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2022 Supreme(Del) 670
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN, NAVIN CHAWLA, JJ.
Commissioner Of Income Tax (Exemptions) Delhi - Appellant
Versus
Hamdard National Foundation (India) - Respondent
ITA 115, 142, 144 of 2021 & CM Appl. 32406 of 2021, ITA 15 of 2022
Decided on : 16-02-2022
Advocate Appeared:
For the Appellant : Mr.Abhishek Maratha, Sr. Standing Counsel
For the Respondent: Mr.Salil Aggarwal, Sr. Adv. with Mr.Madhur Aggarwal, Adv.
Point of Law: To be ‘substantial’, a question of law must be debatable, not previously settled by the law of the land or any binding precedent, and must have a material bearing on the decision of the case and/or rights of the parties before it, if answered either way. Findings of fact recorded by the courts below, which would imply the CIT(A) and the learned ITAT in these appeals, cannot be reopened
Headnote:
Income Tax Act, 1961 - Section 13(2)(b) read with 13(3) - Property - Income Tax - Donation - Assessing Officer, for Assessment Year, had noted that respondent/assessee had received donation from Hamdard Dawakhana (Wakf) amounting and rental income - In addition, respondent/assessee had also received Rs.20,00,00,000/- (Rupees twenty crore) as corpus donation from Hamdard Dawakhana (Wakf) during said Assessment Year - Relying upon enquiry made from one M/s CB Richard Ellis South - Asia Private Limited and from various websites, makan.com; 99acres.com - Magicbricks.com, Assessing Officer held that the property, had been let out by respondent/assessee to Hamdard Dawakhana (Wakf) at a much lower rate as compared to market rate of rent and therefore, invoked provisions of Section 13(2)(b) read with Section 13(3) of Act - Whether any part of income or any property of charitable trust is used for benefit of a specified person referred to in Section 13(3)(b) of Act.
Finding of the Court:
In first round of litigation between parties for Assessment Year, learned Commissioner of Income Tax (Appeals) allowed appeal of respondent/assessee - In present case, Assessing Officer, apart from relying upon some opinion of rent from property broker firms and websites, does not appear to have made any independent inquiry on adequacy of rent being charged by the respondent/assessee from Hamdard Dawakhana (Wakf) - It is not shown that Assessing Officer made any independent inquiry on age and condition of building of assessee situated at Road - In fact, as contended by learned senior counsel for respondent/assessee and taken note of by learned ITAT and not denied by appellant/revenue, property was not even ready during Assessment Year and was lying vacant - In absence of any such inquiry by Assessing Officer, - Court find no infirmity in Order passed by learned ITAT and no substantial question of law arises in present set of appeals.
Result: Appeal dismissed
JUDGMENT :
NAVIN CHAWLA, J.
1. This batch of appeals is directed against the common order dated 01.11.2019 passed by the learned Income Tax Appellate Tribunal, Delhi Bench ‘C’, New Delhi (hereinafter referred to as the “learned ITAT”) in ITA No. 1640/Del/2019 (AY 2007-08); ITA No. 4789/Del/2012 (AY 2008-09); ITA No. 5411/Del/2012 (AY 2009-10); and ITA No. 3403/Del/14 (AY 2010-11), inter alia holding therein that there was no justification for the addition made by the Assessing Officer by invoking the provisions of Section 13(2)(b) read with Section 13(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) and consequently, directing deletion thereof.
2. In the present batch of appeals, the appellant/revenue has proposed the following questions of law for consideration of this Court:
“(1) Whether Hon‘ble Income Tax Appellate Tribunal was correct in the eyes of law, in passing the impugned order, in the facts and circumstances of the present case, ignoring the fact that assessee offered substantial concession in rent to Hamdard Dawakhana in lieu of voluntary and corpus donations in return which is a clear violation of Section 13(2)(b) r.w.s. 13(3) (b) of the Act and hence assessee is not eligible for exemption u/s 11/12 of the Act?
(2) Whether Hon'ble Income Tax Appellate Tribunal, in the facts and circumstances of the case was correct in allowing exemption u/s 11 & 12 of the Income Tax Act, 1961 to the Assessee/Respondent herein?
(3) Whether the impugned order passed by Hon'ble Income Tax Appellate Tribunal is perverse both on law and facts?”
3. The Assessing Officer, for the Assessment Year 2007-08, had noted that the respondent/assessee had received donation from Hamdard Dawakhana (Wakf) amounting to Rs.9,43,81,000/- (Rupees nine crore, forty-three lakh, eighty-one thousand) and rental income of Rs.46,41,028/- (Rupees forty-six lakh, forty-one thousand and twenty-eight). In addition, the respondent/assessee had also received Rs.20,00,00,000/- (Rupees twenty crore) as corpus donation from Hamdard Dawakhana (Wakf) during the said Assessment Year. Relying upon the enquiry made from one M/s CB Richard Ellis South Asia Private Limited and from the various websites, namely, makan.com; 99acres.com; magicbricks.com, the Assessing Officer held that the property at Asaf Ali Road, New Delhi and Rajdoot Marg, Chanakyapuri, New Delhi, had been let out by the respondent/assessee to Hamdard Dawakhana (Wakf) at a much lower rate as compared to the market rate of rent and therefore, invoked the provisions of Section 13(2)(b) read with Section 13(3) of the Act.
4. In the first round of litigation between the parties for the Assessment Year 2007-08, the learned Commissioner of Income Tax (Appeals) [hereinafter referred to as the ‘learned CIT(A)’] allowed the appeal of the respondent/assessee, however, the same was remanded by the learned ITAT on the ground that the said Order did not contain reasons. On such remand, the appeal preferred by the assessee was dismissed by the learned CIT(A) vide its Order dated 27.12.2018, which was challenged by the respondent/assessee before the learned ITAT by way of an appeal, being ITA No.1640/Del/2019.
5. Similarly, the learned CIT(A) dismissed the appeal of the respondent/assessee for the Assessment Year 2009-10 against which the respondent/assessee preferred an appeal before the learned ITAT, being ITA No. 5411/Del/2012. The learned CIT(A), however, accepted the appeals of the respondent/assessee for the Assessment Year 2008-09 and 2010-11. The appellant/revenue challenged these Orders in appeal(s), before the learned ITAT in the form of ITA No. 4789/Del/2012 and ITA No. 3403/Del/2014 respectively.
6. As noted hereinabove, the learned ITAT, by its common Order dated 01.11.2019, allowed the appeal(s) in favour of the respondent/assessee, holding that the Assessing Officer, in the facts of the case, could not have invoked Section 13(2)(b) read with Section 13(3) of the Act and directed deletion of the a
