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TMI Blog2022 (10) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Department : Shri Jeetender Chand, Sr. DR ORDER PER C.M. GARG, JM This appeal has been directed against the order of Ld. Commissioner of Income Tax (Appeals ) 36 New Delhi dated 15.3.2018 for Assessment year 2011-12. 2, Grounds raised by the Revenue read as follows:- 1. On the facts and in the circumstances of the case and in law, whether the Ld. CIT (A) was correct in holding that spending by the trust outside India without the approval of the CBDT u/s 11(1 )(c) of the Act is permissible, despite that the facts and ration of relied upon cases were not directly related to application of section 11 (1 )(c) of the Act. 2. On the facts and in the circumstances of the case and in law, whether the Ld. CIT (A) erred in not appreciating the decision of the Hon ble Delhi High Court in the case of NASSCOM, in which the Hon ble Court held that non observance of the condition in section 11(1 )(c) of the Act amounts to treating the said section infructuous . 3. On the facts and in the circumstances of the case and in law, whether the Ld. CIT (A) was correct in not appreciating that it was not established that the amount given as grant for specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight in following the order dated 09.02.2018 of Ld. CIT(A) -40 and granting relief to the assessee. 4. On careful consideration of the rival submissions from the first appellate order we observe that Ld. CIT(A) has allowed appeal of the assessee for AY 2011-12 with following observations and findings: 4.2.3.1. I have considered the assessment order, submissions of the appellant, the Remand Reports both by the Assessing Officer as well as comments of the Joint Commissioner of Income Tax and rejoinders of the appellant. The AO has disallowed the said expenses by holding that income applied on activities outside India is not eligible for exemption unless the conditions laid down the provisions of section 11(1)(c) are met. It was also noted that the appellant has neither engaged in promotion of international welfare in which India is interested nor the appellant has furnished any approval of the CBDT as required under the said section. 4.2.3.2. The appellant has relied upon the judgment of the Hon'ble ITAT Delhi in the case of Apparel Export Promotion Council for the year 1998- 99 in ITA No.2613/Del/2005 where expenditure incurred outside India on participation in fair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any 7. Promotion of Indian Toys in USA 4.2.3.4. Vide letter dated 09.02.2018 the appellant had the appeals of subsequently years i.e A.Y 12-13, 13-14 and 14-15 which were pending before Hon ble CIT(A) -40 has been deposed-off and concluded. The Hon'ble CIT (A) 40 had accepted the appellant's grounds of appeal. The appellant has further submitted that the facts and grounds of appeal of A.Y 2011-12 are similar to the facts and grounds of appeal for the A.Y 2012-13, 13-14 and 14-15. Therefore, maintaining judicial discipline and respectfully following the decision of Ld. CIT(A), the appeal on this ground is allowed. 5. The Ld. CIT(A) has granted relief to the assessee by following the order of ITAT in assessee s own appeals for assessment years 2012-13, 2013-14 and 2014-15 dated 23.09.2022 wherein the similar issue, under identical facts and circumstances; has been decided in favour fo assessee. The relevant part of said order is as follows:- 8. We have heard the parties, perused the material on record and gave our thoughtful consideration. 9. It is found from the record that the Ld.CIT(A) has consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Hon ble Delhi High Court in the case of Director of income Tax Vs. Society for Development Alternatives (2012) 205 Taxman 373 Delhi has held as under:- The findings recorded by the Tribunal are that the assessee had received grants for specific purposes from the Government, nonGovernment, foreign institutions, etc. These grants were to be spent, as per the terms and conditions of the grants. The amount, which remained unspent at the end of the year, got spilled over to the next year and was treated as unspent grant. The Tribunal, therefore, held that the assessee was not free to use the grants voluntarily as per its sweet will and, thus, these grants were not voluntary contribution as per section 12. [Para 7] In view of the aforesaid factual position, the appeal preferred by the revenue was liable to be dismissed. [Para 10] 13. Further, in the case of Society for integrated Development in urban and rural areas (SIDUR) Vs. DCIT, (2004) 90 ITD 493 (Hyd) the issue regarding treatment of tide up grants was considered by the Tribunal wherein it was held that voluntarily contributions covered by Section 12 are those contributions freely available to the assessee wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Development Society in ITA No. 210/2011 dated 29/10/2011 wherein it is held as under:- The Tribunal held that the society is acting as a nodal agency receiving grant from Government of India and state Governments and distributes to district authorities for implementation of various Schemes of Government of Indian and supervising the execution of Schemes. It has no discretion to utilize the amount as per own requirements. It also found that in case of nonutilization at the close of the Scheme, the funds are to be refunded along with interest to the Government of India and state Governments. The grants received by the assessee do not belong to the assessee-society. The grants do not form corpus of the asseesee nor is it income of the assessee under Section 11 of the Act. Such grants are not the donations or voluntary contributions under Section 12 of the Act. Thus, the grants received by the assessee should not be considered either as income or for ascertaining the amount expanded or amount to be accumulated. Provisions of Section 11 and 12 of the Act are not applicable for grants received by the assessee under the Schemes It further held that the assessee is statutorily requ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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