Income Tax Appellate Tribunal - Mumbai
Ito (E) 2(1), Mumbai vs Shree Nasik Panchvati Panjrapole, ... on 14 July, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI
BEFORE SHRI R.C. SHARMA, AM AND SHRI AMARJIT SINGH, JM
आयकर अपील सं / I.T.A. No.4993/Mum/2015
(निर्धारण वर्ा / Assessment Year: 2011-12)
ITO (E) 2(1) बिधम/ Shree Nasik Panchvati
Vs. Panjrapole
R.No. 512, 5th Floor, Piramal
Chambers, Lalbaug 1st Floor, Lentin Chambers,
Fort
Mumbai Pin:400012
Mumbai Pin:400020
स्थायी लेखा सं ./जीआइआर सं ./PAN/GIR No. : AAATN0236C
(अपीलाथी /Appellant) .. (प्रत्यथी / Respondent)
Revenue by: Shri Ram Tiwari (CIT DR)
Assessee by: Shri Sanjay Parikh
सुनवाई की तारीख / Date of Hearing: 03.07.2017
घोषणा की तारीख /Date of Pronouncement: 14.07.2017
आदे श / O R D E R
PER AMARJIT SINGH, JM:
The Revenue has filed the present appeal against the order dated 30.07.2015 for the A.Y. 2011-12, passed by the Commissioner of Income Tax (Appeals)-1, Mumbai [hereinafter referred to as the "CIT(A)"] relevant to the AY.2011-12.
2. The Revenue has raised the following grounds:-
"1. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) was right in holding that the assessee performs a charitable purpose within the meaning of Section 2(15) of the Shree Naisk Panchvati Panjrapole Income Tax Act, 1961 even though the income from milk distribution is Rs. 2,22,65,6611-"
2. "Whether on the facts and circumstances of the case and in law, the Ld CIT(A) was right in ignoring that the assessee is a business trust as per the circular No. 77 dated 3.12.1954 issued by Charity Commissione,Bombay. As per the circular if the gross income from dairy business or trade is more than half of it's total gross annual income then Goshala or a Panjarpole should be considered a business trust within the meaning of rule 32(4) of Bombay Public Trusts Rules, 1951. As per assesssee's own calculations receipts from milk sale are 57.39% of total receipts (A.O. has computed it at 9796)."
3. "Whether on the facts and circumstances of the case and in law, the Ld CIT(A) was right in directing Assessing Officer to allow exemption u/s 11 of the I.T. Act 1961"
4. "The appellant prays that the order of the Commissioner of Income Tax (Appeals) -I, Mumbai be set aside and that of the Assessing Officer be restored."
5. "The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary."
3. The brief facts of the case, are that the assessee filed its return of income on 30.09.2011 along with income and expenditure account, balance sheet and audit report in Form No. 10B declaring total income of Rs. Nil. The case was selected for scrutiny. Therefore, notice u./s 143(2) of the I.T. Act dated 31.07.2012 was issued and duly served upon the assessee. Thereafter, notice u/s 142(1) of the I.T. Act dated 13.08.2013. was also issued. On verification, the income of the assessee on account of Milk Distribution was found to the tune of Rs.2,22,65,661/- .The total receipt of the assessee was found to the tune of Rs.2,28,63,082/- which constitutes 97% of the total receipts. Thereafter, the income of the assessee was assessed to the tune of Rs.2,28,63,082/-. Feeling aggrieved the appeal was filed before the CIT(A) who allowed of the claim of the assessee and 2 Shree Naisk Panchvati Panjrapole directed to grant the exempt u/s 11 of the Act 1961. Feeling aggrieved the revenue has filed the present appeal before us.
ISSUE NO.1, 2 & 3:-
4. These issues are nterconnected therefore are being taken up together for adjudication. In fact, under these issues the revenue has challenged the allowance of exemption granted by the CIT(A) u/s 11 of the I.T. Act on account of income from Milk Distribution to the tune of Rs.2,22,65,661/-. Before going further, it is necessary to the advert of the finding of the CIT(A) on record on this issue :-
"I have considered the facts of the case the assessment order of the AO submissions of the appellant and also discussed the case with the AR of the Appellant. The appellant has stated that the Hon' I TAT, Mumbai has restored 12A certificate which was withdrawn by the DIT in AY 2009-10. It was also stated that the Hon. ITAT has clearly given a finding that the amended provisions of section 2(15) will not apply since the assessee is not conducting its affairs on commercial manner with profit motive. The observations of Hon'ble ITAT contained in the order dated 26 March 2014 for A.Y. 2009-10 in this regard are reproduced as under-
"28 After considering the entire facts in totality, in the light of the decisions discussed hereinabove and also drawing support from the speech of the Hon'ble Finance Minister and subsequent clarifications issued by the CBDT within the frame work of the amended provisions of Sec. 2(15) of the Act, in our considered view, there was no material which may suggest that the assessee trust was conducting its affairs solely on commercial lines with a motive to earn profit. There is also no material brought on record which could suggest that the assessee trust has deviated from its objects which it has been pursuing since last 130 years, in our humble opinion and understanding of law, the proviso to sec. 2(15) of the Act is not applicable on the facts of the case and the assessee observes 3 Shree Naisk Panchvati Panjrapole continuance of registration u./s. 12AA of the Act. We accordingly, set aside the order of the DIT (Exem.) and direct the DIT for the continuance of the registration.
34. Aggrieved, assessee is before us. We have discussed at length the objects of the trust in the light of the amended provisions of sec. 2(15) of the Act in assessee's appeal in ITA No. 1198/M/12 wherein after a detailed discussion, we have held that the assessee is eligible for the continuance of registration u/s 12A of the Act and is not hit by the proviso to sec. 2(15) of the Act. In the light of the detailed discussion in ITA No. 1198/M/12, we hold that the activity of sale of milk does not amount to carrying on of any business activity and is not in contravention to the proviso to sec. 2(15) of the Act. Following our decision in ITA No. 1198/M/12, the assessee will continue to avail exemption u/s 11 of the Act."
5. On appraisal of the above mentioned finding, we noticed that this issue has came before the ITAT in the assessment year 2009-10 vide which Hon'ble ITAT Mumbai has restored the 12A certificate which was withdrawn by the DIT (E) in A.Y. 2009-10. It was observed that the provision of Section 2(15) of the Act will not apply in the case of the assessee. Thereafter, on the same facts the matter came before the CIT(A) in the A.Y. 2010-11. The CIT(A) also directed the AO to grant exemption by relying upon the judgment of Hon'ble Gujarat High Court in case titled as CIT Vs. Sabarmati Ashram Goshala Trust 362 ITR 539 . The facts and circumstances have not been changed in the A.Y. 2011-12 .The exemption u/s 12A was granted for the A.Y. 2009-10 and 2010-11 by the Hon'ble ITAT as well as CIT(A) respectively. On the basis of the said decision, the CIT(A) allowed the claim of the assessee. The other important thing which came into notice that in the assessee's own case the Hon'ble 4 Shree Naisk Panchvati Panjrapole High Court of bombay has decided the matter of controversy in favour of assessee in ITA N. 1695 of 2014 for the A.Y. 2009-10 in which assessee was allowed exemption u/s 12A of the Act. Now no distinguishable facts have been placed on record from deviating the finding of the CIT(A) in question. In view of the above said circumstances, we are of the view that CIT(A) has passed the order judiciously and correctly which is not required to be interfere with at this appellate stage. Accordingly, these issues have decided in favour of the assessee against the Revenue.
6. In the result, the appeal filed by the Revenue is hereby ordered to be dismissed.
Order pronounced in the open court on 14.07.2017.
Sd/- Sd/-
(R.C. SHARMA) (AMARJIT SINGH)
ले खध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER
मुंबई Mumbai; दिनां क Dated : 14.07.2017
V.P. Singh
आदे श की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयु क्त(अपील) / The CIT(A)-
4. आयकर आयु क्त / CIT
5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
आदे शधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधिक िंजीकधर /(Dy./Asstt. Registrar) 5