Aditya Siksha & Swasathya Samiti (Regd.), Haryana V. ITO, Bhiwani

ITA 1667/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2750 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: SHIV RATTAN
• Keywords: Principle of natural justice
• Section: 144; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.1667/DEL/2012 ASSESSMENT YEAR : 2008-09 ADITYA SIKSHA & SWASATHYA SAMITI (REGD.), C/O SURAMVEER SINGH, S/O HARI SINGH, VPO GHASOLA, TEHSIL CH. DADRI, DISTT. BHIWANI, HARYANA. PAN : AABTA6163B VS. ITO, WARD-I, HUDA COMMERCIAL COMPLEX, BHIWANI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHIV RATTAN, ADVOCATE REVENUE BY : SHRI BHIM SINGH, SR.DR ORDER PER A.D. JAIN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2008-09 AGAINST THE ORDER DATED 28.11.2011 PASSED BY T HE CIT (A), ROHTAK, TAKING THE FOLLOWING GROUNDS:- 1. THAT THE LD. ITO ERRED IN FRAMING THE EX-PARTE BEST JUDGEMENT ASSESSMENT, WITHOUT PROPER SERVICE OF NOTICE. 2. THAT THE LD. ITO FURTHER ERRED IN DISALLOWING AND THE L D. CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF THE DEDUCTION WORTH RS.95046/- CLAIMED U/S 10(23C) (IIIAD) OF THE INCOME TAX ACT, 1961, BY THE APPELLANT SOCIETY, ESTABLISHED FOR THE PURP OSE OF IMPARTING EDUCATION AND NOT FOR THE PROFIT MOTIVE. 3. THAT THE LD. ITO FURTHER ERRED IN DISALLOWING AND THE L D. CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF THE DEDUCTION WORTH RS.1702452/- CLAIMED U/S 10(23C)(IIIAD) OF THE INCOM E TAX ACT, 1961, BY THE APAPELLANT SOCIELTY, IN RESPECT OF EXCESS OF INCOME OVER EXPENDITURE, SHOWN IN THE INCOME & EXPENDITURE A/ C OF ADITYA COLLEGE OF EDUCATION RUN BY THE APPELLANT SOCIETY , ITA NO.1667/DEL/2012 2 ESTABLISHED FOR THE PURPOSE OF IMPARTING EDUCATION AN D NOT FOR THE PROFIT MOTIVE. 4. THAT THE LD. ITO FURTHER ERRED IN MAKING AND THE LD. CI T (A) ERRED IN CONFIRMING THE ADDITION OF RS.1313806/- ON ACCOUNT OF UNSECURED LOANS. 5. THAT THE LD. ITO FURTHER ERRED IN MAKING AND THE LD. CI T (A) ERRED IN CONFIRMING THE ADDITION OF RS.187000/- ON A CCOUNT OF NON DEDUCTION TAX AT SOURCE ON BUILDING RENT OF RS.1870 00/-. 6. THAT THE ORDERS OF BOTH THE LD. ITO AND THE LD. CIT (A) ARE AGAINST FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 7. THAT THE LD. CIT (A) HAS FAILED TO PROPERLY APPRECIATE SUBMISSIONS, FACTS AND CIRCUMSTANCES OF THE CASE AND TH E LEGAL PROPOSITION SUBMITTED BY THE APPELLANT. 2. THE FACTS AS PER THE RELEVANT ORDERS ARE THAT THE A SSESSEE SOCIETY IS RUNNING A B.ED. COLLEGE UNDER THE NAME AND STYLE O F ADITYA COLLEGE OF EDUCATION. RETURN OF INCOME WAS FILED ON 30.09.2 008 AT NIL INCOME AFTER CLAIMING EXEMPTION OF RECEIPTS OVER EXPENDITUR E OF ` 95,046/- U/S 10(23C) (IIIAD) OF THE ACT. DURING THE INITIAL COU RSE OF ASSESSMENT PROCEEDINGS, SHRI RAVINDER KUMAR, PRINCIPAL OF THE S OCIETY, AS AUTHORIZED BY THE PRESIDENT AND SECRETARY OF THE SOC IETY, APPEARED BEFORE THE ASSESSING OFFICER. HOWEVER, THERE WAS NO RESP ONSE TO A NUMBER OF NOTICES/ADJOURNMENTS GIVEN BY THE ASSESSING OFF ICER SUBSEQUENTLY. FINALLY, NOTICE U/S 143 (2)/142 (1) DAT ED 14.12.2010 FOR THE HEARING ON 16.12.2010 WAS SENT THROUGH THE DAFTR I OF THE OFFICE AND AS PER HIS REPORT, THE COLLEGE HAS BEEN CLOSED AND THE NOTICE COULD NOT BE SERVED. THE ASSESSING OFFICER, THEREFORE, DEPUTED IN SPECTOR FOR SERVICE OF THE NOTICE WHO CONTACTED SHRI SHIV NARAIN , SECRETARY OF THE SOCIETY AND ALSO TELEPHONICALLY CONTACTED SHRI SURAM VIR, PRESIDENT OF THE SOCIETY. AS SHRI SHIV NARAIN, SECRETARY REFUSED TO TAKE THE NOTICES, THE NOTICES WERE SERVED BY AFFIXTURE. THE ASSESSING OFF ICER COMPLETED THE ASSESSMENT U/S 144 OF THE ACT. ITA NO.1667/DEL/2012 3 3. THE ASSESSEE CONTENDED BEFORE THE LD. CIT (A) AS FOLL OWS:- 3.1 M/S ADITYA SHIKSHA & SAWASTHYA SAMITI, RUNNING B. ED. COLLEGE, WAS PROVISIONALLY AFFILIATED WITH MAHARSHI DAYANAND UNIVERSITY (MDU), ROHTAK. THE PROVISIONAL AFFILIATION WAS WITHDRAWN BY THE UNIVERSITY VIDE LETTER DATED 1.8.2009 A ND THE COLLEGE WAS NOT ALLOWED ADMISSION FOR THE B.ED COURSE DURING 2009-10. COPY OF THE LETTER WITHDRAWING THE PROVISIONA L AFFILIATION HAS BEEN FURNISHED. THE COLLEGE RUN BY THE SOCIETY WAS THEREFORE CLOSED AFTER THE WITHDRAWAL OF PROVISIONA L AFFILIATION BY MDU. WHEN APPROACHED BY THE INSPECTOR ON 14.12.2010 TO SERVE THE NOTICES ON THE SECRETARY OF THE SOCIETY, HE WAS INFORMED THAT THE SOCIETY HAD PASSED RESOLUTION AUTHORIZING THE PRESIDENT OF THE SOCIETY TO DEAL WITH ALL SUCH MATTERS AND THE MOBILE NO. OF THE PRESIDENT WAS GIVEN TO THE INSPECTOR. THE INSPECTOR HAD CONTACTED THE PRESIDENT ON THE PHONE WHO INFORMED THAT HE IS ILL. THE INSPECTOR SHOU LD HAVE SERVED THE NOTICE ON THE PRESIDENT INSTEAD OF AFFIXING TH E SAME AT THE COLLEGE ADDRESS. AN AFFIDAVIT DATED 13.10.2011 OF SH. SURAMVIR SINGH, PRESIDENT OF THE SOCIETY IN THIS REGAR D WAS FURNISHED DURING THE APPEAL PROCEEDINGS. 3.2 THE APPELLANT DID NOT HAVE ITS OWN BUILDING AND TOOK THE AND BUILDING, OWNED BY 7 PERSONS, ON RENT W.E.F. AUG UST, 2006 ON A MONTHLY RENTAL OF RS.16,000/- FOR 3 YEARS AND FU RNISHED A COPY OF THE RENT DEED. THE APPELLANT SOCIETY STARTED IN TAKE OF 100 B.ED. STUDENTS DURING THE ACADEMIC SESSION 2006-07 AS PER THE CONDITIONAL RECOGNITION FROM NCTE AND PROVISIONAL AFFILIATION FROM MDU VIDE NOTIFICATION DATED 13.09.2006. FOR RUNN ING THE COURSE, THE APPELLANT SOCIETY TOOK LOANS FROM VARIOUS PERSONS EACH BELOW RS.20,000/- AMOUNTING TO RS.13,13,806/-. THE AR FURNISHED LIST OF THE LOAN CREDITORS ALONG WITH THEIR C ONFIRMATIONS. THE PROVISIONAL AFFILIATION WAS WITHDRAWN BY MDU VIDE LETTER DATED 1.8.2009 AS THE SOCIETY COULD NOT ARRANGE ITS OWN LAND AND BUILDING. 3.3 THE APPELLANT SOCIETY WAS SET UP TO IMPART EDUCATION AND NOT FOR THE PURPOSE OF PROFIT. THE GROSS RECEIPTS OF TH E APPELLANT SOCIETY WERE BELOW ` 1.00 CRORE AND THEREFORE THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING EXEMPTION U/S 10 ( 23C) (IIIAD) IS ERRONEOUS. THE AR FURNISHED AUDITED ACCOUNTS OF THE A PPELLANT SOCIETY AND THE COLLEGE RUN BY IT. 4. THE LD. CIT (A) WHILE DISMISSING THE ASSESSEES APPEAL V IDE THE IMPUGNED ORDER, OBSERVED AS FOLLOWS REGARDING GROUND N O.1 CONCERNING THE ASSESSEES CHALLENGE TO THE ASSESSING OFFICE RS ACTION OF FRAMING EX PARTE ASSESSMENT WITHOUT PROPER SERVICE OF NOTICE:- ITA NO.1667/DEL/2012 4 4. I HAVE CONSIDERED THE ISSUE AND THE SUBMISSIONS M ADE BY THE AR. FROM THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE A.O. HAS GIVEN A NUMBER OF OPPORTUNITIES TO THE APPELLANT SO CIETY TO SUBSTANTIATE THE CLAIMS MADE IN THE RETURN OF INCOME AND ALSO TO FURNISH THE DETAILS CALLED FOR BY HIM. INITIALLY, THE PRINCIPAL OF THE APPELLANT SOCIETY WAS PRESENT BUT THEREAFTER THERE WAS NO COMPLIANCE TO VARIOUS NOTICES SENT BY THE A.O. AS THE ASSESSMENT WAS TIME BARRING ON 31.12.2010, THE A.O. GA VE A LAST OPPORTUNITY BY NOTICE DATED 14.12.2010 FIXING THE HE ARING ON 16.12.2010. SH. SHIV NARAIN, SECRETARY, INSTEAD OF RECEIVING THE NOTICE, PERSONALLY BROUGHT BY THE INSPECTOR, REFUSED THE SAME ON SOME TECHNICALITIES AND INSTEAD DIRECTED THE I NSPECTOR TO SERVE ON SH. SURAMVIR SINGH, PRESIDENT, WHO AGAIN DID NOT TAKE THE NOTICE ON THE GROUND THAT HE WAS ILL. THE CONT ENTION OF THE APPELLANT THEREFORE THAT PRINCIPLES OF NATURAL JUSTIC E HAVE BEEN VIOLATED IS WITHOUT ANY BASIS AND THEREFORE DESERV ES TO BE REJECTED. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS REITER ATED THE STAND TAKEN BY THE ASSESSEE BEFORE THE LD. CIT (A). BESI DES, A LETTER DATED 18.07.2013 HAS BEEN FILED, WHICH READS AS FOLLOW S:- R/SIR, WE GIVE THE UNDERTAKING TO APPEAR BEFORE THE A.O. FOR ASSESSMENT OF THE CASE. THE SOCIETY IS CLOSED AND THE NOTICE MAY KINDLY BE DIRECTED TO BE SERVED ON ANY OF THE TWO A DDRESSES GIVEN BELOW:- 1. SURAMVEER SINGH, S/O SHRI HARI SINGH, V & PO GHASOLA, TEH CH. DADRI, DISTT. BHIWANI. OR 2. SHIV RATTAN, ADVOCATE, 265-66, SHIV NAGAR COLONY, BHIWANI 127021 (HARYANA). THANKING YOU & OBLIGE. YOURS FAITHFULLY, SD/- (SHIV RATTAN) ADVOCATE, COUNSEL FOR ADITYA SIKSHA & SWASATHYA SAMITI, DISTT. BHIWANI. NEW DELHI, 18.07.2013. ITA NO.1667/DEL/2012 5 6. THE LD. DR, ON THE OTHER HAND, HAS STRONGLY RELIED ON THE IMPUGNED ORDER AND IT HAS BEEN CONTENDED THAT THE AF FIXTURE OF NOTICE WAS PROPER, SINCE UNDISPUTEDLY, SH. SHIV NARAIN, SECRE TARY, INSTEAD OF RECEIVING THE NOTICE, PERSONALLY BROUGHT BY THE INSPE CTOR, REFUSED THE SAME ON SOME TECHNICALITIES AND INSTEAD DIRECTED THE IN SPECTOR TO SERVE ON SH. SURAMVIR SINGH, PRESIDENT, WHO AGAIN DID NOT TAKE THE NOTICE ON THE GROUND THAT HE WAS ILL. THE CONTENTIO N OF THE APPELLANT THEREFORE THAT PRINCIPLES OF NATURAL JUSTICE HAVE BEE N VIOLATED IS WITHOUT ANY BASIS AND THEREFORE DESERVES TO BE REJECTED . 7. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MAT ERIAL ON RECORD. AS PER THE STATEMENT OF FACTS FILED, THAT THE ASSESSEE IS A SOCIETY ESTABLISHED FOR THE PURPOSE OF IMPARTING EDUCAT ION AND NOT FOR THE PROFIT MOTIVE, AS IS CLEAR FROM THE CONSTITUTION O F THE SOCIETY; THAT THE ASSESSEE SOCIETY WAS RUNNING A B.ED. COLLEGE UNDER TH E NAME AND STYLE OF ADITYA COLLEGE OF EDUCATION AT WAREHOUSE ROA D, CH. DADRI, DISTT. BHIWANI. THE COLLEGE WAS PROVISIONALLY AFFILI ATED WITH MAHARSHI DAYANAND UNIVERSITY, ROHTAK. THE PROVISIONAL AFFILIA TION OF THE COLLEGE WAS WITHDRAWN BY THE UNIVERSITY AND THE COLLEGE WAS N OT ALLOWED ADMISSION FOR THE B.ED COURSE FOR THE SESSION 2009-10 VID E LETTER NO.CB-IX/09/10065-66 DATED 01.08.2009; THAT THE NOT ICES SENT BY THE LD. ITO UPTO THE YEAR 2009 WERE DULY RECEIVED BY TH E ASSESSEE SOCIETY, AS IS CLEAR FROM THE FIRST PARA OF PAGE 2 OF THE ASSESSING OFFICERS ORDER; THAT THE COLLEGE RUN BY THE SOCIETY WAS CLOSED AFTER WITHDRAWAL OF PROVISIONAL AFFILIATION BY THE UNIVERSITY OF THE COLL EGE, AS IS CLEAR FROM THE REPORT OF THE DAFTRI OF THE INCOME TAX OFFICE, AS MENTIONED IN THE FIRST PARA OF PAGE 3 OF THE ORDER; THAT THE SECRETAR Y OF THE SOCIETY HAD CLARIFIED TO THE INSPECTOR DEPUTED ON 14.12.2010 BY THE LD. ITO TO SERVE THE NOTICE ON THE ASSESSEE SOCIETY FOR THE HEARING OF TH E CASE ON 16.12.2010 THAT THE SOCIETY HAS PASSED RESOLUTION, AUTH ORIZING THE PRESIDENT OF THE SOCIETY TO DEAL WITH ALL SUCH MATTERS AND THE MOBILE ITA NO.1667/DEL/2012 6 NO. OF THE PRESIDENT WAS GIVEN TO THE INSPECTOR. THE INSPECTOR HAD CONTACTED THE PRESIDENT OF THE SOCIETY ON HIS MOBILE THEN AND THERE ITSELF. THE PRESIDENT HAD TOLD THE INSPECTOR THAT HE WAS ILL. THE LD. ITO, HAS MENTIONED ONLY HALF FACTS IN THE SECOND PARA OF P AGE 3 OF THE ORDER; AND THAT THE LAST KNOWN ADDRESS OF THE ASSESSEE WAS KNOWN TO THE LD. ITO AND THE PASTING OF NOTICE ON THE CLOSED C OLLEGE IS AGAINST ALL THE PRINCIPLES OF NATURAL JUSTICE. 8. FURTHER, AS PER THE LETTER DATED 18.07.2013 (SUPRA ), THE ASSESSEE HAS UNDERTAKEN TO APPEAR BEFORE THE A.O. FOR ASSESSMENT OF THE CASE. 9. THE ASSESSEE, IT IS SEEN, HAS BEEN CONDEMNED UNHEARD. FROM THE FACTS AVAILABLE ON RECORD, IT IS CLEAR THAT THE A SSESSEE DID NOT WILLFULLY ABSENT ITSELF BEFORE THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS. IT COULD NOT APPEAR BEFORE THE ASSESSING O FFICER BECAUSE THE SOCIETY HAD BEEN CLOSED DOWN ON THE WITHDRAWAL B Y THE MD UNIVERSITY, ROHTAK OF AFFILIATION TO THE COLLEGE RUN BY THE SOCIETY. 10. IN THE ABOVE FACTS, WE DEEM IT APPROPRIATE TO RE MIT THIS MATTER TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH ON AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE A SSESSEE UNDOUBTEDLY SHALL COOPERATE IN THE FRESH ASSESSMENT PROCE EDINGS BEFORE THE ASSESSING OFFICER. 11. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.20 13. SD/- SD/- [G.D. AGRAWAL] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED, 31.07.2013. ITA NO.1667/DEL/2012 7 DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR, ITAT, DELHI BENCHES