2016 (12) TMI 1921

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....08-09 & 2009-10. Since, the issue is these appeals are common in nature, the appeals are clubbed and heard together and disposed off by the common order. For the sake of convenience, we first take up the assessee appeal ITA No. 2616/Mds/2016 for the assessment year 2005-06 and take up the facts narrated by the appeal. 2. The assessee has raised the following grounds: 2.1 The Ld. CIT(A) failed to appreciate that all the affairs of the Appellant Institution is governed by the state statue Tamil Nadu Advocates Welfare Fund Act, 1987 (Act No. 49 of 1987) and the income and utilization for meeting the objects of the fund are also governed and mandated as per the said statute and that they being exempt u/s. 11 having been registered u....

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..... 11 and this aspect has a substantive bearing on the taxability of the income for the impugned year. 2.7 The Ld. CIT(A) erred in concluding that there is no nexus between the revenue generated and the expenditure in pursuing the objects of the appellant mandated by law and further erred in bringing the said income being the Gross receipts less marginal expenses to tax at maximum marginal rate failing to not that the expenditure towards object are integral to the manner of generating the receipts 2.8 The Ld. CIT(A) erred in not allowing for impugned year while accepting the fact that the onetime life subscription is capital in nature and an earmarked receipt while wrongly concluding that "Section 11 has become inoperative"....

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....e Act for the said assessment year and assessed the assessee's Welfare Fund as Association of persons and passed orders u/s. 143 r.w.s. 147 of the Act dated 26.12.2011 with assessed income of Rs. 1,88,01,470/- and raised the demand. 4. Aggrieved by the order, the assessee filed an appeal with the CIT(A). The Ld. AR argued the grounds and reiterated the submissions of assessment proceedings and emphasized that the assessee fund is part and parcel of Bar Council of Tamilnadu. The Ld. CIT(A) found that the assessee has made an application for Registration u/s. 12AA of the Act and was granted on 25.02.2011 for the assessment year 2011-12 onwards and also Application was filed with the CBDT under the provisions of section 119(2)(b) for gr....

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.... registration. 6. Further, The Ld. AR submitted that the order u/s. 119(2)(b) of the Act has bearing on the assessment of the assessee in deciding the taxability of the income and shall be the basis revolves on granting of registration u/s. 12AA of the Act and prayed for setting aside assessment to the AO and to comply the conditions of Registration as per CBDT order dated 19.07.2016. Contra, the Ld. DR accepted the CBDT order u/s. 119(2b) of the Act filed by the assessee and has no serious objections. 7. We have considered the facts, material on record and the order u/s. 119(2b). We are of the opinion, that there is strength in the arguments of the assessee and in the interest of justice, we set aside the order of the CIT(A) and remi....