vikrant 1/5 18(1) ITXA 1851 2014+.odt IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1851 OF 2014 Commissioner of Income Tax I, Pune Appellant Vs. Bharati Vidyapeeth, Pune Respondent Mr. Sham Walve for Appellant. Mr. Balkrishna V. Jhaveri a/w Mr. Arjun Gupta and Mr. Ali Mehndi for Respondent. CORAM : S. C. DHARMADHIKARI & PRAKASH D. NAIK, JJ. DATE : SEPTEMBER 25, 2017. P.C. : 1. This Appeal of Revenue challenges order passed by Income Tax Appellate Tribunal dated 21st March, 2014. 2. We would have to refer to some basic facts so as to give ultimate answer to submission of Revenue's counsel. 3. respondent assessee had, at relevant time, claimed that it was founded through deed of trust on 10 th May, 1964 to propagate education in various fields in modern India, and particularly in Maharashtra. It obtained certificate of registration under Section 12A of Income Tax Act, 1961 (for short, IT Act ) from Commissioner of Income Tax, Pune on 13 th September, 1973. There have been numerous educational and ::: Uploaded on - 29/09/2017 ::: Downloaded on - 02/10/2017 12:05:04 ::: vikrant 2/5 18(1) ITXA 1851 2014+.odt allied institutions in diverse fields set up and are regularly functioning. Even deemed university is set up since granting of registration. exemption from payment of taxes on income gained by them under Sections 11 and 12 of IT Act has thus been enjoyed in terms of this registration. 4. For assessment year in question, namely, assessment year 2008 2009, return of income was filed showing taxable income as nil. During course of assessment proceedings, Assessing Officer noted that trust is maintained by Board of Trustees. He observed that registration of trust has been cancelled by commissioner of Income Tax, Pune under Section 12AA(3) by order dated 8th November, 2007. Since registration has been cancelled, Assessing Officer was of opinion that assessee is to be treated like any other assessee and cannot take assistance of above two legal provisions. Relying upon his findings for assessment years 2006 2007 and 2007 2008, assessment was finalized treating assessee as Association Of Persons. 5. show cause notice was issued by Assessing Officer dated 6th December, 2010 calling upon assessee why its income should not be brought to tax in above terms. 6. Assessing Officer, on receipt of explanation, was not satisfied and proceeded to pass his order. ::: Uploaded on - 29/09/2017 ::: Downloaded on - 02/10/2017 12:05:04 ::: vikrant 3/5 18(1) ITXA 1851 2014+.odt 7. Aggrieved by that and by cancellation of registration, assessee approached Income Tax Appellate Tribunal, Bench at Pune. Tribunal was pleased to allow its Appeal and cancel order of Commissioner of Income Tax. It restored registration of assessee as charitable trust. 8. Therefore, assessee contended that exemption under Section 11 has to be allowed on restoration of such registration. 9. It is in these circumstances that Assessing Officer's order was set aside by Commissioner of Income Tax (Appeals). Thereafter, that order of Commissioner of Income Tax (Appeals) dated 24th November, 2011 came to be challenged by Revenue in subject Appeal before Tribunal, which has been dismissed by impugned order. 10. questions of law termed as substantial have been proposed in following words: (i) Whether on facts and in circumstances of case and in law, Hon'ble Income Tax Appellate Tribunal was justified in relying on its decision for restoration of registration u/s. 12A without appreciating that department has filed appeal before Hon'ble High Court in respect of said decision? (ii) Whether on facts and in circumstances of case and in law, Hon'ble Income Tax Appellate Tribunal was justified in holding that disallowance of 15% of total income u/s 11(1) of Act (Rs.30,98,09,448/ ), disallowance of capital expenditure ::: Uploaded on - 29/09/2017 ::: Downloaded on - 02/10/2017 12:05:04 ::: vikrant 4/5 18(1) ITXA 1851 2014+.odt claimed as deduction from other earmarked funds (Rs.19,44,03,517/ ), addition of Rs.20,00,000/ made to corpus fund and disallowance of capital expenditure of Rs.15,16,76,304/ claimed as application of income were not required to be adjudicated as assessee was held to be entitled to benefit of exemption u/s 11 of Income Tax Act, 1961 for reasons given in A.Y.2006 2007 & A.Y.2007 2008 when such finding of Hon'ble Tribunal has already been appealed against before this Hon'ble Court? 11. It is conceded that unless Revenue gets over difficulty it faces insofar as question no. (i) as is reproduced is concerned, there is no occasion for it to argue that question no.(ii) is substantial question of law. We repeatedly asked Mr. Walve as to how Revenue has framed and proposed above question no.(i), how does it arise in facts and circumstances of present case and from order of Tribunal? Merely because Revenue has challenged order passed by Tribunal restoring assessee's registration under Section 12A of IT Act and that Appeal is admitted and pending means we must, as of right or course, entertain this Appeal, was our specific query. Which principle of law will enable Revenue to urge that order of Tribunal should be interfered with, has not been clarified. only argument is, namely, if Revenue succeeds in Appeal challenging order of Tribunal restoring assessee's registration, then it may be open for Revenue to tax its income and by holding that both Sections 11 and 12 of IT Act have no application thereto. We do not think that such ifs and buts would permit Revenue to get over presently binding ::: Uploaded on - 29/09/2017 ::: Downloaded on - 02/10/2017 12:05:04 ::: vikrant 5/5 18(1) ITXA 1851 2014+.odt order of Tribunal. That order of restoration of registration binds Revenue. That order has not been quashed and set aside by this Court. Appeal is merely admitted. To our mind, question as proposed in present matter is not substantial question of law. So long as law does not oblige entertaining of Appeal of Revenue proposing above question, we do not think we should entertain it. There is difference and vast as it is, between order being subjected to challenge and challenge having succeeded. In later case, order is wiped out because then it is quashed and set aside. Today, challenge is merely pending. That cannot be equated to challenge succeeding. That hurdle is yet to be crossed. If that is not crossed, initial order of restoration of registration continues to bind Revenue. As result of above discussion, we do not find that questions proposed are substantial questions of law. Appeal is dismissed but without any order as to costs. (PRAKASH D. NAIK, J.) (S. C. DHARMADHIKARI, J.) ::: Uploaded on - 29/09/2017 ::: Downloaded on - 02/10/2017 12:05:04 ::: TheCommissionerofIncome-tax-I,Pune v. BharatiVidyapeeth