ACIT, New Delhi V. M/s. Kalgidhar Nursery School, New Delhi

ITA 1170/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2320 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-12-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 27-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: KS KOHLI
• Keywords: Gift; Principle of natural justice; Additional evidence
• Section: 142(1); 12; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.G. BANSAL ITA NO. 1170(DEL)2009 ASSESSMENT YEAR: 2005-06 ASSTT.COMMISSIONER OF INCOME TAX, M/S. KALGIDH AR NURSERY SCHOOL, CIRCLE 33(1), NEW DELHI. V. 1, G URUJDWARA SINGH, SABHA INTERPURI, NEW DELHI. C.O. NO. 342(DEL)2009 (IN ITA NO. 1170(DEL)09) ASSESSMENT YEAR: 2005-06 M/S. KALGIDHAR NURSERY SCHOOL, 1, GURUJDWARA SINGH, SABHA V. ASSTT. COMMISSIONER OF I. TAX, INTERPURI, NEW DELHI. CIR. 33(1), NEW DELHI. (APPELLANT) (R ESPONDENT) DEPARTMENT BY: SHRI B.K. GUPTA, SR. DR ASSESSEE BY: SHRI K.S. KOHLI, CA ORDER PER A.D. JAIN, J.M. THESE ARE DEPARTMENT'S APPEAL AND THE ASSESSEE'S CR OSS OBJECTIONS FOR ASSESSMENT YEAR 2005-06. THE DEPARTMENT HAS TAKEN THE FOLLOWI NG GROUNDS:- 1. LD. CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTA NCES OF THE CASE, IN ADMITTING THE ADDITIONAL EVIDENCE WITHOUT AFFORDING AN OPPORT UNITY TO THE AO AS PER PROVISIONS OF RULE 46A(3) OF THE ACT; ITA 1170& CO 342 2 2. LD. CIT(A) HAS ERRED IN ALLOWING EXEMPTION U/S 10(23 BBA) IN VIEW OF PROVISO TO THIS CLAUSE WHICH READS AS UNDER: PROVIDED THAT NOTHING IN THIS CLAUSE SHALL BE CONS TRUED TO EXEMPT FROM TAX THE INCOME OF ANY TRUST, ENDOWMENT OR SOCIETY REFERRED TO THEM. 2. THE CROSS OBJECTIONS OF THE ASSESSEE ARE AS FOLL OWS:- 1. LD. CIT(A) HAS NOT ADMITTED ANY ADDITIONAL EV IDENCE. 2. LD. CIT(A) HAS ALLOWED EXEMPTION U/S 10, WHERE A SSESSEE WAS NOT REQUIRED TO FILE RETURN OF INCOME TAX TO THE DEPART MENT AS ITS ACTIVITIES ARE CHARITABLE, NOT FOR PROFIT. 3. THAT THE RECEIPT OF THE SCHOOL ARE MUCH LESS THA N RS. 1 CORE IN THE FINANCIAL YEAR AND THE PRESENT BODY SOCIETY SRI GURU SINGH S ABHA A REGISTERED SOCIETY ITS TOTAL RECEIPT ARE EVEN LESS THAN RS. 1 CRORE. 4. THE ASSESSEE IS NOT REQUIRED TO FILE RETURN OF INCO ME AS RECEIPTS ARE BELOW RS. 1 CRORE. 5. THAT ACTIVITIES ARE PURELY CHARITABLE AS ALSO OBSER VED BY LD. DIT(E) IN HIS ORDER U/S 12 AA R.W.S. 12 A OF I.T. ACT, 1961. 6. THAT KALGIDHAR NURSERY SCHOOL HAS NO INDEPENDENT ST ATUS AND IS PART AND PARCEL OF SIR GURU SINGH SABHA, INDERPURI, NEW DELH I . 7. THE RECEIPT OF SCHOOL ARE APPLIED FOR ONLY PURP OSE OF IMPARTING EDUCATION FOR WHICH IT WAS ESTABLISHED AND NOT FOR PROFIT. 8. THE ACCOUNTS OF KALGIDHAR NURSERY SCHOOL ARE MERGED WITH PARENT BODY SRI GURU SINGH SABHA. 9. NO SEPARATE ASSESSMENT CAN BE MADE OF ONE BRANCH, A ND, THEREFORE, DEMAND IS BOUND TO BE DELETED, AS DEMAND IS ILLEGAL, UNJUSTIF IED AND AGAINST THE NATURAL LAW OF JUSTICE. 10. IN ORDER TO HAVE A CHARITY, YOU MUST HAVE A SOURCE OF INCOME. THE INCOME MAY COME FROM GIFTS, OR IT MAY COME FROM RUNNING A CHAR ITABLE ACTIVITY, NOT FOR PROFIT, AS ASSESSEE IS DOING. ITA 1170& CO 342 3 3. HAVING RECEIVED THE INFORMATION FROM THE CIT(CIB ) FOR TRANSACTIONS OF RS. 16,02,267/-, THE AO ISSUED A NOTICE U/S 142(1) TO T HE ASSESSEE. NONE HAVING ATTENDED, ANOTHER NOTICE WAS ISSUED, WHICH ALSO REMAINED UNAT TENDED. THE AO THUS COMPLETED THE ASSESSMENT U/S 144 OF THE I.T. ACT, TREATING THE T RANSACTION OF RS. 16,02,267/- AS UNEXPLAINED INCOME OF THE ASSESSEE. THE LEARNED C IT(A) ASKED THE ASSESSEE TO PRODUCE THE EVIDENCE UNDER RULE 46A(4) OF THE I.T. RULES, W ITH REGARD TO THE CLAIM OF NON- TAXABILITY OF THE INCOME. THE EVIDENCE PRODUCED B Y THE ASSESSEE WAS ENTERTAINED BY THE CIT(A) WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO TO REBUT THE SAME AND THE ADDITION WAS DELETED ON THE BASIS OF THIS ADDITION. THE DE PARTMENT IS AGGRIEVED. 4. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT INDEE D, NO OPPORTUNITY OF HEARING HAS BEEN GRANTED TO THE AO. THE EVIDENCE PRODUCED BY T HE ASSESSEE BEFORE THE CIT(A) HAS BEEN ENTERTAINED AT THE BACK OF THE AO, WHICH IS IN STARK VIOLATION OF THE NATURAL JUSTICE PRINCIPAL OF AUDI ALTEREM PARTEM . THAT BEING SO, THE ORDER UNDER APPEAL, AS IT STANDS, IS NOT MAINTAINABLE. ACCORDINGLY, THE MATTER IS REMI TTED TO THE FILE OF THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF THE E VIDENCE PRODUCED BY THE ASSESSEE BEFORE THE LD. CIT(A). 5. THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE, ACCORDINGLY, ALSO REMITTED TO THE AO'S FILE. THE AO SHALL ALLOW FULL OPPORTUNITY TO THE ASSESSEE TO SUPPORT ITS CASE BY EXPLAINING THE EVIDENCE FILED BEFORE THE CIT(A). THE ASSESSEE, NO DOUBT, WILL COOPERATE WITH THE AO. ITA 1170& CO 342 4 6. IN THE RESULT, FOR STATISTICAL PURPOSES, BOTH, T HE APPEAL OF THE DEPARTMENT AS WELL AS THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE TREA TED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9.12.2009. SD/- SD/- (K.G. BANSAL) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9.12.2009 *RM COPY FORWARDED TO: 1.M/S. KALGIDHAR NURSERY SCHOOL, 1, GURUJDWARA SINGH, SABHA INTERPURI, NEW DELHI. 2. ACIT, CIR. 33(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR