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TMI Blog2024 (9) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... r years had been accepted while framing the assessment orders u/s 143(3) of the Act. As seen that for the years under consideration, as rightly submitted on behalf of the assessee and not disputed on behalf of the Department, the facts have not undergone any change whatsoever. The specified persons also remain the same. Department has not been able to show as to how, as contended in Ground No.1, the observations of the AO in the years under consideration, are effectively any different from those made by the AO for assessment years 2010-11, 2014-15 and 2015-16, the years decided by the Tribunal in favour of the assessee. No merit in the appeals filed by the Department, which appeals are liable to be dismissed. - SHRI A.D.JAIN, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER For the Appellant : Shri Sudhir Sehgal, Advocate For the Respondent : Shri Rohit Sharma, CIT DR ORDER PER A.D.JAIN, VICE PRESIDENT These are Department s appeals for assessment years 2011-12, 2012-13, 2013-14 and 2017-18. As common issues are involved in all these appeals, these were heard together and are being disposed of by this common order. 2. The facts, for convenience, are being taken from ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guous. The intent of the memorandum is not to pay the members regular salary/payments but to reimburse them for any expense incurred for the society. However, the assessee has attempted to derive a convoluted meaning out of a straight forward clause which is common for charitable trusts. According to the assessee, the members were being provided salary/honorarium for the services they perform for the society which includes expenditures they incur for the purpose of the society such as travel for attending meetings with CBSE Board, DPS society, etc. This interpretation is misplaced and cannot be accepted. What was allowed as per the Memorandum was reimbursement of travel and other bonafide expenses if they were incurred for attending meetings on behalf of the assessee or for engaging in other activities for the benefit of the assessee in order to ensure that the funds of the assessee were used for the objects of the assessee. By paying regular salary/honorarium, the assessee has diverted the funds of the society to its members even before any expenditure is incurred for the society and there is no way to ensure/check if the expenditure is bonafide and if it is actually incurred for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather been busy doing other commercial activities. 11. Furthermore, the assessee has submitted that the payments made to the three members was reasonable as they are all graduate/post graduate and belong to the home circle i.e. the wards of the trustees and therefore, it was convenient for the society as an inside person will work with more dedication and devotion than the hired outside persons but not justified with proof of work. This argument is not justified as the concerned members have not been spending enough time in the school and there is nothing to show what contributions they have made in terms of efforts for the society. These specified persons have been diverting their energies to other business and other works which are not related to the objects of the assessee society. Moreover, the argument that inside persons work with more dedication does not hold water. Running a quality educational institute requires training and decent experience in the field of education. The assessee has failed to show what qualifications and experience each of the members possessed in order to justify the salary paid to them. 12. The assessee was also asked to submit details with proof of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laiming exemption u/s 11 and 12 of the Act. This stand has been confirmed by the very recent judgement of the Hon'ble Supreme Court in the case of M / s Dilip Kumar Company dated 30.07.2018, wherein the Hon'ble Apex Court has stated that the exemption clauses are to be strictly interpreted in favour of the Revenue. It held that when there is ambiguity in tax exemption notification/clause, the benefit of such uncertainty must be interpreted in favour of the State. Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. Through this decision, the Hon'ble Supreme Court has overruled its own judgement in the case of Sun Export [2002-TIOL-118-SC-CX-LB] and all the decisions which took similar view as in Sun Export Case wherein it was held that if two views are possible in interpreting the tax exemption notification, the one favourable to the assessee in the matter of taxation has to be preferred. The case laws cited by the assessee stand countered by this recent judgement of the Hon'ble Supreme Court referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e., the wards of the Trustees and that so, it was convenient for the Society, as an inside person would work with more dedication and devotion than hired outside persons; that however, the assessee had not submitted any justification with proof of the work done by these Members; that the assessee had failed to show the qualifications and experience possessed by these three Members, so as to justify the salary paid to them; that it was in no way justified that the salaries paid to these Members were more than the pay of the Principal of the school run by the Society; that the assessee had further tried to justify the salary, stating it to be only 4% of the receipts of the assessee; that however, the quantum of payment was not commensurate with the time and effort devoted to the assessee and so, the payment was unreasonable; and that though the assessee had argued that the tax on the salary had already been paid by the Members and that an income could only be taxed once and so, it could not be taxed in the hands of the assessee, it was noted that it was not a case of taxation of salary in wrong hands or a case of double taxation, but, it was a case of unreasonable and undue benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are similar to the facts involved in ITA No. 1069/Chd/2019 for the A.Y. 2010-11, therefore, our findings given in the former part of this order shall apply mutatis mutandis for the A. Y's 2014-15 and 2015-16 also. 6. Aggrieved, the Department is in appeal. 7. The ld. DR has contended that the Ld. CIT(A) has erred in law in not appreciating that the order of ITAT Chandigarh Bench A ITA Nos.1069 to 1071/CHD/201 9 for A.Y. 2010-11, 2014-15 and 2015-16 in the assessee's own case is not applicable as the facts and the observation made by the AO in this case are different and that the Ld. CIT(A) has erred in law in allowing relief to the assessee as the assessee society has made payments to specified persons which are covered under Section 13(1)(c)(ii) r.w.s I3(2)(c) r.w.s 13(3) of the Income Tax Act. 8. On the other hand, the ld. Counsel for the assessee has placed strong reliance on the impugned order. It has been stated that the order passed by the Tribunal correctly followed by the CIT(A), is well versed and the issue has been dealt with therein elaborately. It has been stated that for the years under consideration, there is no change in the facts and circumstances of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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