Case Law Details

Case Name : DCIT(E) Vs GS 1 India (ITAT Delhi)
Appeal Number : ITA No. 5042/Delhi/2015
Date of Judgement/Order : 18/05/2017
Related Assessment Year : 2011-12
Courts : All ITAT (7635) ITAT Delhi (1803)

DCIT(E)  Vs GS 1 India

Assessee is a society involved in importing, developing and distributing of Bar code technology to be used by various manufacturers and industries which is for the general benefit of public at large.

However, during the scrutiny of the return of income of the assessee for the AY 2011-12, AO made an addition of Rs. 19,68,89,320/-. In appeal, Ld. CIT (A), by way of impugned order, directed the AO to allow exemption u/s 11(1) of the Act with all consequential benefits.

In a case on same matter for earlier years in case of Assessee Hon’ble Jurisdictional High Court vide order dated 26.09.20 13 in W.P. (C) No. 7797/2009 allowed the approval u/s 10(23C)(iv) of the Act by treating the assessee as charitable institution and subsequently the DGIT(E) allowed exemption u/s 10(23C)(iv) of the Act vide order dated 23.10.2013 following the order of the Hon’ble High Court.

However, during the scrutiny of the return of income of the assessee for the AY 2011-12, AO stated that the Department has preferred an SLP before the Hon’ble Supreme Court against the orders of the Delhi High Court and the matter was subjudice.

ITAT held that  Importing, developing and distributing of Bar code technology to be used by various manufacturers and industries  were classifiable as advancement of any other object of general public utility duly covered by section 2(15), therefore, revenue was not justified in denying the exemption especially in view of the fact that similar exemption, had been accorded during subsequent assessment years and there was no change in circumstances.

FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-

This is an appeal by the Revenue challenging the order dated 01.06.2015 in appeal no. 77/2014-15 passed by the Ld. Commissioner of Income Tax (Appeals)-40 (Exemption), New Delhi (hereinafter referred in short as the “Ld. CIT (A)”).

2. Briefly stated facts are that the assessee is a society involved in importing, developing and distributing of Bar code technology to be used by various manufacturers and industries which is for the general benefit of public at large. It was registered under the Societies Registration Act w.e.f. 07.06.1996, and u/s 12AA(1) of the Income Tax Act, 1961 (hereinafter for short called as the ‘Act’) w.e.f. 09.03.1998 and the income of the assessee is exempt u/s 11(1) of the Act. However, application u/s 10(23C)(iv) for AY 2008-09 onwards was rejected by the DGIT (E) by order dated 17.11.2008 and the exemption was cancelled by DIT (E) by order dated 30.06.2009.

3. In the appeal preferred by the assessee, the Hon’ble Jurisdictional High Court vide order dated 26.09.20 13 in W.P. (C) No. 7797/2009 allowed the approval u/s 10(23C)(iv) of the Act by treating the assessee as charitable institution and subsequently the DGIT(E) allowed exemption u/s 10(23C)(iv) of the Act vide order dated 23.10.2013 following the order of the Hon’ble High Court. However, during the scrutiny of the return of income of the assessee for the AY 2011-12, AO stated that the Department has preferred an SLP before the Hon’ble Supreme Court against the orders of the Delhi High Court and the matter was subjudice, as such, he proceeded as per the previous orders and made an addition of Rs. 19,68,89,320/-. In appeal, Ld. CIT (A), by way of impugned order, directed the AO to allow exemption u/s 11(1) of the Act with all consequential benefits.

4. Aggrieved by the impugned order, the Revenue is in appeal before us.

5. We have carefully gone through the record. It is submitted by the Ld. DR and also we could found from the order of the Ld.CIT (A) that pursuant to the orders dated 26.09.2013 of the Hon’ble Jurisdictional High Court in assessee’s own case for the AY 1996-97, by order dated 23.10.2013, Ld. DGIT (E) had allowed the exemption u/s 10(23C)(iv) of the Act to the assessee and against the cancellation of registration u/s 12AA(3) of the Act w.e.f. 2009-10 a coordinate bench of this Tribunal in ITA No. 3733/Del/2009 vide order dated 11.10.2013 allowed the appeal of the assessee by placing reliance on the above order of the Hon’ble Jurisdictional High Court in assessee’s own case. Further, for the assessment years 2009-10 and 2010-11 the Ld. CIT (A), vide orders dated 24.12.2013 and 03.20 15, allowed the plea of the assessee. After recording all these facts in the impugned order Ld. CIT (A), considered the assessment order and contentions of the assessee in the light of the orders referred to above and held that the activities of the assessee are covered u/s 2(15) of the Act under the sixth limb and that the assessee is eligible for exemption u/s 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 Ld. CIT (A) granted relief in respect of the assessment years 2009-10 and 2010-11 also, we find no legal infirmity in the order of the Ld. CIT (A) and we confirm the same. Consequently, the grounds of appeal of the Revenue are dismissed.

6. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 18.08.20 17

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