MADHAY PRADESH JESUITS LOYOLA ASHRAM, BILASPUR(CG) V. ACIT CIRCLE-1(1), BILASPUR(CG)

CO 11/BIL/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7068 (ITAT-RAIPUR)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 06-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B K BANKA
• Assessee Lawyers: M K SHARMA
• Keywords: Depreciation; Charitable institution; Rule of consistency; Assessment record; Benefit of exemption; Capital expenditure
• Section: 143(3); 142(1); 12A; 27; 144; 11

Judgement Text

1 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. IN THE INCOME TAX APPELLATE TRIBUNAL BILASPUR BENCH, BILASPUR BEFORE SHRI SHAILENDRA KUMAR YADAV, J.M. AND SHRI R.K. PANDA, A.M. ITA NO. 26/BLPR/2011 ASSESSMENT YEAR 2007-08 ASST. COMMISSIONER OF INCOME- TAX, CIRCLE 1(1) MAHIMA COMMERCIAL COMPLEX, VYAPAR VIHAR, BILASPUR (C.G.), PIN 495 004. VS MADHYA PRADESH JESUITS LOYOLA ASHRAM, RAJEEV VIHAR, BILASPUR (C.G.) (APPELLANT) (RESPONDENT) PAN NO. AAATM6475F C.O. NO. 11/BLPR/2011 ARISING OUT OF ITA NO. 26/BLPR/2011 ASSESSMENT YEAR 2007-08 MADHYA PRADESH JESUITS LOYOLA ASHRAM, RAJEEV VIHAR, BILASPUR (C.G.) VS ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 1(1) MAHIMA COMMERCIAL COMPLEX, VYAPAR VIHAR, BILASPUR (C.G.), PIN 495 004. (CROSS OBJECTOR) (RESPONDENT) PAN NO. AAATM6475F ASSESSEE BY SHRI M.K. SHARMA (SR. D.R.) RESPONDENT BY SHRI B.K. BANKA DATE OF HEARING 7.02.2012 DATE OF PRONOUNCEMENT 10.02.2012 ORDER PER R K PANDA, AM THE APPEAL FILED BY THE REVENUE AND THE C.O. FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DTD. 29.11.2010 OF THE L D. CIT(A), BILASPUR RELATING 2 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. TO A.Y. 2007-08. FOR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FI LED THE RETURN OF INCOME ON 18.10.2007 DECLARING NIL INCOME AFTER C LAIMING EXEMPTION U/S. 11 OF THE INCOME TAX ACT, 1961. ACCORDING TO THE A. O. HE ISSUED NOTICE U/S 143(2) ON 24.09.2008 FIXING THE CASE FOR HEARING ON 30.09.2008. THE NOTICE WAS SERVED ON 27.09.2008 AS PER ACKNOWLEDGEMENT AVA ILABLE ON RECORD AS STATED BY THE A.O. SUBSEQUENTLY THE A.O. ISSUED NO TICE ON 10.03.2009 AND 21.05.2009. HOWEVER, THERE WAS NO COMPLIANCE. THE A.O. SUBSEQUENTLY ISSUED NOTICE ON 22.06.2009 FIXING THE CASE FOR HEA RING ON 15.07.2009 AND THERE WAS NO COMPLIANCE. THE A.O. AGAIN ISSUED NOTI CE U/S 142(1) OF THE ACT ON 27.07.2009 WHICH WAS SERVED ON THE ASSESSEE ON 3 0.07.2009. IN RESPONSE TO THIS NOTICE ALSO THERE WAS NO COMPLIANC E AS MENTIONED BY THE A.O. THEREFORE, THE A.O. PROCEEDED TO COMPLETE THE ASSESSMENT U/S 144 OF THE ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECOR D. 2.1 THE A.O. NOTED THAT THE ASSESSEE-TRUST HAS 18 U NITS AND THE ASSESSEE HAS FILED SEPARATE AUDIT REPORT FOR EACH UNIT APART FROM CONSOLIDATED AUDIT REPORT. THE RETURN WAS ACCOMPANIED BY CONSOLIDATED AUDIT REPORT IN FORM NO. 10B. THE TOTAL INCOME SHOWN AS RECEIVED FROM O THER SOURCES WAS AT RS. 6,88,51,204/- WHICH HAS BEEN CLAIMED EXEMPT U/S 11 OF THE ACT. SINCE THERE WAS NO COMPLIANCE TO THE VARIOUS NOTICES ISSU ED BY THE A.O., THE A.O. 3 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. HELD THAT THE ASSESSEE IS NOT FULFILLING THE REQUIS ITE CONDITIONS PRESCRIBED U/S 11 OF THE ACT. THE ASSESSEE HAS NOT OBTAINED T HE REGISTRATION OF THE TRUST U/S 12A. THE INCOME DERIVED BY THE ASSESSEE IS MAINLY FROM INTEREST ON DEPOSITS IN THE NAME OF THE ASSESSEE-TRUST AND A LSO FROM DONATIONS FROM DIFFERENT SOURCES AND THE ASSESSEE HAS NOT FILED TH E TRUST DEED/BYE-LAWS OF THE SOCIETY TO ESTABLISH THE CREATION OF THE TRUST AND HOLDING OF THE PROPERTY UNDER THE TRUST OR UNDER OTHER LEGAL OBLIGATION FOR CLAIMING THE DEDUCTION. ACCORDING TO HIM A PERUSAL OF VARIOUS BALANCE SHEET S FILED OF VARIOUS TRUSTS SHOWS THAT IN MOST OF THE CASES THE INCOME WAS NOT APPLIED FOR CHARITABLE OR RELIGIOUS PURPOSES. FURTHER, SUBSTANTIAL FUNDS WERE LYING AS CASH IN HAND IN SEVERAL INSTITUTES WHICH WERE FREELY AVAILABLE FOR USE OF THE OFFICE BEARERS. THE LIST OF OFFICE BEARERS OF THE BODY WAS ALSO NOT FILED BEFORE THE HIM. HE OBSERVED THAT IN MOST OF THE CASES SUBSTANTIAL AMOU NTS WERE SHOWN AS ADVANCES TO DIFFERENT BODIES. IN VIEW OF THE ABOVE , THE A.O. REJECTED THE CLAIM OF THE ASSESSEE-TRUST U/S 11 OF THE ACT AND D ETERMINED THE TOTAL INCOME AT RS. 3,22,30,280/-. 2.2 BEFORE THE LD. CIT(A) THE ASSESSEE FILED DETAIL ED SUBMISSIONS. AN AFFIDAVIT DTD. 04.03.2010 MADE BY THE ASSESSEE WAS FILED ACCORDING TO WHICH NO NOTICE U/S 143(2) WAS RECEIVED BY THE ASSESSEE. IT WAS SUBMITTED THAT THE REGISTRATION WAS GRANTED TO THE ASSESSEE-TRUST W.E.F. 1.4.1973. IT WAS SUBMITTED THAT IN RESPONSE TO NOTICE DTD. 27.7.2009 ISSUED BY THE A.O. THE ASSESSEE HAD FILED ITS REPLY ON 12 TH AUGUST, 2009 AND THEREAFTER NO NOTICE 4 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. WAS RECEIVED BY THE ASSESSEE. THE ASSESSMENT COMPL ETED U/S 143(3) FOR A.Y. 2003-04 TO 2006-07 WERE ALSO FILED BEFORE THE LD. C IT(A). RELIED ON A COUPLE OF DECISIONS IT WAS SUBMITTED THAT THE ASSESSEE-TRU ST FULFILS ALL THE CONDITIONS LAID DOWN U/S 12A OF THE ACT. THEREFORE, THE ORDER OF THE A.O. SHOULD BE SET ASIDE. 2.3 AFTER CONSIDERING THE ARGUMENTS ADVANCED BY THE ASSESSEE AND THE DOCUMENTS SUBMITTED BEFORE HIM, THE LD. CIT(A) CALL ED FOR A REMAND REPORT FROM THE A.O. THE A.O. SUBMITTED HIS REMAND REPORT DTD. 5.10.2010 WHICH READS AS UNDER:- TO THE COMMISSIONER OF INCOME-TAX (APPEALS), BILASPUR C.G. SIR, SUB:- SUBMISSION OF REMAND REPORT IN THE CASE OF MA DHYA PRADESH JESUITS LOYOLA ASHRAM, BILASPUR FOR ASSTT. YEAR 2007-08. KINDLY REFER TO THE HONBLE CIT(A), BILASPUR S LET TER IN ITA NO. 121/09-10/CIT(A)/BSP/ESTT/09-10/119 DATED 11.3. 2010 ON THE ABOVE SUBJECT. THE REPORT CALLED IS SUBMITTED AS UNDER:- ON PERUSAL OF ASSESSMENT RECORD IT IS FOUND THAT TH E ACKNOWLEDGEMENT IN SUPPORT OF FIRST NOTICE U/S 143( 2) DATED 24.9.2008 IS FOUND PLACED ON RECORD. THE NOTICE U/ S 142(1) DATED 27.7.2007 WAS ALSO RECEIVED BY THE ASSESSEE. IT HA S ALSO BEEN NOTICED THAT THOUGH VERY FEW DOCUMENTS WERE MADE AV AILABLE TO MY PREDECESSOR ACIT BUT THE FOLLOWING DOCUMENTS NO W FILED BEFORE THE LEARNED CIT(A) WERE NOT AT ALL PUT-FORTH BEFORE MY PREDECESSOR ACIT AT THE TIME OF COMPLETION OF THE A SSESSMENT. (I) COPY OF AFFIDAVIT TO THE EFFECT THAT NOTICES U/S 143(2) WERE NOT RECEIVED AND ONLY NOTICE U/S 142(1) WAS RECEIVED BY THE ASSESSEE WHICH WAS DULY COMPLIED ON 12.8.2009. (II) COPY OF COMPLIANCE LETTER TO NOTICE U/S 142(1) WHICH WAS RECEIVED IN THE DEPARTMENT ON 12.8.2009. 5 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. (III) COPY OF LETTER DATED 28.1.2010 AND 18.2.2010 REQUESTING FOR CERTIFIED COPY OF ORDER SHEET AND NOTICES. (IV) COPY OF LETTER OF MINISTRY OF HOME AFFAIRS, NEW DELHI REGARDING ALLOTMENT OF NEW REGISTRATION NUMBER UNDER THE FOREIGN CONTRIBUTION (REGULATION) ACT 1976. (V) COPY OF FORM FC-3 SHOWING ACCOUNT OF FOREIGN CONTRIBUTION FOR THE YEAR ENDING 31.3.2007. (VI) COPY OF I.T. RETURN FILED FOR A.Y. 2007-08. (VII) COPY OF AFFIDAVIT TO THE EFFECT THAT THE SOCIETY WAS SHIFTED TO LOYOLA ASHRAM, RAJIV VIHAR, SECL SUB POST, BILASPUR, C.G. (VIII) COPY OF AMENDED MEMORANDUM OF ASSOCIATION OG MP SHOWING OBJECTS LIKE CHARITY WORK TO PERFORM WORKS OF CHARITY, SOCIAL, MORAL, SPIRITUAL AND CORPORAL ETC. THIS MEMORANDUM SHOWS THE NAME OF MEMBERS OF THE SOCIETY. (IX) REGISTRATION CERTIFICATE OF REGISTRAR OF SOCIETIES HAVING REGISTRATION NO. 77/59 DATED 31.3.1960. SINCE THE ABOVE SUPPORTING DOCUMENTS WERE NOT FILED BEFORE MY PREDECESSOR ACIT DURING THE COURSE OF ASSESSMENT PR OCEEDINGS AND THE ASSESSMENT WAS GOING TO BE BARRED BY LIMITA TION, THE ACIT HAD NO OTHER ALTERNATIVE BUT TO COMPLETE THE ASSESS MENT EXPARTE U/S 144 OF THE ACT, 1961. THE OTHER IMPORTANT ISSUE IN THIS CASE IS REGARDIN G NON- ALLOWANCE OF EXEMPTION U/S 11 OF THE I. TAX ACT, 19 61 AS IN THE OPINION OF MY PREDECESSOR ACIT, THE ASSESSEE WAS NO T FULFILLING THE REQUISITE CONDITIONS. HE WAS OF THE VIEW THAT THE FIRST AND FOREMOST CONDITION REQUIRED TO BE FULFILLED U/S 11 OF THE ACT WAS THAT THE PERSON IN RECEIPT OF SUCH INCOME WAS REQUI RED TO OBTAIN REGISTRATION OF THE TRUST U/S 12A OF THE I.T. ACT, 1961. HE STATED THAT THE ASSESSEE HAD NOT STATED HOW THE REGISTRATI ON OF M.P. JESUITS, KUNKRI WAS APPLICABLE IN THE CASE OF THE A SSESSEE AS THE ADDRESS OF THE ASSESSEE WAS M.P. JESUITS LOLYOLA AS HRAM, RAJEEV VIHAR SECL SUB POST, BILASPUR. IN HIS OPINION SUBS TANTIAL FUNDS WERE LYING AS CASH IN HAND IN SEVERAL INSTITUTES A ND WERE FREELY AVAILABLE FOR USE OF THE OFFICE BEARERS AT THEIR WH IMS AND FANCIES. CONSIDERING THE ABOVE FACTS AND IN THE ABSENCE OF L IST OF OFFICE BEARERS AND FOR THE DETAILED REASONS DISCUSSED IN T HE ASSESSMENT ORDER, THE ACIT CONCLUDED THAT THE INCOME AND DONAT IONS RECEIVED BY THE SOCIETY IS NOT LIABLE FOR EXEMPTION U/S 11 OF THE I.T. ACT, 1961 AND THE SAME WAS ADDED AND TAXED. FURTHER, IT IS PERTINENT TO MENTION HERE THAT 85% OF THE FUNDS RECEIVED HAS NOT BEEN UTILISED FOR CHARITABLE ACTIVITIES IN 6 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. MOST OF THE UNITS OF THE SOCIETY AS IS EVIDENT FROM INCOME & EXPENDITURE STATEMENT FILED FOR EACH UNIT. CONSIDERING THE ABOVE, THE CASE MAY BE DECIDED ON MERIT. CASE RECORDS IN ONE VOLUMES ARE SUBMITTED HEREWITH. ENCL. AS ABOVE. YOURS FAITHFULLY, SD/- (RAASHID SHIBLI) ASSISTANT COMMISSIONER OF I. TAX CIRCLE 1(1), BILASPUR (C.G.) 2.4 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE AN D THE REMAND REPORT FROM THE A.O., THE LD. CIT(A) UPHELD THE ASS ESSMENT COMPLETED U/S 144 OF THE ACT. HE HOWEVER DIRECTED THE A.O. TO AL LOW EXEMPTION CLAIMED U/S 11 OF THE ACT BY THE ASSESSEE. WHILE DOING SO HE OBSERVED THAT RECORD EVIDENCES THE FACT THAT THE ASSESSEE IS A VERY OLD SOCIETY WORKING SINCE 1959 REGISTERED UNDER THE SOCIETIES REGISTRATION ACT 186 0 HAVING REGISTRATION NO. 77/1959 DTD. 31.3.1960 WHICH WAS MENTIONED IN THE R ETURN FILED AND THAT THE REGISTRATION CERTIFICATE AND BYE-LAWS OF THE SO CIETY WERE FILED MANY TIMES IN DIFFERENT PROCEEDINGS IN THE PAST. THE ASSESSEE HAVING COMPLIED WITH ALL THE STATUTORY FORMALITIES, WAS GRANTED REGISTRATION U/S 12A OF THE ACT VIDE REGISTRATION NO. 33/1973 DATED 10.07.1974. AS ADMI TTED BY THE A.O., THIS REGISTRATION NUMBER WAS ALSO MENTIONED IN THE RETUR N FILED FOR THE YEAR UNDER CONSIDERATION. REFERRING TO THE AOS ASSERTI ON THAT THE REGISTRATION GRANTED FOR M.P. JESUITS, KUNKURI WAS NOT APPLICABL E TO ASSESSEE SOCIETY, HE OBSERVED THAT AS PER CLARIFICATION BY THE ASSESSEE THE SOCIETY IS SAME BUT FOR THE CHANGE OF ADDRESS ONLY AS EARLIER THE SOCIETY WAS WORKING IN KUNKURI 7 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. AND LATER SHIFTED TO PATHALGAON AND ULTIMATELY NOW TO BILASPUR. SINCE THERE WAS NO STATUTORY REQUIREMENT IN THE ACT TO INCORPOR ATE CHANGE OF ADDRESS IN THE CERTIFICATE ISSUED U/S 12A, THE LD. CIT(A) OBSE RVED THAT NO ADVERSITY SHOULD HAVE BEEN HELD AGAINST THE ASSESSEE IN THIS REGARD. IN THE EVENT OF ANY DOUBT OR DISPUTE BEFORE ANY ADVERSITY WAS HELD AGAINST THE ASSESSEE IN THIS REGARD, IT WAS ALL THE MORE INCUMBENT UPON THE A.O. TO HAVE ASCERTAINED THE ASCERTAINABLE FACTS FROM THE ASSESSEE THROUGH L OCAL ENQUIRIES CONDUCTED BY DEPUTING HIS INSPECTOR OF IT. THIS EVEN WAS NOT DONE AND HENCE THE IMPUGNED ASSESSMENT COULD NOT BE TERMED AS BEST JUD GMENT ASSESSMENT. ACCORDING TO THE LD. CIT(A) RECORD EVIDENCES THE FA CT THAT IN THE PAST THE ASSESSEE SOCIETY WAS BEING SUBJECTED TO SCRUTINY AS SESSMENTS IN BILASPUR CIRCLE AND NEITHER THE REGISTRATION GRANTED U/S 12A NOR THE EXEMPTION CLAIMED/ALLOWED U/S 11 WAS EVER DISPUTED. SIMPLY B ECAUSE THE IMPUGNED ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT, THE A. O. AS PER LD. CIT(A) WAS NOT EMPOWERED TO IGNORE THE REGISTRATION ALREAD Y GRANTED TO THE ASSESSEE SOCIETY U/S 12A. ACCORDING TO HIM RECORD E VIDENCES THE FACT THAT IN ALL THE PRECEDING YEARS THE CONDITIONS PRESCRIBED F OR AVAILING EXEMPTION U/S 11 OF THE ACT WERE FULFILLED AND THE ASSESSEE SOCIE TY WAS CONSISTENTLY ALLOWED SUCH EXEMPTION AND NOTHING NEW WAS BROUGHT ON RECOR D BY THE A.O. TO DOUBT THE GENUINENESS OF THE BENEFITS CLAIMED U/S 1 1 AND 12A OF THE ACT. ALTHOUGH PRINCIPLES OF RESJUDICATA HAVE NO APPLICAT ION TO THE IT PROCEEDINGS, BUT RULE OF CONSISTENCY DOES APPLY. NO FRESH FACTS/ EVIDENCE WAS BROUGHT ON RECORD BY THE AO TO DEPART FROM THE PAST ACCEPTED P OSITION OF FACTS. SINCE 8 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. THE ASSESSEE SOCIETY WAS DULY REGISTERED BOTH UNDER THE SOCIETIES REGISTRATION ACT AND ALSO UNDER THE IT ACT, 1961, T HE PROPERTIES HELD BY THE SOCIETY AND THE INVESTMENTS MADE THEREIN TOGETHER W ITH THE RECEIPT OF THE DONATIONS/INCOME, AS PER THE VIEW OF LD. CIT(A), QU ALIFY FOR EXEMPTION AS CLAIMED. TO VERIFY THE CORRECTNESS IN THE ASSERTIO N OF THE A.O. THAT IN MANY UNITS OF THE ASSESSEE SOCIETY 85% OF THE FUNDS RECE IVED WERE NOT UTILISED FOR CHARITABLE PURPOSES HE OBSERVED ON VERIFICATION OF THE RELEVANT DETAILS AND AUDITED ACCOUNTS PLACED ON RECORD THAT SUCH SURPLUS ACCUMULATION WAS LESS THAN 15% WHICH WAS WITHIN THE STATUTORY LIMITS. REF ERRING TO THE DISALLOWANCE OF CAPITAL EXPENDITURE AND TREATING TH E SAME AS CURRENT INCOME HE HELD THAT THE TERM APPLICATION HAS A RELATIVEL Y WIDER CONNOTATION FOR THE PURPOSES OF SECTION 11 WHICH IS THE SETTLED POSITIO N OF LAW. EVEN CAPITAL EXPENDITURE WHICH IS OTHERWISE NOT CONSIDERED AS AN ALLOWABLE EXPENSE IS ALSO TREATED AS EXPENDITURE. HE OBSERVED THAT IT IS NOT NECESSARY THAT THE APPLICATION OF INCOME SHOULD BE IN THE FORM OF REVE NUE EXPENDITURES ONLY. ANY EXPENDITURE WHETHER CAPITAL OR REVENUE IN NATUR E WOULD BE TREATED AS APPLICATION SUBJECT TO THE CONDITION THAT THE APPLI CATION SHOULD SERVE THE PURPOSES OF THE OBJECTS OF THE ORGANISATION. NO EVI DENCE WAS BROUGHT BY THE A.O. TO PROVE THAT THE IMPUGNED APPLICATION OF INCO ME WAS FOR PURPOSES OTHER THAN THE OBJECTS OF THE ASSESSEE SOCIETY. HEN CE THE ORDER OF ASSESSMENT ON THIS POINT IS REVERSED. 9 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. 2.5 THE LD. CIT(A) FURTHER HELD THAT ASSESSMENT OF THE FOREIGN DONATIONS OF RS. 76,06,120/- RECEIVED BY THE ASSESSEE SOCIETY AS CURRENT INCOME IS UNJUSTIFIED SINCE THE ASSESSEE WAS DULY REGISTERED UNDER THE FOREIGN CONTRIBUTION REGULATION ACT 1956 WITH THE MINISTRY OF HOME AFFAIRS, NEW DELHI AND THE DETAILS OF RECEIPT AND UTILISATION PU RPOSE-WISE SUBMITTED ANNUALLY IN THE PRESCRIBED FORM WERE NEVER DISPUTED . AS PER PROVISIONS OF SECTION 11(1)(D) OF THE ACT THE SAME IS CAPITAL REC EIPT AND DID NOT FORM PART OF INCOME. HE OBSERVED THAT LETTER FROM THE DONOR T O THE EFFECT THAT IT WAS A CORPUS GRANT WAS PLACED ON RECORD. DETAILS OF INVE STMENT WERE GIVEN IN THE BALANCE SHEET AND AS PER THE STATUTORY REQUIREMENTS DECLARATION IN THE RETURN OF INCOME WAS ALSO GIVEN AFFIRMING THAT NONE OF THE INVESTMENTS WERE KEPT OTHERWISE THAN WHAT WAS PERMISSIBLE U/S 11(5) OF THE ACT. HENCE, ACCORDING TO THE LD. CIT(A) THE A.O.S ALLEGATION A GAINST THE ASSESSEE IN THIS REGARD IS INCORRECT. HE OBSERVED THAT SINCE SOME OF THE SIGNIFICANT DOCUMENTS MENTIONED WERE NOT FILED BEFORE THE A.O. IN ASSESSMENT PROCEEDINGS COMPLETED EX-PARTE, COMPLETE SET OF THE SAME WERE SENT TO THE A.O. FOR HIS COMMENTS AND DESPITE AVAILING AMPLE TI ME AND OPPORTUNITY, THE A.O. HAD NOT BROUGHT ON RECORD ANY EVIDENCE TO PROV E THE CONTRARY. SINCE THE ENTIRE INCOME OF THE ASSESSEE SOCIETY IS HELD E XEMPT FROM TAXATION AND SINCE NO DEPRECIATION WAS CLAIMED, HE DIRECTED TO T HE A.O. TO WITHDRAW DEPRECIATION ALLOWED BY HIM. 10 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. 2.4 THE LD. CIT(A) FURTHER NOTED FROM THE MEMORANDU M OF ASSOCIATION AVAILABLE ON RECORD THAT THE VARIOUS OBJECTS FOR WH ICH THE SOCIETY WAS FORMED ARE OF CHARITABLE IN NATURE. HE FURTHER NOTED THAT THE LIST OF OFFICE BEARERS OF THE SOCIETY IS MENTIONED IN THE MEMORANDUM OF ASSOC IATION AVAILABLE ON RECORD. DISTINGUISHING VARIOUS DECISIONS RELIED ON BY THE A.O. HE OBSERVED THAT NO EVIDENCE WAS BROUGHT ON RECORD BY THE A.O. THAT THE EXPENSES WERE INCURRED FOR THE PURPOSE OTHER THAN THE OBJECTS OF THE SOCIETY. RELYING ON A COUPLE OF DECISIONS HE HELD THAT THERE IS NO EVIDEN CE BROUGHT BY THE A.O. TO DOUBT OR DISPROVE THE GENUINENESS OF THE BENEFIT CL AIMED U/S 11 AND 12A OF THE ACT. 2.5 AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS:- 1 (A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND IN ALLOWI NG THE RELIEF OF RS. 3,22,30,280/- BY DIRECTING THE A.O. TO ALLOW TH E EXEMPTION CLAIMED U/S 11 OF THE ACT IN SPITE OF THE FACTS ON RECORDS THAT FUNDS WERE LYING AS CASH IN HAND IN SEVERAL INSTITU TIONS OF THE ASSESSEE AND WERE FREELY AVAILABLE FOR USE OF THE O FFICE BEARERS AT THEIR WHIMS AND FANCIES AND IT IS ALSO IMPORTANT TO MENTION HERE THAT THE ASSESSEE AVOIDED TO FURNISH THE LIST OF TH E OFFICE BEARERS OF THE BODY BEFORE THE A.O. (B) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND IN DIRECTING THE A.O. TO ALLOW THE EXEMPTION CLAIMED U/S 11 OF THE ACT IN SPITE OF THE FACTS ON RECORDS THAT 85% OF THE FUNDS RECEIVED WERE NOT UTI LISED FOR CHARITABLE PURPOSES IN MOST OF THE UNITS OF THE ASS ESSEE SOCIETIES. (C) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND INSPITE OF TH E FACTS ON RECORDS THAT B/SHEETS OF THE DIFFERENT UNITS OF THE SOCIETY REVEALED THAT IN MOST OF THE CASES OUT OF SUBSTANTIAL SUMS R ECEIVED AS VOLUNTARY CONTRIBUTIONS AND PARENTS CONTRIBUTION, T OTAL EXPENDITURE INCURRED FOR CHARITABLE PURPOSES IS VER Y MEAGRE, TRANSFERRING THE SUBSTANTIAL BALANCE TO THE CAPITAL FUND AND OUT OF 11 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. EXPENDITURE INCURRED TOWARDS CHARITY, MAJOR PART OF EXPENSES RELATED TO REPAIR AND MAINTENANCE EXPENSES, VEHICLE MAINTENANCE AND KITCHEN EXPENSES ETC. (D) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN LAW AND IN DIRECTING THE A.O. TO ALLOW THE EXEMPTION CLAIMED U/S 11 OF THE ACT IN SPITE OF THE FACTS ON RECORDS THAT NONE OF THE INSTITUTION OF THE APPELLA TE SOCIETY IS ACTING WITHOUT PROFIT MOTIVE. [ 101 ITR 234 (SC), 1 01 ITR 796 (SC). 2. THAT THE LD. CIT(A)S ORDER BEING ERRONEOUS, PE RVERSE AND CONTRARY TO THE FACTS ON RECORD, THE SAME MAY BE RE VERSED WHILE THAT OF THE A.O. BE RESTORED. 3. THE ASSESSEE HAS ALSO FILED C.O. 11/BLPR/2011, T HE GROUNDS OF WHICH ARE AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, AND INSPITE OF FILING OF THE AFFIDAVIT BY THE APPELLANT -ASSESSEE DENYING RECEIPT OF ANY OR ALL OF THE THREE NOTICES DATED 24 .09.2008, 10.03.2009 AND/OR 22.06.2009 RESPECTIVELY, U/S 143( 2) OF THE INCOME TAX ACT, 1961, THE COMMISSIONER OF INCOME-TA X (APPEALS) ERRED IN FINDING THAT THE FIRST NOTICE DATED 24.09. 2008 U/S. 143(2) OF THE ACT HAD BEEN SERVED ON THE ASSESSEE, AND ON THE BASIS OF SUCH PERVERSE FINDING, HE FURTHER ERRED IN UPHOLDIN G THE EX-PARTE ASSESSMENT U/S 144 ON THE ASSESSEE, IN UTTER DISREG ARD OF THE LAW FOUND BY THE SUPREME COURT IN ASST. C.I.T. V. HOTEL BLUE MOON [(2010) 321 ITR 362]. 2. THAT, WITHOUT CONSIDERING THE PRAYER OF THE APP ELLANT- ASSESSEE FOR LEAVE TO INSPECT THE RECORDS, IN POSSE SSION OF THE ASSESSING OFFICER, RELATING TO ALLEGED SERVICE OF A NY OR ALL OF THE NOTICES DATED 24.09.2008, 10.03.2009 AND/OR 22.06.2 009 RESPECTIVELY, U/S 143(2) OF THE ACT, THE LD. CIT(A) ERRED IN FINDING THAT THE FIRST NOTICE DATED 24.09.2008 HAD BEEN VAL IDLY SERVED ON THE ASSESSEE. 3. THAT, WITHOUT PREJUDICE, THE LD. C.I.T.(A) FAILE D TO CONSIDER AND/OR APPRECIATE THE PURPORTS OF GROUND NO. 3 OF T HE GROUNDS OF APPEAL, IN ITS PROPER PERSPECTIVE, AND/OR TO GIVE A FINDING ON THE APPELLANT-ASSESSEES CLAIM OF DUE COMPLIANCE OF T HE NOTICE DATED 27.07.2009 U/S 142 OF THE ACT, AND THUS HE ERRED IN FINDING NO LEGAL INFIRMITY IN THE IMPUGNED ASSESSMENT ORDER P ASSED EX-PARTE U/S 144 OF THE ACT. 12 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. 4. THAT, WITHOUT PREJUDICE, THE LD. C.I.T. (A) WAS CORRECT ON FACTS AS WELL AS IN LAW IN HOLDING THAT THE RECORD SHOWED THAT THE APPELLANT-ASSESSEE HAD BEEN GRANTED REGISTRATION ON 10.07.1974 U/S 12-A OF THE ACT, WHICH CONTINUED TO REMAIN IN F ORCE IN THE ASSESSMENT YEAR 2007-08 UNDER APPEAL, AND THAT THE ORDER SHOWED THAT IF FULFILLED ALTHROUGHOUT THE CONDITION S FOR AVAILING OF EXEMPTION U/S 11 OF THE ACT, AND FURTHER THAT NO NE W MATERIAL WAS BROUGHT ON RECORD .. TO DOUBT THE GENUINENESS OF THE BENEFITS CLAIMED U/S.11 AND 12-A OF THE ACT AND, THEREFORE, HIS DIRECTION TO THE ASSESSING OFFICER TO ALLOW THE ASS ESSEES CLAIM OF EXEMPTION OF ITS INCOME U/S 11, WAS FULLY JUSTIFIED . 4. THE LD. D.R., AT THE OUTSET, SUBMITTED THAT DUE TO NON-COMPLIANCE OF NOTICES ISSUED BY THE A.O., HE HAD NO OTHER OPTION BUT TO COMPLETE THE ASSESSMENT U/S 144 OF THE ACT. IN THE REMAND REPOR T THE A.O. HAS CATEGORICALLY MENTIONED THAT THE ASSESSEE HAS NOT S TATED HOW THE REGISTRATION OF M.P. JESUITS, KUNKRI WAS APPLICABLE IN THE CASE OF THE ASSESSEE AS THE ADDRESS OF THE ASSESSEE WAS M.P. JE SUITS LOLYOLA ASHRAM, RAJEEV VIHAR, SECL SUB POST OFFICE, BILASPUR. FURT HER 85% OF THE FUNDS RECEIVED HAS NOT BEEN UTILISED FOR CHARITABLE ACTIV ITIES BY THE ASSESSEE. THEREFORE, THE ORDER OF THE A.O. SHOULD BE RESTORED . IN HIS ALTERNATE CONTENTION HE SUBMITTED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION. 5. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, WHILE SUPPORTING THE ORDER OF THE LD. CIT(A) DIRECTING THE A.O. TO A LLOW EXEMPTION CLAIMED U/S 11 SUBMITTED THAT DUE TO NON RECEIPT OF NOTICE FROM THE A.O. THE ASSESSEE COULD NOT PRODUCE THE REQUISITE DETAILS. HE SUBMIT TED THAT THE ASSESSEE IS A REGISTERED SOCIETY REGISTERED UNDER THE SOCIETIES R EGISTRATION ACT, 1860 VIDE 13 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. REGISTRATION NO. 77/5 DT. 31.3.1960 AND ALSO REGIST ERED U/S 12A OF THE I.T. ACT W.E.F. 1.4.1973. HE SUBMITTED THAT FOR THE IMP UGNED A.Y. THE ASSESSEE HAS FILED ITS RETURN OF INCOME ALONG WITH AUDIT REP ORT AND FORM NO. 10-B. IN RESPONSE TO NOTICE U/S 142(1) DTD. 27.7.2009 THE AS SESSEE FILED ITS WRITTEN SUBMISSION IN COMPLIANCE TO THE SAID NOTICE ON 12 TH AUGUST 2009. THEREAFTER NOTHING WAS RECEIVED. REFERRING TO THE AFFIDAVIT DT. 4.3.2010 HE SUBMITTED THAT NO NOTICE U/S 143(2) WAS RECEIVED BY THE ASSESSEE. THEREFORE IN ABSENCE OF SUCH NOTICE ISSUED AND SERVED ON THE ASSESSEE, THE ASSESSMENT IS VOID AB-INITIO. HE SUBMITTED THAT THE ASSESSEE FULFILLED ALL THE CONDITIONS FOR GETTING EXEMPTION U/S 11 OF THE ACT. NOTHING CONTRARY WAS FOUND BY THE A.O. EVEN DURING REMAND PROCEEDINGS. THEREFORE THE ORDER OF THE LD. CIT(A) SHOULD BE UPHELD. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE LD. CIT (A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. FROM THE COPY OF THE ORDER SHEET ENTRY FILED AT PAPER BOOK PAGE AT 104 WE FIND THE A.O. HAD MENTIONED THAT NOT ICE U/S 143 (2) WAS ISSUED FIXING THE CASE FOR HEARING ON 30.09.2008. F ROM THE COPY OF THE REMAND REPORT WE FIND THE A.O. HAS MENTIONED THAT A CKNOWLEDGMENT IN SUPPORT OF RECEIPT OF FIRST NOTICE U/S 143(2) DTD. 24.9.2008 IS FOUND PLACED ON RECORD. WE FIND THE ASSESSEE IN RESPONSE TO NOT ICE U/S 142(1) DT. 27 TH JULY 2009 HAD FILED CERTAIN DOCUMENTS ON 12 TH AUGUST, 2009. SINCE FULL 14 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. DETAILS WERE NOT FILED BEFORE THE A.O. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS THE A.O. PASSED THE EX PARTE ORDER REFU SING THE BENEFIT OF EXEMPTION U/S 11. ALTHOUGH THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF PAST RECORDS AS WELL AS ON THE BASI S OF THE AUDIT REPORTS OF THE IMPUGNED ASSESSMENT YEAR AND THE REMAND REPORT, THE FACT REMAINS THAT THE DETAILS OF HUGE INCOME AND EXPENDITURE HAS NOT AT ALL BEEN VERIFIED BY THE A.O. THE POWER OF THE A.O. DURING REMAND PRO CEEDING IS LIMITED. ALTHOUGH THE RETURN IS ACCOMPANIED WITH THE AUDITED ACCOUNT, THE A.O. HAS EVERY RIGHT TO VERIFY THE GENUINENESS OF THE EXPENS ES. IF THE ASSESSEE IS HAVING REGISTRATION U/S 12A OF THE ACT AND SINCE T HE ACCOUNTS OF THE ASSESSEE ARE AUDITED THEN THERE IS NO REASON WHY TH E ASSESSEE SHOULD NOT PRODUCE THE BOOKS OF ACCOUNT AND THE OTHER RELEVANT VOUCHERS FOR THE EXAMINATION OF THE A.O. CONSIDERING THE TOTALITY O F THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE WE DEEM IT PROPER TO RES TORE THE ISSUE BACK TO THE FILE OF THE A.O. WITH THE DIRECTION TO GIVE ONE MOR E OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE ALLOWABILITY OF CLAIM OF EXEMPTION U/S 11 BY PRODUCING BOOKS OF ACCOUNT AND OTHER DETAILS. WE H OLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. SINCE THE APPEAL FILED BY THE REVENUE IS SET ASIDE TO THE FILE OF THE A.O., THE CROSS OBJECTION FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND DISMISSED. 15 ITA NO. 26/BBLP R/2011& CO 11/BLPR/2011 MADHYA PRADES H JESUITS LOYOLA ASHRAM. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSE AND THE C.O. FILED BY THE ASSES SEE IS DISMISSED. ORDER PRONOUNCED ON 10.02.2012. SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER SD/- ( R K PANDA ) ACCOUNTANBT MEMBER PLACE: BILASPUR : DATED: 10.02.2012 RK COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT, BILASPUR 4 CIT (A) BILASPUR 5 DR BENCH BILASPUR 6 MASTER FILE /TRUE COPY/ BY ORDER SENIOR PRIVATE SECRETARY, ITAT, BILASPUR