TMI Blog2012 (10) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 13(1)(c) of the Act - Held that the payment of Rs.3,60,000/- per annum as honorarium to the Secretary of society, which was not proved to be in excess of the normal and prevalent remuneration being paid for an identical services contemporaneously, cannot be considered as a “benefit” to the interested person as would attract the provisions of section 13(1)(c) and debar the appellant from claiming exemption u/s. 11. The assessing officer is therefore directed not to deny exemption u/s. 11 on this ground alone. - ITA No.1381/Hyd/2011 - - - Dated:- 6-7-2012 - SHRI D.KARUNAKARA RAO AND SHRI SAKTIJIT DEY, JJ. Appellant by : Shri K.Viswanatham Respondent by : Shri P.Muralikrishna Adv. ORDER Per D.Karunakara Rao, Accountant Member: This appeal filed by the Revenue is directed against the order of the Commissioner of Income-tax(Appeals)-IV, Hyderabad dated 30.8.2011 for the assessment year 2008-09. 2. Effective grounds of the Revenue in this appeal read as follows- (i). The order of the CIT(A) is not acceptable as it is erroneous both in law and on facts. (ii) The CIT(Appeals) ought to have appreciated the fact that obtaining approval of the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld the decision of the CIT(A) vide its Order No.652/Hyd/2006 dated 12.12.2008. The Department has preferred appeal against the Hon ble ITAT s order before the Hon ble High Court of A,P. It is respectfully submitted that for maintaining the consistency and in order to keep the matter alive further appeal is recommended. 3. The first issue involved in the above grounds of of the Revenue is with regard to the conclusion of the CIT(A) that the assessee is eligible for benefits of Section 11 of the Act in alternative to the provisions of S.10(23C)(vi) of the Act. 4. On this issue, the learned counsel for the assessee, at the outset, mentioned that this issue is covered by series of decisions of this Tribunal, wherein similar grounds of the Revenue were considered and the matter was adjudicated, as in the case of Dy. Director of Incometax( Exemption) Hyderabad, V/s. Exhibition Society, Hyderabad for the assessment year 2006-07 vide order dated 22th March, 2012 in ITA No.1195/Hyd/2009, wherein the Tribunal has set aside the order of the CIT(A) and restored the matter to the file of the assessing officer, for verification, with the following observations- 5. We however, find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the absence of grounds taken by the Revenue in that behalf, has not remitted the matter back to the files of the assessing officer. 6. On the other hand, the Learned Departmental Representative for the Revenue, though did not controvert the fact that the issue is covered by the consistent view taken by the Tribunal in similar matters, , he disputed the contention of the assessee against setting aside of the matter to the file of the assessing officer for verification He further mentioned that these provisions are linked and they are no stand alone provisions, and therefore, the benefits of S.11 to 13 cannot be granted unless the conditions attached thereto are legally satisfied. Referring to the provisions of S.254(1), Learned Departmental Representative argued vehemently by stating that ITAT is empowered to pass orders as it thinks fit and therefore, ITAT is justified in entertaining the oral arguments raised during the proceedings before it. 7. We heard both the parties and perused the orders of the lower authorities and perused the material available on record. Assessee s argument that the benefit of S.11 should be granted in the alternative, without verification of cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the following manner- 32. It is noteworthy that, in terms of provision of Rule 11 of the Appellate Tribunal Rules 1963, while the appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule. The mandate of the rule is thus clear and unambiguous. While there are restrictions on the appellant as to the issues he can raise in the appeal, there are no restrictions on the Tribunal as to on what grounds the Tribunal decides the appeal. The only rider is, in terms of proviso to Rule 11, that the Tribunal shall not rest its decision on any other ground unless the party who may be affected there by has had a sufficient opportunity of being heard on that ground . In effect thus, as long as affected parties have an opportunity of having been heard on the ground on which appeal is decided, the Tribunal can decide the appeal on any of the issue whether raised by the parties or not. It is also important to appreciate that the expressions subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above discussion, consistent with the view taken by the coordinated benches of Tribunal, in similar matters, we set aside the impugned order of the CIT(A) and restore the matter to the file of the assessing officer with a direction to verify the aspect of donation, capitation fee etc. if any collected by the assessee, and further direct that if it is found that besides fulfilling other prerequisites for exemption under S.11, the assessee has not charged any money by whatever name it is called, i.e. donation, building fund, auditorium fee etc, over and above the prescribed fee for the admission of students, the assessee would be entitled for exemption under S.11, even though the notification under S.10(23C)(vi) of the Act have not been received by it. We direct accordingly. 11. The next issue involved in this appeal relates to the addition made on account of depreciation claimed by the assessee. The Assessing Officer has observed that the trust had claimed expenditure on account of depreciation. He was of the view that since the purchase of capital asset used to promote the objective of the trust is allowed as application of income, depreciation is not allowable on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er for fresh consideration, in the light of the above observations. The Assessing Officer shall accordingly redecide the issue in accordance with law and after giving reasonable opportunity of hearing to the assessee. 13. The next issue involved in this appeal of the Revenue, covered by ground No.(xii) above, relates to disallowance made in terms of S.13(1)(c) of the Act. 14. We heard both sides and perused the impugned orders of the lower authorities and other material available on record. As is evident from the ground itself, the disallowance in terms of S.13(2)(c) of the Act is an amount of Rs.3,60,000 representing Honorarium to Secretary of the assessee society. From the impugned orders of the lower authorities that the Secretary of the assessee-society, Shri Khaza Mohammed Arifuddin, to whom the honorarium in question has been paid is a bachelor of Arts and a Master of Law from Osmania University, and copies of the relevant certificates were also furnished. It was claimed that Shri Arifuddin is the whole time secretary of the assessee society since its formation in the year 1991 and was being paid an Honorarium of Rs.42000 per annum at that time. It was submitted on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
