Ram Mohan Mission High School, Kolkata V. ITO(Exemption), Ward 1(1), kol., Kolkata

ITA 208/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1798 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 07-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL
• Assessee Lawyers: SANDIP KR ROY; MANOJ DUTTA
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER) ITA NO. 208/KOL/2017 ASSESSMENT YEAR: 2013-14 RAM MOHAN MISSION HIGH SCHOOL................APPELLANT P-1/C PRINCE ANWAR SHAH ROAD SCHEME-114B KOLKATA 700 045 [PAN : AAAAR 243 R] INCOME TAX OFFICER, (EXEMPTIONS)WARD-1, KOLKATA..............RESPONDENT APPEARANCES BY: SHRI MANOJ DUTTA AND SANDIP KR. ROY, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI P.K. MONDAL, ADDL. CIT, D/R. APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JULY 16 TH , 2018 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 5 TH , 2018 ORDER PER J. SUDHAKAR REDDY, AM :- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 8 KOLKATA, (HEREINAFTER THE LD. CIT(A)), DT. 19/01/2017, PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE IS AN AOP AND IS REGISTERED U/S 12A OF THE ACT, VIDE ORDER DT. 22/03/2013. IT IS RUNNING A SCHOOL. THE ASSESSING OFFICER DURING THE COURSE OF SCRUTINY PROCEEDINGS NOTED THAT CERTAIN RECEIPTS HAVE BEEN DIRECTLY TAKEN TO THE BALANCE SHEET. THESE ARE AS FOLLOWS:- ANNUAL CHARGES RS.29,29,800/- BUILDING CHARGES RS.6,66,900/- COMPUTER FEES RS.9,49,500/- INCIDENTAL FEES RS.13,08,375/- FINE RS.90,942/- TOTAL :- RS,59,45,517/- 2.1. THESE AMOUNTS WERE COLLECTED THROUGH THE FEE BOOK FROM THE STUDENTS OF THE SCHOOL. ON A QUERY FROM THE ASSESSING OFFICER AS TO WHY THESE RECEIPTS WERE NOT ROOTED THROUGH THE INCOME AND EXPENDITURE ACCOUNT AND DISCLOSED IN THE COMPUTATION OF INCOME, THE ASSESSEE SUBMITTED THAT THESE AMOUNTS WERE CAPITALIZED ON THE GROUND THAT THEY WERE ONE TIME RECEIPTS. IT WAS ALSO SUBMITTED THAT, IF THIS REVENUE IS INCLUDED IN THE INCOME AND 2 ITA NO. 208/KOL/2017 ASSESSMENT YEAR: 2013-14 RAM MOHAN MISSION HIGH SCHOOL EXPENDITURE ACCOUNTS SECTION 11(2) OF THE ACT, WOULD BECOME APPLICABLE AND THE STUDENTS WHO CONTINUE FOR MORE THAN 5 YEARS, WOULD LOSE THE BENEFIT. A PLEA WAS MADE THAT HIS ISSUE WAS CONSIDERED BY THE DIT(EXEMPTION), KOLKATA, WHILE GRANTING REGISTRATION. THESE EXPLANATIONS WERE REJECTED BY THE ASSESSING OFFICER BY HOLDING THAT ALL THE ABOVE ITEMS OF RECEIPTS WERE COLLECTED EVERY MONTH AND IT WAS NOT IN THE NATURE OF A CORPUS DONATION U/S 11(1)(D) OF THE ACT, NOR WAS THERE ANY SPECIFIC DIRECTION BY THE PERSON PAYING THE AMOUNT AS REGARDS THE UTILIZATION OF THE SAME. HE HELD THAT THE RECEIPT SHOULD BE ROUTED THROUGH PROFIT AND LOSS ACCOUNT AND THE AMOUNT SHOULD HAVE BEEN APPLIED IN TERMS OF SECTION 11 OF THE ACT. HE HELD THAT 85% OF THE INCOME COMPUTED ON COMMERCIAL LINES SHOULD BE APPLIED DURING THE YEAR AND 15% OF THE INCOME CAN BE ACCUMULATED, UNLESS EXPLANATION 2 TO SECTION 11(1), IS INVOKED BY THE ASSESSEE. HE ACCORDINGLY COMPUTED THE INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL WITHOUT SUCCESS. 3. FURTHER AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE ME. 4. AFTER HEARING RIVAL CONTENTIONS, I DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE ASSESSING OFFICER AS CONFIRMED BY THE LD. CIT(A). THE RECEIPTS IN QUESTION ARE ROUTINE IN NATURE AND SHOULD HAVE BEEN CONSIDERED AS INCOME. ONLY SUCH RECEIPTS, WHICH ARE GIVEN SPECIFIC DIRECTIONS AND ARE IN THE NATURE OF CORPUS DONATION, CAN BE EXCLUDED. THE LD. CIT(A) AT PARA 6.2., PAGE 7 OF HIS ORDER, HELD AS FOLLOWS:- 6.2 THE ITO AO HAS WELL ADDRESSED AND DISCUSSED THE ISSUE, AS ALSO COUNTERED THE AR'S ARGUMENTS. I CONCUR WITH THE ITO AO. THERE IS NOT MUCH MORE FOR ME TO ADD, EXCEPT TO FURTHER CLARIFY AND COUNTER THE AR'S ARGUMENTS - WHICH ARE MERE ARGUMENTS ONLY. REGARDING THE AR'S CLAIM THAT THE AMOUNTS WERE TOWARDS 'CORPUS RECEIPTS', I.E., TO BE CLAIMED U/S 11(1)(D) - THIS FIRSTLY IS A BASELESS ARGUMENT, FOR WHEN THE FACT IS THAT THE APPELLANT 'CHARGES' FOR THESE AMOUNTS, THEN THESE ARE JUST NOT 'VOLUNTARY CONTRIBUTIONS'. SO, SECTION 11(1)(D) IS JUST NOT ATTRACTED, NOR IS IT THE CASE. ON THIS ASPECT, IT IS BUT COMMON KNOWLEDGE THAT MOST EDUCATIONAL INSTITUTIONS CHARGE FOR VARIOUS AMOUNTS FOR VARIOUS PURPOSES/UNDER THE GUISE OF VARIOUS PURPOSES. THE PLAIN FACT OF THE MATTER IS THAT WHATEVER FEES/SUMS THAT ARE CHARGED/DEMANDED FROM THE STUDENTS ARE TO BE INCOME U/S 11 (L)(A), AND THUS MUST BE ROUTED THROUGH THE INCOME & EXPENDITURE A/C. AS REGARDS THE OTHER ALTERNATIVE ARGUMENT OF THE AR ON ACCUMULATION U/S 11(2), IT IS EVEN MORE ILLOGICAL ARGUMENT AND SELF-DEFEATING. SECTION 11(2) RESTRICTS THE PERIOD OF ACCUMULATION TO 5 YEARS, BECAUSE THE INSISTENCE IS ON APPLICATION OF THE ACCUMULATION AS SOON AS POSSIBLE. 3 ITA NO. 208/KOL/2017 ASSESSMENT YEAR: 2013-14 RAM MOHAN MISSION HIGH SCHOOL AS REGARDS YET ANOTHER ARGUMENT OF THE AR THAT THE RECEIPTS ARE ONE TIME AND NOT RECURRING, THIS IS NOT RELEVANT, AND ALSO IT IS CONTRARY TO FACTS AS THE AMOUNTS ARE CHARGED/COLLECTED THROUGH THE MONTHLY FEE BOOK ITSELF. THUS, THE AMOUNTS CHARGED FROM THE STUDENTS MUST BE ROUTED THROUGH THE INCOME & EXPENDITURE A/C, AND THE PROVISIONS OF SECTION 11(1)(A) AND SECTION 11(2), IF COMPLIED WILL APPLY. 5. I FIND NO INFIRMITY IN THIS ORDER OF THE LD. CIT(A) AND HENCE UPHOLD THE SAME. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. KOLKATA, THE 5 TH DAY OF SEPTEMBER, 2018. SD/- [ J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 05.09.2018 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. RAM MOHAN MISSION HIGH SCHOOL P-1/C PRINCE ANWAR SHAH ROAD SCHEME-114B KOLKATA 700 045 2. INCOME TAX OFFICER, (EXEMPTIONS)WARD-1, KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES