Director of Income Tax (Exemption) vs Lovely Bal Shiksha Parishad

This appeal by the Revenue u/s 260A of the IT Act, 1961 (the Act for short) is directed against order dt. 19th Jan., 2001, passed by the Tribunal, Delhi, ''F'' Bench, Delhi (hereinafter referred to as the Tribunal) in ITA No. 6994/Del/94-pertaining to the asst. yr. 1991-92.

By the impugned order the Tribunal has dismissed Revenue''s appeal against the order passed by the CIT(A) whereby the CIT(A) had come to the conclusion that the respondent-assessed was entitled to exemption u/s 10(22) of the Act. While holding so the CIT(A) had observed that there had been no instance of any expenditure being incurred by the assessed-society for purposes other than educational and no personal benefit had been derived by any member of the society or persons close to the society. It has been further observed that the society will also not lose exemption u/s 10(22) of the Act merely because it has claimed depreciation.

While agreeing with the CIT(A), the Tribunal has observed that the assessed had been granted exemption u/s 10(22) of the Act in the past as well. The Tribunal has found that during this year also the assessed-society has existed for carrying out only educational activities with no profit motive and merely because there were certain surpluses the society will not lose exemption u/s 10(22) of the Act. Hence, the appeal.

Assailing the order passed by the Tribunal, Mr. R.D. Jolly, learned Senior Standing Counsel for the Revenue, has strenuously urged that the aforenoted findings recorded by the Tribunal are not correct in as much as the. AO had noted in the assessment year some other activities carried on by the assessed, which could not be said to be educational activities. However, on a pointed query by the Court as to whether there was any change in the nature of activities of the assessed in the present assessment year as compared to the earlier years, learned counsel would submit that he has no instructions in this behalf.

Mr. Kalra, learned Senior Counsel for the respondent on the other hand, points out that not only in the past, even after the passing of assessment order for the present assessment year the assessed has been consistently getting exemption u/s 10(22) of the Act from the asst. yr, 1994-95 onwards.

In view of the aforenoted factual petition and keeping in view the fact that no change in the nature of activities has been pointed out and the assessed has been granted exemption u/s 10(22) of the Act not only in respect of the earlier years but subsequent years as well, we are of the opinion that the order of the Tribunal does not involve any substantial question of law.

In this regard we may usefully refer to the decision of the apex Court in M/s. Radhasoami Satsang Saomi Bagh, Agra Vs. Commissioner of Income Tax, , wherein their Lordships of the Supreme Court had observed that though strictly speaking res judicata does not apply to Income Tax proceedings but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. These observations squarely apply to the facts in hand.

Resultantly, we decline to entertain the appeal and the same is accordingly, dismissed.