M/S. DR. D. JOHN PONNUDURAI EDUCATIONAL TRUST, CHENNAI V. DCIT, EXEMPTIONS - III, CHENNAI

ITA 2251/CHNY/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0205 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 06-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G CHANDRABABU
• Assessee Lawyers: S SRIDHAR
• Keywords: Deemed to accrue or arise in india; Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . . , . , BEFORE SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2251/CHNY/2019 /ASSESSMENT YEAR: 2010-11 M/S. DR.D.JOHN PONNUDURAI- EDUCATIONAL TRUST, NO.25A, NEW COLONY, ALWAR THIRUNAGAR, CHENNAI-600 087. V. THE DY. COMMISSIONER OF INCOME TAX, EXEMPTION-III, CHENNAI. [PAN: AAATD 6839 L] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR, ADV. /RESPONDENT BY : MR.G. CHANDRABABU, SR.DR /DATE OF HEARING : 07.12.2020 /DT. OF PRONOUNCEMENT : 09.12.2020 / O R D E R PER SHRI S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-10, CHENNAI, IN ITA NO.94(T R.)/13-14/CIT(A)-10 DATED 13.05.2019 FOR THE AY 2010-11. 2. M/S. DR.D.JOHN PONNUDURAI EDUCATIONAL TRUST, THE ASSESSEE, IS A SOCIETY REGISTERED U/S.12AA AND IS RUNNING EDUCATIONAL INST ITUTIONS & HOSPITALS. WHILE MAKING THE ASSESSMENT U/S.143(3) OF THE ACT, THE AO FOUND THAT THE ASSESSEE HAS NOT PRODUCED PROOF TOWARDS CAPITAL EXP ENDITURE OF RS.69,96,962/- AND REVENUE EXPENDITURE OF RS.1,53,0 0,343/- AND HENCE ITA NO.2251/CHNY/2019 :- 2 -: DISALLOWED THESE EXPENDITURE AND DETERMINED THE TOT AL APPLICATION. SINCE THE DETERMINED APPLICATION IS WITHIN 85% OF ASSESSE ES RECEIPTS, HE QUANTIFIED THE TOTAL INCOME AT NIL. SUBSEQUENTLY , THE AO ISSUED A NOTICE U/S.154 PROPOSING TO ASSESS PART OF THE DISALLOWED AMOUNT AS DEEMED INCOME U/S.11(1) READ WITH CBDT CIRCULAR NO.5-P(LXX -6) OF 1968 DATED 19.06.1968, SEPARATELY. THE OMISSION OF WHICH IS A N APPARENT MISTAKE FROM THE RECORD AND HENCE, HE PROPOSED TO REVISE THE ASS ESSMENT. THE ASSESSEE OBJECTED TO THE SAME. OVERRULING IT, THE AO REVISED THE INCOME IN HIS ORDER U/S.154 DATED 27.09.2013 DETERMINING THE TOTAL INCO ME AT RS.1,53,00,343/- . AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE COMMISSIONER OF INCOME TAX(A) AND THE LD.CIT(A) DISMISSED THE APPEA L. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE CASE WAS HEARD THROUGH VIDEOCONFERENCING. T HE LD.AR SUBMITTED THAT THE ASSESSEE IS A SOCIETY REGISTERED U/S.12AA OF THE ACT AND IT IS RUNNING EDUCATIONAL INSTITUTIONS & HOSPITALS. IN THE ASSESS MENT MADE U/S.143(3), THE AO ADDED THE DISALLOWANCES AND RE-DETERMINED TH E TOTAL APPLICATION, WHICH WAS WELL WITHIN 85% OF THE TOTAL RECEIPTS. T HEREFORE, HE CONCLUDED THE ASSESSMENT DETERMINING THE TAXABLE INCOME NIL . SUBSEQUENTLY, HE ISSUED THE IMPUGNED NOTICE U/S.154 AND DETERMINED T HE TOTAL INCOME AT RS.1,53,00,343/- WHICH IS NOT CORRECT. WHEN WE ENQ UIRED AS TO HOW THE ASSESSEE COULD NOT PROVE THE IMPUGNED CLAIM, THE LD .AR SUBMITTED THAT THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY TO PRODUCE THE REQUIRED EVIDENCE/MATERIAL TO PROVE THAT THE IMPUGNED EXPEND ITURE WERE INCURRED ITA NO.2251/CHNY/2019 :- 3 -: TOWARDS THE PURPOSES OF ASSESSEE TRUST. PER CONTRA , THE LD.DR SUBMITTED THAT IF THE ISSUES ARE REMITTED BACK TO THE FILE OF THE AO FOR RE-EXAMINATION, HE HAS NO OBJECTION. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIALS. IT IS CLEAR THAT THE ASSESSEE IS A SOCI ETY REGISTERED U/S.12AA OF THE ACT AND IT IS RUNNING EDUCATIONAL INSTITUTIONS & HOSPITALS. THE NATURE OF REVENUE EXPENDITURE DISALLOWED BY THE AO APPEARS TO BE VERIFIABLE VIZ., SALARY, ELECTRICITY CHARGES, STAFF WELFARE, ETC., F ROM THE PRIMARY/SECONDARY EVIDENCES. BEING A CHARITABLE ORGANIZATION, WE ARE OF THE VIEW THAT THESE ISSUES REQUIRE A FRESH EXAMINATION AND HENCE, WE RE MIT THE ISSUES BACK TO THE AO FOR FRESH EXAMINATION. THE ASSESSEE SHALL P RODUCE ALL ORIGINAL PRIMARY/SECONDARY EVIDENCES/MATERIALS BEFORE THE AO IN SUPPORT OF ITS CONTENTIONS SO THAT THE GENUINENESS OF THE EXPENDIT URE CLAIMED COULD BE EXAMINED AND APPROPRIATELY DEALT WITH BY THE AO. T HE AO ON DUE EXAMINATION AND AFTER AFFORDING ADEQUATE OPPORTUNIT Y TO THE ASSESSEE, SHALL PASS AN ORDER ON MERITS. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 09 TH DAY OF DECEMBER, 2020, IN CHENNAI. SD/- SD/- ( . . ) (DUVVURU R.L. REDDY) /JUDICIAL MEMBER ( . ) (S. JAYARAMAN) /ACCOUNTANT MEMBER ITA NO.2251/CHNY/2019 :- 4 -: /CHENNAI, /DATED: 09 TH DECEMBER, 2020. TLN /COPY TO: 1. /APPELLANT 4. ' /CIT 2. /RESPONDENT 5. /DR 3. ' ( ) /CIT(A) 6. /GF