M/s Viswakalyan Educational Cultural& Social Association , Vijayapura V. The Income Tax Officer (Exemption) Ward-1 , Gulbarga

ITA 2248/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7157 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 23-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D KIRAN
• Keywords: Opportunity of being heard
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO . 2 248 /BANG/201 8 ASSESSMENT YEAR : 2009 - 10 M/S. VISWAKALYAN EDUCATIONAL CULTURAL & SOCIAL ASSOCIATION, EXCELLENT SCHOOL, ASHRAM ROAD, ADARSH NAGAR, VIJAYAPURA 586 103. PAN: AAAAV5544K VS. THE INCOME TAX OFFICER [EXEMPTIONS], WARD 1, GULBARGA. APPELLANT RESPONDENT APPELLANT BY : SHRI RAVI SHANKAR, ADVOCATE RESPONDENT BY : SHRI D. KIRAN, JCIT (DR) DATE OF HEARING : 0 3 .01.2019 DATE OF PRONOUNCEMENT : 11 . 01 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A), GULBARGA DATED 16.05.2018 FOR ASSESSMEN T YEAR 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT [A] IS NOT JUSTIFIED IN UPHOLDIN G THE DENIAL OF EXEMPTION CLAIMED U/S.10 [23C] [IIIAD] IN RESPECT O F THE SUM OF RS. 5,25,000/- ON THE GROUND THAT THE SAID INCOME FROM RUNNING COACHING CLASSES DID NOT QUALIFY FOR EXEMPTION U/S. 10[23C][ IIIAD] OF THE ACT, UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANT'S CASE. 2.1 THE LEARNED CIT[A] FAILED TO APPRECIATE THAT TH E AFORESAID INCOME DERIVED BY THE APPELLANT WAS ALSO IN FURTHERANCE OF IMPARTING EDUCATION AND NOT FOR THE PURPOSE OF PROFIT AND CON SEQUENTLY, THE EXEMPTION CLAIMED U/S.10[23C][IIIAD] OF THE ACT OUG HT NOT TO HAVE BEEN DENIED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[ A] IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.8,94,000/- BEING TH E DONATION RECEIVED BY THE APPELLANT HOLDING THAT THE SAME HAS TO BE TR EATED AS INCOME U/S.115BBC[3] OF THE ACT, WHICH PROVISIONS ARE NOT ATTRACTED TO THE ITA NO. 2248/BANG/2018 PAGE 2 OF 4 FACTS OF THE APPELLANT'S CASE SINCE THE APPELLANT H AS GIVEN THE NAME AND ADDRESS OF THE DONORS AND THUS THE IMPUGNED ADD ITION MADE DESERVES TO BE DELETED. 4. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.10,95,500/- BEING THE BUILDING FUND RECEIVED BY THE APPELLANT HOLDING THAT THE SAME HAS TO BE TREATED AS INCOME U /S.115BBC[3] OF THE ACT, WHICH PROVISIONS ARE NOT ATTRACTED TO THE FACTS OF THE APPELLANT'S CASE SINCE THE APPELLANT HAS GIVEN THE NAME AND ADDRESS OF THE DONORS AND THUS THE IMPUGNED ADDITION MADE DESE RVES TO BE DELETED. 5. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.6,03,000/- BEING THE BEING THE BOX COLLECTION RE CEIVED BY THE APPELLANT HOLDING THAT THE SAME HAS TO BE TREATED A S INCOME U/S.115BBC[3] OF THE ACT, WHICH PROVISIONS ARE NOT ATTRACTED TO THE FACTS OF THE APPELLANT'S CASE SINCE THE APPELLANT H AS GIVEN THE NAME AND ADDRESS OF THE DONORS AND THUS THE IMPUGNED ADD ITION MADE DESERVES TO BE DELETED. 6. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES ITSELF LIABLE TO BE C HARGED TO INTEREST U/S. 234A AND 234B OF THE ACT, WHICH UNDER THE FACT S AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO B E CANCELLED. 7. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 3. THE ASSESSEE HAS ALSO RAISED ONE ADDITIONAL GROU ND WHICH READS AS UNDER. 1. THE ORDER OF ASSESSMENT IS BAD IN LAW AND VOID-A B-INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY, THE MANDATORY REQUIREMENTS TO ASSUME JURISDICTION U/S.148 OF THE ACT DID NOT EXIS T AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, THE RE-ASSESSMENT R EQUIRES TO BE CANCELLED. 2. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED. 4. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT IN THE ADDITIONAL GROUND RAISED BY THE ASSESSEE, THE ONLY ISSUE IS REGARDING VALIDITY OF RE-ASSESSMENT PROCEEDINGS AND SINCE THIS IS A LE GAL ISSUE, THE SAME SHOULD BE ADMITTED IN VIEW OF THE JUDGMENT OF HONB LE APEX COURT RENDERED IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. AS R EPORTED IN 229 ITR 383 ITA NO. 2248/BANG/2018 PAGE 3 OF 4 AND THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT R ENDERED IN THE CASE OF GUNDATHURTHIMAPPA AND SONS AS REPORTED IN 70 ITR 70 . IN COURSE OF HEARING, HE SUBMITTED COPY OF THE REASONS RECORDED BY THE AO FOR REOPENING AND POINTED OUT THAT AS PER THE REASONS RECORDED BY THE AO FOR REOPENING, HE HAS NOTED VARIOUS FACTS BUT FROM THESE REASONS R ECORDED BY THE AO, IT IS NOT COMING OUT THAT THERE IS ANY ESCAPEMENT OF INCO ME IN THE FACTS OF PRESENT CASE. HE SUBMITTED THAT THE GROSS RECEIPT OF THE ASSESSEE IS LESS THAN RS. 1 CRORE AND IN THIS REGARD, HE DRAWN MY AT TENTION TO PAGE NO. 3 OF THE PAPER BOOK WHICH CONTAINS RECEIPTS AND PAYMENTS ACCOUNT FOR THE YEAR ENDING AS ON 31.03.2009. HE POINTED OUT THAT AS PE R THE SAME, AFTER INCLUDING THE OPENING CASH BALANCE ALSO, TOTAL RECE IPT IS OF RS. 83,13,803/-. HE DRAWN MY ATTENTION TO THE PROVISIONS OF SECTION 10[23C][IIIAD] AND RULE 2BC OF IT RULES, 1962. HE POINTED OUT THAT AS PER THESE PROVISIONS OF THIS SECTION AND THIS RULE, ANY INCOME RECEIVED BY ANY P ERSON ON BEHALF OF AN EDUCATIONAL INSTITUTION IS EXEMPT IF AGGREGATE ANNU AL RECEIPT OF SUCH INSTITUTION DO NOT EXCEED THE AMOUNT OF RS. 1 CRORE . HE SUBMITTED THAT IN THE PRESENT CASE, THE AGGREGATE ANNUAL RECEIPT IS L ESS THAN RS. 1 CRORE AND THEREFORE, THE ENTIRE INCOME OF ASSESSEE IS EXEMPT U/S. 10[23C][IIIAD]. REGARDING CLAUSE VI OF SECTION 10[23C], HE POINTED OUT THAT OBTAINING APPROVAL UNDER THIS CLAUSE IS NOT REQUIRED IN THOSE CASES WHICH ARE COVERED UNDER SUB-CLAUSE ( IIIAB ) OR SUB-CLAUSE ( IIIAD ) OF SECTION 10(23C). HE SUBMITTED THAT THEREFORE, THIS GROUND SHOULD BE ADM ITTED AND IF REQUIRED, THE MATTER MAY BE RESTORED BACK TO THE FILE OF CIT(A) F OR DECISION ON THIS ISSUE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A) . 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN V IEW OF THE FACTS DISCUSSED ABOVE, I ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AND RESTORE THE MATTER BACK TO THE FILE OF CIT(A) FOR DECISION ON M ERIT OF THIS ISSUE. REGARDING THE VARIOUS GROUNDS RAISED BY ASSESSEE ON MERIT, I FEEL IT PROPER TO RESTORE THE SAME ALSO TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER DECIDING THE TECHNICAL ASPECT FIRST BECAUSE THE ISSUE ON MER IT SHOULD BE DECIDED AFTER FINAL DECISION ON TECHNICAL ASPECT. MOREOVER, THE ISSUE ON MERIT IS DECIDED BY CIT (A) IN CRYPTIC MANNER AS PER PARA 4 OF HIS O RDER WITHOUT CONSIDERING VARIOUS DETAILS PROVIDED BY THE ASSESSEE BEFORE AO AND CIT(A) IN RESPECT OF ITA NO. 2248/BANG/2018 PAGE 4 OF 4 RECEIPT OF DONATIONS BY THE ASSESSEE DURING THE PRE SENT YEAR OF RS. 10,19,500/- ON ACCOUNT OF BUILDING FUND AS AVAILABL E ON PAGES 18 TO 24 OF THE PAPER BOOK AND RS. 8,94,000/- ON ACCOUNT OF OTH ER DONATIONS AS PER THE DETAILS AVAILABLE ON PAGE NOS. 25 TO 30 OF PAPER BO OK. AS PER THE ASSESSEE, THESE DETAILS WERE FURNISHED BY ASSESSEE BEFORE AO AND CIT(A) BOTH BUT, CIT(A) STATES IN PARA 4.2 OF HIS ORDER THAT IN THE CASE OF THE ASSESSEE, COMPLETE DETAILS OF DONORS WERE NOT SUBMITTED BY AS SESSEE DURING ASSESSMENT PROCEEDINGS. FOR THIS REASON ALSO, I FE EL IT PROPER TO RESTORE THE ENTIRE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. IN VIEW OF THIS DECISION, NO ADJUDICATION ON MERIT IS CALLED FOR AT THE PRESE NT STAGE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 11 TH JANUARY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.