2017 (11) TMI 1049 - AT - Income Tax

Application under section 10(23C)(iv) rejected - Held that - After recording all the facts and the contentions of the assessee in the light of the orders referred and held that the activities of the assessee are covered under section 2(15) of the Act under the sixth limb and that the assessee is eligible for exemption under section 11(1) of the Act. There is no change of circumstances since the date of the order of the hon ble High Court and also from the facts relevant to the assessment years 2009-10 and 2010-11. In the circumstances, while respectfully following the order of the hon ble jurisdictional High Court and also in view of the fact that the learned Commissioner of Income-tax (Appeals) granted relief in respect of the assessment years 2009-10 and 2010-11 also, we find no legal infirmity in the order of the learned Commissioner of Income-tax (Appeals) and we confirm the same - Decided against revenue.

Summary

Issues involved:
1. Appeal challenging order of Commissioner of Income-tax (Appeals)
2. Exemption under section 11(1) of the Income-tax Act, 1961
3. Dispute regarding application under section 10(23C)(iv)
4. Legal infirmity in the impugned order

Analysis:

Issue 1: Appeal challenging order of Commissioner of Income-tax (Appeals)
The appeal was filed by the Revenue challenging the order passed by the Commissioner of Income-tax (Appeals). The Commissioner had directed the Assessing Officer to allow exemption under section 11(1) of the Income-tax Act with all consequential benefits to the assessee. The Revenue was aggrieved by this order and appealed before the Appellate Tribunal.

Issue 2: Exemption under section 11(1) of the Income-tax Act, 1961
The Tribunal examined the facts of the case, including the registration of the assessee under the Societies Registration Act and section 12AA(1) of the Income-tax Act. The Tribunal noted that the activities of the assessee were covered under section 2(15) of the Act under the sixth limb, making the assessee eligible for exemption under section 11(1) of the Act. The Tribunal found no change in circumstances since previous orders and upheld the exemption granted by the Commissioner of Income-tax (Appeals).

Issue 3: Dispute regarding application under section 10(23C)(iv)
The dispute arose when the application under section 10(23C)(iv) for the assessment year 2008-09 onwards was rejected by the Director General of Income-tax (Exemption) and the exemption was cancelled by the Director of Income-tax (Exemption). However, the jurisdictional High Court allowed the approval under section 10(23C)(iv) for the assessee, leading to the exemption being granted. The Assessing Officer, during the scrutiny for the assessment year 2011-12, made an addition to the income, citing a pending special leave petition before the Supreme Court. The Commissioner of Income-tax (Appeals) directed the Assessing Officer to allow the exemption under section 11(1) of the Act.

Issue 4: Legal infirmity in the impugned order
The Tribunal thoroughly reviewed the record and found that the orders of the High Court and previous Tribunal decisions supported the assessee's eligibility for exemption under section 11(1) of the Act. The Tribunal confirmed the order of the Commissioner of Income-tax (Appeals) and dismissed the appeal of the Revenue, stating that there was no legal infirmity in the impugned order.

In conclusion, the Tribunal upheld the exemption granted to the assessee under section 11(1) of the Income-tax Act, 1961, based on the previous High Court orders and Tribunal decisions, dismissing the appeal of the Revenue.