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Commissioner of Income-tax, Belgaum Versus Vijaya Mahantesh Vidyavardhak Sangha

2016 (1) TMI 369 - KARNATAKA HIGH COURT

Eligibility for exemption under Section 80G(5) denied - Commissioner rejected the application is that proper accounts were not maintained by the respondent - assessee - ITAT allowed claim - Held that:- Revenue is right in his submission that the paragraphs dealing with the merits of the case in the impugned order passed by the Tribunal, do not advert to any factual matrices of the case insofar as the figures reflecting income and expenditure which were adverted to by the Commissioner of Income T .....

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to facts and reasons contained in the order assailed before appellate authority. On perusal of the order of the Tribunal, we are of the considered view that the Tribunal has not adverted to the various aspects of factual matrices, which resulted in rejection of application by the Commissioner.

Admittedly, the Tribunal is the last fact-finding authority. The Commissioner while rejecting the application has adverted to various aspects of the matter to support his reasoning. They inclu .....

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ng the benefit of exemption for the previous years. It has taken a definite stand that accounts with regard to the project work is separately maintained. The Commissioner has adverted to various aspects and rejected the application. Therefore, the Tribunal ought to have considered each and every aspect and examined as to whether or not the findings recorded by the Commissioner are in accordance with law. In the circumstances, we feel it appropriate that the matter must be reconsidered by the Tri .....

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ibunal, Panaji Bench, Panaji ('ITAT' for short). 2. This appeal was admitted on 10.12.2012 to consider the following questions of law:- (1) Whether the Tribunal is correct in Law and Facts, holding that the respondent assessee society's action in maintaining separate account in respect of vermicular project without bringing into society's account which is mandatory in view of provisions of Section 11 that assessee should maintain books of account in respect of grants, income rece .....

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society has not committed any fault of not accounting for such grant money as income of the assessee and utilize the same to the extent of 85% which is mandatory in view of provisions of Sec.11(2) of the IT Act 1961? (4) Whether the tribunal is correct in law and facts, in holding that respondent assessee society cannot be punished for the misappropriation of funds by the Chairman and the Secretary of the society as the same would defeat the very purpose and intention of the Legislature in brin .....

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its duties and as such the decision relied upon by the Tribunal is not applicable to the facts of the case? 3. The facts leading to this case are that the respondent filed an application for renewal of exemption under Section 80G of the Income Tax Act, 1961 ['Act' for short] before the Commissioner of Income Tax, Belgaum, who vide order dated 28.3.2010 rejected the said application. It was contended by the respondent that it is running various educational institutions in Bagalkot Distric .....

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8377; 1,29,74,000/- was sanctioned during the year 2006-07. On these among other reasons, respondent sought for renewal of exemption under Section 80G. The Commissioner has held in his order that receipt of a sum of ₹ 1,18,50,000/- from the Government towards Vermiculture project during the year 2007-2008 and details of transactions with regard to expenses of ₹ 71,47,430/- said to have been incurred were not reflecting in the books of account of the Society. The accounts revealed onl .....

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On consideration of the material before him, the Commissioner ultimately held that the respondent was not eligible for consideration of the application for exemption under Section 80G(5) and rejected the same as per Section 80G(5)(i) of the Act. The said order passed by the Commissioner was challenged by the assessee - respondent before the ITAT, Panaji, which came to be allowed by the impugned order. Hence, this appeal. 4. We have heard Sri Y.V. Raviraj, learned standing Counsel for Income Tax .....

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Tax without there being any cogent reasons to do so. He draws our attention to the reasoning of the impugned order in paragraph - 16 of the impugned order, wherein, the Tribunal has considered the merits of the case and arrived at a conclusion that the dispute is only with regard to some advances given to the Vermiculture Project by the Society and the Society had treated the said project as a separate entity and a separate account of the project was maintained. The Tribunal, on this premise he .....

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o the respondent and allowed the appeal on such erroneous assumptions. The learned standing Counsel, further submits that the issue involved in the case is, that the respondent - assessee had admittedly received large sums of money from the Central Government for the Vermiculture Project which were not reflecting in the Books of the respondent - Society. The Commissioner of Income tax had meticulously gone into each aspect of the matter and passed a detailed order. On the other hand, the Tribuna .....

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espondent while supporting the order of the Tribunal submits that the respondent - assessee is carrying on youmen service and submits that the impugned order does not suffer from any illegality and prays for dismissal of the same. 9. We have given our anxious consideration to the submission made at the bar and perused the records. 10. The principle ground upon which the Commissioner rejected the application is that proper accounts were not maintained by the respondent - assessee. The Commissione .....

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f the Commissioner. However, the impugned order is not supported by reasons and does not suggest that the Tribunal had re-appreciated the facts with reference to the various financial entries found in the order passed by the Commissioner. Whenever an order is passed by a quasi - judicial authorities either upholding or reversing a finding of lower authority, the appellate order must necessarily record cogent reasons with reference to facts and reasons contained in the order assailed before appel .....

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