The Commissioner of Income Tax - Exemption v. Software Technologies Parks of India

1 HE COMMISSIONER OF INCOME TAX-EXEMPTION ' Appellant Through: Mr, Ajit Shairoa, Sr. Standing. Counsel.

VERSUS

SOFTWARE TECHNOLOGIES PARKS OF INDIA Respondent Tlirough: Mr. J.K. Singh with Mr. Rahul Chaudhary and Mr. Avesh Chaudhary,Advocates. + ~ ■ rrA1345/2018 THE COMMISSIONER OFINCdALE TAX-EXEMPTION Appellant Through- Mj. Ajit Sharrna, Sr. Standing Counsel.

VERSUS

SOFT'WAPE TECHNOLOGIES PARKS OF INDIA.,..., Respondent Through: Mr. J.K. • Singh with Mr. Rahul Chaudhary and Mi-. Avesh Chaudhary,Advocates. ITA Nos J29'e, 1363 & 1345 of2018 Page J of[4] 2019:DHC:7403-DB COBAM: JUSTICE S.MURALIDHAR JUSTICE TALWANT SINGH Q BP E R % 30.07.2019

1. These are Revenue's appeals against the common impugned order dated 16'^^ May 2018 passed by the Income Tax Appellate Tribunal (TTAT')in ITA Nos.843./DEL/2010 (Assessment Year 'AY' 2006-07), 21,69/DEL/2011 (AY 2007-08), ITA No.2431/DEL/2011 (AY 2007-08) and ITA No.l470/DEL/2013(AY 2008-09)respectively.

2. One of the issues urged by the Revenue which is common to AYs 2006;07 and 2007-08 is whether the ITAT was rightin allowingthe claim of the Assessee in,respect of deerped application under Section:11(1) Explanation 2 ofthe Income Tax Act, 1961 ('Act') notwithstanding that the Assessee did not file the requisite intimation within the time period stipulated in the Act.

3. The Court finds that'm Association ofCorporation andApexSocieties ofHandlooms v,Assistant Director ofInconie-Tax(2013)351 ITS.287 (Del), it was held by this Court that intimation in Form-10 for the purposes ofclaiming the benefit of the Section 11 of the Act could be furnished by the Assessee even dqring the assessment proceedings. A similar view has been taken by the Bombay High Court'm Commissioner \ ofIncome Tax-Ill,Pune v. Sakal ReliefFund(2017)81 taxman.com 396(Bom).

4. On the facts ofthe present case, although the Assess.ee did not give the intimation at the time of filing the original returns, adinittedly, the ITA Nos. 1296, 13.03 & 1345 of2018.. Page 2of[4] 0^ intimation was enclosed with the revised return filed by the Assessee. The Court accordingly does not find any error having been committed by the ITAT in holding this issue in favour ofthe Assessee.

5. A common question urged by the Revenue for AYs 2007-08 and 2008- 09 is whether the ITAT was right in granting the benefits of Sections 11 and 12 ofthe Actto the Assessee even though it was involved in business activities and was conducting no 'charitable activity'?

6. The ITAT noticed that there was no change in the functions of the Assessee from earlier and it's objects were never disputed by the Revenue authorities at any stage. It was held that the Revenue failed to establish that the activities carried out by the Assessee were contrary to its objects and JEunctipns. It was unable to be established bythe Revenue on facts that the Assessee was carrying on commercial activity. In the earlier AYs, this issue had been decided against the Revenue as noticed by the Commissioner ofIncome Tax (Appeals)['CIT (A)'] in his order dated 28"^ February 2011 for AY 2007-08..Consequently, the Court declines to frame,any question on this issue.

7. The third issue which has been raised by the Revenue which is specific. 1 to AY 2008-09 is whether the ITAT was right in allowing depreciation in assets, the full cost of which was already allowed as application of income,in earlier years, even though allowing the same cpuld lead to a situatiou where amount ofdepreciation would exceed the purchase value ofthe assets.

8. It is pointed out by Mr. Rahul Chaudhary, learned counsel appearing for the Assessee on advance notice,that this issue is.no longer res integra ITA Nos. 1296, 1303 & 1345 of2018 Page 3of[4] 2019:DHC:7403-DB.( in view ofthe decision ofthe Supreine Courtin Commissioner ofIncome Tax-Ill,Pune v. Rajasthan & Gujarati Charitable Foundation Foona, (2018) 89 taxman.com 127(SC). The ITAT too followed the said decision and decided the issue againstthe Revenue.

9. The fourth issue raised for AY 2007-08 is whether an amount received as advance was in fact utilized by the Assessee for charitable puipose. Here again on facts the ITAT has found in favour ofthe Assessee, which finding has not been shown to be perverse. The Court accordingly declines to frame such issue as raised bythe Revenue.

10. The appeals are accordingly dismissed.