M/s Fifth Dimention Academy, Gwalior V. A.C.I.T., Circle-3, Gwalior

ITA 17/AGR/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67460 (ITAT-AGRA)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 04-09-2013
• Assessment Year: misc
• Appeal Filed On: 10-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Section: 10; 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO.17/AGRA/2013 ASSESSMENT YEAR: 2009-10 M/S. 5 TH DIMENSION ACADEMY, VS. A.C.I.T., CIRCLE-3, GL-2, KACHNAR GREEN GARDEN, GWALIOR. CITY CENTRE, PATEL NAGAR, GWALIOR. (PAN : AAATT 9125 F). (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 24.09.2013 DATE OF PRONOUNCEMENT : 24.09.2013 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 04.12.2012 FOR THE ASSESSMENT YEAR 20 09-10 ON THE FOLLOWING GROUNDS:- 1) LEARNED CIT (APPEAL) GWALIOR HAS ERRED BY NOT A LLOWING EXEMPTION U/S 10 (23C) TO EDUCATIONAL INSTITUTION. 2) LEARNED CIT (APPEAL) GWALIOR HAS ERRED BY NOT CO NSIDERING LIST OF DONERS WITH COMPLETE NAME AND ADDRESS. 3) LEARNED CIT (APPEAL) GWALIOR HAS ERRED BY NOT RE COGNIZING BOOKS OF ACCOUNTS AND VOUCHERS FOR VERIFICATION AND CONFIRMED 10% OF VARIOUS EXPENSES OF DISALLOWANCE. 2 ITA NO.17/AGRA/2013 A.Y. 2009-10 2. BRIEFLY THE FACTS OF THE CASE ARE THAT IN THIS C ASE A SURVEY UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) WAS CONDUCTED ON 16.09.2008 I.E. IN THE PREVIOUS YEAR 2008-09 RELEVANT TO THE A .Y. UNDER APPEAL. THE ASSESSMENT HAS BEEN COMPLETED ON THE BASIS OF FINDI NGS OF THE SURVEY PROCEEDINGS. THE FOLLOWING ADDITIONS HAVE BEEN MADE BY THE A.O. WHILE COMPLETING THE ASSESSMENT:- 1) ADDITION ON ACCOUNT OF ANONYMOUS DONATION : RS. 2,22,271/- U/S. 115BBC 2) DISALLOWANCE OF CLAIM U/S.10(23C) OF THE ACT : R S. 36,705/- 3) DISALLOWANCE OF 20% OF VARIOUS EXPENSES : RS. 44,557/- 2.1 THE A.O. NOTED THAT THE ASSESSEE HAS CLAIMED RE BATE UNDER SECTION 10(23C) OF THE ACT. HOWEVER, ON PERUSAL OF THE INCOME AND EXPENDITURE ACCOUNT, THE ASSESSEE HAS CONDUCTED VARIOUS ACTIVITIES I.E. WOME N AWARENESS, OLD AGE & HANDICAPPED HELP, PRE-EXAMINATION COACHING, CHILD R IGHT WORK SHOP, LEGAL HELP CAMP, BHRUN HATYA PREV. SEM., WOMEN FARMER TRAINING , NASHA MUKTI, ADOLCENT AWARENESS, CHILD HEALTHY NUTRITION, AIDS AWARENESS, CONSUMER AWARENESS, PROF. DEV & SKILL DEV. TRAINING, YOGA CAMP, MODERN AGRICULTURAL & NEW SEC. SEM., VACCINATION PROG., ENVIRONMENT AWARENESS, CU LTURAL ACTIVITY, ROAD SAFETY PROG., SANITATION PROG., MOTHER AND CHILD DEV. PROG ., FOOD PROCESSING WORK SHOP, ADMINISTRATION & CONTIN, EXP. ETC. 3 ITA NO.17/AGRA/2013 A.Y. 2009-10 2.2 ON PERUSAL OF ABOVE ACTIVITIES, THE ASSESSEE HA S CONDUCTED VERY FEW EDUCATIONAL ACTIVITIES. THE A.O., THEREFORE, HELD THAT THE ABOVE ACTIVITIES ARE NOT COVERED UNDER EDUCATIONAL ACTIVITIES. AS PER SECTI ON 10(23C) EDUCATIONAL INSTITUTIONS MUST EXIST SOLELY FOR EDUCATIONAL PURP OSES. AS THE CASE IS NOT COVERED BY SOLELY FOR EDUCATIONAL ACTIVITIES, THEREFORE, TH E ASSESSEE WOULD NOT BE ENTITLED FOR EXEMPTION UNDER SECTION 10(23C) OF THE ACT. THEREF ORE, THE SURPLUS AMOUNT OF RS.36,705/- WAS DISALLOWED AND ADDED BACK. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) AND SUBMITTED THAT ON ALL THE ABOVE HEADS THE ACTIVITY WAS TO EDU CATE AND GIVE TRAINING WHICH ARE COVERED UNDER EDUCATIONAL ACTIVITIES. MAJOR EXPENS ES ARE TO RUN JAN SIKSHAN SANSTHAN KHANDWA & OTHER EDUCATIONAL PROJECT FOR WH ICH GRANT IS RECEIVED FROM GOVERNMENT. LD. CIT(A) DID NOT ACCEPT THE CONTENTI ON OF THE ASSESSEE BECAUSE THE ASSESSEE IS NOT SOLELY ENGAGED IN EDUCATION ACT IVITIES. THEREFORE, THE ASSESSEE WOULD NOT BE ENTITLED FOR EXEMPTION UNDER SECTION 1 0(23C) OF THE ACT. 3.1 THE A.O. ALSO NOTED THAT THE ASSESSEE HAS CREDI TED DONATION OF RS.2,22,271/-. DURING THE COURSE OF SURVEY, THE ASSESSEE HAS NEITH ER PRODUCED DETAILS OF THESE DONATIONS NOR PRODUCED RECEIPT BOOKS. IN THE STATE MENT DATED 16.09.2008 OF SMT. MADURI SHARMA, SECRETARY OF THE SOCIETY, SHE HAS ST ATED THAT NO RECEIPTS HAD BEEN ISSUED FOR THE DONATIONS RECEIVED BY THE ACADEMY. SUCH RECORDS ARE KEPT ON IN 4 ITA NO.17/AGRA/2013 A.Y. 2009-10 COMPUTERIZED FORMAT. ONCE AGAIN THE ASSESSEE SOCIE TY WAS SPECIFICALLY ASKED VIDE ORDER SHEET DATED 28.11.2011 AS TO WHY IN THE ABSEN CE OF DONOR RECEIPTS THE AMOUNT SHOULD NOT BE TREATED AS ANONYMOUS DONATIONS AND TA XED UNDER SECTION 115BBC OF THE ACT. THE ASSESSEE SUBMITTED BEFORE THE A.O. TH AT THE RECEIPTS HAVE BEEN PREPARED AFTERWARDS. SINCE DURING THE COURSE OF SU RVEY NO EVIDENCES OR MATERIAL WAS PRODUCED TO PROVE THE GENUINE DONATION RECEIVED , THEREFORE, THE A.O. WAS OF THE VIEW THAT THE LIST PREPARED LATER ON IS FABRICA TED AND WAS CONSIDERED AS ANONYMOUS DONATION UNDER SECTION 115BBC OF THE ACT. 3.2 THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT( A) AND IT WAS SUBMITTED THAT LIST OF DONORS ALONG WITH RECEIPT BOOK WAS FILED WI TH THE REPLY. THERE IS NO PROOF OF FINDING OF A.O. THAT RECEIPTS AND DETAILS HAVE B EEN FABRICATED. THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAU SE DURING THE COURSE OF SURVEY NOTHING WAS FOUND REGARDING DONATION RECEIVED FROM DONORS AND RECEIPTS HAVE BEEN PREPARED LATER ON, THEREFORE, IT WAS FABRICATED AND WAS ALSO CONSIDERED AS ANONYMOUS DONATIONS. APPEAL OF THE ASSESSEE WAS AC CORDINGLY DISMISSED. 3.3 THE A.O. FURTHER ON PERUSAL OF THE EXPENDITURE FOUND THAT THE ASSESSEE HAS INCURRED RS.2,22,789/- AS VARIOUS EXPENSES BUT IN T HE ABSENCE OF PROPER VERIFICATION OF THESE EXPENSES, 20% OUT OF THE SAME WERE DISALLO WED. THE LD. CIIT(A) RESTRICTED THE DISALLOWANCE TO 10%. 5 ITA NO.17/AGRA/2013 A.Y. 2009-10 4. THIS APPEAL WAS TAKEN UP FOR HEARING THRICE. EA RLIER ON ALL THE OCCASIONS THE SAME WAS ADJOURNED ON THE REQUEST OF THE LD. COUNSE L FOR THE ASSESSEE SHRI S.K. LULLA, C.A. AS HE WAS SUFFERING FROM ILL HEALTH. W HEN THE APPEAL WAS AGAIN TAKEN UP FOR HEARING ON 24.09.2013 I.E. TODAY A REQUEST W AS FORWARDED THROUGH FAX FOR ADJOURNMENT SIGNED BY ONE UNAUTHORIZED PERSON (PAPP U) IN WHICH IT WAS STATED THAT THE COUNSEL FOR THE ASSESSEE IS OUT OF STATION. IT IS NOT A PROPER REQUEST FOR ADJOURNMENT AND NO PLAUSIBLE REASON HAS BEEN GIVEN FOR ADJOURNMENT. THE LD. DEPARTMENTAL REPRESENTATIVE OPPOSED TO THE REQUEST OF ADJOURNMENT BECAUSE ON A SMALL MATTER APPEAL HAS ALREADY BEEN ADJOURNED THRE E TIMES AND NOW EVEN THE ASSESSEE HAS NOT CARED TO MOVE PROPER APPLICATION F OR ADJOURNMENT GIVING SPECIFIC REASONS FOR SEEKING ADJOURNMENT. THE REQUEST FOR A DJOURNMENT WAS ACCORDINGLY REJECTED AND APPEAL IS HEARD IN THE ABSENCE OF THE ASSESSEE. 5. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND RELIED UPON THE ORDER OF I.T. A.T., AGRA BENCH IN THE CASE OF MANAS SEWA SAMITI VS. ADDL. CIT IN ITA NO.229/AGRA/ 2011, ORDER DATED 23.10.2012 AND SUBMITTED THAT SINCE THE ASSESSEE DO ES NOT EXIST SOLELY FOR THE EDUCATIONAL PURPOSE, THEREFORE, WAS NOT ENTITLED FO R DEDUCTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. NO EVIDENCE OF DONATION S WERE FOUND AND PRODUCED DURING THE SURVEY. THEREFORE, IT WAS CORRECTLY TRE ATED AS ANONYMOUS DONATION. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORD ERS OF THE AUTHORITIES BELOW. 6 ITA NO.17/AGRA/2013 A.Y. 2009-10 6. I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DEP ARTMENTAL REPRESENTATIVE, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE T HOROUGH THE PAPER BOOK FILED BY THE ASSESSEE ON RECORD. THE A.O. HAS SPECIFICAL LY NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS CONDUCTED VARIOUS ACTIVITIES WHICH COVER LARGE NUMBER OF ACTIVITIES WHICH ARE NOT EDUCATIONAL IN NATURE. TH E LD. CIT(A) ALSO CONFIRMED THE FINDING OF FACT RECORDED BY THE A.O. THAT FOR CLAIM ING DEDUCTION UNDER SECTION 10(23C) OF THE ACT, THE ASSESSEE SHALL HAVE TO PROV E THAT THE EDUCATIONAL INSTITUTION EXISTS SOLELY FOR EDUCATIONAL PURPOSE, BUT IN THE C ASE OF THE ASSESSEE, THE ASSESSEE HAS BEEN DOING OTHER THAN EDUCATIONAL ACTIVITIES AL SO. THE ASSESSEE HAS FILED COPY OF INCOME AND EXPENDITURE ACCOUNT IN THE PAPER BOOK WHICH ALSO SUPPORTS THE FINDING OF AUTHORITIES BELOW THAT THE ASSESSEE HAS INCURRED EXPENSES ON VARIOUS OTHER ACTIVITIES WHICH ARE NOT EDUCATIONAL IN NATUR E. THE AUTHORITIES BELOW WERE, THEREFORE, JUSTIFIED IN HOLDING THAT THE ASSESSEE W OULD NOT BE ELIGIBLE FOR EXEMPTION UNDER SECTION 10(23C) OF THE ACT. GROUND NO.1 OF T HE APPEAL OF THE ASSESSEE IS ACCORDINGLY DISMISSED. 6.1 AS REGARDS THE ADDITION MADE ON ACCOUNT OF ANON YMOUS DONATION, IT IS ADMITTED FACT THAT DURING THE COURSE OF SURVEY THE ASSESSEE HAS NOT PRODUCED ANY RECEIPT BOOK OR DETAILS OR EVIDENCE SHOWING THAT TH E ASSESSEE HAS GENUINELY RECEIVED DONATIONS. IT IS ALSO ADMITTED FACT THAT ALL THE RECORDS WERE PREPARED AFTERWARDS, GENUINENESS OF WHICH HAS NOT BEEN ESTAB LISHED. THEREFORE, AUTHORITIES 7 ITA NO.17/AGRA/2013 A.Y. 2009-10 BELOW WERE JUSTIFIED IN HOLDING THAT THE ASSESSEE H AS FABRICATED THE EVIDENCES TO SHOW THE DONATIONS. IN THE PAPER BOOK ALSO, NO EVI DENCES HAVE BEEN FILED TO SHOW THAT THE ASSESSEE HAS RECEIVED GENUINE DONATIONS. IN THE ABSENCE OF ANY COGENT EVIDENCE ON RECORD, I DO NOT FIND ANY REASON TO INT ERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. GROUND NO.2 OF THE ASSESSEES A PPEAL IS ACCORDINGLY DISMISSED. 6.2 AS REGARDS DISALLOWANCE OF 10% OF THE EXPENSES IS CONCERNED, THE A.O. HAS GIVEN SPECIFIC FINDING THAT THE ASSESSEE COULD NOT VERIFY AND JUSTIFY THE EXPENSES WITH SUPPORTING BILLS AND VOUCHERS. THE LD. CIT(A) WAS, THEREFORE, JUSTIFIED IN RESTRICTING THE ADDITION TO 10% OF THE EXPENSES. G ROUND NO.3 OF THE ASSESSEES APPEAL IS ACCORDINGLY DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- (BHAVNESH SAINI) JUDICIAL MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT (APPEALS) CONCERNED/CIT CO NCERNED/ D.R., ITAT, AGRA BENCH, AGRA/ GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY