Case Law Details
Baba Hira Singh Bhattal Institute of Engineering &Technology Lehragaga Vs DCIT (Exemptions) (ITAT Chandigarh)
During the course of assessment proceedings, the AO observed that as per the assessee’s society audit report right from A.Y. 2008-09 to 2013-14, it has not received any money from the Government except for A.Y. 2006-07 where Rs. 50 lacs has been received and in A.Y 2007-08 where Rs. 1 Crore has been received. It was accordingly observed by the AO that the assessee society is not being wholly or substantially financed by the Government, being one of the essential conditions for claiming exemption under section 10(23C)(iiiab) of the Act and a show cause was issued to the assessee society as to why the exemption so claimed should not be denied to the assessee society for the year under consideration.
Whole case of the AO rest on the consistent factual position right from A.Y. 2008-09 to 2013-14 that the assessee society has not received any money from the Government except for A.Y. 2006-07 and A.Y 2007-08, and it was accordingly observed by the AO that the assessee society is not being wholly or substantially financed by the Government, being one of the essential conditions for claiming exemption under section 10(23C)(iiiab) of the Act. For A.Y 2006- 07 to A.Y 2012-13, the Coordinate Bench has held that the assessee is wholly funded by the Government and is eligible for exemption under section 1 0(23C) (iiiab) of the Act. Nothing has been brought on record in terms of whether the Revenue has challenged the said order of the Coordinate Bench or the order so passed has been upset by the Courts. Therefore, as on date, the order of the Coordinate Bench stands and continues to hold the field.
ITAT find that the ld CIT(A) has referred to the order of the Coordinate Bench and has held that the condition as to whether the assessee is wholly or substantially financed by the Government is a question of fact which has to be ascertained and examined for each year and receipts for A.Y 2013-14 was never a subject matter of adjudication by the Tribunal and for the year under consideration, it has not been specified as to what extent and what amount was considered as Government Finance out of total receipts of Rs 8,29,90,727/-. During the course of hearing, the ld AR has submitted that both the lower authorities have failed to appreciate that the contents of the said letter issued by the Government of Punjab stand as of today as the letter has not been withdrawn and for the year under consideration, the whole of the revenue generated by Institute amounting to Rs 8,29,90,727/- belongs to the Consolidated fund of the Government of Punjab and the same has been permitted to be retained by the institute for achieving the objectives of the Society as yearly grant. On perusal of the letter dated 17.08.2016 issued by the Principal Secretary to Government of Punjab, Department of Technical Education& Industrial Training, we find that it talks about the revenues generated by the Institute which belongs to the Consolidated fund of the Government and which has been permitted to be retained by the institute as yearly grant. In the said letter, we find that there is no limit specified on the quantum of revenues generated by the institute, the period during which such revenues are generated and the period for which the revenues are allowed to be retained by the institute. Therefore, irrespective of quantum of revenues which the institute generate in respective financial years, the revenues so generated belongs to the Consolidated fund of the Government and which continue to remain permitted to be retained by the institute. The Coordinate Bench has therefore taking into consideration the aforesaid contents of the said letter has decided the matter for all the years starting from A.Y 2006-07 to A.Y 2012-13 and for the year under consideration, we therefore do not see any basis to deviate from the decision of the Coordinate Bench as undisputedly, for the year under consideration, there is no change in the facts and circumstances of the case as regard retention of revenues by the assessee society as grant in aid by the Government of Punjab and the assessee society thus continue to remain wholly funded by the Government of Punjab and the assessee is thus held eligible for exemption under section 1 0(23C) (iiiab) of the Act.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
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