Appeal details
Counselvise Citation
112022514 RSA 2012
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 3 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-11-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
03-11-2015
Assessment Year
2004-2005
Appeal Filed On
23-07-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P.MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1120/HYD/2012 (ASSESSMENT YEAR 2004-05) ASSTT. COMMISSIONER OF INCOME - TAX, ANANTAPUR V/S VOLUNTARY ACTION NETWORK (VANA) ANANTAPUR (PAN - AAATV 3095 N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.KURMI NAIDU RESPONDENT BY : NONE DATE OF HEARING 3.11.2015 DATE OF PRONOUNCEMENT 4.11.2015 O R D E R PER SMT. P. MADHAVI DEVI, JUDICIAL MEMBER : THIS IS THE REVENUES APPEAL FOR THE ASSESSMENT Y EAR 2004-05. IN THIS APPEAL, THOUGH NOTICES HAVE BEEN SENT BY THE REGISTRY, THEY HAVE BEEN RETURNED UNSERVED. THEREFO RE, THE REVENUE WAS DIRECTED TO SERVE THE NOTICE ON THE ASSESSEE. TODAY, I.E. ON 3.11.2015 WHEN THE APPEAL CAME UP FOR HEARING, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS FILED WRITTEN SUBM ISSION STATING THAT THE NOTICES FORWARDED BY THE ASSISTANT REGISTRAR, I TAT, WERE FORWARDED TO THE ASSESSING OFFICER FOR SERVICE, BUT THE ASSES SING OFFICER VIDE LETTER DATED 26.3.2015 HAS STATED THAT THE MEMBERS OF THE ASSESSEE TRUST REFUSED TO RECEIVE THE NOTICES STATING THAT T HE ASSESSEE TRUST IS IN DEFUNCT STATE FOR THE PAST EIGHT TO NINE YEARS AND THAT ALL THE COMMITTEE MEMBERS RESIGNED FROM THEIR POSITIONS IN THE TRUST. IT IS STATED THAT THE COMMITTEE MEMBERS HAVE GIVEN A LETT ER DATED 5.11.2014 TO THIS EFFECT. COPIES OF THE NOTICES, R EPORT OF THE ASSESSING OFFICER AS WELL AS THE LETTER OF THE COMMITTEE MEMB ERS ARE ENCLOSED TO ITA NO.1120/HYD/2012 VOLUNTARY ACTION NETWO RK (VANA) ANANTAP UR 2 THE WRITTEN SUBMISSIONS FILED BY THE LEARNED DEPART MENTAL REPRESENTATIVE. TAKING DUE NOTE OF ALL THESE FACTS , WE PROCEED TO HEAR THE APPEAL AND DISPOSE OF THE SAME ON THE BASIS OF THE MATERIAL ON RECORD AND THE SUBMISSIONS OF THE LEARNED DEPARTMEN TAL REPRESENTATIVE. 2. AT THE OUTSET, IT IS SEEN THAT THE APPEAL OF T HE REVENUE IS BARRED BY LIMITATION BY A PERIOD OF 39 DAYS. REVEN UE HAS FILED APPLICATION FOR CONDONATION OF DELAY BY STATING THA T THE DELAY HAS OCCURRED DUE TO INORDINATE DELAY IN TRANSMISSION OF RECORD FROM THE OFFICE OF THE COMMISSIONER, TIRUPATI TO THE OFFICE OF THE ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE 1, ANANTAPUR AND THE DELAY IS NEITHER WILLFUL NOR WANTON. TAKING DUE NOTE OF THES E FACTS, WE ARE INCLINED TO CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPE AL IS THAT THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE EX CESS OF INCOME OVER EXPENDITURE IS NOT TAXABLE ON THE GROUND THAT IT RE PRESENTS SURPLUS FUND OF THE DONOR FOR A SPECIFIC PROJECT, AND THERE FORE, IS NOT TAXABLE. 4. BRIEF FACTS OF THE CASE LEADING TO THE SAID AS SESSMENT ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED UNDER SOC IETIES REGISTRATION ACT OF 1860. IT FILED ITS RETURN OF INCOME FOR ASS ESSMENT YEAR 2004-05 ON 26.102004 ADMITTING NIL INCOME, AFTER CLAIMING E XEMPTION OF RS.39,87,929 REPRESENTING EXCESS OF INCOME OVER EXP ENDITURE UNDER S.11 OF THE INCOME TAX ACT,1961. DURING THE ASSES SMENT PROCEEDINGS UNDER S.143(3) OF THE ACT, THE ASSESSIN G OFFICER REJECTED THE ASSESSEES CLAIM FOR EXEMPTION UNDER S.11 OF TH E ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND THE REAFTER BEFORE THE ITAT. THE ITAT REMANDED THE MATTER TO THE FILE OF T HE ASSESSING OFFICER FOR FRESH CONSIDERATION IN THE LIGHT OF THE DECISION OF THE ITA NO.1120/HYD/2012 VOLUNTARY ACTION NETWO RK (VANA) ANANTAP UR 3 TRIBUNAL IN THE CASE OF NIRMAL AGRICULTURAL CREDIT SOCIETY REPORTED IN71 ITD 152. IN THE ASSESSMENT PROCEEDINGS UNDER S.14 3(3) READ WITH S.254 OF THE ACT, THE ASSESSING OFFICER OBSERVED TH AT THE TRIBUNAL IN THE CASE OF NIRMAL AGRICULTURAL CREDIT SOCIETY (SUP RA) HAS HELD THAT THE AMOUNTS RECEIVED FROM A DONOR FOR A PARTICULAR PROJ ECT ARE NOT THE INCOME OF THE DONEE AND THAT THE FUNDS REMAINING U NSPENT ON PROJECT HAVE TO BE RETURNED TO THE DONOR. THE ASSESSING OFF ICER FURTHER OBSERVED THAT THE ASSESSEE HAS NOT MAINTAINED ANY S EPARATE BOOKS OF ACCOUNT FOR THE PROJECT AND HAS ALSO NOT RETURNED T HE UNSPENT MONEY. ACCORDINGLY, HE HELD THAT THE EXCESS OF INCOME OVER EXPENDITURE IS CHARGEABLE TO TAX. ACCORDINGLY, THE ASSESSING OFFIC ER RAISED DEMAND OF TAX. 5. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A), WHO ALLOWED THE SAME AND HENCE, THE REVENUE IS IN APPEAL AGAINST THE RELIEF GRANTED BY THE CIT(A). 6. HAVING REGARD TO THE MATERIAL ON RECORD AND TH E CONTENTIONS OF THE LEARNED DEPARTMENTAL REPRESENTAT IVE, WE FIND THAT THE AMOUNTS HAVE BEEN RECEIVED BY THE ASSESSEE FOR A PARTICULAR PROJECT, WHICH IS THE ONLY PROJECT TAKEN UP BY THE ASSESSEE. THE ONLY QUESTION FOR CONSIDERATION IS WHETHER THE EXCESS OF RECEIPT OVER EXPENDITURE IS THE INCOME OF THE ASSESSEE CHARGEABL E TO TAX. WE FIND THAT THIS ISSUE IS ALREADY CONSIDERED BY THE COORDI NATE BENCH OF THE TRIBUNAL IN THE CASE OF NIRMAL AGRICULTURAL CREDIT SOCIETY CITED SUPRA, AND IT HAS BEEN HELD THAT SUCH FUNDS WHICH HAVE NO T BEEN SPENT FOR SPECIFIC PROJECT ARE TIED UP FUNDS AND NOT THE INCO ME OF THE RECIPIENT. THE CIT(A) HAS ONLY FOLLOWED THE DECISION OF THE CO ORDINATE BENCH TO HOLD THAT THE SURPLUS AMOUNT UNSPENT ON THE PROJECT BY THE ASSESSEE IS NOT TAXABLE IN THE HANDS OF THE ASSESSEE. IN VIE W OF THE SAME, WE DO ITA NO.1120/HYD/2012 VOLUNTARY ACTION NETWO RK (VANA) ANANTAP UR 4 NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF T HE CIT(A). REVENUES APPEAL IS ACCORDINGLY DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED PRONOUNCED IN THE COURT ON 4 TH NOVEMBER, 2015 SD/- SD/- (S.RIFAUR RAHAMAN) (P.MADHAVI DEVI) ACCOUNTANT MEMBER. JUDICIAL MEMBER DT/- 4 TH NOVEMBER, 2015 COPY FORWARDED TO: 1. VOLUNTARY ACTION NETWORK (VANA), 1 - 2 - 347, ASHOK NAGA4R EXTENSION., ANANTAPUR 2. ASST. COMMISSIONER OF INCOME - TAX CIRCLE 1, ANANTAPUR 3. COMMISSIONER OF INCOME-TAX(APPEALS) GUNTUR 4. COMMISSIONER OF INCOME - TAX TIRUPATI 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.
