GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY,NEW DELHI V. DCIT (E) CIRCLE-1(1), NEW DELHI

ITA 9234/DEL/2019

AI Insights

The case involves Guru Gobind Singh Indraprastha University, which appealed against the order of the Commissioner of Income Tax (Appeals) confirming the Assessing Officer's decision to tax the university's surplus income under normal provisions, denying exemptions under sections 11, 12, and 10(23C) of the Income Tax Act. The university argued that it was entitled to these exemptions as its registration under section 12A was granted from the assessment year 2013-14, and the activities and objects remained unchanged since then. The Tribunal found that the reopening of the assessment under section 148 and subsequent proceedings under section 147 were not justified solely on the basis of non-registration for the assessment year 2011-12, as per the second proviso to section 12A(2).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474637 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Other Referred Cases: Sree Sree Ramkrishna Samity vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: PRITISH SABHARWAL
• Keywords: Reassessment proceedings; Capital expenditure; Principle of natural justice; Charitable institution; Benefit of exemption; Non passing of speaking order
• Section: 147; 148; 250; 11; 12AA; 12A; 12; 10(23C)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.9234/Del/2019 (ASSESSMENT YEAR 2011-12) Guru Gobind Singh Indraprastha University, Sector-16C, Dwarka, New Delhi-110078 PAN-AAAJI0015R Vs. Dy. CIT (Exemption), Circle-1(1), New Delhi. (Appellant) (Respondent) Assessee by Shri Pritish Sabharwal, Adv. Department by Shri Surender Pal, CIT-DR Date of Hearing 27/02/2025 Date of Pronouncement 27/02/2025 O R D E R PER MANISH AGARWAL, AM: This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals), Delhi-40 (in short “Ld. CIT(A)”), vide order u/s 250 of the Income Tax Act, 1961 (in short “The Act”) dated 30/08/2019 for the Assessment Year 2011-12, confirming the action of the AO in computing the income of the assessee under normal provisions of the Act by not allowing the benefit of exemption u/ss. 11,12 & 10(23C) of the Act. 2 ITA No.9234 /Del/2019 Guru Gobind Singh Indraprastha University vs. DCIT 2. The assessee has challenged the appellate order on the following grounds of appeal: “GROUND 1: ADDITION OF CAPITAL EXPENDITURE ON ACCOUNT OF DENIAL OF BENEFIT OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. “During the year under consideration, the Appellant claimed benefit u/s 12A of the Act and claimed capital expenditure amounting to Rs. 47,91,28,849/- since the objects of the Appellant remained the same as those on the basis of which the registration was granted w.e.f. A.Y. 2012-13 in accordance with first proviso to section 12A(2) of the Act, the benefit of section 11 and 12 of the Act shall be available in respect of any income derived from property held under trust in any assessment proceeding for an earlier assessment year, if the objects and activities of such trust or institution in the relevant assessment year are the same as those on the basis of which such registration has been granted. The Ld. CIT without appreciating to the fact that it has been clearly mentioned in the first proviso to section 12A(2) of the Act that where the registration has been granted to the trust or institution under section 12AA, then the benefit under section 11 and 12 of the Act shall be available in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year. Thus the amount applied towards capital expenditure can be claimed as deduction. The above addition had been done without having any material evidence on hand by the Ld. CIT. The Ld. CIT while making the additions didn't give any basis or belief for those additions. Also the addition made by the Ld. CIT is not speaking in nature. Addition fails to reflect the actual facts, basic or belief of assessment. Thus the said addition on such illogical and careless nature of Ld. CIT stands to be invalid. In this respect we submit that the assessment order passed on illogical and without any basis should be set aside and be declared as null and void and the impugned order in such a case can be struck down as invalid on that score itself. GROUND 2: NON SPEAKING ORDER PASSED UNDER SECTION 250 IS VOID AB-INITIO: The Ld. CIT erred in violating the principles of natural justice by not mentioning the facts of the case. The order fails to reflect the actual facts, 3 ITA No.9234 /Del/2019 Guru Gobind Singh Indraprastha University vs. DCIT basic or belief of assessment is invalid. In this respect we submit that the Ld. CIT erred in not passing a speaking order against the submissions of the appellant. Therefore, order passed under section 250 which is non- speaking in nature is void ab initio. The action of the Ld. CIT was wholly unreasonable, uncalled and bad in law. GROUND 3: GENERAL GROUNDS  Presumptions, assumptions and surmises, without having material evidences on hand;  Grounds are independent and without prejudice to each other. The appellant craves leave to add, amend, alter, delete, rescind, forego or withdraw any or all the grounds of appeal at any time before or during the course of hearing.” 3. Brief facts of the case are that the assessee is a society engaged in imparting education. The assessment in this case was reopened vide notice issued u/s.148 of the Act dated 28.03.2018 and consequently the order was passed on 28.12.2018, wherein the AO observed that the registration u/s 12A was granted to the assessee w.e.f. from AY 2013-14 and thus second proviso to section 12A(2) is not available to the assessee. It is further observed by the AO that assessee is registered u/s 10(23C)(vi) of the Act w.e.f. AY 2012-13 hence assessee is not entitled for the benefit u/s 10(23C)(vi) also and therefore, the surplus of income over expenditure as declared in the computation of income is taxed as per normal by provisions of the Act. In fist appeal, Ld. CIT(A) has dismissed the appeal filed the assessee, therefore, the present appeal is preferred by the assessee before the Tribunal. 4 ITA No.9234 /Del/2019 Guru Gobind Singh Indraprastha University vs. DCIT 4. As observed above, in the present case, the assessee has granted registration u/s.12A of the Act w.e.f. FY 2012-13. The reassessment proceedings for the impugned assessment year were initiated by issue of notice u/s 148 dated 28.3.2018 and the re- assessment order u/s.147 r.w.s.143(3) was passed on 28/12/2018. From the perusal of series of events, it is seen that when the notice u/s.148 of the Act was issued, the assessee was granted registration u/s.12A of the Act w.e.f. A.Y. 2013-14. As per second proviso to sub- section 2 to Section 12A of the Act, no proceedings u/s.147 could be initiated only for non-registration of such trust. The relevant provisions of Section 12A(2) of the Act are reproduced hereunder :- “Conditions for applicability of sections 11, 12 and 12A. (1) xxxxxxx (2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made: Provided that where registration has been granted to the trust or institution under section 12AA, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year: Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the 5 ITA No.9234 /Del/2019 Guru Gobind Singh Indraprastha University vs. DCIT aforesaid assessment year only for non-registration of such trust or institution for the said assessment year. 5. The Co-ordinate Bench of ITAT Kolkata in the case of Sree Sree Ramkrishna Samity, in ITA Nos.1680 to 1685/Kol/2012, vide order dated 09.10.2015, has held in para 6.7 as under:- “6.7. We hold that the registration of trust under section 12A of the Act once done is a fait accompli and the AO cannot thereafter make further probe into the objects of the trust. Reliance in this regard is placed on the decision of the Hon'ble Apex Court rendered in the case of ACIT vs Surat City Gymkhana reported in (2008) 300 ITR 214 (SC). Drawing analogy from this judgement, the logical inference could be that as long as the objects were charitable in nature in the earlier years and in the year in which registration u/s 12AA was granted, the existence of trust for charitable purposes in the earlier years cannot be doubted with. Even otherwise, no adverse findings were given by the revenue with regard to the existence of the assessee society for charitable purposes in the assessment years under appeal.” 6. Since the facts of the case of the assessee are similar to the facts of Sree Sree Ramkrishna Samity (supra), which has also linked to the fact that the case of the assessee is reopened solely for the reason that it has not got registered u/s.12A of the Act for the impugned assessment year, therefore, by following the decision of the coordinate bench of the Tribunal in the case of Sree Sree Ramkrishna Samity, cited supra, we are of the view that the proceedings initiated u/s.147 of the Act against the assessee society are illegal and bad in law and consequently the order passed u/s.147 r.w.s.143(3) of the Act is invalid. The ground of appeal No. 1 of the assessee is allowed. 6 ITA No.9234 /Del/2019 Guru Gobind Singh Indraprastha University vs. DCIT 7. Since we have already allowed the assessee’s ground No.1, the remaining grounds become academic in nature and thus not adjudicated. 8. In the result appeal of the assessee is allowed. Order is pronounced in open court on 27/02/2025. Sd/- Sd/- (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27/02/2025 PK/Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "