2018 (11) TMI 1894 - AT - Income Tax

Exemption u/s. 11 - charitable activity u/s 2(15) - HELD THAT - It is evident that the Tribunal 2017 (6) TMI 1363 - ITAT PUNE granted gave relief to the assessee on the similar issue of applicability of provisions of section 11 r.w.s. 13(1)(c) of the Act. It is undisputed fact that the Advertisement expenditure were always paid by the assessee to the said SBC. In the process, the Tribunal relied on its own order in the assessee s own case for the A.Y. 2008-09 as extracted in Para No.5 of the order of Tribunal. Considering the settled nature of the issue, we are of the opinion that the order of the CIT(A) is fair and reasonable and it does not call for any interference. Accordingly, the grounds raised by the Revenue are dismissed.

Summary

Issues:
1. Denial of exemption u/s. 11 of the Income Tax Act based on payments made to sister concern.
2. Applicability of sections 13(1)(c) and 13(2)(c) of the IT Act on payments made to prohibited persons.

Analysis:
1. The appeal was filed by the Revenue against the order of CIT(A)-10 for the Assessment Year 2012-13, where the Assessing Officer (AO) denied exemption u/s. 11 of the Act to the assessee society due to a payment of &8377; 9.28 crores to its sister concern. The AO invoked section 40A(2)(b) of the Act and held that the income should be taxed as per normal provisions. The CIT(A) directed for grant of exemption u/s. 11 based on previous Tribunal orders upholding similar facts.

2. The Revenue challenged the CIT(A)'s decision citing sections 13(1)(c) and 13(2)(c) of the IT Act, arguing that payments made to prohibited persons should disallow exemption u/s. 11. The Revenue's contention was that the CIT(A) erred in not applying these provisions. However, the Tribunal referred to its earlier order in the assessee's case for A.Yrs. 2010-11 and 2011-12, where it was held that there was no reason to interfere with the CIT(A)'s decision. The Tribunal emphasized the settled nature of the issue and dismissed the Revenue's grounds.

In conclusion, the Tribunal upheld the order of the CIT(A) and dismissed the appeal of the Revenue, stating that the denial of exemption u/s. 11 and the applicability of sections 13(1)(c) and 13(2)(c) were already settled in favor of the assessee based on previous Tribunal decisions. The Tribunal found no reason to interfere with the CIT(A)'s order, emphasizing the consistency in decisions across assessment years.