DAWAT E ISLAMI HIND, MUMBAI MAHARASHTRA V. COMMISSIONER OF INCOME TAX, EXEMPTION

ITA 2077/MUM/2021

AI Insights

The case involves Dawat E Islami Hind, a charitable trust, appealing against the revision order passed by the Commissioner of Income Tax (Exemptions), Mumbai under section 263 of the Income Tax Act, 1961. The revision was based on the grounds that the original assessment order did not adequately verify the details of corpus donations, which are crucial for determining tax liabilities under section 115BBC. The tribunal examined whether the Assessing Officer had conducted a sufficient examination of the donations and found that the necessary verifications were not undertaken, leading to the dismissal of the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125855 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-01-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 14-11-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Assessment record; Set aside
• Section: 6; 263; 143(3); 142(1); 12A; 10B; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA no.2077/Mum./2021 (Assessment Year : 2015–16) Dawat E Islami Hind Shop no.9, Sharifa Mansion 2 nd Flank Road, 97, Shayda Marg Mumbai 400 009 PAN – AABTD0414G ................ Appellant v/s Commissioner of Income Tax (Exemption), Mumbai ................Respondent Assessee by : Shri Ankit Chokshi Revenue by : Shri Sandeep Raj Date of Hearing – 05/01/2023 Date of Order – 31/01/2023 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 16/03/2021 passed under section 263 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Exemptions), Mumbai (“learned CIT”), for the assessment year 2015-16. 2. The present appeal filed before us is delayed by 182 days. In this appeal, the impugned order dated 16/03/2021, was received by the assessee on 18/03/2021. Thus, as per the provisions of section 253(3) of the Act, the assessee was required the filed the appeal within 60 days from the received Dawat E Islami Hind ITA no.2077/Mum./2021 Page | 2 the order. However, the assessee filed the appeal, for the year under consideration, on 15/11/2021. We find that the Hon'ble Supreme Court, vide order dated 10/01/2022, passed in M.A. no.21 of 2022, in M.A. no.665 of 2021, in Suo-Motu Writ Petition (Civil) no.3 of 2020, directed that the period from 15/03/2020 till 28/02/2022, shall stand excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of all judicial and quasi-judicial proceedings. As the due date for filing the present appeal was falling within the aforesaid time period, in view of the order passed by the Hon’ble Supreme Court, there is no delay in filing the present appeal and we proceed to decide the same on merits. 3. In this appeal, the assessee has raised the following grounds: “On the facts and in law, the learned CIT has erred in initiation of proceedings u/s 263 of the Income-tax Act, 1961 and which was without jurisdiction as the order u/s. 143(3) of the Act was passed after complete verification of all the details including corpus donation duly produced by the appellant. There your appellant prays to quash the order passed u/s. 263 of the Act. On the facts and in law, the learned CIT has erred in holding that the assessment order was erroneous and prejudicial to the interest of revenue on all issues discussed in revision order u/s. 263 of the Act. There your appellant prays to quash the order passed u/s. 263 of the Act. On the facts and in law, the learned CIT has erred in passing revision order u/s. 263 of the Act without verification of the details furnished by the appellant. There your appellant prays to quash the order passed u/s. 263 of the Act. Your appellant craves leave to add, alter, amend, and/or delete any grounds as mentioned above during the course of appeal hearing.” 4. The only grievance of the assessee is against the revision order passed by the learned CIT under section 263 of the Act. 5. The brief facts of the case as emanating from the record are: The assessee is a charitable trust registered under section 12A of the Act. The Dawat E Islami Hind ITA no.2077/Mum./2021 Page | 3 assessee filed its return of income on 06/03/2017, along with the income and expenditure account, balance sheet, and audit report in Form No. 10B declaring a total income of Rs. Nil. The return filed by the assessee was selected for scrutiny and statutory notices under sections 143(2) and 142(1) along with a questionnaire were issued and duly served on the assessee. The Assessing Officer (“AO”) vide order passed under section 143(3) of the Act disallowed the claim of depreciation of Rs.1,64,084, and assessed the total income of the assessee at Rs. Nil. 6. Subsequently, vide notice dated 09/02/2021, issued under section 263 of the Act revision proceedings were initiated in the case of the assessee on the basis that out of the total corpus donation of Rs.1,32,22,089, received during the year, the assessee submitted details of only 14 donors, donation of which sums up to Rs.6,60,110. However, regarding the balance corpus donation of Rs.1,25,61,979, there is no information available on record to show that a specific direction was given by the donor to make the donation part of the corpus. Thus, in the absence of the details of corpus donation, the learned CIT alleged that the assessment order passed by the AO is erroneous and prejudicial to the interest of the Revenue. In response thereto, the assessee objected to the initiation of revision proceedings and submitted a list of corpus donations. 7. Vide impugned order dated 16/03/2021, the learned CIT rejected the submissions of the assessee and held that the AO has completed the assessment without any basic verification of the issues mentioned in the show cause notice issued under section 263 of the Act. The learned CIT further held Dawat E Islami Hind ITA no.2077/Mum./2021 Page | 4 that even the rudimentary details have not been obtained, no verification has been undertaken and the applicability of the provisions of section 115BBC has not been examined by the AO. Accordingly, the learned CIT held that the assessment order is erroneous insofar as it is prejudicial to the interest of Revenue and set aside the same. The learned CIT, further, directed the AO to conduct the assessment proceedings de novo, after undertaking necessary verification of cash donations, and corpus contributions, wherein no specific direction as such is on the record, and also the applicability of section 115BBC of the Act. Being aggrieved, the assessee is in appeal before us. 8. We have considered the rival submissions and perused the material available on record. Vide notice dated 09/02/2021, issued under section 263 of the Act, the learned CIT on verification and careful examination of the assessment records for the year under consideration observed that during the year, the assessee has shown gross receipts of Rs.4,42,62,636, out of which corpus donation is shown at Rs.1,32,22,089, and an anonymous donation of Rs.7,51,216. The learned CIT further on perusal of bank statements observed that the cash deposits exceeded Rs.10,000, in a day in various bank accounts is to the tune of 2,64,39,849, which works out to approximately 60% of the gross receipts. It was also observed on verification of the income and expenditure account that the assessee has shown donation receipts of Rs.3,01,26,431, excluding anonymous donations. In respect of the corpus donations of Rs.1,32,22,089, received during the year, the learned CIT noted that the assessee has submitted details only regarding 14 donors who have given a specific direction to make the donation part of the corpus and the Dawat E Islami Hind ITA no.2077/Mum./2021 Page | 5 donation given by such donors total to Rs.6,60,110. The learned CIT after considering the provisions of section 11(1)(d) of the Act held that donation can be treated as corpus donation, only when the donor makes a specific direction to make it part of the corpus. However, with respect to the balance donation of Rs.1,25,61,979, in absence of specific direction from the donor to treat the same as part of the corpus donation, the learned CIT alleged the same to be an anonymous corpus donation chargeable to tax under section 115BBC of the Act. In its reply to the show cause notice issued under section 263 of the Act, the assessee submitted a list of corpus donations. 9. As per the learned AR, vide notice dated 26/09/2017, issued under section 142(1) of the Act, the AO specifically sought the details of corpus and non-corpus donations received during the year, which were duly provided by the assessee. The learned AR further submitted that after consideration of all the details submitted by the assessee, the AO passed the assessment order under section 143(3) of the Act, and thus the assessment order cannot be said to have been passed without making proper verification/examination. However, during the hearing, upon being asked regarding the submission filed by the assessee furnishing the details sought by the AO, the learned AR, apart from referring to the list of donors forming part of the paper book alleged to have been filed before the learned CIT in response to show cause notice under section 263 of the Act, could not bring any submission on record which was filed before the AO, during the assessment proceedings, furnishing aforesaid details regarding corpus and non-corpus donation received during the year. Thus, in the present case, even though upon perusal of notice issued under Dawat E Islami Hind ITA no.2077/Mum./2021 Page | 6 section 142(1) of the Act it can be said that the details of corpus and non- corpus donation received by the assessee during the year were sought by the AO, however, in absence of any material on record that such details were also provided by the assessee, it cannot be presumed that the AO has conducted basic verification of the issues and examined the details as highlighted in the order passed under section 263 of the Act. Accordingly, we find no infirmity in the impugned order passed by the learned CIT under section 263 of the Act and the same is upheld. As a result, grounds raised by the assessee are dismissed. 10. In the result, the appeal by the assessee is dismissed. Order pronounced in the open Court on 31/01/2023 Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 31/01/2023 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai