Asstt. Commissioner of Income Tax-1, Kanpur V. M/s. Maharana Pratap Education Centre, Kanpur

ITA 132/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78542 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 16-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: P K KAPOOR
• Keywords: Charitable institution; Opportunity of being heard
• Section: 260A; 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 132/LKW/2012 ASSESSMENT YEAR: 2008 - 09 ASSTT. CIT - 1 KANPUR V. M/S MAHARANA PRATAP EDUC ATION CENTRE 117/Q/66, SHARDA NAGAR KANPUR PAN: AABTM5254H (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. ALOK MITRA, D.R. RESPONDENT BY: SHRI. P. K. KAPOOR, C.A. DATE OF HEARING: 19 05 2014 DATE OF PRONOUNCEMENT: 23 05 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER: - 1 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELE TING THE ADDITION OF RS. 5,35.18,632 / - ON ACCOUNT OF EXCESS OF INCOME OVER EXPENDITURE AND DIRECTING THE ASSESSING OFFICER TO COMPUTE THE INCOME OF THE ASSESSEE UNDER SECTION 11 & 12 OF THE INCOME TAX ACT, 1961 BY IGNORING THE FACT; THAT THE DEPARTMENT HAS NOT ACCEPTED THE ORDER OF THE HOBBLE ITAT FOR A.Y. 2005 - 06 REGARDING GRANT OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 TO THE ASSESSEE AND AN APPEAL UNDER 260A OF THE ACT HAS BEEN FILED BEFORE THE HON'BLE HIGH COURT, ALLAHABAD. 2 . THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 5,40,000 / - ON ACCOUNT OF SALARY PAID TO THE SPECIFIED PERSONS PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : COVERED UNDER SECTION 13(3)/40A(2)(B) OF INCOME TAX ACT, 1961 WITHOU T APPRECIATING THE FACTS AND MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. 3 . THAT THE ORDER OF THE LD. CIT (A) - II, KANPUR DATED 21.12.2011 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 30.12.2010 TO BE RESTORED . 2 . DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE IMPUGNED ISSUES ARE SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 - 10 . COPY OF THE ORDER OF THE TRIBUNAL DATED 29.11. 2013 IN ITA NO.533/LKW/2012 IS PLACED ON RECORD. 3 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE A.O. 4 . WE HAVE CAREFULLY PERUSED THE ORDER OF THE LD. CIT(A), GROUNDS RAISED BY THE REVENUE BEFORE US AND THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 - 10 AND WE FIND THAT THE ISSUE S RAISED BEFORE US IN THE INSTANT CASE WERE ALSO RAISED BEFORE THE TRIBUNAL AS GROUNDS NO.1 AND 3 IN ASSESSMENT YEAR 2009 - 10 AND THE TRIBUNAL HAS EXAMINED BOTH THE ISSUES IN DET AIL AND CONFIRMED THE ORDER OF THE LD. CIT(A). F OR THE SAKE OF REFERENCE, WE EXTRACT THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL DATED 29.11.2013 AS UNDER: - 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT EVEN AS PER GROUND RAISED BY THE REVENUE, IT IS STATED BY THE REVENUE THAT THIS ISSUE IS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BUT REVENUE HAS FILED APPEAL U/S 260A OF THE ACT BEFO RE HON'BLE ALLAHABAD HIGH COURT AND THEREFORE, LEARNED CIT (A) IS NOT JUSTIFIED IN DECIDING THIS ISSUE IN FAVOUR OF THE ASSESSEE. WE DO NOT FIND ANY MERIT IN THE GROUNDS RAISED BY THE REVENUE BECAUSE IT IS NOT SHOWN BY THE REVENUE THAT THE TRIBUNAL ORDER IN I.T.A. NO.64/LUC/09 DATED 17/04/2009 HAS BEEN STAYED BY PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : HON'BLE ALLAHABAD HIGH COURT AND IN THAT SITUATION, IT HAS TO BE ACCEPTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION AND THEREFORE, THERE IS NO INFIRMITY IN THE O RDER OF LEARNED CIT (A) ON THIS ISSUE. ACCORDINGLY, THIS GROUND OF THE REVENUE IS REJECTED. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ONCE IT IS ACCEPTED THAT THE REGISTRAT ION GRANTED TO THE ASSESSEE U/S 12A HAS BEEN RESTORED BY THE TRIBUNAL AND SUCH TRIBUNAL ORDER IS STILL VALID, THE INCOME OF THE ASSESSEE HAS TO BE COMPUTED AS PER THE PROVISIONS OF SECTION 11 AND 12 OF THE ACT. AS PER THE PROVISIONS OF THAT SECTION, TO TH E EXTENT SUCH SURPLUS OF INCOME OVER EXPENDITURE IS APPLIED FOR THE OBJECTS OF THE TRUST/INSTITUTION AND IF SUCH APPLICATION IS 85% OR MORE OF SUCH INCOME, THEN THE INCOME OF THE ASSESSEE HAS TO BE ACCEPTED AS EXEMPT. FROM THE ORDERS OF THE AUTHORITIES BE LOW, NOTHING IS COMING OUT AS TO WHETHER THERE IS ANY APPLICATION OF INCOME FOR THE OBJECTS OF THE ASSESSEE INSTITUTION. BEFORE US ALSO, NO SUCH EVIDENCE IS MADE AVAILABLE. EVEN IN THE STATEMENT OF FACTS FILED BY THE ASSESSEE BEFORE LEARNED CIT (A), THERE IS NO SUCH DETAIL AVAILABLE REGARDING ANY APPLICATION OF INCOME FOR THE OBJECTS OF THE ASSESSEE INSTITUTION. EVEN IF SUCH ADDITION IS DELETED BY THE TRIBUNAL IN EARLIER YEARS, IN THE PRESENT YEAR ALSO, THIS FACT HAS TO BE EXAMINED THAT THE ASSESSEE HAS M ADE APPLICATION OF INCOME TOWARDS ITS OBJECTS AND HENCE, WE SET ASIDE THE ORDER OF CIT (A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION. WE WOULD LIKE TO MAKE IT CLEAR THAT THE BURDEN IS ON THE ASSESSEE TO BRING EVIDENCE ON RECORD TOWARDS APPLICATION OF INCOME FOR THE OBJECTS OF THE ASSESSEE INSTITUTION AND IF THE ASSESSEE CAN BRING SUCH EVIDENCE ON RECORD TO SHOW THAT 85% OR MORE OF INCOME HAS BEEN UTILIZED FOR THE PURPOSE OF ASSESSEE INSTITUTION, BEING CHARITABLE PURPOSE, THEN OBVIOUSLY IT HAS TO BE HELD THAT THE ASSESSEE INSTITUTION IS ENTITLED FOR EXEMPTION U/S 11 BUT IF THE ASSESSEE FAILS TO DO SO THEN NO SUCH EXEMPTION IS ALLOWABLE. THE ASSESSING OFFICER SHOULD PASS NECESSARY ORDER AS PER LAW AS PE R ABOVE DISCUSSION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND NO. 2 IS ALLOWED FOR STATISTICAL PURPOSES. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE DISALLOWANCE OF RS.5.40 LAKHS WAS MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 13(3) OF THE ACT. LEARNED CIT(A) HAS DELETED THIS DISALLOWANCE ON THE BASIS THAT SIMILAR DISALLOWANCE WAS DELETED BY THE TRIBUNAL IN EARLIE R YEAR. HE HAS ALSO REPRODUCED A CHART OF YEAR - WISE RECEIPT FOR THE PRESENT YEAR AS WELL AS FOR THREE PRECEDING ASSESSMENT YEARS. WE FIND THAT AS PER THE CHART, THE GROSS RECEIPT IN THE PRESENT YEAR HAS INCREASED SUBSTANTIALLY IN COMPARISON TO EARLIER YE ARS BUT THE PAYMENT OF REMUNERATION IS THE SAME. UNDER THESE FACTS, IF SUCH PAYMENT OF REMUNERATION WAS HELD TO BE ALLOWABLE IN EARLIER YEAR, IT CANNOT BE SAID THAT THE SAME IS EXCESSIVE IN THE PRESENT YEAR. HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. THIS GROUND OF REVENUE IS REJECTED. 5 . SINCE THE IMPUGNED ISSUES ARE SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND FOLLOWING OUR EARLIER ORDER, WE CONFIRM THE ORDER OF THE LD. CIT(A). 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.5.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD MAY , 2014 JJ: 1905 COPY FO RWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )