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M/s Nellai Nadar Mahimai Paripalana Sangam Versus The Assistant Director of Income Tax (Exemptions) IV, Chennai

Depreciation on the capital asset of trust disallowed - AO allowed exemption under Section 10(23C)(vi) - Held that:- The fact remains that the Director of Income Tax (Exemptions) granted registration under Section 12AA of the Act after considering the object of the Sangam and the purpose for which it was established. The CIT(Appeals) by letter dated 17.03.2015 asked the assessee to furnish its objection, if any, for disallowing the claim under Section 11 of the Act or Section 10(23C) of the Act. .....

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er two or three days. Then, the available time would be only 5 or 6 days. If for any reason, the letter could not be served on the assessee within two or three days, then the time limit available to the assessee for furnishing objection would be reduced proportionately. Therefore, this Tribunal is of the considered opinion that even assuming for argument sake, the letter dated 17.03.2015 was served on the assessee, the time given to the assessee for filing objection is not sufficient enough. The .....

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, Chennai, dated 26.03.2015 and pertains to assessment year 2011-12. 2. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee-Sangam was registered as charitable institution under Section 12AA of the Income-tax Act, 1961 (in short 'the Act'). During the year under consideration, the assessee claimed depreciation on the capital asset. However, the Assessing Officer disallowed the claim of the assessee and granted exemption under Section 10(23C)(vi) of the Act. The .....

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n 11 of the Act. Referring to the order of the CIT(Appeals), more particularly para 4.1, the Ld.counsel submitted that the CIT(Appeals) is not correct in saying that the aim of the assessee-Sangam is not solely for education. According to the Ld. counsel, the object of the Sangam is primarily for education. The Sangam is also pursuing institutional activity apart from the primary object of education. Therefore, the assessee-Sangam is eligible for exemption under Section 11 of the Act. Since the .....

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letter dated 17.03.2015 was not served on the assessee. The working said to be made by the CIT(Appeals) was also not furnished to the assessee. Therefore, the assessee could not file any objection before the CIT(Appeals). Even assuming for argument sake that so-called letter dated 17.03.2015 was served on the assessee, still the time given to the assessee was not sufficient to give objection since the CIT(Appeals) passed the order on 26.03.2015. 4. The Ld.counsel for the assessee further submitt .....

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aim of exemption under Section 11 of the Act, since such a power was not conferred on the CIT(Appeals). The CIT(Appeals) is expected to adjudicate the issue raised by the assessee in the grounds of appeal. Unfortunately, according to the Ld. counsel, the CIT(Appeals) has not discussed anything about the issue of depreciation and disallowed the claim of the assessee under Section 11 of the Act. Therefore, according to the Ld. counsel, the CIT(Appeals) is not justified. 5. On the contrary, Sh. P. .....

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sessing the income of ₹ 1,21,55,545/-. The assessee claimed before the Assessing Officer that it was entitled to exemption under Section 11 and Section 10(23C)(vi) of the Act. This objection was overruled. On a query from the Bench whether the letter dated 17.03.2015 was furnished to the assessee, the Ld. D.R. very fairly submitted that he has to call for records from the CIT(Appeals) to verify whether the letter was in fact served on the assessee or not. The Ld. D.R. further submitted tha .....

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Ld. D.R. submitted that the power of the CIT(Appeals) is co-terminus with that of the Assessing Officer. Therefore, according to the Ld. D.R., what the Assessing Officer omitted to consider, the CIT(Appeals) can very well consider the same provided an opportunity given to the assessee. In the case before us, according to the Ld. D.R., the Assessing Officer has not considered the violation of Section 13(1)(b) of the Act. Therefore, he had no occasion to examine whether the assessee is eligible f .....

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ons on either side and perused the relevant material available on record. Admittedly, the Assessing Officer allowed exemption under Section 10(23C)(vi) of the Act, however, disallowed the claim of the assessee for depreciation on the capital asset. It is not in dispute that the assessee filed appeal before the CIT(Appeals) only in respect of the claim of depreciation. The CIT(Appeals), while considering the appeal of the assessee in respect of depreciation, found that there was violation of Sect .....

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