Dy Commissioner of income Tax, Chandigarh V. All India Pingalwara Society, Amritsar

ITA 1317/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6894 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 08-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Keywords: Charitable institution
• Section: 12AA; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1316/CHD/2016 ASSESSMENT YEAR: 2012-13 THE DY. CIT VS. M/S ALL INDIA PINGALWARA SOCIETY CIRCLE-1 (EXEMPTION) G.T. ROAD, NEAR OLD TEHSIL CHANDIGARH AMRITSAR PAN NO. AAATA2237R CROSS OBJECTION NO. 5/CHD/2017 (IN ITA NO.1316/CHD/2016) ASSESSMENT YEAR: 2012-13 M/S ALL INDIA PINGALWARA SOCIETY VS. THE DY. CIT G.T. ROAD, NEAR OLD TEHSIL CIRCLE-1 (EXEMPTION) AMRITSAR CHANDIGARH ITA NO.1317/CHD/2016 ASSESSMENT YEAR: 2013-14 THE DY. CIT VS. M/S ALL INDIA PINGALWARA SOCIETY CIRCLE-1 (EXEMPTION) G.T. ROAD, NEAR OLD TEHSIL CHANDIGARH AMRITSAR PAN NO. AAATA2237R CROSS OBJECTION NO. 6/CHD/2017 (IN ITA NO.1317/CHD/2016) ASSESSMENT YEAR: 2013-14 M/S ALL INDIA PINGALWARA SOCIETY VS. THE DY. CIT G.T. ROAD, NEAR OLD TEHSIL CIRCLE-1 (EXEMPTION) AMRITSAR CHANDIGARH (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. SANAT KAPOOR DEPARTMENT BY : SHRI. RAVI SARANGAL DATE OF HEARING : 05/07/2017 DATE OF PRONOUNCEMENT : 07/09/2017 ORDER PER BENCH : BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE A ND CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT( A)-2, AMRITSAR DT. 31/08/2016. 2 2. SINCE THE GROUNDS RAISED AND ISSUES INVOLVED IN BOTH THE APPEALS OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARE IDE NTICAL, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. WE SHALL BE TAKING ITA NO. 1316/CHD/20 16 IN CASE OF REVENUE AND C.O NO. 5/CHD/20174 IN CASE OF ASSESSEE AS THE LEAD CASE FOR DISPOSING OF ALL THE APPEALS TOGETHER. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: (1) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED BY WRONGLY APPLYING SECTION 115BBC (2) INSPIT E OF THE FACT THAT SECTION 115BBC (1) IS UNAMBIGUOUS AND CLEARLY APPLIES TO TH E CASE IN HAND. (2) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DECIDING THE ISSUES IN FAVOUR OF ASSES SEE EVEN WHEN THE DONATIONS RECEIVED IN GOLAKS WERE NOT SUBJECT TO ANY KIND OF VERIFICATION BEING FROM ANONYMOUS SOURCES. (3) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) HAS ERRED IN DECIDING THE ISSUES IN FAVOUR OF THE A SSESSEE EVEN WHEN IT WAS REGISTERED AS A CHARITABLE SOCIETY U/S 12AA AND NOT AS A RELIGIOUS SOCIETY OR RELIGIOUS-CUM-CHARITABLE SOCIETY. (4) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE CIT(A) IS CONTRARY TO THE EVIDENCE AN D MATERIAL ON THE RECORD OF THE CASE AND THEREFORE, PERVERSE. (5) THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROU NDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OFF. (6) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE RELIANCE ON THE HON'BLE SUPREME COURT IN THE CASE OF RAM CHA NDRA SHUKLA V. SHREE MAHADEOJI AIR 1970 (SC) 458 BY THE ITAT WAS JUSTIFI ED KEEPING IN THE FACT THAT THE SAID JUDGEMENT WAS IN RELATION TO HINDU LAW AND APP LICABILITY OF INCOME TAX LAW WAS CLEARLY HELD TO BE OF NO RELEVANCE IN THE SAID JUDGEMENT. 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ADDITION MADE U/S 115BBC IS ILLEGAL, BA D IN LAW AND WITHOUT JURISDICTION. 2. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE THE PROVISION OF SECTION 115BBC ARE NOT APPLICABLE TO ASSESSEE AS TH E CHARITY COLLECTED THROUGH VARIOUS GOLAKS (CHARITY BOXES ) WAS NOT IN THE NATU RE OF ANONYMOUS DONATIONS. 5. AS PER THE ASSESSMENT ORDER THE AO OBSERVED THAT THE ASSESSEE IS A CHARITABLE SOCIETY AND NOT A RELIGIOUS CHARITABLE S OCIETY, AND THEREFORE WITHOUT DOUBT IT IS COVERED U/S 115BBC(1) OF THE ACT. THE A SSESSING OFFICER HELD THAT THE DONATIONS RECEIVED THROUGH GOLAKS ARE NOT VERIFIABL E WITH RESPECT TO THE NAME AND ADDRESSES OF THE DONORS BEING FROM UNKNOWN/UNVE RIFIABLE PERSONS. 3 ACCORDINGLY THE DONATIONS TO THE TUNE OF 2,49,07,63 5/-WERE TREATED AS ANONYMOUS DONATIONS WITHIN THE MEANING OF SECTION 1 15BBC(1) OF THE ACT AND SUBJECTED TO TAX UNDER THE PROVISIONS OF SECTION 11 5BBC(L)(I) OF THE ACT I.E. 30% OF THE AMOUNT IN EXCESS OF 5% OF THE TOTAL DONAT IONS OF RS 20,48,28,477/-. 6. THE LD. CIT(A) HELD THAT THE ADDITION ON ACCOUNT OF GOLAK (CHARITY BOXES) RECEIPTS WERE MADE U/S 11 5BBC FOR A. Y. 2010-11 AND 2011-13 AND THE APPEALS FILED BY THE ASSESSEE AGAINST THESE ASESSMENT ORDERS HAD BEEN EARLIER ACCEPTED BY THE CIT(A), AMRITSAR HOLDING THAT THE ASSESSEE T RUST IS ESTABLISHED WHOLLY FOR RELIGIOUS AND CHARITABLE PURPOSES AND AS SUCH FALLS UNDER SECTION 115BBC(2)(B) OF THE ACT AND PROVISIONS OF SECTION 115BBC(1) OF THE ACT ARE NOT APPLICABLE TO THE ASSESSEE TRUST. 7. AGGRIEVED THE REVENUE FILED APPEAL BEFORE US AND CROSS OBJECTION BY THE ASSESSEE. 8. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES. 9. WE HAVE GONE THROUGH THE RECORDS AND FOUND THAT THE MATTER HAS ALREADY BEEN DEALT EXTENSIVELY BY THE CO-ORDINATE B ENCH OF ITAT, AMRITSAR. THE CONCLUDING PART OF THE ORDER IN ITA NO. 212 & 431/A SR/2014 DT. 25/02/2016 IN THE ASSESSEES OWN CASE FOR THE AY 2010-11 AND 2011-12. MOREOVER, AS CONTENDED, THE CONCEPT AND IMPORTANCE OF CHARITY, AGAINST THE BACKDROP OF THE INDIAN SOCIETY, HAS BEEN IN EXISTEN CE FROM TIME MEMORIAL IN ALL RELIGIONS, WITHOUT EXCEPTION. THE ASSESSEE, IN THIS REGARD, HAS CITED ZAKAAT FROM ISLAM, DASVAND FROM SIKHISIM AND THE RECOGNITION OF THIS CONCEPT FROM MANU- SAMRITI, THE ORIGINAL MAGNUM OPUS ON THE INDIAN SOC IAL SYSTEM. THAT THIS CONCEPT HAS CONTINUED TO BE ACCEPTED AND PRACTICED IN INDIA ALL ALONG DOWN THE AGES, AND THUS IT IS FIRMLY ENTRENCHED IN OUR SOCIETY, CA NNOT BE QUESTIONED. 8. ALL THE ABOVE HAS BEEN EXTENSIVELY CONSIDERED IN THE ABOVE DECISIONS CITED. TWO OF THEM, I.E., BARKATE SAIFIYAH SOCIETY (SUPRA) AND PT. RAM CHANDRA SHUKLA(SUPRA) HAVE BEEN FOLLOWED BY THE LD. CIT(A) . THE LD. CIT(A), THOUGH, DID NOT HAVE THE BENEFIT OF BHAGWAN SHJREE LAXMI NARAI N (SUPRA), SINCE THIS DECISION WAS RENDERED POST THE CIT(A)S ORDER. THE DECISION OF THE ITAT, DELHI BENCH IN THE CASE OF BHAGWAN SHREE LAXMI NARAIN ( SUPRA), AS CONFIRMED BY THE HONBLE HIGH COURT, HAS CONSIDERED THIS MATTER IN M UCH DETAIL. DAWOODI BOHRA JAMAT (SUPRA), HANDED DOWN BY THE HONBLE SUPREME COURT, HAS BEEN FOLLOWED. THE DEPARTMENT HAS REMAINED UNABLE TO PER SUADE US TO DEVIATE THERE FROM . 10. ACCORDINGLY, WE HOLD THAT THE LD. CIT(A) HAS CO RRECTLY DELETED THE ADDITION FOR BOTH THE ASSESSMENT YEARS UNDER CONSID ERATION. OUR OBSERVATIONS ARE, MUTATIS, SQUARELY APPLICABLE TO BOTH THE YEARS , SINCE THE ISSUES IN BOTH THE APPEALS ARE COMMON. 4 11. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED WHEREAS CROSS OBJECTION FILED BY THE ASSESSEE ARE ALLOWED. THE ORDER IS PRONOUNCED ON 07/09/2017 IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: AG COPY TO: 1. THE APPELLANT, 2.THE RESPONDENT, 3.THE CIT 4.THE CIT(A) 5.THE DR