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Income Tax Appellate Tribunal, “RAJKOT” BENCH, RAJKOT
Before: SHRI WASEEM AHMED, ACCOUNTANT MEMEBR & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMEBR
ITA No. 385/Rjt/2017 & 4 Ors. [Ashok Gondhia Memorial Trust] - 2 -
PER WASEEM AHMED, AM:
The above three appeals by Revenue and two cross objections by assessee arise from respective orders of the Commissioner of Income Tax (Appeals) (‘CIT(A)’) for assessment years mentioned above.
ITA No 385/RJT/2017, an appeal by the Revenue for A.Y. 2010-11
At the time of hearing, it was submitted by the Ld.AR for the assessee that the appeal filed by the Revenue is hit by recently issued CBDT Circular No.17 of 2019 dated 08/08/2019 revising the previous thresholds pertaining to tax effects. It is inter alia noticed that the CBDT vide Instruction No. F. No. 279/Misc/M-93/2018-ITJ dt. 20/08/2019 has observed that Circular No.17/2019 dated 08/08/2019 relating to enhancement of monetary limits is also applicable to all pending appeals. As per aforesaid Circular read with instruction, all pending appeals filed by Revenue are liable to be dismissed as a measure for reducing litigation where the tax effect does not exceed the prescribed monetary limit which is now revised at Rs.50 Lakhs. In the instant case, the tax effect on the disputed issues raised by the Revenue is stated to be not exceeding Rs.50 lakhs and therefore appeal of the Revenue is required to be dismissed in limine.
The Learned DR for the Revenue fairly admitted the applicability of the CBDT Circular No. 17 of 2019. Accordingly, appeal of the Revenue is dismissed as not maintainable. However, it will be open to the Revenue to seek restoration of its appeal on showing inapplicability of the aforesaid CBDT Circular in any manner.
In the result, the appeal of the Revenue for A.Y.2010-11 is dismissed.
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Coming to ITA No 393/RJT/2017, an appeal by the Revenue for A.Y. 2013-14
The Revenue has raised the following grounds of appeal:
“1. The Ld. CIT(A) has erred in law and on facts of the case in allowing the benefit of section 11 to the assessee trust which the A.O. denied holding that the assessee trust was engaged in commercial activities as envisaged u/s.2(15) of the Act. 1.1 The Ld.CIT(A) has failed to appreciate that the assessee trust was no longer engaged in the activities of medical relief but was engaged in the business of earning fees from another person who was running the said hospital on its own, without any assistance from the trust. 2. On the facts and circumstances of the case, the Ld. Commissioner of Income- Tax (Appeals) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. Commissioner of Income-tax (Appeals) may be set aside and that of the Assessing Officer be restored.”
The only issue raised by the Revenue is that the learned CIT(A) erred in allowing the claim of the assessee under section 11 of the Act.
The assessee is a trust and registered with charity commissioner Rajkot under Bombay Public Trust Act and under section 12A of the Act. The assessee claimed to be engaged in the medical activity by providing medical relief to needy person. For this purpose the assessee was running a hospital namely N.M. Virani Hospital till 31-07-2006. Thereafter, the function of NM Virani hospital was stopped and the management was transferred to Wockhardt Hospital Pvt Ltd to run the hospital on its own risk and cost. For this purpose, the Wockhardt was paying certain amount to the assessee trust which was utilized in providing medical relief to the needy patient.
However, the AO was of the view that the assessee is no longer engaged in charitable activity and therefore he disallowed the exemption claimed by the assessee under 11 of the Act.
ITA No. 385/Rjt/2017 & 4 Ors. [Ashok Gondhia Memorial Trust] - 4 -
On appeal by the assessee, the learned CIT(A) deleted the disallowances made by the AO by following the order of predecessor in the own case of the assessee for AY 2007-08, 2009-10, 2010-11 and 2011-12 which were also confirmed by the ITAT Rajkot.
Being aggrieved by the order of the leaned CIT(A), the Revenue is in appeal before us.
The learned DR before us vehemently supported the order of the AO. On the other hasnd, the learned AR before us submitted that the issue is covered in favour of the assessee by the order of this tribunal in own case of the assessee for A.Y. 2007-08 in ITA No. 1310/Rjt/2010 and same was also followed in A.Ys. 2009-10, 2010-11 and 2011-12.
We have heard the rival contentions of both the parties and perused the materials available on record. At the outset, we find that the issue on hand is covered in favour of the assessee by the order of this Tribunal in the own case of the assessee for AY 2007-08 bearing ITA No. 1310/Rjt/2010. The relevant finding of the co-ordinate bench reads as under:
“4.1. We find that the AO denied the exemption u/s. 11 of the Act on the basis of inference that the assessee is not carrying out the activities as per its Object. However, the ld.CIT(A) has given a finding that the inference as drawn by the AO is incorrect. As per one of the Objects, embedded into the clause-7 of the trust-deed, it is envisaged to carry out activities concerning medical need and or relief. It is undisputed fact that the assessee-trust has given monitory benefits to the patients by discounting the bills and also by giving financial aid to the patients. It is not the case of the AO that the funds of the assessee-trust has been applied for other than the Objects of the trust-deed. The only objection of the AO is that the assessee-trust has executed an agreement with a company which is commercially exploiting the properties of the assessee-trust. The ld.CIT(A) has observed that the appellant-trust has applied its income to the needy patients. This finding on fact is not controverted by the Revenue by placing any material on record. Further, the AO wrongly construed the term 'medical relief. The ld.CIT(A) has rightly held that the 'medical relief is not dependent upon infrastructure. In that event, the medical camps organized by a trust with the help or on payment to any hospital would not fall under medical relief as the trust has only made payment of medicine, doctor's fee and other medical facility. This in our considered view would defeat the very object of the provision of section-11. Moreover, the assessee has drawn our attention to the order of the Charity Commissioner who has observed that looking to all the facts, it is seen that no immovable property of the trust has been transferred. The ownership of the trust is also seen in the name of the assessee-trust in the Revenue records. The activities carried out as per the Objects of the trust. A statement
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of the list of the treatments given by the trust is submitted in the matter, which shows that as the trust's income increases, there has been a corresponding and successive increase also in the treatment help given by the trust. Therefore, we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. Thus, ground No.1 Revenue's appeal is rejected.”
Before us, no material has been placed on record by the Revenue to demonstrate that the decision of Tribunal as discussed above has been set aside / stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year under consideration and that of earlier years nor has placed any contrary binding decision in its support. Thus, respectfully following the order this tribunal in own case of assessee the we uphold the finding of the learned CIT(A). Thus, the ground of appeal raised by the Revenue is hereby dismissed.
In the result, the appeal of the Revenue for A.Y.2013-14 is dismissed.
Coming to CO No. 01/RJT/2018 in ITA No 383/RJT/2017 by the assessee
The Assessee has raised following cross objection:
“That the learned CIT (A)-3, Rajkot has grievously erred in not adjudicating on the additional Ground No.9 raised by the respondent that "Alternatively and without prejudice to the other grounds of appeal, the learned A.O. has grievously erred in not allowing the set off of deficit of the assessment year under consideration and that being brought forward from the earlier years in accordance with the decision of the Hon'ble Gujarat High Court in the case of Plot Swetamber Murti Pujak Sangh (211 ITR 293)"
At the outset, we find that the identical cross objection was filed by the assessee in AY 2007-08 and 2009-10 where the coordinate bench held that issue raised by the assessee in CO is with regard to alternative plea which was rightly rejected by the CIT-A by holding that the main ground has been decided in favour of the assessee. Therefore, the alternative ground is not required to be adjudicated. Therefore, respectfully following the same we do not find any reason to interfere in the order of the CIT-A. Hence the ground of objection raised by the assessee is hereby dismissed.
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In the result, the Cross Objection of the assessee for A.Y.2013-14 is dismissed.
Coming to ITA No. 18/Rjt/2018, an appeal by the Revenue for A.Y. 2014-15
The Revenue has raised following grounds of appeal:
“1. The Ld CIT(A) has erred in the law and on facts in allowing the benefit of exemptions u/s.11 without considering the fact that the assessee is involved in widespread commercial activities in nature of business and the activity of the assessee is covered under first and second proviso to sec.2(15)of the Act. 2. The Revenue craves to add, alter, amend, modify, substitute, delete and/or rescind all or any Grounds of Appeal on or before the final hearing, in necessity so arises.”
At the outset we note that the issues raised by the Revenue in its grounds of appeal for the A.Y. 2014-15 are identical to the issues raised by the Revenue in ITA No. 393/RJT/2017 for the assessment year 2013-14. Therefore, the findings given in ITA No. 393/RJT/2017 shall also be applicable for the year under consideration i.e. AY 2014-15. The appeal of the Revenue for the assessment 2013-14 has been decided by us vide paragraph Nos. 12 & 13 of this order against the Revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2013-14 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the grounds of appeal filed by the Revenue is hereby dismissed.
In the result, the appeal of the Revenue for A.Y.2014-15 is dismissed.
Coming to CO No. 14/Rjt/2018 in ITA No 18/Rjt/2018 by the assessee
At the outset, we note that the issues raised by the assessee in its grounds of cross objection for the A.Y. 2014-15 are identical to the issues raised by the assessee in CO. No. 01/RJT/2018 for the assessment year 2013- 14. Therefore, the findings given in CO No. 01/RJT/2018 shall also be applicable for the year under consideration i.e. AY 2014-15. The CO of the assessee for
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the assessment 2013-14 has been decided by us vide paragraph No. 16 of this order against the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2013-14 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the grounds of cross objection filed by the assessee is hereby dismissed.
In the result, the Cross Objection of the assessee for A.Y.2014-15 is dismissed.
In the combined result, three appeals filed by the Revenue and two Cross Objections filed by Assesse are dismissed.
This Order pronounced in Open Court on 02/09/2022
Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 02/09/2022 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
Deputy/Asstt. Registrar ITAT, Rajkot