ITO (EXEMPTION), VARANASI V. M/S. SMT. BANARASI DEVI EDUCATIONAL SOCIETY, VARANASI

ITA 204/ALLD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4247 (ITAT-ALLAHABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 23-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA
• Assessee Lawyers: D K SINGH
• Keywords: Charitable institution
• Section: 143(3); 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VARANASI CIRCUIT BENCH , VARANASI BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 204 & 205/ALLD/2017 ASSESSMENT YEAR: 2011 - 12 & 2012 - 13 ITO (EXEMPTION) VARANASI V. M/S SMT. BANARASI DEVI EDUCATIONAL SOCIETY SOYEPUR, LAMAHI PANDEYPUR, VARANASI T AN /PAN : AABAS7026G (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI VIRENDRA OJHA, CIT(DR) RESPONDENT BY: SHRI D. K. SINGH, C.A. DATE OF HEARING: 09 05 201 9 DATE OF PRONOUNCEME NT: 10 0 5 201 9 O R D E R PER A. D. JAIN, V.P . : THESE ARE REVENUE S APPEALS AGAINST THE ORDERS OF THE LD. CIT(A), VARANASI, BOTH DATED 28/7/2017 FOR THE ASSESSMENT YEARS 2011 - 12 AND 2012 - 13. 2 . IN BOTH THE APPEALS, THE SOLE ISSUE RAISED BY THE REVENUE IS AG AINST THE ORDER OF THE LD. CIT(A) , DELETING THE ADDITION OF RS.76,13,000/ - (FOR THE ASSESSMENT YEAR 2011 - 12), AND RS.1,36,28,265/ - (FOR THE ASSESSMENT YEAR 2012 - 13), ON ACCOUNT OF EXCESS OF INCOME OVER EXPENDITURE, DENYING THE BENEFIT OF SECTION 11 OF THE ACT. 3 . FOR ASSESSMENT YEAR 2011 - 12, THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 29/3/2012, DECLARING THE INCOME AT NIL. THE A.O. COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT, COMPUTING THE INCOME OF THE ASSESSEE AT RS.83,82,600/ - . THE A.O. W HILE ITA NO.204 & 205/ALLD /2017 PAGE 2 OF 5 COMPUTING THE INCOME OF THE ASSESSEE , HAD ADDED A SUM OF RS.76,13,000/ - BEING THE EXCESS INCOME OVER THE EXPENDITURE . 4 . AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND MADE SUBMISSIONS, AS BELOW: 2. THE RETURN OF THE ASSESSEE HAS B EEN SELECTED FOR SCRUTINY, FIRST TIME FOR THE A.Y. 2010 - 11 AND THE ASSESSEE HAS FULLY COOPERATED WITH THE LD. A.O. AND PROVIDED ALL THE INFORMATION & EXPLANATION ASKED FOR BY THE LD. A.O. HOWEVER THE A.O. HAS NOT COMPLIED WITH HIS QUASSI JUDICIAL DUTIES AN D HAS PASSED THE ORDER ON THE BASIS OF CONJECTURE AND SURMISES AND THE REGISTRATION 12A OF THE SOCIETY HAS BEEN WITHDRAWN BY THE HON'BLE CIT, VARANASI ON RECOMMENDATION OF THE A.O., THEREFORE AGGRIEVED FROM SUCH ORDER THE ASSESSEE HAS FILED APPEAL BEFORE T HE HON'BLE ITAT, ALLAHABAD AND ALSO THE CASE OF THE ABOVE NAMED ASSESSEE IS SELECTED FOR THE SCRUTINY IN CONSECUTIVE NEXT YEARS I.E. 2011 - 12& 2012 - 13 AND ASSESSEE HAS FILED APPEAL AGAINST ORDER PASSED IN THAT YEARS. 3. THAT ON 16/03/2016 HON'BLE ITAT HAS P ASSED ORDER IN THE CASE OF A.Y.2010 - 11 DIRECTING THE HON'BLE CIT TO RESTORE THE REGISTRATION U/S 12A OF THE ABOVE NAMED ASSESSEE. COPY OF THE ORDER HAS ALREADY BEEN SUBMITTED BEFORE GOODSELF. 4. SINCE ASSESSMENT MADE IN THESE YEARS ARE MADE ON ASSUMPTION T HAT STATUS OF THE ASSESSEE IS AOP, INSTEAD OF CHARITABLE TRUST/INSTITUTION, BECAUSE REGISTRATION U/S 12A WAS WITHDRAWN, BUT AFTER ORDER OF THE H ON'BLE ITAT THE STATUS OF THE CHARITABLE INSTITUTION HAS BEEN RESTORED BY HON'BLE CIT(EXEMPTION) LUCKNOW HENCE T HE ASSESSMENT SHOULD BE MADE ACCORDINGLY. COPY OF RESTORATION ORDER IS ENCLOSED HEREWITH FOR YOUR KIND CONSIDERATION. 5. THAT AS REGARDS AD - HOC ADDITIONS MADE BY THE A.O., THE ASSESSEE ABOVE NAMED SUBMITS POINT TO POINT TO EXPLANATION: A. THAT RS. 4,01,000 .00 HAS BEEN ADDED ON ACCOUNT OF DONATION, BUT SIR! IF CONSIDER THE WORDING OF THE ORDER WHICH IS REITERATED HERE 'IN THIS CONTENTION, ASSESSEE FILED A REPLY ALONGWITH NAME AND ADDRESS OF THE PERSONS. IN SOME OF THE CASES, AR OF THE ASSESSEE FILED COPY OF ITRS AND PAN OF THE PERSONS WHO CONTRIBUTED TOWARDS CORPUS FUND AND GENERAL ITA NO.204 & 205/ALLD /2017 PAGE 3 OF 5 DONATION. BUT, AFTER GIVING AN AMPLE OPPORTUNITIES, ASSESSEE COULD NOT PRODUCE/FILE THE DETAILS IN RESPECT OF THE FOLLOWING PERSONS...SIR ! DONATION HAS BEEN PROVIDED BY WELL - WISHE RS OF THE INSTITUTION AND IT IS NOT POSSIBLE FOR COLLECT THE PAN/ITR OF EACH PERSON AT THE TIME OF RECEIVING DONATION, HENCE THE ADDITION MADE IS NOT JUSTIFIED, B. THAT ASSESSEE ABOVE NAMED IS A SOCIETY RUNNING WELFARE ACTIVITIES IN THE SOCIETY AND ORGANI ZED THE HEALTHCARE CAMP AND FOOD FOR HUNGER, WHICH CALLED 'NARAYAN SEWA I . E. BHANDARA, BUT ALL THE EXPENSES HAS BEEN DISALLOWED BY THE A.O. HOW CAN BE IT IS JUSTIFIABLE? THESE ARE ADDITIONS ON THE BASIS OF CONJECTURE AND NOT SUPPORTED BY LEGAL FACTS. 5 . THE LD. CIT(A), ON CONSIDERING THE SUBMISSIONS OF THE ASSESSEE , HELD THAT SINCE THE CIT (EXEMPTION) HAS GRANTED REGISTRATION UNDER SECTION 154/12AA OF THE ACT TO THE ASSESSEE , VIDE HIS ORDER DATED 15/12/2016, THE ADDITION OF RS.76,13,000/ - MADE BY THE A.O., T REATING THE EXCESS INCOME OVER THE EXPENDITURE AS TAXABLE INCOME OF THE ASSESSEE, IS DELETED. 6 . NOW, THE REVENUE IS IN APPEAL BEFORE US AGAINST THE DELETION OF ADDITION OF RS.76,13,000/ - . THE LD. D.R. SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.76,13,000/ - MAD ON ACCOUNT OF EXCESS INCOME OVER THE EXPENDITURE, DENYING THE BENEFIT OF SECTION 11 OF THE ACT. HE , THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE CANCELLED AND THAT OF THE A.O. MAY BE RESTOR ED. 7 . THE LD. A.R. OF THE ASSESSEE, ON THE OTHER HAND, HAS PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT SINCE THE CIT (EXEMPTION) HAS GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT TO THE ASSESSEE, THE ADDITION OF RS.76,13,000/ - MADE BY THE A.O., TREATING THE EXCESS INCOME OVER THE EXPENDITURE AS TAXABLE INCOME OF THE ITA NO.204 & 205/ALLD /2017 PAGE 4 OF 5 ASSESSEE, IS NOT JUSTIFIED AND HENCE THE ORDER OF THE LD. CIT(A), DELETING SUCH ADDITION IS NOT TO BE INTERFERED WITH. 8 . HAVING HEARD THE RIVAL CONTENTIONS AND FROM A PERU SAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE A.O. HAD MADE THE ADDITION ON ACCOUNT OF EXCESS INCOME OVER THE EXPENDITURE, AS THE ASSESSEES INCOME WAS NOT EXEMPT UNDER SECTION 11 OF THE ACT , BECAUSE THE ASSESSEE WAS NOT HAVING REGISTRATION UNDER SECTION 12AA OF THE ACT, WHICH WAS WITHDRAW BY THE CIT VIDE HIS ORDER DATED 31/3/2013 . THE A.O., ACCORDINGLY, TREATED THE STATUS OF THE ASSESSEE AS AOP INSTEAD OF CHARITABLE SOCIETY AND ASSESSED ITS INCOME ACCORDINGLY. AGAINST THE WITHDRAWAL OF REG ISTRATION UNDER SECTION 12AA OF THE ACT BY THE CIT, VARANASI, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 16/3/2016 IN ITA NO. 116/ ALLD/2015 , DIRECTED THE DEPARTMENT TO RESTORE THE REGISTRATION OF THE ASSESSEE. AC CORDINGLY, THE CIT PASSED AN ORDER, DATED 15/12/2016 UNDER SECTION 154/12AA OF THE ACT, WITHDRAW ING ORDER PASSED BY THE CIT , CANCELLING THE REGISTRATION OF THE ASSESSEE SOCIETY UNDER SECTION 12AA OF THE ACT. S INCE THE CIT HAD WITHDRAWN THE ORDER , CANCELLI NG REGISTRATION UNDER SECTION 12AA OF THE ACT, THE ASSESSEE WAS ENTITLED FOR EXEMPTION UNDER SECTION 11 OF THE ACT. WE ARE, T HEREFORE, OF THE VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. ACCORDINGLY, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9 . FOR ASSESSMENT YEAR 2012 - 13, THE FACTS ARE IDENTICAL AND IN THE SAME WAY, AS IN ASSESSMENT YEAR 2011 - 12, THE A.O. HAD MADE THE ADDITION OF RS.1,36,28,265/ - ON ACCOUNT OF EXCESS INCOME OVER THE EXPENDITURE. THE LD. CIT(A), OBSERVI NG THAT SINCE THE CIT (EXEMPTION), VIDE HIS ORDER DATED 15/12/2016, HAS ALLOWED REGISTRATION TO THE ASSESSEE UNDER SECTION 12A OF THE ACT, HAD DELETED THE ADDITION. ITA NO.204 & 205/ALLD /2017 PAGE 5 OF 5 10 . SINCE THE FACTS ARE IDENTICAL, FOLLOWING THE SAME VIEW AS WE HAVE TAKEN IN ITA NO.204/ALLD/ 2017, IN PARA NO.8 ABOVE, WE CONFIRM THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION. ACCORDINGLY, THE GROUND OF APPEAL TAKEN BY THE REVENUE IS DISMISSED. 11 . IN THE RESULT, THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 / 0 5 /201 9 . SD/ - SD/ - [ T. S. KAPOOR ] [ A. D. JAIN ] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 10 /0 5 / 201 9 JJ: 0905 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR BY ORDER ASSISTANT REGISTRAR