2015 (10) TMI 1749 - HC - Income Tax

Exemption available as per Section 11 (i) (a) - ITAT remanded matter to the Commissioner of Income Tax (Appeals) to examine case of assessee - Held that - It is relevant to note that the assessee claimed exemption under Section 11(i)(a) of the Income Tax Act, 1961 but the Commissioner of Income Tax (Appeals) examined the same in light of provisions of Section 11 (2) of the Act of 1961. The Tribunal remanded the matter with direction to adjudicate the entire matter afresh by taking into consideration provisions of Section 11(1) (a) of the Act of 1961. In our considered opinion the remand made by the Tribunal is in accordance with law. Setting off of excess expenditure in income of earlier years - Held that - It is not in dispute that the assessee is creation of a statute and from inception that is a charitable institution. It is also pertinent to notice that subsequent to the year 2009 the exemption as allowed by ITAT is avaialble to the assessee. In view of it, we do not find any just reason to interfere in the instant matter being having no subsequent question of law involved. The appeal is dismissed accordingly.

Summary

Issues:
1. Correctness of the judgment passed by the Income Tax Appellate Tribunal regarding exemption under Section 11(i)(a) of the Income Tax Act, 1961.
2. Setting off excess expenditure in income of earlier years.

Issue 1: Correctness of the judgment regarding exemption under Section 11(i)(a) of the Income Tax Act, 1961:

The appeal questioned the correctness of the Income Tax Appellate Tribunal's judgment remanding the matter to the Commissioner of Income Tax (Appeals) to re-examine the case of the assessee in light of the exemption available under Section 11(i)(a) of the Income Tax Act, 1961. The Tribunal directed a fresh adjudication considering the provisions of Section 11(1)(a) of the Act. The High Court opined that the remand by the Tribunal was lawful. The Commissioner of Income Tax (Appeals) had initially assessed the exemption claim under Section 11(2) of the Act, which the Tribunal found necessary to reconsider under Section 11(1)(a). The High Court upheld the Tribunal's decision, stating it was in accordance with the law.

Issue 2: Setting off excess expenditure in income of earlier years:

Regarding the setting off of excess expenditure in the income of earlier years, the High Court found that the Tribunal's decision was consistent with the Court's judgment. The Court noted that the assessee was a charitable institution created by statute and had been eligible for exemption post-2009 as allowed by the Income Tax Appellate Tribunal. Given these circumstances, the High Court concluded that there was no justifiable reason to interfere in the matter as there were no subsequent legal questions involved. Consequently, the appeal was dismissed.

In conclusion, the High Court upheld the Income Tax Appellate Tribunal's decision on both issues, emphasizing the lawful remand for re-examination of the exemption claim and the consistent application of law regarding the setting off of excess expenditure in the income of earlier years for the charitable institution.