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Hamdard Laboratories India (formerly known as Hamdard Dawakhana Wakf) Versus ADIT (E) , Trust Circle-II, Delhi

2015 (12) TMI 1376 - ITAT DELHI

Exemption u/s 11 denied - Held that:- The assessee is wholly and solely engaged in business activity and the assesseeby itself is not engaged in any charitable activity except the donations made to HNF, which the assessee considers as a charitable organization. But it is seen that even the activities of HNF is not charitable as no free treatment or free medicines are distributed to the poor. The exemption u/s. 11 is available when the assessee is engaged in charitable activities, but in the pres .....

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/2015 - Dated:- 18-12-2015 - Sh. Aby T. Varkey, Judicial Member And Sh. O. P. Kant, Accountant Member For the Appellant : Sh. Simran Mehta, Adv For the Respondent : Sh. Amit Jain, Sr DR ORDER Per Bench These appeals by the assessee are directed against four separate orders dated 10.07.2013 passed by learned Commissioner of Income Tax (Appeals) for the assessment years 2006-07 to 2009-10. Identical grounds of appeal are raised in all the four appeals, therefore, for the sake of brevity and conven .....

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serves to be set aside on these grounds. iii. The CIT (A) in fact did not hear the appeal but merely recorded the attendance of the company's employee who was neither competent to argue the appeal and nor authorized to do so alongwith the name of the counsel who in fact never appeared in the matter as would be apparent from the order sheet of the proceedings before the successor CIT (A). iv. Without prejudice to the preceding grounds which are independent of each other the CIT (A) erred in d .....

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e said exemption has been allowed to it in past assessment years on the same set of facts and the position of law remains unchanged. vi. The CIT (A) while denying exemption u/s 11 failed to appreciate that the business of 'Hamdard Dawakhana' was irrevocably dedicated to charity and the principal predominant and primary object was genuine charitable activity and the commercial activity carried on by the appellant was merely a means to effectuate the charitable object. vii. That the CIT (A .....

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thout prejudice to the aforesaid grounds and without prejudice to the main argument that the assessee was entitled to the benefit of exemption u/s 11 both on facts and in law the CIT (A) erred in disallowing depreciation on the assets purchased and put to use in the years prior to the assessment year under appeal. x. The CIT(A) further erred in upholding the action of the AO in bringing to tax a sum of ₹ 3,87,454/- on account of deletions in the fixed assets during the year under considera .....

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2006- 07. No part of these accumulations was taxable in the assessment year 2006-07. xiii. The CIT (A) has further erred in confirming the levy of interest u/s 234B, 244A and 234D to the tune of ₹ 17,73,69,651/ -, ₹ 12,424/- and ₹ 72,229/- respectively. The assessee was not liable in law for any such levies. xiv. The appellant reserves to itself, the right to add, alter, amend, substitute, withdraw and/or any Ground(s) of Appeal at or before the date of hearing. 2. At the outse .....

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essing Officer withdrawn the exemption granted under Section 11 of the Act in respect of the assessment years 2006-07 to 2009-10. Aggrieved against the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). Simultaneously, the assessee challenged the order dated 22.02.2012 of the ld. Director General of Income Tax (Exemption) before the Hon ble High Court in Writ Petition (Civil) bearing WP(C) No. 3598/2010. The said writ petition was allowe .....

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of Income Tax (Appeals) also decided all the four appeals filed by the assessee in respect of assessment years 2006-07 to 2009-10 on 10.07.2013, confirming the actions of the ld. Assessing Officer. Aggrieved, the assessee is in appeal before us in respect of all the four assessment years. Simultaneously, the assessee also filed writ petition bearing WP(C) No. 3599/2012 before the Hon ble High Court seeking to quash the order of the ld. Director General of Income Tax (Exemptions) withdrawing the .....

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identical orders dated 10.07.2013 for AY 2006-07 to AY 2009-10 dismissed Hamdard s appeal against the AO s orders denying exemption under Section 11 of the Act. Hamdard contends that the CIT(A) passed the said orders dated 10.07.2013 without providing an opportunity of oral hearing to Hamdard. It is contended that the CIT(A) has passed the order without taking into consideration its submissions. The Revenue, on the other hand, defends the impugned orders on the ground that the CIT(A) s predeces .....

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eswara Rao (supra) held in unequivocal terms and dismissed the notion that an authority that decides a dispute may be different from the one that heard the same. The material on record establishes that the CIT(A), the second Respondent in the four writ petitions herein, assumed charge on 28.06.2013 and the submissions by Hamdard were made prior to the said date before the second Respondent s predecessor. There is no dispute regarding the fact that second Respondent did not hear the matter on 28. .....

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8.07.2013. Further, a perusal of the impugned orders dated 10.07.2013 would indicate that the second Respondent has omitted to consider Hamdard s submissions filed before the second Respondent s predecessor on 04.03.2013 and 06.05.2013. Indeed, this Court s order dated 11.04.2012 in W.P.(C) 3598 of 2012, whereby it set aside the order of withdrawal of Hamdard s exemption under Section 10 (23C)(iv) dated 22.02.2012, does not even find mention in the four impugned orders, notwithstanding that this .....

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rinciples of natural justice in passing the impugned orders. Even on merits, it is apparent that the ground for denial of exemption underSection 11 is that Hamdard is not engaged in charitable activities within the meaning of Section 2(15) of the Act. The CIT(A) held in this regard as follows: "4.9 I have considered the order of the AO and the submissions of the assessee and I do not find any merit in the submissions of the assessee. There is no dispute and it is in fact admitted by the ass .....

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