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1 - 10 of 12 (0.65 seconds)Section 12A in The Income Tax Act, 1961 [Entire Act]
C.I.T. vs Indian National Theatre Trust on 13 November, 2007
20. The said proposition has been reiterated by the Hon'ble Delhi
High Court in the case of CIT vs Indian National Theatre Trust (2008)305
ITR 149. Ld.Counsel for the assessee has also drawn our attention to a
number of other decisions wherein it has been held that giving loans
to other charitable institutions registered u/s 12A having to
similar objects are not in violation ff the provisions of section
13(l)(d) read with section 11(5) of the Act. Ld. DR has not distinguished
the case laws relied upon by the assessee.
Hz?4G10??X?8 T?Y;?U? ?? +?!???=A ... vs ???B?}? ? E_}~Z?Zo?Z??S??No: ... on 17 October, 2008
On the contrary, the
reliance placed by the Ld. DR on the decision of the Hon'ble
Madras High in the case of C1T vs V.G.P. Foundation, we find is
based on different set of facts, since in that case the advance was given
to sister concern with no finding that it was also a charitable society
re g istered with the same objects as the donor, while in the present
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case the loan has been given by one society to another having
similar objects and both societies are registered u/s 12A. Therefore, we
agree with the Ld.CIT(Appeals) that the impugned advance did not
violate the provisions of section 13(l)(d) r.w.s. 11(5) of the Act also.
Section 1 in The Income Tax Act, 1961 [Entire Act]
Section 3 in The Income Tax Act, 1961 [Entire Act]
Section 10 in The Income Tax Act, 1961 [Entire Act]
Section 11 in The Income Tax Act, 1961 [Entire Act]
Section 11 in The Advocates Act, 1961 [Entire Act]
Commissioner Of Income-Tax vs V.G.P. Foundation on 8 October, 2002
"5.2 I have considered the observations of the Assessing Officer
as made by him in the assessment order while denying impugned
exemption/deduction. I have also considered the written
submissions filed by the ape society through its Ld.AR vide letter
dated 2 3 . 0 6 . 2 0 1 6 o n t h e i s s u e u nd e r r e f e r en c e. 1 h a v e
f u rt h e r c o n s i d e re d v a ri o u s j u d i c i al p r o n o u nc em e nt s
r e l i e d u p o n by t h e a p p el l a nt s oc i et y a s w el l a s o t h e r
m a t e ri al pl ac e d o n record. On careful consideration of the
assessment order, it has been noticed that the Assessing Officer
has denied exemption to the appellant society claimed by it
under section 11 of the Act on excess of income over
expenditure declared b| the appellant society in income and
expenditure account as in his opinion the appellant society has
given loan to a group society without any consideration or
adequate security as the group society is a specified person under
the provisions of section 13(3) of the Act in which some of the
members of the appellant society are also members and as
such the provisions of sections 13(l)(c) and 13(l)(d) read with
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sections 13(3) and 11(5) of the Act are attracted in the case of the
appellant society, While denying impugned exemption, the
Assessing Officer has also observed that the fund transferred by
the appellant society to its group concern by way of loan is in fact
an investment made by the appellant society in another group
society as the fund given in the form of loan has been utilized by
the other group society in fixed assets. The Assessing Officer also
relied upon decision of Honorable Madras High Court in the
case of CIT Vs V.G.P. Foundation reported at (2003) 183 CTR
(Mad) 330/262 ITR 187 (Mad) to support its contention. On the
other hand, the appellant society through its Ld. AR has submitted
that the society to whom the loan has been given is not a specified
person under the provisions of section 13(3) of the Act rather it is a
charitable institution registered under section 12AA of the Act
which is also engaged in similar activities as that of the appellant
society as the group society to whom loan has been given also
runs charitable institution(s) just like the appellant society. It has
also been submitted that the loan given by the appellant society
to another group society engaged in similar activities is in
accordance with its objects and cannot be termed as investment
or deposit in violation of the provisions of section 11(5) of the Act
but the loan should be treated as an application of funds as the
appellant society has advanced the loan for the fulfillment of its
objects. It has further been submitted that none of the members of
the appellant society has drawn any undue benefit directly or
indirectlyfrom the transactions of loan under consideration. It has
again been submitted that loan has been advanced in earlier
years and no disallowance has been made in that year although
the assessment in that particular year was also completed under
section 143(3) o f t h e A c t . T o s u p po r t i t s c o nt e nt i on , t he
a p p e l l a nt s o c i et y h a s pl ac ed o n r e c o r d c o pi e s o f
assessment orders in earlier years including the year in which
loan has been given. In nutshell, the appellant society through
its Ld. AR has submitted that the provisions of sections 13(l)(c)
and 13(l)(d) read with sections 13(3) and 11(5) of the Act are not
attracted in its case as the appellant society has not violated the
provisions of section 11/12 of the Act. In support of its
arguments/submissions, the appellant society through its Ld, AR
has also relied on various judicial pronouncements which find
mention in the written submissions reproduced above. On careful
consideration of the rival contentions and more particularly
keeping in view the ratios of various judicial pronouncements
relied upon by the appellant society, I am of the opinion that there
is a lot of force in the arguments of the appellant society. I am
also of the opinion that the group society to whom loan has been
given is not covered under the provisions of section 13(3) of the Act
and as such provisions of sections 13(l)(c) and 13(l)(d) read
with sections 13(3) and 11(5) of the Act are not attracted in the
case of the appellant society. It has also been noticed that
under identical circumstances no such disallowance was made
in earlier years although the assessments in earlier years were also
completed under section 143(3) of the Act. Under such
circumstances, the action of the Assessing Officer in denying
exemption of Rs.l,97,39,9527- in this case claimed by the appellant
society under section 11(1 ) of the Act cannot be said to be
justified, The judicial pronouncements relied upon by the
appellant society also support its case whereas the facts of the
judicial pronouncement relied upon by the Assessing Officer are
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distinguishable as the loan in t h at c a s e w a s gi v e n t o a
c o m p a n y a n d n ot t o a c h a ri t a bl e i n s t i t u t i o n " .