ITO, Jaipur V. RAJASTHAN BIBLE INSTITUTE, Jaipur

ITA 113/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5141 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 29-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRAWAN KR GUPTA
• Keywords: Rejection of books of accounts; Additional evidence; Reasonable cause
• Section: 143(3); 12A; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.113/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, WARD-I (EXEMPTIONS), JAIPUR CUKE VS. M/S RAJASTHAN BIBLE INSTITUTE, MUBARAK BAGH, AJMER ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAATR 5217 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHRAWAN KR. GUPTA (ADV.) JKTLO DH VKSJ LS@ REVENUE BY SHRI RAGHUVIR SINGH DAGUR(ADDL.J CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.06.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 19/07/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-I, JAIPUR DATED 18.11.2014 FOR THE RELEVANT ASSESSMENT YEAR 2010-11 WHEREIN THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: (I) DELETING THE ADDITION OF RS. 59,11,416/- MADE O N ACCOUNT OF UNVERIFIABLE EXPENSES CLAIMED BY THE ASSESSEE BY REJECTING BOOKS OF A/C OF THE ASSESSEE SOCIETY U/S 145(3) OF THE IT ACT, 1961. (II) NOT UPHOLDING THE REJECTION OF BOOKS OF ACCOUN T DESPITE THE FACT THAT IT IS AN ADMITTED FACT THAT THE THEN PRESIDENT OF THE INS TITUTION HAS MISAPPROPRIATED FUNDS OF THE INSTITUTION AS SUCH TH E ENTRIES MADE IN THE BOOKS OF ACCOUNTS WERE NOT CORRECT AND ACCORDINGLY THE PROVISIONS OF SECTION 145(3) WERE APPLICABLE. ITA NO. 113/JP/15 ITO, WARD-! (EXEMPTIONS), JAIPUR VS. RAJASTHAN BIBL E INSTITUTE, JAIPUR 2 (III) ADMITTING ADDITIONAL EVIDENCE U/S 46A OF IT R ULES 1962 DESPITE THE FACT THAT THE ASSESSEE DOES NOT FULFIL ANY OF THE CONDIT IONS AS LAID OUT IN RULE 46A(1) OF IT RULES, 1962. 2. THE BRIEF FACTS OF THE ASSESSEE ARE THAT THE AS SESSEE IS A SOCIETY REGISTERED U/S 12A(A) OF THE ACT. THE MAIN OBJECT O F THE ASSESSEE SOCIETY IS TO SERVE OLD AGE PEOPLE, RUNNING DISPENSARY AND TO PRO MOTE THE READING, STUDY AND TEACHING OF THE HOLY BIBLE. THE ASSESSEE ALSO O RGANIZES CONFERENCES, CONVENTIONS, CAMPS, WORKSHOP VACATION BIBLE SCHOOLS SHORT TERM BIBLE COURSE AND EXHIBITIONS. 2.1 IN THIS CASE NOTICE U/S 143(2) WAS ISSUED ON 23 .09.2011 AND ASSESSMENT U/S 143(3) WAS COMPLETED ON 18.02.2011 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS 59,11,420. THE AO STATED THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SOCIETY WAS ASKED TO PROD UCE THE COMPLETE BOOKS OF ACCOUNT ALONG WITH BILLS AND VOUCHERS FOR EXAMINATI ON ON 18.02.2013. HOWEVER, ON 18.02.2013, NO BILLS AND VOUCHERS PRODU CED AND IT WAS SUBMITTED THAT ALL THE VOUCHERS OF THE SOCIETY WERE LAYING IN THE CUSTODY OF POLICE STATION, COURT AND LAWYERS. THEREAFTER THE AO PASSED THE ASS ESSMENT ORDER BY STATING THAT NO PROOF REGARDING THE SAME WAS SUBMITTED. ALT HOUGH CASH BOOK, BANK BOOK, AND LEDGER ACCOUNT WERE PRODUCED, THE VERACIT Y AND GENUINENESS OF THE EXPENSES CLAIMED BY THE ASSESSEE SOCIETY COULD NOT BE PROVED IN THE ABSENCE OF BILL AND VOUCHERS. HENCE THE AO REJECTED THE BOO KS OF ACCOUNT OF THE SOCIETY U/S 145(3) OF THE ACT. THE AO FURTHER STATED THAT THAT NO EXPENSES COULD BE VERIFIED AND SHE MADE ADDITION OF RS. 59,11,416/- O N ACCOUNT OF ENTIRE EXPENSES CLAIMED IN THE AUDITED INCOME AND EXPENDIT URE ACCOUNT. 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATT ER IN APPEAL BEFORE THE LD CIT(A) WHO CONSIDERING THE SUBMISSIONS, THE ADDITIO NAL EVIDENCES AS WELL AS REMAND REPORT OF THE AO DELETED THE IMPUNGED ADDITI ON. 3. DURING THE COURSE OF HEARING, THE LD AR REITERAT ED THE SUBMISSIONS MADE BEFORE THE LD CIT(A) WHICH FORMS PART OF HIS ORDER AND ARE NOT REPRODUCED HERE AGAIN. 4. THE LD DR VEHEMENTLY ARGUED THE MATTER ABD SUBM ITTED THAT THE AO WAS RIGHT IN REJECTION OF BOOKS OF ACCOUNTS AND REL IED UPON THE ORDER OF THE AO. ITA NO. 113/JP/15 ITO, WARD-! (EXEMPTIONS), JAIPUR VS. RAJASTHAN BIBL E INSTITUTE, JAIPUR 3 5. WE HAVE GONE THROUGH RIVAL CONTENTIONS AND PURSU ED THE ORDER OF THE LD. CIT(A). WE FIND THAT THE LD CIT(A) HAS RIGHTLY CON SIDERED THE PLEA OF THE ASSEESSEE IN ITS INABILITY TO SUBMIT THE BILLS AND VOUCHERS FOR REASONS BEYOND ITS CONTROL AS THE SAME WERE SEIZED BY THE POLICE AUTHO RITIES AND LYING IN THE COURTS CUSTODY AND IN CONSIDERING THE ADDITIONAL EV IDENCES. FURTHER, IN LIGHT OF HONBLE RAJASTHAN HIGH COURT DECISION IN CASE OF CI T VS. GOTAN LIME KHANIZ UDYOG 256 ITR 243 (RAJ), EVEN WHERE THE BOOKS OF ACCOUNTS ARE HELD TO BE REJECTED, CAN IT BE SAID THAT MERE REJECTION OF BOO KS OF ACCOUNT WILL NECESSARILY LEAD TO ADDITIONS TO THE RETURNED INCOME. IN THAT C ASE, IT WAS HELD THAT THE BOOKS OF ACCOUNT TOGETHER WITH PAST HISTORY OF THE CASE AND ALSO MATERIAL COLLECTED BY THE AO SHOULD BE CONSIDERED FOR ESTIM ATION OF INCOME. IN THE INSTANT CASE, THE LD CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE AO HAS NOT POINTED OUT ANY DEFECTS IN VIOLATION OF THE SECTION 12 A OF THE ACT AS WELL AS VIOLATION OF ANY OF THE CONDITIONS FOR APPLICABILIT Y OF SEC 11& 12 OF THE I.T ACT 1961. THE SAID FINDINGS REMAIN UNCONTROVERTED BEFO RE US. WE ACCORDINGLY AGREE WITH THE CONTENTION OF THE LD AR THAT THE AO NEITHER IN THE ASSESSMENT ORDER NOR IN THE REMAND REPORT HAS STATED THAT THER E WAS VIOLATION OF ANY OF THE CONDITIONS FOR APPLICABILITY OF SEC. 11 & 12A O F THE IT ACT REQUIRED FOR A SOCIETY REGISTERED U/S OF 12A OF THE ACT. 6. WE, ACCORDINGLY, CONFIRM THE FOLLOWING FINDING O F LD CIT(A) CONTAINED AT PARA 3.2 PAGE 13-14 OF HIS ORDER: THERE WAS REASONABLE CAUSE WHICH PREVENTED ASSESSE E IN PRODUCING THE BOOKS OF ACCOUNTS ALONGWITH BILLS AND VOUCHERS ON 1 8/02/2013 AS THEY HAVE ALREADY SEIZED BY THE POLICE AUTHORITIES AND L YING IN THE COURTS CUSTODY. IN THE ASSESSMENT ORDER AO HAS NOT POINTED OUT ANY DEFECTS IN VIOLATION OF THE SECTION 12 A OF THE ACT. APART FROM THIS, IT IS ALSO SEEN THAT AO HAS NOT POINTED OUT ANY DEFECTS IN THE BOOKS OF ACCOUNT S SO PRODUCED BEFORE HER BUT ON THE BASIS OF SUSPICION, REJECTED THE BOO KS OF ACCOUNT. APART FROM THIS, AO HAS ALSO NOT GIVEN HER ANY FINDINGS R EGARDING VIOLATION OF CONDITIONS FOR APPLICABILITY OF SEC 11& 12 OF THE I .T ACT 1961, REQUIRED FOR A SOCIETY REGISTERED UNDER RULE 12 A OF THE I T RUL ES 1962. ONLY ON THE BASIS OF NON-PRODUCTION OF SUPPORTING BILLS & VOUCH ERS, AO HAS RAISED DOUBT LEADING TO FORMING OF AN OPINION ABOUT THE GE NUINENESS OF ITA NO. 113/JP/15 ITO, WARD-! (EXEMPTIONS), JAIPUR VS. RAJASTHAN BIBL E INSTITUTE, JAIPUR 4 TRANSACTIONS AND CLAIM OF EXPENDITURES MADE BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT APPELLANT HAS PRODUCED BEFOR E THE AO (I) CASH BOOK, (II) BANK BOOK AND (III) LEDGER ACCOUNT FOR V ERIFICATION. AOS ACTION IS WITHOUT ANY JUSTIFICATION AND ALSO BAD IN LAWS. IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE AS N ARRATED ABOVE DISALLOWANCE OF ENTIRE EXPENDITURE OF RS. 59,11,416 AND TREATING THEM AS INCOME FROM OTHER SOURCES IS BAD IN LAW, HENCE CANNOT BE SUSTAINED, ACCORDINGLY ENTIRE ADDITION IS DELETED. ASSESSEE GE TS A RELIEF OF RS. 59.11.420. IN THE RESULT, THE GROUNDS TAKEN BY THE REVENUE ARE DISPOSED OFF AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/07 /2016. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 19/ 07/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE INCOME TAX OFFICER, WARD-1 (EXEM PTIONS), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S RAJASTHAN BIBLE INSTITUTE, JAIP UR 3. VK;DJ VK;QDR@ CIT (EXEMPTIONS), JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-I, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.113 /JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO. 113/JP/15 ITO, WARD-! (EXEMPTIONS), JAIPUR VS. RAJASTHAN BIBL E INSTITUTE, JAIPUR 5