Maharaja Ranjit Singh War Museum Society Vs CIT (Punjab And Haryana)

The Punjab and Haryana High Court heard an appeal from the Maharaja Ranjit Singh War Museum Society concerning the tax treatment of funds transferred to the Punjab State War Heroes Memorial & Museum Society (PSWHMMS). The Income Tax Appellate Tribunal had upheld the addition of these funds to the appellant society's income, citing violations of tax laws. The High Court considered whether the recipient society's registration status was relevant and if the rejection of a revised form was justified.

IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH

ITA No.259 of 2019 (O&M)
Date of Decision : 20/3/2020

Maharaja Ranjit Singh War Museum Society, Ludhiana
Appellant

Versus

Commissioner of Income Tax, Jalandhar
Respondent

CORAM: HON’BLE MR. JUSTICE AJAY TEWARI, JUDGE
HON’BLE MR. JUSTICE AVNEESH JHINGAN, JUDGE

Present: Mr. Deepak Agrawal, Advocate for the appellant.

AVNEESH JHINGAN, J.

[1] Appeal under section 260A of the Income Tax Act, 1961 [for brevity ‘the Act’] is filed against the order dated 28.08.2018 of the Income Tax Appellate Tribunal, Amritsar [hereinafter referred to as ‘the Tribunal’] claiming following substantiation questions of law :-

“a. Whether the Ld. ITAT was justified in upholding that the amount give to PSWHMMS is the income of the appellant-society in terms of section 11(3)(d) by holding that the status of the recipient-society is immaterial forthe purposes of application of section 11(3)(d), when thedepartmental circular itself differentiate between the societies as enumerated in section 11(3)(d) and other societies?

b. Whether in the present circumstances the Ld. ITAT was justified in rejecting the revision of form No.10 when the calculations have been changed by the authorities below?

[2] The relevant facts are that appellant is a Society workingunder the Government of Punjab, same being principal donor also. The Society is running the Museum by the name of Maharaja Ranjit Singh War Museum and was registered under section 12AA of the Act on 06.08.1998. The object of the Society is to create sense of patriotism and nationality among the citizens; to preserve and display war history of Punjab. For the assessment year 2014-15, the annual receipts of the Society were `67,65,299/- and assessee had accumulated sum of `1,08,63,246/-. During the relevant year, Rupees one crore was given to Punjab State War Heroes Memorial & Museum Society, Amritsar [for brevity ‘PSWHMMS’] on directions of the Government of Punjab. The donee-Society was not registered under section 12AA at the relevant time though subsequently registered. The income tax return was selected for scrutiny, assessment was framed on 19.12.2016. Apart from other additions the amount transferred to PSWHMMS was considered as income of the appellant, holding that there was violation of section 11(2) and 11(3)(d) of the Act. The first appeal filed was partly allowed on 07.07.2017, however the impugned addition was upheld. In further appeal, the Tribunal partly allowed the appeal on 28.08.2018 but the addition in question was sustained.

[3] Though three substantial questions of law have been claimed, the issue involved and pressed is:-

[4] The relevant portion of section 11 of the Act is reproduced below:-

To know more in details find the attachment file