ITO (E), New Delhi V. Bhartiya Adim Jati Sewak Sangh, New Delhi

ITA 1200/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9038 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMITA M BISHWAS
• Assessee Lawyers: M K BHATT
• Keywords: Charitable institution
• Section: 143(3); 12A; 10B; 48

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SHRI SUCHITRA KAMBLE , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 1200/DEL/2016 (ASSESSMENT YEAR: 2009 - 10 ) ITO(E), WARD - 1(3), NEW DELHI VS. BHARTIYA ADIM JATI SEWAK SANGH, THAKKAR BAPA SMARAK SADAN, JAHNDEWALA NEW DELHI PAN: AAATB1083C (APPELLANT) (RESPONDENT) REVENUE BY : M/S. PRAMITA M. BISHWAS, CIT DR ASSESSEE BY: SHRI M. K. BHATT, CA DATE OF HEARING 26/07 / 2021 DATE OF PRONOUNCEMENT 0 5 / 0 8 / 2021 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS APPEAL IS FILED BY THE ITO(EXEMPTION), WARD - 1(3), NEW DELHI AGAINST THE ORDER OF THE LD CIT(A) - 40, NEW DELHI DATED 07.12.2015 FOR ASSESSMENT YEAR 2009 - 10, WHEREIN, THE ADDITION MADE BY THE LD AO IN ORDER U/S 143(3) OF THE ACT DATED 30.12.2011 OF RS. 11,13,54,150 / - WAS DELETED. THEREFORE, THE AO IS AGGRIEVED AND HAS RAISED THE FOLLOWING THREE GROUNDS OF APPEAL: - 1. THE LD CIT(APPEAL) HAS ERRED IN IGNORING THE FACT THAT THE ACCOUNTS OF THE ASSESSEE WERE DEFECTIVE AS THE ASSESSEE FAILED TO INCORPORATE RECEIPTS FROM GOVERNMENT GRANT ACCOUNT TO THE EXTENT OF RS. 25,60,92,254/ - IN THE INCOME & EXPENDITURE A/C; 2. THE LD CIT(APPEAL) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS SHOWN EXPENDITURE OF RS. 23,76,20,704/ - AGAINST SPECIFIED GRANTS OUT OF WHICH AN AMOUNT O F RS.21,20,71,634/ - HAS BEEN SHOWN AS LIABILITY PAYABLE TO OWN BRANCHES 3. THE LD CIT(A) HAS OVERLOOKED THE FACT THAT ACCOUNTS MAINTAINED BY THE RESPECTIVE BRANCHES DOESNT REFLECT CORRESPONDING AMOUNT RECEIVABLE FROM THE HEAD OFFICE AND ASSESSING OFFICER HAS MADE ADDITION OF RS. 11,13,54,150/ - BEING DIFFERENCE IN THE BOOKS AS MAINTAINED BY THE BRANCHES AND HEAD OFFICE AND FURTHER AS THE ASSESSEE HAS FAILED TO OFFER ANY DETAILS/ PROOF OF EXPENDITURE. PAGE | 2 2. THE BRIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE IS A CHARITABLE TRUST REGISTERED U/S 12A OF THE ACT. IT FILED ITS RETURN OF INCOME ON 29.09.2009 AT RS. NIL. THE RELEVANT FORM NO. 10B AND THE BALANCE SHEET AND ANNUAL ACCOUNTS WERE ALSO FILED. 3. THE ASSESSEE OBJECT IS THAT IT RECEIVED GRANT FROM DEPARTMENT OF W OMEN & CHILD DEVELOPMENT, MINISTRY OF TRIBAL AFFAIRS AND CENTRAL WELFARE BOARD ETC. IT MAINTAINS A CENTRAL OFFICE ACCOUNT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE HAS DECLARED INCOME OF RS. 49,58,711/ - . HOWEVER, IN THE CE NTRAL OFFICE ACCOUNT GRAND RECEIVED FROM GOVT. OF INDIA DID NOT REFLECT. THE ASSESSEE ON QUESTION SUBMITTED A BALANCE SHEET CONSOLIDATION OF GOVT GRANT ACCOUNT SHOWING THE TOTAL INCOME OF RS. 25 ,60,92,254 . THE LD AO NOTED THAT THIS IS UNDISCLOSED INCOME OF THE ASSESSEE NOT SHOWN IN THE I N C O M E A N D E X P E N D I T U R E ACCOUNT. THE ASSESSEE SUBMITTED THAT SUCH GRANT IS NEVER BROUGHT UNDER INCOME OF THE TRUST BUT IS DISTRIBUTED TO THE VARIOUS BRANCHES OF THE TRUST. THE ASSESSEE SUBMITTED THE TOTAL LIST OF 65 BRANCHES. THE LD AO NOTED THAT THE ACCOUNT OF THE SOME OF THE BRANCHES ARE NOT ADDED. THEREFORE, THE LD AO HELD THAT THE ASSESSEE SHOULD HAVE SUBMITTED TRUE AND CORRECT ACCOUNT IN THE RETURN OF INCOME BUT NOT SUBMITTED THE MAJOR PORTION OF ACCOUNTS ALONG WITH RETURN OF INC OME. T H U S , ASSESSEE H A S VIOLATED FUNDAMENTAL CONDITIONS OF REGISTRATION U/S 12A OF THE ACT. THE LD AO NOTED THAT EXPENDITURE TO THE EXTENT OF RS. 10,24,54,014/ - AND RS. 89,00,136/ - ON THE HEAD OFFICE A C C O U N T ARE CREATED BY THE MERE TRANSFER ENTRY BY CREDITING THE BRA NCH ACCOUNT WITHOUT CORRESPONDING EXPENDITURE IN THE BRANCH ACCOUNT. THE SAME CANNOT BE ALLOWED AS GENUINE EXPENDITURE. THEREFORE, THE SUM OF RS. 11,13,54,150/ - WAS DISALLOWED. THE LD AO FURTHER PROPOSED TO THE DIRECTOR OF EXEMPTION PROPOSAL FOR WITHDRAWAL OF REGISTRATION U/S 12A OF THE ACT. T H E A S S E S S M E N T O R D E R U / S 1 4 3 ( 3 ) W A S P A S S E D O N 3 0 . 1 2 . 2 0 1 1 5. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A) WHO DELETED THE ABOVE ADDITION AND THEREFORE, THE AO IS AGGRIEVED. 6. THE LD DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD AO AND STATED THAT THE ADDITION HAS BEEN DELET ED WITHOUT APPRECIATING THE FACTS OF THE CASE. 7. THE LD AR SUBMITTED A DETAILED PAPER BOOK REFERRED TO THE COPY OF THE LETTERS OF SANCTION OF THE GRANT AND COPY OF UTILIZATION CERTIFICATE . H E R E F E R R E D T O T H E P A G E N O . 48 OF THE PAPER BOOK BEING THE LETTER OF DEPUTY SECRETARY OF GOVT. OF INDIA DATED 18.11.2008 WHICH STATED THAT WELFARE SCHEME RUN BY THE ASSESSEE WERE TRANSFER R E D TO CENTRAL SOCIAL WELFARE BOARD ON TEMPORARY BASIS TILL SAME ENQUIRIES ARE COMPLETED AS COMPLAINT AGAINST THE ASSESSE E I S P E N D I N G . HE FURTHER REFERRED TO PAGE | 3 PAGE NO. 50 OF THE PAPER BOOK WHEREIN, IT IS SPECIFICALLY CERTIFIED THAT THE ASSESSEE HAD UTILIZED SUM OF RS. 23.76 CRORES FOR RENT CRCHES UNDER RAJIV GANDHI CRECHE SCHEME DURING THE YEAR 2008 - 09 IN ANTICIPATION OF SANCTION OF GR ANT. HOWEVER, NO GRANT IS RELEASED DURING THE YEAR. THEREFORE, THE CLAIM OF THE LD AR THAT AS NO GRANT IS RECEIVED BY THE ASSESSEE , THERE CANNOT BE ANY GRANT SHOWN IN THE ANNUAL ACCOUNTS OF THE ASSESSEE. HE EXTENSIVELY REFERRED TO PARA 5.2.3 OF THE ORDER O F THE LD CIT(A) STATING THAT THESE FACTS ARE RECORDED FROM AND BASED ON THIS THE LD CIT(A) HAS DELETED THE ADDITION. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS, THE LD CIT(A) ON THE BASIS OF FACTS PRODUCED BEFORE HIM HAS CATEGORICALLY HELD THAT NO AMOUNT OF GRANT HAS BEEN RECEIVED BY THE ASSESSEE AND GRANT IS STILL TO BE RECEIVED AS THERE ARE CERTAIN ENQUIRIES PENDING AGAINST THE ASSESSEE THE SANCTION OF THE GRANT HAS LOT OF CONDITIONS. THIS ALSO EVIDENT FROM THE LETTER SHOWN BY THE LD AR. IN VIEW OF THIS , AS THERE IS NO CERTAINTY OF THE GRANT TO BE RECEIVED BY THE ASSESSEE IN VIEW OF THE PENDING ENQUIRIES AGAINST THE ASSESSEE WHICH IS ALSO TAKES REPORT OF CONTROLLER AND AUDITOR GENERAL OF INDIA. HE ALSO NOTED THAT LEGAL INCOME RAISED BY THE CENTRAL ACCOUNT OFFICE AND THE BRA N CHES OF THE ASSESSEE HAS BEEN CORRECTLY ACCOUNTED FOR BY THE ASSESSEE. HE FURTHER HELD THAT THE ASSESSEE HAS INCURRED EXPENDITURE TO THE EXTENT OF ONLY RS. 42,90,740/ - AND THEREFORE, IN ABSENCE OF ANY GRANT RECEIVED BY THE ASSES SEE DURING THE YEAR THE GRANT INCOME COULD NOT HAVE BEEN ACCOUNTED FOR A S I T N E I T H E R A C C R U E D N O R R E C E I V E D . THIS FACT IS SHOWN BY THE LETTER OF THE GOVT . OF INDIA AS WELL AS THE UTILIZATION CERTIFICATE ISSUES BY THE CHARTERED ACCOUNTANT. IN VIEW OF THIS , WE DO NOT FIND ANY INFIRMITY IN THE O RDER OF THE LD CIT (A) IN HOLDING THAT THE DISALLOWANCE MADE IN THE HANDS OF THE ASSESSEE OF THE EXPENDITURE IS NOT SUSTAINABLE. ACCORDINGLY, ALL THE THREE GROUNDS RAISED BY THE LD AO ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 10. T HE ORDER IS PRONOUNCED IN THE OPEN COURT ON 0 5 / 0 8 / 2 0 2 1 . - SD/ - - SD/ - ( SUCHITRA KAMBLE ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 5 / 0 8 / 2021 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT PAGE | 4 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI