TaxTMI 
TaxTMI 
2019 (11) TMI 999
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....of the exemption u/s 10(23C)(vi) of Income Tax Act, when such claim of exemption u/s 10(23)(vi) of the Act ws neither made in the return of income nor before the assessing officer. Such claim is not allowable as per the decision of the Hon'ble Supreme Court in Goetze (India) Ltd Vs CIT reported in 284 ITR 323 SC [2006]. 3. The revenue reserves the right to add, urge or alter all or any other ground/grounds on or before the date of hearing. 2. The facts giving rise to the present appeal are that case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as 'the Act') was framed vide order dated 14.3.2016. While framing the assessment, the A.O. observed that the assessee Trust has given benefit to the specified person. Therefore, it violated the provisions of section 13(1)(c)13(3) of the Act. Hence, the A.O. made addition in respect of interest on the advances given to the specified person in sum of Rs. 4 Crores. It is noted by the A.O. that the assessee trust made payment of Rs. 4 crores on 14.12.2010 in respect of agreement to purchase of land admeasuring 124646 Sq.ft. @ Rs. 800/- per sq.ft. to Smt....
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....income in the case of the assessee after applying the provisions of section 11 of the Act, at the time of submitting the return of income, therefore, question of claiming any exemption u/s 10(23(C) does not arise at the time of submitting the return of income. 2. That the learned A.O. while making the assessment has determined the income of the assessee at a total income of Rs. 38650573/- prior to allow benefits of sections 11 and 10(23C)(via) of the Act, to the assessee for the reasons mentioned in the assessment order. Against which the assessee filed an appeal before Honourable Commissioner of Income Tax Appeals-II Indore who had decided the appeal in favour of the assessee by directing the Ld. A.O. to allow the benefits of section 10(23C) (via) to the assessee for which he has been accorded approval for exemption of income earned by him out of the Educational activities, vide his order dated 02.02.2018. Against which the Department has preferred appeal before the Honorable Bench for directions issued to allow the benefits of section 10(23C) (via) to the assessee. 3. The Department seek the opinion of the Honourable Bench that when in the opinion of the Ld. A.O. that the ass....
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....it of section 10(23C)(vi) of the Act. Now we beg to submit before the Honourable Bench as under in connection with directions of the Honourable CIT-A-II Indore in connection with allowing the exemption u/s 10(23C)(via) of the Act irrespective of the facts that the same was not claimed in the return of income. The Honourable CIT-A after considering the submissions of the assessee and relying on Circular No 14 dated 11.04.1955 issued by CBDT in which it had been instructed to all the authorities engaged in collecting the revenue to allow all the benefits to the assessee irrespective of the fact that the same was claimed by the assessee or not. The Honourable CIT-A after emphasingthe contents of Para 3 of the above said circular which were in nature of instruction to all the authorities engaged in collecting the revenue about the approach of their working in favour of the assessee. And dealing the Duties and Responsibilities of the Assessing Authorities under the Income Tax Act has issued the directions to allow the benefits of section 10(23C) (via) of the Act to the assessee. The instructions as mentioned in Para 3 of the above mentioned circular No 14 dated 11.04.1955 as issue....
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.... of CIT V Makendm Mills reported in 234 ITR 56 in which the Honourable Court has examined the applicability of the above Circular in regime of 1961 Act. And it was opined that the said Circular is still inforce even though issued prior to 1961 Act as the Circular has not been withdrawn till date. Further the honorable CIT-A after giving his findings that the provisions of Section 119(1) of the Act requires every officer to follow orders, instructions and directions of CBDT are binding in nature on the tax authorities, even if the directions given by CBDT are at variance with the provisions of Law. The Circular in effect is as good as law. Further the honorable CIT-A also given his findings that Article 265 of Indian Constitution empowers the Government to levy and collect tax that it can through authority of Law only as such tax cannot be legitimately collected from the taxpayer which is collectable as per the provisions of Law only. The Department in the grounds of appeal has strongly relied upon the ratio of case law as verdict by Honourable Supreme Court of India in the case of Goetze (India) Ltd 284 ITR 323. In this regard it is submitted that the decision of the Apex Cou....
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....r sub-clause(v) or sub-clause(vi) or sub-clause(via) shall not be treated as application if income to the objects for which such fund or trust or institution or university or educational institution or hospital or other medical institution as the case may be is established. Thus from the reading of the above proviso it is clear that the proviso comes into play if the eligible assessee does not apply its income towards the objects for which he is carrying out his activities and accumulates it, then any payments made out of such accumulation to any assessee registered u/s 12AA then such payment shall not be treated as application of income to the objects for which assessee carries out his activities. Whereas in the case of the assessee who has applied the entire income during the year itself and has not opted any accumulation of income not only during the year under consideration but even since the inception of the assessee as such there is no force in the ground as raised by the Department contra vending the Proviso 13 of Section 10(23C) of the Act. In the light of the above submissions and the Circular of the Board, it can be safely said that the Department is not permitted t....