Prasannamani College Of Physical Education & Yoga, Cuttack V. ITO Exemption, Cuttack

ITA 216/CTK/2022

AI Insights

The case involves Prasannamani College of Physical Education & Yoga, an educational trust, which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi. The appeal was concerning an intimation under section 143(1) of the Income Tax Act, 1961, which disallowed capital expenditure claimed by the assessee for the assessment year 2019-2020. The CIT(A) had directed the Assessing Officer (AO) to verify the nature of the expenditures, whether they were in cash or through banking channels, and the claim of depreciation on capital acquisition. The Tribunal noted that since the issue was debatable and required verification, it could not be disallowed at the intimation stage under section 143(1). The Tribunal also referenced a similar case involving the same assessee for a different assessment year, where a similar intimation was quashed.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127060 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-03-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 29-12-2022
• Other Referred Cases: ITA No.46/CTK/2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MISS LAYATMIKA
• Keywords: Depreciation; Tax effect; Capital expenditure; Set aside
• Section: 143(1)

Judgement Text

आयकर अऩीऱीय अधधकरण, कटक न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य एवं श्री अरुण खोड़पऩया ऱेखा सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अऩीऱ सं/ITA No.216/C TK/2022 (ननधाारण वषा / Asses s m ent Year :2019-2020) Prasannamani College of Physical Education & Yoga, At/Po: Tigiria, Dist-Cuttack Vs ITO (Exemption), Cuttack PAN No. :AACAP 1478 J (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee by : Shri S.K.Sarangi, CA with Miss Layatmika Nath & Shri Chandrashekhar Panda, Interns of The Law College, Cuttack राजस्व की ओर से /Revenue by : Shri S.C.Mohanty, Sr. DR स ु नवाई की तारीख / Date of Hearing : 30/03/2023 घोषणा की तारीख/Date of Pronouncement : 30/03/2023 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 26.12.2022, passed in DIN & Order No.ITBA/NFAC/S/250/2022- 23/1048224366(1) for the assessment year 2019-2020. 2. It was submitted by the ld. AR that the assessee is an educational trust and filed its return of income for the relevant assessment year on 20.08.2019. An intimation u/s.143(1) of the Act came to be issued on 04.03.2021, wherein the capital expenditure as incurred by the assessee had been treated as not allowable. It was the submission that on appeal, the ld. CIT(A) had directed the AO to carry out verification to ascertain as to whether the expenditures were in cash or through banking channel and whether the depreciation has been claimed towards capital ITA No.216/CTK/2022 2 acquisition. It was submitted that the fact that the ld. CIT(A) has directed for verification of the expenses, the same is in the nature of debatable issue and an expenditure which requires verification, cannot be disallowed in an intimation u/s.143(1) of the Act. It was the submission that the revenue has not filed any appeal against the order of the ld. CIT(A). It was the prayer that the intimation issued u/s.143(1) of the Act may be set aside. It was, thus, the submission that under similar circumstances, in assessee’s own case for the assessment year 2017- 2018 in ITA No.46/CTK/2022, order dated 01.09.2022, the coordinate bench of the Tribunal has quashed the intimation issued u/s.143(1) of the Act as the adjustment had been done on the issue which was debatable. 3. In reply, ld. Sr. DR filed his written submission, which read as under:- “1. The reason for variance/Demand’ available in the detailed intimation sent by e-mail to the e-mail ID pmcpedy @gmail.com as mentioned as the bottom of the first page of the original order [the intimation u/s.143(1) of Income Tax Act] is missing. 2. In view of this it is prayed that the registry may kindly be directed- (iii) to scrutinize all appeals and applications so received to find out whether they are in conformity with rules; (iv) to point out defects in such appeals and applications to the parties requiring them to rectify by affording reasonable opportunity and, if within the time so granted defects are not rectified, to obtain the orders of the bench for the return of the appeals and applications. 4. It was further submitted that the appeal of the assessee is not maintainable insofar as he has not attached the reasons for the adjustments. ITA No.216/CTK/2022 3 5. Ld. Sr. DR specifically drew our attention to the provisions of Section 268(A) of the Act which specifically provides that the Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case. It was submitted that non-filing of an appeal by the revenue should not be treated as the acquiescence by the revenue. It was the submission that the ld. CIT(A) having directed for verification the assessee can produce all the details before the AO who would adjudicate the issue. 6. We have considered the rival submissions. A perusal of the provisions of Section 143(1) of the Act clearly shows that what is disallowable or specifically what is the adjustment that can be done to the total income of the assessee are very clearly mentioned. The adjustments have been done by the AO by disallowing capital expenditure admittedly is not something that is provided in the provisions of Section 143(1) of the Act. It is an admitted fact that the ld. CIT(A) does not have the power to restore the issue to the file of the AO for verification. When the ld. CIT(A) has erred in law, which specifically bars him restoring an issue to the file of the AO for verification, it is very much available to the revenue to challenge that finding. The circulars of tax effect issued by the CBDT admittedly exclude specific issues which are issues for raising a question of law. Violation of a specific provisions of an act by the ld. CIT(A), if that is also not challenged under the guise of tax effect, it is nothing but ITA No.216/CTK/2022 4 acquiescence by the revenue to the Act and the ld. CIT(A). The ld. CIT(A) has not adjudicated on merits. A clearly legal violation has taken place in the order. The fact that he also accepts that this issue of the expenditure is not capital in nature which requires verification shows that it is not an issue which can be considered in an intimation u/s.143(1) of the Act. This being so, the order of the ld. CIT(A) is set aside and the intimation issued u/s.143(1) of the Act is also stand modified deleting the disallowance made in the intimation u/s.143(1) of the Act. 7. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 30/03/2023. Sd/- (अरुण खोड़पऩया) (ARUN KHODPIA) Sd/- (जाजज माथन) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 30/03/2023 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : आदेशान ु सार/ BY ORDER, (Assistant Registrar) आयकर अऩीऱीय अधधकरण, कटक/ITAT, Cuttack 1. अऩीऱाथी / The Appellant- Prasannamani College of Physical Education & Yoga, At/Po: Tigiria, Dist-Cuttack 2. प्रत्यथी / The Respondent- ITO (Exemption), Cuttack 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. पवभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ज पाईऱ / Guard file. सत्यापऩत प्रयत //True Copy//