Adarsh Education Trust, Panchmahal V. The ACIT, Panchmahal Circle, Godhra

ITA 224/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8306 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 28-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

ITA NO. 224/AHD/2015 ADARSH EDUCATION TRUST VS. ACIT A.Y. 2011-12 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] I.T.A. NO.224/AHD/2015 ASSESSMENT YEAR : 2011-12 ADARSH EDUCATION TRUST .....APPELLANT AT. BHEDIA, PO NARODA, TAL. KHANPUR, DIST. PANCHMAHAL - 389230 [PAN : AACTA 3704 B] VS. ASSISTANT COMMISSIONER OF INCOME-TAX .RESPONDENT PANCHMAHAL CIRCLE, GODHRA APPEARANCES BY: SAKAR SHARMA FOR THE APPELLANT ALOK KUMAR FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 24.07.2017 DATE OF PRONOUNCING THE ORDER : 23.10.2017 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 07.11.2014 PASSED BY THE CIT(A) FOR THE ASSESSMENT YEAR 2011-12. 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS :- 1. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CO NFIRMING ACTION OF ASSESSING OFFICER IN DETERMINING TOTAL INCOME AT RS.7,97,204/ - WITHOUT GRANTING DEDUCTION FOR THE EXPENDITURE INCURRED IN ACCORDANCE WITH THE PRO VISIONS OF THE ACT. 2. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN HOLD ING THAT THE APPELLANT IS NOT AN EDUCATIONAL INSTITUTION. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IS AN EDUCATIONAL TRUST AND IS ENGA GED N THE EDUCATIONAL ACTIVITIES. HE, HOWEVER, TREATED CARRIED FORWARD SURPLUS OF RS.7,97 ,204/- AS INCOME ON THE GROUND THAT ITA NO. 224/AHD/2015 ADARSH EDUCATION TRUST VS. ACIT A.Y. 2011-12 PAGE 2 OF 3 THE ASSESSEE DID NOT HAVE REGISTRATION UNDER SECTIO N 12A/12AA DURING THE RELEVANT YEAR. THE REASONING ADOPTED BY THE ASSESSING OFFIC ER WAS AS FOLLOWS:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS FOUND THAT THE ASSESSEE HAS CARRIED-FORWARD THE SURPLUS OF RS. 7,97,204/- RECEI VED BY WAY OF DONATION IN ITS AUDITED BALANCE SHEET AND AFTER ACCUMULATION, THE A SSESSEE HAS APPLIED SAID FUND TO ITS ENTITIES AS A LOAN. IT IS NOTED THAT AS SESSEE IS REGISTERED U/S 12A/12AA ON OR AFTER AY 2012-13 AND IN ABSENCE OF REGISTRATI ON, ACCUMULATION OF INCOME AND APPLICATION OF SURPLUS FUND CANNOT BE GRANTED T O THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR AS PER THE IT ACT, 1961. H ENCE, ASSESSEE IS NOT ELIGIBLE TO ACCUMULATE THE SAID SURPLUS. IN VIEW OF THE ABOVE, ACCUMULATED AMOUNT OF RS. 7,97,204/- IS ADDED BACK TO THE INCOM E OF THE ASSESSEE. PENALTY PROCEEDINGS U/S 271(1)(C) ARE ALSO INITIATED FOR FU RNISHING INACCURATE PARTICULARS OF INCOME AND THEREBY CONCEALING THE PARTICULARS OF IN COME. 4. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND THE ASSESSEE, INTER ALIA, CONTENDED THAT THE ASSESSEE IS ANY WAY ENTITLED TO EXEMPTION UNDER SECTION 10(23C)(IIIAD). THIS PLEA WAS, HOWEV ER, BRUSHED ASIDE BY THE CIT(A) BY OBSERVING THAT SUCH EXEMPTION IS APPLICABLE TO A U NIVERSITY OR AN EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES, AND NOT F OR PROFIT. THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 6. WE SEE MERITS IN THE PLEA OF THE LEARNED COUNSEL . WE HAVE NOTED THAT ADMITTEDLY GROSS RECEIPTS OF THE ASSESSEE ARE WELL UNDER RS.1, 00,00,000/- AT RS.86,47,790/- AND THE ASSESSING OFFICER HIMSELF NOTES THAT THE ASSESS EE TRUST IS ENGAGED IN EDUCATIONAL ACTIVITIES. THE PROVISIONS OF SECTION 10(23C)(III)( AD) ARE THUS PRIMA FACIE SATISFIED. IN OUR CONSIDERED VIEW, THIS CLAIM HAS BEEN WRONGLY RE JECTED IN A SUMMARY MANNER. IN THIS VIEW OF THE MATTER, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THE MATTER, ON MERI TS, FOR ELIGIBILITY OF EXEMPTION UNDER SECTION 10(23C) OF THE ACT. WHILE DOING SO, HE WILL GIVE A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WITH THESE OBSERVATIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF OCTOBER, 2017. SD/- SD/- MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 23 RD DAY OF OCTOBER, 2017 **BT* ITA NO. 224/AHD/2015 ADARSH EDUCATION TRUST VS. ACIT A.Y. 2011-12 PAGE 3 OF 3 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF TAKING DICTATION: ... ......- ..PREPARED AS PER ONE PAGE MANUSCRIPT OF HO NBLE AM WHICH IS ATTACHED WITH THIS CASE FILE ....23.10.2017..................... 2. DATE OF TYPING & DRAFT ORDER PLACED BEFORE THE D ICTATING MEMBER: .. 23.10.2017.................... ..... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: .... 23.10.2017.................... ........ 4. DT. ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT: ... 23.10.201 7........ 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: . 27.10.2017.......................... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: ..... 7. THE DT. ON WHICH THE FILE GOES TO THE ASTT. REGISTR AR FOR SIGNATURE ON THE ORDER: .................. ....... 8. DATE OF DESPATCH OF THE ORDER: ................. ........