Commissioner of Income Tax (Exemptions) v. Asian Centre for Organisation Research & Development

1. The Revenue urges in these two appeals that the ITAT fall into ITA 1057/2017 1058/2017 p^ge j of[4] 2017:DHC:8739-DB error in confirming the CIT(A)'s order. The appellant-Commissioner had set aside the re-assessment for the years 2005-06, 2006-07. The assessee's returns were framed and filed under Section 143(1) (A) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') which claimed the benefit ofSection 12(AA) from the year 2009-10 - which had been granted on 14.10.2008. The assessee's activities included as elaborated inMemorandum ofRules and Regulations were: "5.[2] To conduct, organize, participate in and otherwise: associate with seminars, discussions conferences, courses, teams training and educational programmes pertaining to matters of interest to the developmepit of. industrial, rural and health organizations.::;. 3.[3] To write, design & publish books, video-films, cassettes, manuals, journals, and other literature or audio-visual aidsfor thefurtherance oftheobjects. 3.[4] To render assistance and advise on scientific methods of managemmt. of men, m^ machinery, money and other, resources, and or, operations. 3.[5] To do all other things and such other lawful things as may be conducive to the\ attainment of the above object or objects identical thereto, but not to engage in business as such. 3.[6] To utilize the income ofthe society towards the promotion and aims and objects ofthe society.'" ITA 1057/2017 & 1058/2017 Pagt 2 of[4] \

2. The assessment for the concerned years were sought to be re opened on two grounds; firstly, that the activities which yield an income were not charitable and that they amounted to canying on a provision - commercial activities and secondly, that the provision of Section 13(3) were violated because of the link with Ms. Kiran Wadhera.

3. The additions made during the re-assessment were set aside primarily on the ground that notice under Section 147 &148 was not justified. However, the CIT(A) considered the merits and was of the opinion that the assessee had enjoyed the benefit uninterruptedly for 27 years and that the income yielded and reported to the Revenue could not be characterized as commercial. So far as the connection with Ms. Kiran Wadhera was concerned, the CIT(A) noticed that she was afull time employee and therefore did not fall within the mischief of Section 13(c). The ITAT affirmed the opinion of the CIT(A) but confined its discussion to the question ofreassessment.

4. The Revenue urges that the ITAT ought to have appreciated the circumstances that the assessment in this case was not completed on scrutiny basis but under Section 143(1) (A). Thus, the reassessment could not be upheld by the ITAT. Learned counsel also cited the decision taken in ''Commissioner ofIncome Tax Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd.(2008) 14 SCC 408(SC), in support of the submissions. A 1(58/2017 r _____

5. It is evident in appeal that the CIT(A) went into the legality of the reassessment of notice as well as merits of the case. Had the Appellate-Commissioner confined his inquiry to the issu^ of reassessment, the revenue might have been justified in its appeal. Given that the CIT(A) returned the findings on merits as to the permissibility ofthe receipt within the four comers ofSection 1ZA of the Income Tax Act, the complaint that the ITAT confined its hiquiry to the validity of the reassessment in the circumstances of the case, according to us, does not result into aquestion of law - much less a substantial one. The Gourt also notices that the assesses had continuously enjoyed the benefit ofSection 12A for about 27 years.

6. In view of the forgoing discussion, it is held that the appeals have no merit. They are accordingly dismissed.

BEAT NOVEMBER 24, 2017 'rs' /TA 1057/20/7 & 1058/2017

S. RAVINDRA

(JUDGE) (JUDGE) Page 4 of[4] %