ITO Ward 2(4), Nagpur V. M/s Gurudwara Trust, Nagpur

CO 11/NAG/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8570 (ITAT-NAGPUR)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-04-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 16-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: HARISH BHONEJA
• Keywords: Charitable institution
• Section: 12AA; 148

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR , BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI D.KARUNAK AR RAO , A M ITA NO S . 122 TO 124 / N AG / 20 1 1 ( ASSESSMENT YEAR S : 2006 - 07, 07 - 08 & 08 - 09) ITO WARD - 2(4), ROOM NO.408, 3 RD FLOOR, AAYKAR BHAVAN, CIVIL LINES, NAGP,UR - 440 001 . VS. M/S GURUDWARA TRUST, GADDIGODAM, KAMPTEE ROAD, NAGPU R. PAN/GIR NO. : A ABTG 1340 E ( APPELLANT ) .. ( RESPONDENT ) AND CROSS OBJECTION NOS. 09 TO 1 1 / NAG /20 1 2 ( ASSESSMENT YEARS :2006 - 07, 07 - 08 & 08 - 09) M/S GURUDWARA TRUST, GADD IGODAM, KAMPTEE ROAD, NAGPUR. VS. ITO WARD - 2(4), ROOM NO.408, 3 RD FLOOR, AAYKAR BHAVAN, CIVIL LINES, NAGP,UR - 440 001. PAN/GIR NO. : A ABTG 1340 E ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR. PRAKASH MANE /ASSESSEE BY : MR. HARISH BHONEJA DATE OF HEARING : 7 TH MARCH ., 201 3 DATE OF PRONOUNCEMENT : 03/04/ 201 3 O R D E R P ER BENCH : THE DEPARTM ENT HAS PREFERRED THREE APPEALS FOR THE ASSESSMENT YEARS 2006 - 07 TO 2008 - 09, RESPECTIVELY, WHEREAS THE ASSESSEE HAS PREFERRED THREE CROSS OBJECTIONS RELATING TO THE SAME ASSESSMENT ITA NO. 122, 123 & 124 /20 1 1 & CO NOS.9, 10&11/2012 2 YEARS, BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CI T(A) - I, NAGPUR (MAHARASHTRA), WHICH HAVE BEEN HEARD THROUGH E - COURT, MUMBAI. 2 . AT THE OUTSET, LEARNED COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT HE DOES NOT WANT TO PRESS THE CROSS OBJECTIONS BECAUSE THEY ARE IN SUPPORT OF THE ORDER OF THE LEARNED CIT(A ) . THEREFORE, THESE THREE CROSS OBJECTIONS FILED BY TH E ASSESSEE ARE HEREBY DISMISSED AS NOT PRESSED. 3 . NOW, WE WILL TAKE UP THE APPEALS OF THE DEPARTMENT, WHEREIN THE DEPARTMENT IS OBJECTING THE DIRECTION OF THE LEARNED CIT(A) TO REDUCE THE AMOUNTS OF E XPENDITURE UTILIZED FOR THE YEAR UNDER CONSIDERATION FROM THE ASSESSEE INCOME AND BRING THE BALANCE AMOUNT TO TAX. THE DEPARTMENT IS ALSO OBJECTING THAT SINCE THERE WAS NO REGISTRATION UNDER SECTION 12AA, THEREFORE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN GIVING SUCH DIRECTION. 4 . THE ASSESSEE IS A PUBLIC CHARITABLE TRUST, WHICH HAS APPLIED FOR REGISTRATION UNDER SECTION 12AA ON 31 - 3 - 009 . ON 11 - 11 - 2009 THE ASSESSEE FILED RETURN FOR THREE YEARS I.E. RS. NIL FOR THE ASSESSMENT YEAR 2006 - 07 , RS. 29,860/ - FOR A SSESSMENT YEARS 2007 - 08 AND RS. 5,98,260/ - FOR ASSESSMENT YEAR 2008 - 09 , RESPECTIVELY . SINCE THE RETURNS W E RE FILED BELATEDLY, THEREFORE, NOTICES UNDER SECTION 148 WERE ISSUED TO THE ASSESSEE TO REGULARIZE THE RETURNS. DURING THE ITA NO. 122, 123 & 124 /20 1 1 & CO NOS.9, 10&11/2012 3 ASSESSMENT PROCEEDING, THE AO NOTICED THAT THE ASSESSEE HAS BROUGHT CERTAIN RECEIPTS TO THE BALANCESHEET DIRECTLY, WHICH WAS TO THE TUNE OF RS. 35,38,858/ - , RS. 39,71,120/ - AND RS. 49,23,491/ - FOR THESE THREE ASSESSMENT YEARS RESPECTIVELY. TH E S E RECEIPTS WERE ON ACCOUNT OF BUILDING FUND , LANGAR & PRASAD FUND, GURUPURAB FUND AND COMPUTER FUND. ACCORDING TO THE AO THESE AMOUNTS TO BE TREATED AS RECEIPTS OF THE ASSESSEE AS THESE ARE VOLUNTARILY CONTRIBUTIONS RECEIVED BY THE TRUST AND THEREFORE CONSTITUTE AS INCOME WITHIN THE MEANING OF SECT ION 2(24)(IIA) OF THE ACT. THE CONTENTION OF THE ASSESSEE WERE REJECTED BY THE AO THAT CERTAIN FUNDS OUT OF THESE RECEIPTS WERE UTILIZED FOR THESE THREE YEARS. DETAIL S OF THOSE FUNDS WERE ALSO GIVEN. ACCORDING TO THE AO, THE FUNDS RECEIVED UNDER THE HEAD BUILDING FUND, LANGAR & PRASAD FUND, GURUPURAB FUND HAVE BEEN EARMARKED FOR EXPENDITURE. HOWEVER, THIS DOES NOT ALTER THE CHARACTER OF THE RECEIPTS. ACCORDINGLY, THE ENTIRE RECEIPTS WERE BROUGHT TO TAX BY THE AO. 5 . BEFORE THE C IT(A) , IT WAS SUBMITTED THAT WHILE THE AO HAS ADDED THE TOTAL RECEIPTS ON ACCOUNT OF EARMARKED FUND, DETAILS OF WHICH ARE AVAILABLE IN THE BALANCE SHEET, HOWEVER, HE HAS COMPLETELY IGNORED THE WORKING OF THE ASSESSEE THAT AS A NATURAL COROLLARY, THE EXPENSES OUT OF THESE EARMARKE D FUNDS ARE TO BE REDUCED TO ARRIVE AT THE TAXABLE SURPLUS. DETAILS OF EXPENSES HAVE BEEN ALSO FILED, WHICH ARE RECORDED IN THE ORDER OF THE LEARNED CIT(A) AT PAGE 4. AFTER CONSIDERING THE ITA NO. 122, 123 & 124 /20 1 1 & CO NOS.9, 10&11/2012 4 SUBMISSION AND PERUSING THE MATERIAL ON RECORD, THE LEARNED CIT(A) FOUND THAT THE AO WAS JUSTIFIED IN BRINGING THE SURPLUS TO TAX ON THE GROUND THAT THE ASSESSEE HAD NOT BEEN REGISTERED UNDER SECTION 12AA OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR, HOWEVER, IT IS CLEAR THAT THE AO RELIED ON THE FIGURES AVAILABLE IN THE BALANCE SHEET TO ADOPT THE AMOUNTS TREATED AS RECEIPTS, IN THE CASE OF LANGAR & PRASAD FUND AND GURUPURAB FUND . THE AO WITHOUT ANY COGENT REASONS IGNORED THE AMOUNTS, WHICH WERE UTILIZED DURING THESE YEARS AS EXPENSES . IT WAS SEEN BY THE LEARNED CIT(A) THA T LANGAR & PRASAD FUND AFTER REDUCING THE UTILIZED FUND I.E. EXPENSES DURING THESE YEARS. THE BALANCE OF RS. 1,58,360/ - FOR ASSESSMENT YEAR 2006 - 07, RS. 4,07,107/ - FOR ASSESSMENT YEAR 200 7 - 0 8 AND RS.2,49,463/ - FOR ASSESSMENT YEAR 2008 - 09, RESPECTIVELY. LIK EWISE GURUPURAB FUND AFTER REDUCING THE EXPENDITURE THE BALANCE REMAINS RS. 79,653/ - , RS. 4,86,244/ - AND RS. 1,43,111/ - FOR THESE THREE YEARS RESPECTIVELY. ACCORDINGLY, CIT(A) HELD THAT SINCE THE ASSESSEE IS NOT A REGISTERED TRUST UNDER SECTION 12AA, HOWEVER, THE EXPENSES INCURRED DURING THE YEAR HAVE BEEN UTILIZED IN THE YEAR, HAS TO BE RECEIVED GROSS RECEIPT AND THE REMAINING AMOUNT HAS TO BE BROUGHT TO TAX. ACCORDINGLY, THE AO WAS DIRECTED TO REDUCE THE AMOUNT S UTILIZED FOR ALL THESE YEARS AS PER THE FIGURE S AVAILABLE IN THE STATEMENT OF ACCOUNTS AND BRING THE BALANCE AMOUNT TO ITA NO. 122, 123 & 124 /20 1 1 & CO NOS.9, 10&11/2012 5 TAX. AGGRIEVED THEREBY THE DEPARTMENT IS IN APPEALS HERE BEFORE THE TRIBUNAL FOR ALL THE AFORESAID ASSESSMENT YEARS. 6 . LEARNED DR PLACED RELIANCE ON THE ORDER OF THE AO. ON THE OTHE R HAND, LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF CIT(A). 7 . AFTER CONSIDERING THE ORDER OF THE AO AND THE CIT(A) , WE FOUND NO UNREASONABLENESS IN THE FINDING OF THE LEARNED CIT(A) , WHO HAS RIGHTLY DIRECTED THE AO TO REDUCE THE FUNDS UTILIZED DURING THESE YEARS AND BALANCE AMOUNT BRIGHT TO TAX ACCORDINGLY. IT IS A NORMAL PROCEDURE IN LAW THAT ANY INCOME WHICH IS RECEIVED DURING THE RESPECTIVE YEAR HAS TO BE REDUCED BY THE EXPENDITURE FOR THAT YEAR. CIT(A) HAS DONE THE SAME THING. THER EFORE, WE SEE NO REASON TO INTERFERE IN THE FINDING OF THE LEARNED CIT(A) . ACCORDINGLY, THE ORDER OF THE LEARNED CIT(A) FOR THE AFORESAID ASSESSMENT YEARS ARE HEREBY CONFIRMED. 8 . RESULTANTLY , ALL THE APPEALS OF THE DEPARTMENT AS WELL AS CROSS OBJECTIONS FILED BY THE ASSESSEE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF AP R .201 3 . ITA NO. 122, 123 & 124 /20 1 1 & CO NOS.9, 10&11/2012 6 01 3 SD/ - SD/ - ( ) ( D.KARUNAKAR RAO ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 0 3 / 0 4 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI