SINGHBHUM GRAMODYOG VIKAS SANSTHAN, JAMSHEDPUR V. ITO EXEMPTION WARD , JAMSHEDPUR

ITA 01/RAN/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0626 (ITAT-RANCHI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 01-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MOHANTY
• Assessee Lawyers: ANJALI JAIN; ARPIT JAIN ACA
• Keywords: Additional evidence
• Section: 271(1)(c); 234B

Judgement Text

1 ITA NO. 0 1 /RAN/20 1 8 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 01 / RAN/20 1 8 ASSESSMENT YEAR : 20 1 4 - 2015 SINGHBHUM GRAM U DYOG VIKAS SANSTHAN, C/O - M/S ANJA L I JAIN & ASS OCIATES, CHARTERED ACCOUNTANTS, NEAR GURU NANAK SCHOOL, P.P.COMPOUND, RANCHI V S ITO (EXEMPTIONS) WARD - JAMSHEDPUR PAN NO. : AA DTS 1849 N (APPELLANT ) .. RESPONDENT ASSESSEE BY : MS. ANJALI JAIN, FCA & MR. ARPIT JAIN, ACA REVENUE BY : SHRI A.K.MOHANTY , J CIT DATE OF HEARING : 2 9 . 11 .201 8 DATE OF PRONOUNCEMENT : 30 . 11 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : THE ASSESSEE HA S FILED THE APPEAL AGAINST THE ORDER OF CIT(A), JAMSHEDPUR , DATE D 10.10.2017 FOR THE ASSESSMENT YEAR 2014 - 2015 , WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE : - 1. ADDITION OF RS.170,356.00 THE ASSESSEE RECEIVES MONEY AND CONTRIBUTIONS FROM VARIOUS GOVERNMENT ORGANIZATIONS FOR EMPLOYMENT GENERATION AND UPLIFTMENT OF VILLAGE INDUSTRIES. THIS AMOUNT WAS REIMBURSED FOR THE WORK WHICH WAS CARRIED OUT IN THE PAST BY THE ORGANIZATION. THE SAME IS NOT TAKEN INTO ACCOUNT FOR THE SAME REASON AS IT IS NOT RELATED WITH KHADI AND THAT SEPARATE UTILISATION CERTI FICATES ARE SUBMITTED TO THE GOVERNMENT. THE 2 ITA NO. 0 1 /RAN/20 1 8 TRANSACTION DOES NOT RESULTSIN ACCRUAL OF ANY INCOME AS THEY HOLD THE MONEY IN TRUST AND SPEND AS PER THE DIRECTIONS. REGARDING LIC OF AMOUNT RS.20,556 IN THE GIVEN CONTEXT, NO SOCIETY CAN BE INSURANCE AGENT. INSURANCE AGENT CAN ONLY BE INDIVIDUALS OR A COMPANY. THE A/R HAD GIVEN THE EXPLANATION THAT THIS RENEWAL COMMISSION RECEIVED WAS WRONGLY UPLOADED IN THE PAN OF THE SOCIETY. WHEREAS IT SHOULD BE IN THE NAME OF MRS. MANJU SINHA, WHO IS THE WIFE OF SECRETARY OF SGVS. DURING THE YEAR TOTAL INCOME OF MRS. MANJU SINHA WAS NOT MORE THAN 2.5 LAC AND AS SUCH SHE HAS NOT FILED HER RETURN AND HAD NOT EVEN CLAIMED HER TDS. THEREFORE, THE SAME SHOULD NOT BE ADDED AND THE TOTAL AMOUNT OF RS. 1,70,356 MAY BE DELETED. 2 . ADDITION OF RS. 551,245.00 OF RESERVE FUND IN THE GIVEN CASE, THE RESERVE FUND WAS UTILIZED DURING THE YEAR BY THE SOCIETY. EXPLANATIONS WERE PROVIDED WHICH WERE MISINTERPRETED AS A RESULT OF WHICH THE LD. AO ADDED BACK THE FUND. 3. ADDITION OF RS 130,692.00 ON ACCOUNT OF BANK INTEREST. THE AMOUNT OF INTEREST DOES NOT FORMS PART OF THE INCOME FOR THE SOCIETY AS THE SAME HAS TO BE REFUNDED BACK OR IT IS ADJUSTED WITH THE NEXT INSTALMENT OF CONTRIBUTION BASED ON TOTAL EXPENSES MADE. SINCE THIS DOES N OT FORMS PART OF THE INCOME THE SAME IS NOT RECOGNIZED AS INCOME. MOREOVER THE INTEREST RECEIVED FROM BANK HAS TO BE RETURNED IF THE WORK IS COMPLETED AND NOT UTILIZED AS PER THE SANCTIONED LETTER. THEY ACT AS MERE CUSTODIANS OF SUCH MONEY. AS THE NATURE OF THE TRANSACTIONS I.E. INTEREST EARNED IS OUT OF THE FUNDS RECEIVED FROM THE GOVERNMENT AND THESE FUNDS ARE ADJUSTED WITH FUTURE INSTALLMENTS, SAME SHOULD NOT BE ADDED AND THE ADDITION SHOULD BE DELETED. 4. ADDITION OF RS. 2,78,40,346.00 ON ACCOUNT O F DEPOSITS IN VARIOUS BANK ACCOUNTS THE LEARNED AO HAS ADDED THE ENTIRE SUM OF MONEY RECEIVED BY THE SOCIETY BY NATIONAL HORTICULTURE MISSION AS UNDISCLOSED INCOME. AS STATED EARLIER THIS SOCIETY ACTS AS CUSTODIAN TO VARIOUS GOVERNMENT ORGANIZATION CONTRI BUTING MONEYS FOR THE SAID PURPOSES. IT IS UNJUSTIFIED TO ADD TOTAL RECEIPTS OF THE GOVERNMENT FUNDS WHICH ARE RECEIVED BY THE SOCIETY TO DISTRIBUTE AS PER THE SANCTIONED TERMS. THERE IS NO ACCRUAL OF INCOME. THE SANCTION LETTERS/TERMS DOES NOT ALLOW FOR A NY INCOME/ ADMINISTRATIVE EXPENSES FOR THE SOCIETY. MOREOVER THE SOCIETY GETS THE GOVERNMENTS FUNDS RECEIPTS 3 ITA NO. 0 1 /RAN/20 1 8 DULY AUDITED BY THE A.G AND SUBMITS UTILIZATION CERTIFICATES ON THE BASIS OF WHICH THE GOVERNMENT ORGANIZATION RELEASES FURTHER FUNDS. IN MERE CONT RAST, THE SOCIETY ACTS AS GOVERNMENT UNIT WHICH RECEIVES FUNDS FROM THE CENTRE AFTER THE CENTRE RECEIVES UTILIZATIONS CERTIFICATES. THE ACCOUNTS ARE AUDITED BY THE AG BUT NO RETURNS ARE FILED. SAME WISE IS THE CASE FOR THE SOCIETY AS THE MONEY IS HELD UNDE R TRUST OR ACTING AS CUSTODIAN OF MONEY, IT CANNOT BE TERMED AS INCOME IN THE HANDS OF THE SOCIETY. IT IS ALSO IMPORTANT TO NOTE THAT MERE RECEIPTS DO NOT ACCOUNT FOR INCOME AND CHARGING THE ENTIRE INCOME TO TAX IS UNJUSTIFIED. IF THERE BE ANY REASON ACCO UNTS SHOULD HAVE BEEN ASKED FOR PRODUCTION FOR THE SAID WORK, WHICH WAS NEVER DONE DESPITE OUR REPEATED CONTENTION AND SUBMISSIONS. ACCORDINGLY IT IS PRAYED THAT THE SAME SHOULD NOT BE ADDED AND THE ADDITION MADE SHOULD BE DELETED 5. IT IS ALSO IMPORTA NT TO NOTE THAT THE ASSESSEE IS GOVERNED UNDER SECTION U/S 10(23B) OF THE INCOME TAX ACT,1961 WHICH EXEMPTS THE ENTIRE KHADI INCOME OF THE SOCIETY AS A RESULT OF WHICH ONLY KHADI RELATED INCOME AND EXPENDITURE ARE CALCULATED AND RETURNS ARE FILED. RELIEF C LAIMED IN APPEAL: - > TO DELETE THE ADDITIONS SO PREFERRED BY THE LD. ASSESSING OFFICER. > TO DELETE THE ADDITIONS CONFIRMED BY THE CIT(A) > TO STAY THE DEMAND TILL THE PENDENCY OF THE APPEAL. > TO CANCEL THE PENALTY U/S 271(1)(C) SO INITIATED BY TH E LEARNED ASSESSING OFFICER. > TO CANCEL THE INTEREST CHARGED U/S 234B > TO ALLOW EXEMPTION U/S 10(23B) ON THE TOTAL INCOME > TO ALLOW IN PRODUCING ANY FRESH DOCUMENT OR EVIDENCE OF GROUNDS OF APPEAL DURING THE COURSE OF HEARING. 2 . BRIEF FACTS OF T HE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF KHADI AND FILED THE RETURN OF INCOME ON 22 .09.2014 FOR THE ASSESSMENT YEAR 201 4 - 201 5 DECLARING TOTAL INCOME OF RS. 20,560 / - . UPON SELECTION OF THE CASE FOR SCRUTINY , NOTICES U/S.143(2)/142(1) OF THE ACT WERE ISSUED. THEREAFTER THE AO COMPLETED THE ASSESSMENT MAKING VARIOUS ADDITION S AND ASSESSED THE TOTA L INCOME OF THE ASSESSEE RS. 2,86,92,640/ - AND PASSED ORDER U/S.143(3) OF THE ACT, DATED 29.12.2016 . 4 ITA NO. 0 1 /RAN/20 1 8 3 . AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREF ERRED AN APPEAL BEFORE THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE AR OF THE ASSESSEE APPEARED AND ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MADE BEFORE THE AO. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE FINDINGS OF AO, DISMISSED THE APPEAL OF THE ASSESSEE. 4 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 5 . LD. AR SUBMITTED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THE APPELLATE PROCEEDINGS, THE DOCUMENTS WHICH ARE NECESS ARY FOR THE INCOME TAX PURPOSE COULD NOT BE FILED AS THE SECRETARY OF THE ASSOCIATION WAS IN THE JUDICIAL CUSTODY, THEREFORE, THE ASSESSEE WAS DEPRIVED TO SUBSTANTIATE ITS CASE WITH VALID DOCUMENTS. LD. AR PRAYED THAT ADDITIONAL EVIDENCE TO BE ACCEPTED AND APPEAL BE ALLOWED. 6 . CONTRA, LD. D R RELIED ON THE OTHER OF LOWER AUTHORITIES AND MENTIONED THAT THE AO SHOULD BE PROVIDED OPPORTUNITY FOR EXAMINATION OF THE NEW MATERIAL FILED BEFORE THE TRIBUNAL AND PRAYED FOR REMITTING THE ISSUE TO THE FILE OF AO . 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE GOING INTO MERIT OF THE CASE, THE CONTENTION OF LD. AR THAT THE DOCUMENTS FILED BEFORE THE TRIBUNAL ARE VITAL FOR DECIDING THE CASE OF THE ASSESSEE AND DUE TO NON - AVAILABILITY OF THE SECRETARY, WHO IS IN JUDICIAL CUSTODY, THE DOCUMENTS COULD NOT BE PRESENTED AND NOW THE DOCUMENTS 5 ITA NO. 0 1 /RAN/20 1 8 ARE AVAILABLE ALONG WITH THE APPLICATION. WE CONSIDERING THE SUBMISSION OF THE ASSESSEE ARE OF THE SUBSTANTIVE OPINION THAT THE ADDITIONAL EVIDENCE FILED ALONG WITH THE APPLICATION IS ADMITTED AND THE SAME IS REMITTED TO THE FILE OF AO TO VERIFY AND EXAMINE THE CORRECTNESS AND THE ASSESSEE SHALL COOPERATE IN SUBMITTING THE INFORMATION AT THE EARLIEST FOR EARLY DISPOSAL OF THE CASE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 / 11 /201 8 SD/ - S D/ - (N.S.SAINI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 30 / 11 /2018 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT SINGHBHUM GRAMYDYOG VIKAS SANSTHAN, C/O - M/S ANJALI JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, NEAR GURU NANAK SCHOOL, P.P.COMPOUND, RANCHI 2. THE RESPONDENT ITO (EXEMPTIONS) , WARD, JAMSHEDPUR 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.