2017 (10) TMI 721 - AT - Income Tax

Denying the benefit of exemption under sections 11 & 12 - Held that - Undisputedly, in AY 2009-10, the coordinate Bench of the Tribunal vide an order dated 20.08.2014 passed in assessee s own rejected the appeal filed by the Revenue denying the benefit of exemption under sections 11 & 12 of the Act. It is also not in dispute that there is no change in the facts and circumstances of the case during the year under assessment. In the backdrop of undisputed facts and circumstances of the case, when we examine the assessment order passed by the AO and grounds of appeal raised by the Revenue, it is transpired that present appeal has been filed just for sole reason that the decisions rendered by the Tribunal in assessee s own case for AY 2009-10 has not been accepted by the department and appeal has been filed in the Hon ble High Court. This trend of filing appeal is not only disappointing but leads to the multiplicity of the litigation because otherwise no substantial illegality or perversity has been pointed out by the Revenue. In view of what has been discussed above and following the order passed by the coordinate Bench of the Tribunal affirmed by the Hon ble Delhi High Court and the fact that there is no change in the facts and circumstances in case at hand nor there is any change in the objects and activities of the society, we find no illegality or perversity in the impugned order passed by the ld. CIT (A), hence the present appeal filed by the Revenue is hereby dismissed.

Summary

Issues:
1. Whether the activities of the society are commercial in nature, despite having charitable objects?
2. Whether the decision of ITAT in the assessee's own case for AY 2009-10 is applicable in the present case?

Issue 1:
The appellant, Deputy Commissioner of Income Tax, challenged the order passed by the Commissioner of Income-tax (Appeals) regarding the assessment year 2011-12. The appellant argued that although the society had charitable objects, its activities were commercial, specifically in constructing and letting out properties for profit. The Assessing Officer (AO) concluded that the society's actions were not charitable as defined under section 2(15) of the Income-tax Act, leading to the assessment of total income at ?25,25,99,150.

Issue 2:
The Revenue appealed the decision of the CIT (A) before the Tribunal, citing the rejection of exemption benefits under sections 11 & 12 of the Act in AY 2009-10. However, the Tribunal noted that there was no substantial illegality or perversity in the decision, as the facts remained unchanged from the previous assessment year. The Tribunal emphasized that the appeal seemed to be filed merely due to the department's disagreement with the previous Tribunal decision. The High Court had affirmed the Tribunal's decision, stating that the Director of Income-tax did not have the power to cancel registration under section 12A before 01.06.2010, as clarified by the Finance Act, 2010.

In conclusion, the Tribunal dismissed the Revenue's appeal, citing the consistency of facts and the absence of any substantial illegality or perversity in the CIT (A)'s order. The Tribunal upheld the previous decisions regarding the society's charitable status and activities, emphasizing the importance of avoiding unnecessary litigation and respecting legal interpretations.