised by the assessee – trust in all the appeals are not adjudicated.

In the result, the assessee – trust’s appeals for the assessment years 2007- 08, 2008-09, 2009-10, 2010-11 and 2011-12 are treated as allowed for statistical purposes.

Order pronounced in the open Court on this 18th day of Sept 2015.

M/S AL-AMEEN CHARITABLE TRUST,BANGALORE vs. DY.DIT, BANGALORE