DDIT (E)-1(1), MUMBAI V. MUMBAI CRICKET ASSOCIATION, MUMBAI

ITA 1807/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8279 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 08-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV AGARWAL
• Assessee Lawyers: JAYANT GOKHALE
• Keywords: Charitable institution
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B : MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER ITA. NO. 1807/MUM/2010 ASSESSMENT YEAR 2002-2003 ITA. NO. 1808/MUM/2010 ASSESSMENT YEAR 2003-2004 DY. DIT (E)-1 (1) MUMBAI. VS. MUMBAI CRICKET ASSOCIATION MUMBAI 20. PAN AAATM4779J (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI RAJIV AGARWAL (DR) FOR RESPONDENT : MR. JAYANT GOKHALE ORDER PER D. MANMOHAN, V.P. 1. THESE APPEALS ARE DIRECTED AGAINST THE ORDERS P ASSED BY THE CIT(A)-I, MUMBAI AND THEY PERTAIN TO THE ASSESS MENT YEARS 2002- 2003 AND 2003-2004. 2. FACTS OF THE CASE IN SHORT ARE THAT THE ASSESSE E IS A CHARITABLE TRUST AND ITS ENTITLEMENT TO EXEMPTION I S NOT IN DISPUTE. THE TOTAL INCOME AS DISCLOSED IN THE RETURN, FOR THE AS SESSMENT YEARS UNDER CONSIDERATION, MATCHES WITH THE AMOUNT OF INC OME AS COMPUTED BY THE ASSESSING OFFICER. COMMON FEATURE I N BOTH THE APPEALS ARE THAT THE AMOUNT OF CORPUS DONATION DIRE CTLY CREDITED TO THE TRUST FUND WAS ADDED TO THE INCOME REFERRED TO IN THE COMPUTATION SUBMITTED BY THE ASSESSEE. THE ASSESSMENT ORDER DOE S NOT MENTION ANY REASON AS TO WHY THE SAME HAS NOT BEEN CONSIDER ED AS A CORPUS DONATION DESPITE THE FACT THAT FULL AND PROPER DISC LOSURE IN REGARD TO NATURE OF THE DONATION RECEIVED HAS BEEN MADE IN TH E AUDITED FINANCIAL STATEMENTS OF THE ASSESSEE. THE AMOUNT RE FLECTED AS CORPUS DONATION WAS CONSIDERED BY THE ASSESSING OFFICER AS INCOME BUT THE SURPLUS ARISING BECAUSE OF SUCH CREDIT WAS FOUND TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 11 (2) OF THE ACT AND THUS THE NET TAXABLE 2 PAYABLE BY THE ASSESSEE WAS NOT CHANGED. HOWEVER, T HE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE HAVING NOT PREFERRED ANY APPEAL AGAINST THE ASSESSMENT ORDER, CHANGE OF HEAD OF INCOME WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME AND ACCORDINGLY LEVIED PENALTY UNDER SECTION 271 (1) (C ) OF THE ACT. 3. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THAT IN THE PECULIAR FACTS OF THE CASE THE ASSESSING OFFICE R HAS NOT MADE OUT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INAC CURATE PARTICULARS OF INCOME AND THEREFORE, PENALTY LEVIED BY THE ASSE SSING OFFICER IS NOT IN ACCORDANCE WITH THE LAW. HAVING REGARD TO THE DE TAILED ARGUMENTS ADVANCED BEFORE HIM, LEARNED CIT(A) CANCELLED THE P ENALTY BY OBSERVING IN PARA 5 OF THE ORDER (IDENTICALLY WORDE D FOR BOTH THE YEARS) AS UNDER : 5. AFTER CAREFUL CONSIDERATION OF ALL THE FACTS ENUMERATED ABOVE, I DO NOT AGREE WITH THE A.OS CONTENTION THAT MERELY CHANGING OF HEADS IN COMPUTATION OF INCOME WILL AMOUNTS TO THE CONCEALMENT. THE AMOUNT REFERRED BY THE A.O. FOR JUSTIFICATION OF PENALTY ORDER IN INCREASE OF ACCUMULATION U/S. 11 (2) OF THE I.T. ACT BY THE APPELLANT TRUST WAS DISCLOSED IN ITS RETURN OF INCOME IN ITS COMPUTATION OF INCOME ALONG WITH AUDIT REPORT. THUS, THE ENTIRE FACTS OF THE CASE WA S DULY DISCLOSED IN THE RETURN OF INCOME OF THE APPELLANT TRUST. THE SUBSEQUENT ASSESSMENT U/S. 143 (3) R.W.S. 147 OF THE I.T. ACT DOES NOT SHOW AN Y CONCEALMENT IN THE HANDS OF THE APPELLANT TRUST. MERELY CHANGE OF HEADS IN COMPUTATION OF INCOME WILL NOT ATTRACT CONCEALMENT PENALTY. THEREFORE, I AM OF THE VIEW THAT THE APPELLANT DID NOT CONCEAL ANY INCOME WHICH ATTRACT THE PENALTY U/S. 271 (1) (C) OF THE I.T.ACT, 1961. TAKING INTO CONSIDERATION ALL 3 THESE FACTS, I AM OF THE VIEW THAT THE PENALTY IMPOSED BY THE A.O. IS NOT JUSTIFIED AND THEREFORE THE IMPUGNED PENALTY ORDER IS HEREBY CANCELLED. 4. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), R EVENUE IS IN APPEAL BEFORE US. LEARNED DR STRONGLY RELIED UPO N THE ORDER OF THE ASSESSING OFFICER. WHEREAS, THE LEARNED COUNSEL, AP PEARING ON BEHALF OF THE ASSESSEE, SUBMITTED THAT IT WAS NOT A CASE O F CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME AND BY MERE CHANGE OF HEAD, PENALTY PROCEEDINGS SHOULD NOT AUTO MATICALLY BE INITIATED AND IN THIS REGARD LEARNED COUNSEL, RELIE D UPON THE DECISION OF THE APEX COURT IN THE CASE OF RELIANCE PETRO PRO DUCTS LTD. 322 ITR 158. LEARNED DR COULD NOT CONTROVERT THE FINDINGS O F THE LEARNED CIT(A) AND HAS NOT FURNISHED ANY CASE LAW TO IMPRES S UPON THE BENCH THAT THE FACTUAL MATRIX OF THE CASE DESERVES LEVY O F PENALTY UNDER SECTION 271 (1) (C) OF THE ACT. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. IN OUR CONSIDERED OPINION, ORDE R OF THE LEARNED CIT(A) DOES NOT SUFFER FROM ANY INFIRMITY. LEARNED COUNSEL, APPEARING ON BEHALF OF THE ASSESSEE, FILED DETAILED WRITTEN S UBMISSIONS BEFORE THE CIT(A) TO CONTEND THAT THE FACTS OF THE CASE DO NOT WARRANT LEVY OF PENALTY AND UPON APPRECIATION OF FACTS, LEARNED CIT (A) CANCELLED THE PENALTY LEVIED BY THE ASSESSING OFFICER. NO MATERIA L WHATSOEVER WAS FURNISHED BY THE LEARNED DR TO CONTRADICT THE FINDI NGS OF THE LEARNED CIT(A). UNDER THE CIRCUMSTANCES, WE UPHOLD THE ORDE R PASSED BY THE LEARNED CIT(A) AND DISMISS THE APPEALS FILED BY THE REVENUE. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 7-3-2 011. SD/- SD/- (B.RAMAKOTAIAH) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 07 TH MARCH, 2011 VBP/- 4 COPY TO 1. DY. DIT (E)-1 (1), R.NO. 504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI. 2. MUMBAI CRICKET ASSOCIATION, WANKHEDE STADIUM, CHURC HGATE, MUMBAI 20. PAN AAATM4779J 3. CIT(A)-1, MUMBAI 4. DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI. 5. DR B BENCH 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.