Market Committee, Pipli V. ACIT, Kurukshetra

ITA 1160/CHANDI/2011

• Counselvise Citation: 116021514 RSA 2011
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 02-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: B S SAINI
• Keywords: Depreciation; Charitable institution; Wrong claim
• Section: 143(3); 10B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 1160/CHD/2011 ASSESSMENT YEAR: 2005-06 THE MARKET COMMITTEE, VS THE ACIT, CIRCLE, PIPLI KURUKSHETRA PAN NO. AAIFM4796R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.S.SAINI RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 7.03.2012 DATE OF PRONOUNCEMENT : 7.03.2012 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), KARNAL DATED 24.8.2011RELATING TO ASSESSMEN T YEAR 2005-06. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL READS AS UNDER:- LD. CIT(A) ERRED IN LAW BY CONFIRMING THE ADDITION ON THE BASIS OF NON-UTILIZATION OF 85% WHICH WAS ACTUA LLY SPENT BY THE APPELLANT FOR CHARITABLE PURPOSE WHICH IS UNJUSTIFIED, ILLEGAL AND DESERVES TO BE QUASHED. 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME ON 31.10.2005 DECLARING NIL INCOME. THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') WAS M ADE ON 23.12.2007 ON TOTAL INCOME OF RS. 36,76,600/- BY MAKING AN ADDITI ON OF RS. 28,11,553/- ON ACCOUNT OF WRONG CLAIM OF DEPRECIATION AND OF RS. 1 7,00,859/- ON ACCOUNT OF INCOME TAX DEBITED IN THE INCOME AND EXPENDITURE AC COUNT. THE APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF ASSE SSING OFFICER BEFORE THE CIT(A) WAS DISMISSED. THE ITAT, CHANDIGARH BENCH V IDE ITS ORDER DATED 19.12.2008 IN ITA NO. 801/CHD/2008, HOWEVER, RESTOR ED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTIONS T O EXAMINE THE CLAIM REGARDING EXPENSES AND DEPRECIATION AND TO ALLOW TH E SAME AS PER PROVISIONS OF THE ACT. 4. IN THE ASSESSMENT ORDER DATED 13.11.2010, THE AS SESSING OFFICER OBSERVED THAT MARKET COMMITTEE HAS CLAIMED AND ASS ESSED IN THE STATUS OF CHARITABLE TRUST AND HAS NOT APPLIED 85% OF IT INCO ME FOR CHARITABLE ACTIVITIES AND FURTHER NOTICED THAT DEDUCTION @ 15% OF ITS INCOME HAS BEEN ALLOWED AT RS. 17,84,930/- WHILE COMPUTING TAXABLE INCOME. THE ASSESSING OFFICER OBSERVED THAT SINCE 85% OF THE INCOME HAS N OT BEEN APPLIED FOR CHARITABLE ACTIVITIES, THE EXEMPTION CLAIMED AND A LLOWED U/S 11(1) OF THE ACT AMOUNTING TO RS. 17,84,930/- AT THE TIME OF ORIGINA L ASSESSMENT IS LIABLE TO BE WITHDRAWN. ACCORDINGLY, WITH A VIEW TO TAX WRON G CLAIM OF EXEMPTION U/S 11(1) OF THE ACT AMOUNTING TO RS. 17,84,930/-, NOTI CE U/S 148 OF THE I.T. ACT WAS ISSUED TO THE ASSESSEE ON 3.3.2010. IN RESPONS E THERETO, THE ASSESSEE REPLIED ON 18.3.2010 STATING THEREIN THAT THE RETUR N FILED EARLIER MAY BE TREATED AS FILED IN RESPONSE TO NOTICE U/S 148 OF T HE ACT. THEREAFTER, THE 3 ASSESSING OFFICER ISSUED NOTICES U/S 143(2) AND 142 (1) OF THE ACT. THE ASSESSING OFFICER ALLOWED THE CLAIM OF DEPRECIATION STATING THAT SINCE JURISDICTIONAL HIGH COURT OF PUNJAB & HARYANA HIGH COURT HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE, DEPRECIATION HAS B EEN ALLOWED ACCORDINGLY. 5. THE ASSESSING OFFICER OBSERVED THAT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, IT WAS FURTHER NOTICED THAT THE ASSESS EE HAS NOT APPLIED AN AMOUNT OF RS. 8,65,089/- FOR THE AIMS AND OBJECTS O F THE TRUST AND ALSO HAS NOT APPLIED IN FORM NO.10B TO THE ASSESSING OFFICER REGARDING ACCUMULATION OF THE SURPLUS AMOUNT. ACCORDINGLY, THE ASSESSEE WA S ASKED BY THE ASSESSING OFFICER IN THIS REGARD VIDE ORDER SHEET ENTRY DATED 12.11.2010. THE ASSESSING OFFICER OBSERVED THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, SHRI RAJESH KAUSHIK, ADVOCATE APPEARED AND AGREED TO THE PROPOSED ADDITION. ACCORDINGLY, AN AMOUNT OF RS. 8,65,089/- WAS BROUG HT TO TAX. 6. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE CHALLENGED THE ADDITION OF RS. 8,65,089/- I.E. AMOU NT SPENT LESS THAN 85% OF THE TOTAL RECEIPTS FOR CHARITABLE PURPOSES. 7. THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE OB SERVING AS UNDER:- 1.06 THE ISSUE IS EXAMINED. THE ASSESSING OFFICER NOTED THAT THE APPELLANT MARKET COMMITTEE HAS NEITHER APP LIED 85% OF ITS RECEIPTS FOR CHARITABLE ACTIVITIES NOR FILED FORM 10B WITHIN THE PRESCRIBED TIME TO THE ASSESSING OFFICER TO ALLOW THE ACCUMULATION OF THE AMOUNT SPENT LESS THAN 85% FOR 4 FUTURE UTILIZATION. THE ASSESSING OFFICER, THEREFO RE, ISSUED NOTICE U/S 148 OF THE ACT. DURING THE APPEAL PROCE EDINGS, THE COUNSEL OF THE APPELLANT AGREED TO THE ADDITION OF RS. 8,65,089/- I.E THE AMOUNT SPENT LESS THAN 85% OF TH E TOTAL RECEIPTS FOR CHARITABLE PURPOSES. THESE FACTS HAS N OT BEEN ADDRESSED BY THE COUNSEL OF THE APPELLANT IN THE WR ITTEN SUBMISSIONS FILED DURING THE APPEAL PROCEEDINGS. IN VIEW OF THIS FACT, NO INTERFERENCE IS CALLED FOR IN THE ORD ER OF THE ASSESSING OFFICER AND HENCE THE ADDITION MADE BY HI M ON AGREED BASIS IS HEREBY CONFIRMED. GROUNDS OF APPEA L NO.2 IS, AS SUCH, REJECTED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE, THE D ISPUTE RELATES TO AN ADDITION OF RS. 8,65,089/- WHICH WAS NOT APPLIED FOR THE AIM S AND OBJECTS OF THE TRUST AND HAS ALSO NOT APPLIED IN FORM NO.10B TO THE A.O FOR ACCUMULATION OF THE SURPLUS AMOUNT. IT IS MATTER OF RECORD THAT THE AB OVE FACT WAS CONFRONTED BY THE ASSESSING OFFICER TO THE COUNSEL OF THE ASSESSE E AS PER ORDER SHEET ENTRY DATED 12.11.2010. IT IS ALSO CRYSTAL CLEAR FROM TH E ORDER OF THE ASSESSING OFFICER THAT THE AUTHORIZED REPRESENTATIVE OF THE A SSESSEE SHRI RAJESH KAUSHIK, ADVOCATE APPEARED BEFORE THE ASSESSING OFF ICER AND AGREED TO THE PROPOSED ADDITION. ACCORDINGLY, AN AMOUNT OF RS. 8 ,65,089/- WAS ADDED TO THE INCOME OF THE ASSESSEE. AS PER PARA 1.06 OF TH E IMPUGNED ORDER ALSO, IT IS CLEAR THAT DURING THE APPEAL PROCEEDINGS, THE CO UNSEL OF THE ASSESSEE SHRI R.K. AGGARWAL, ADVOCATE AGREED TO THE ADDITION OF R S. 8,65,089/- I.E. AMOUNT SPENT LESS THAN 85% OF THE TOTAL RECEIPTS FO R CHARITABLE PURPOSES. EVEN IN THE WRITTEN SUBMISSIONS FILED BEFORE THE CI T(A), NO ARGUMENT WAS ADVANCED BY THE COUNSEL OF THE ASSESSEE. THUS IT I S CLEAR FROM THE ORDERS OF 5 ASSESSING OFFICER AS WELL AS CIT(A) THAT AT BOTH ST AGES I.E. BEFORE THE ASSESSING OFFICER AND THE CIT(A), RESPECTIVE COUNS ELS APPEARED BEFORE THESE AUTHORITIES AND THE COUNSELS AGREED TO THE IMPUGNED ADDITION. IN OUR CONSIDERED VIEW, THE ORDERS PASSED BY THE LOWER AUT HORITIES ON AN AGREEMENT CAN NOT GIVE RISE TO THE GRIEVANCES AND THE SAME CA NNOT BE AGITATED IN APPEAL BEFORE THE TRIBUNAL. THE VIEW TAKEN BY US IS DULY SUPPORTED BY FOLLOWING JUDGMENTS:- I) BANTA SINGH KARTAR SINGH V CIT, PATIALA (1980) 125 ITR 239(P&H) II) JIVATLAL PURTAPSHI V CIT, BOMBAY (1967) 65 ITR 261 (BOM) 9. IN OUR OPINION, THE ASSESSEE AGREED TO THE IMPUG NED ADDITION BEFORE BOTH THE AUTHORITIES BELOW, THEREFORE, CANNOT BE HE LD TO BE AGGRIEVED BY THESE ORDERS. THUS, THE APPEAL FILED BY THE ASSESSEE REGA RDING DELETION OF ADDITION IS NEITHER COMPETENT NOR CAPABLE OF BEING ENTERTAIN ED BY THE TRIBUNAL. IN VIEW OF THE ABOVE DISCUSSION, WE DISMISS THE APP EAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF MARCH, 2012 SD/- SD/- (MEHAR SINGH) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 7 TH MARCH, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR