Computer Managament & Technical Education Society, Trichy V. ACIT Circle IV, Trichy

ITA 1165/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1302 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 1999-2000
• Appeal Filed On: 22-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HARI GOVIND
• Assessee Lawyers: N VIJAY KUMAR
• Keywords: Reopening of assessment; Charitable institution
• Section: 142(1); 12AA; 148; 144

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.1165/CHNY/2019 ' #$' / ASSESSMENT YEAR : 1999-2000 M/S COMPUTER MANAGEMENT & TECHNICAL EDUCATION SOCIETY, 27, II CROSS, AROKIA NAGAR, CRAWFORD, TRICHY 620 012. PAN : AAATC 3380 R V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE IV, TRICHY (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI N. VIJAY KUMAR, CA ()&' * + / RESPONDENT BY : SHRI K. HARI GOVIND, JCIT , # * -. / DATE OF HEARING :09.07.2019 /0$ * -. / DATE OF PRONOUNCEMENT : 06.09.2019 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -1, TRICHY , DATED 10.01.2019 AND PERTAINS TO ASSESSMENT YEAR 1999-200 0. 2. SHRI N. VIJAY KUMAR, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS ADDITION OF 8 LAKHS WHICH IS SAID TO BE RECEIVED TOWARDS CORPUS FUND. 2 I.T.A. NO.1165/CHNY/19 ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE R ECEIVED 8 LAKHS FROM 33 PERSONS TOWARDS CORPUS OF THE SOCIETY. AC CORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE-SOCIETY IS NOT REG ISTERED AS CHARITABLE INSTITUTION UNDER SECTION 12AA OF THE IN COME-TAX ACT, 1961 (IN SHORT 'THE ACT'). EVEN THOUGH IT WAS NOT REGISTERED AS A CHARITABLE INSTITUTION UNDER SECTION 12AA OF THE AC T, ACCORDING TO THE LD. REPRESENTATIVE, THE CORPUS FUND RECEIVED BY THE ASSESSEE CANNOT BE TREATED AS INCOME IN VIEW OF THE DECISION OF THE PUNE BENCH OF THIS TRIBUNAL IN ITO (EXEMPTIONS) V. SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION (2018) 90 TAXMANN.COM 229 . MOREOVER, ACCORDING TO THE LD. REPRESENTATIVE, THE SAME AMOUNT WAS RECEIVED IN THE YEAR 1998 AND SHOWN AS OPENING AMOUNT IN THE BALANCE SHEET. THEREFORE, THE SAME CANNOT BE TREAT ED AS INCOME OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. 3. ON THE CONTRARY, SHRI K. HARI GOVIND, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT IT IS NOT THE CASE O F THE ASSESSEE THAT THE CORPUS FUND WAS RECEIVED FOR SPECIFIC OBJE CT. REFERRING TO THE DECISION OF PUNE BENCH OF THIS TRIBUNAL IN SERU M INSTITUTE OF INDIA RESEARCH FOUNDATION (SUPRA), THE LD. D.R. SUB MITTED THAT THE PUNE BENCH REFERRED TO THE DECISION OF THIS BENCH O F THE TRIBUNAL IN INDIAN SOCIETY OF ANAESTHESIOLOGISTS V. ITO (2014) 47 TAXMANN.COM 3 I.T.A. NO.1165/CHNY/19 183. THIS BENCH OF THE TRIBUNAL SPECIFICALLY FOUND THAT EVEN THOUGH THE TRUST WAS NOT REGISTERED UNDER SECTION 12AA OF THE ACT, WHEN THE FUNDS WERE RECEIVED FOR SPECIFIC OBJECT, SUCH F UNDS WOULD BE USED ONLY FOR THAT PURPOSE / OBJECT, THEREFORE, THE CORPUS FUND RECEIVED BY THE TRUST CANNOT FORM PART OF TOTAL INC OME. IN THIS CASE, ACCORDING TO THE LD. D.R., THE CONFIRMATION LETTERS SAID TO BE FILED BY THE RESPECTIVE DONORS DO NOT SAY THAT IT IS FOR SPE CIFIC OBJECT OR PURPOSE. THEREFORE, ACCORDING TO THE LD. D.R., IT CANNOT BE SAID THAT THE SO-CALLED DONATION SAID TO BE RECEIVED BY THE A SSESSEE IS FOR CORPUS PURPOSE, HENCE EXCLUDED FROM TAXATION. 4. HAVING HEARD THE LD. REPRESENTATIVE FOR THE ASSE SSEE AND THE LD. D.R. AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE IMPUGNED ORDERS OF BOTH THE AUTHORITIES BELOW, THIS TRIBUNAL FINDS THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE-SOCIETY IS NOT REGISTERED UNDER SECTION 12AA OF THE ACT AS CHARITABLE INSTITU TION. THE ASSESSEE CLAIMS THAT THE AMOUNT RECEIVED IN 1998 WA S SHOWN AS OPENING BALANCE IN THE BALANCE SHEET FOR THE YEAR U NDER CONSIDERATION. THE EXACT DATE OF RECEIPT IS NOT AV AILABLE ON RECORD. IF THE FUNDS WERE RECEIVED AFTER 1 ST APRIL, 1998, THEN NATURALLY THE RECEIPT WOULD FALL DURING THE YEAR UNDER CONSIDERAT ION. IN OTHER WORDS, THE AMOUNT RECEIVED BETWEEN 1 ST APRIL, 1998 AND 31 ST MARCH, 4 I.T.A. NO.1165/CHNY/19 1999, WHICH IS THE RELEVANT FINANCIAL YEAR FOR THE ASSESSMENT YEAR 1999-2000, HAS TO BE NECESSARILY CONSIDERED AS RECE IPT DURING THE YEAR UNDER CONSIDERATION. SINCE THE DATE OF ACTUAL RECEIPT OF FUNDS IS NOT AVAILABLE ON RECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS TO RE-EXAMINE THE MA TTER AND BRING ON RECORD THE ACTUAL DATE OF THE RECEIPT OF AMOUNT FROM THE RESPECTIVE PERSONS. IT ALSO NEEDS TO BE EXAMINED A ND BROUGHT ON RECORD WHETHER DONATION WAS GIVEN FOR A PARTICULAR PURPOSE / OBJECT OR NOT. SINCE THESE DETAILS ARE NOT AVAILABLE ON R ECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE- EXAMINED BY THE ASSESSING OFFICER. 5. NOW COMING TO THE GROUNDS OF APPEAL WITH REGARD TO REOPENING OF ASSESSMENT AND COMPLETION OF ASSESSMEN T UNDER SECTION 144 OF THE ACT. 6. EVEN THOUGH GROUNDS WERE RAISED, NO ARGUMENT WAS ADVANCED BY THE LD. REPRESENTATIVE FOR THE ASSESSEE DURING THE COURSE OF HEARING. MOREOVER, THE AMOUNT TO THE EXT ENT OF 8 LAKHS RECEIVED AS DONATION ESCAPED ASSESSMENT AS OBSERVED BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICE R RIGHTLY ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 18.07.2003. THE SERVICE OF 5 I.T.A. NO.1165/CHNY/19 NOTICE IS NOT IN DISPUTE. SINCE THE ASSESSEE HAD N OT RESPONDED TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 142(1) OF THE A CT ON 29.08.2004. EVEN THOUGH THE ASSESSEE REQUESTED TIME TILL 12.10. 2004, THERE WAS NO RESPONSE FROM THE ASSESSEE. WHEN THE ASSESSING OFFICER CALLED FOR REASONS WHY EXCESS OF INCOME OVER EXPENDITURE A ND DONATIONS SHOULD NOT BE ASSESSED, THE ASSESSEE COULD NOT FILE ANY EXPLANATION OR MATERIAL OTHER THAN FILING THE MEMORANDUM OF THE SOCIETY. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY PASSED ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 6 TH SEPTEMBER, 2019 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 6 TH SEPTEMBER, 2019 6 I.T.A. NO.1165/CHNY/19 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-1, TRICHY 4. PRINCIPAL CIT, TRICHY-2, TRICHY 5. 4#7 (- /DR 6. 8' 9 /GF.