The Aeronautics Education Society, Sunabeda V. Pr.CIT , Sambalpur

ITA 239/CTK/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5080 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-08-2024
• Assessment Year: misc
• Appeal Filed On: 04-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE MANISH AGARWAL The Aeronautics Education Society, Sunabeda, Koraput PAN/GIR No. (Appellant Per Bench This is an appeal filed by the assessee against the order u/s.263 of the Act by dated 24.3.2023 263/100000455516/2023 2. Shri P.C.Sethi, Kumar, ld CIT IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL AND MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.239/CTK/2023 Assessment Year : 2018-19 The Aeronautics Education Society, Sunabeda, Koraput Vs. Pr. CIT, Sambalpur No.AAAJT 1864 H (Appellant) .. ( Respondent Assessee by : Shri P.C.Sethi, Adv Revenue by : Shri Sanjay Kumar, CIT Date of Hearing : 12/8 Date of Pronouncement : 12/8 O R D E R This is an appeal filed by the assessee against the order u/s.263 of the Act by the ld CIT (Exemption), Hyderabad at Bhubaneswar 24.3.2023 in Appeal No.CIT(Exemption Hyd at BBN/Revision 263/100000455516/2023 for the assessment year 2018 P.C.Sethi, ld AR appeared for the assessee and Shri Kumar, ld CIT DR appeared for the revenue. Page1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER , ACCOUNTANT MEMBER Pr. CIT, Sambalpur Respondent) P.C.Sethi, Adv Sanjay Kumar, CIT DR 8/2024 /8/2024 This is an appeal filed by the assessee against the order passed , Hyderabad at Bhubaneswar CIT(Exemption Hyd at BBN/Revision- 2018-19. the assessee and Shri Sanjay ITA No.239/CTK/2023 Assessment Year : 2018-19 Page2 | 5 3. Brief facts of the case are that the assessee is a society engaged in imparting of education to socially and economically backward people living in the villages around the HAL Township and operates educational institutions in the name of Aeronautics Junior and Degree College, Aeronautics Dayanand Anglo Vedic High School and Vyomayana Samstha Vidyalay. The assessment for the impugned year was completed u/s.143(3) of the Act dated 4.2.2021 at a total income of NIL. Thereafter, proceedings u/s.263 of the Act were initiated by the ld CIT (Exemptions), Hyderabad, wherein, he has directed the Assessing Officer to verify the details of grant received and further to examine whether they are corpus donation or voluntary donations which have been received by the appellant and in case, the same are voluntary donation whether appellant has applied 85% or not. In case it is corpus donation whether the same was applied for the purpose or not. 4. It was submitted by ld AR that during the year, the assessment has received Rs.11,00,00,000/- as corpus donation, which was declared in the balance sheet as corpus donation. It was the submission that since it is a corpus donation, same was not declared in the income and expenditure account but the necessary details were filed before the Assessing Officer in the shape of ledger sheets account. He further submitted that this receipt was received from HAL and the assessee being part of it, the grants were ITA No.239/CTK/2023 Assessment Year : 2018-19 Page3 | 5 taken as corpus donation. Ld CIT (E) in para 7.1 of the order has also accepted this fact, which is reproduced as under: “7.1 The Assessing Officer while completing the assessment, considered the entire miscellaneous receipts as voluntary contributions at Rs.14,91,52,949/-. However, it is noticed that the amount of Rs.14,66,46,139/- was actually received from AES and income from VSV book store of Rs.25,06,810/- and in turn, income from AES was arrived at taking the two grants from HAL i.e. Rs.7,00,00,000/- and Rs.4,00,00,000/-. The grants from the HAL being the corpus donation shall not be form part of income and expenditure statement and same are required to be utilized for the purpose for which such corpus donation was granted. Moreover, such corpus donations are to be invested u/s.11(5) of the Income tax Act in the specific investments or utilized for the purpose for which it is received. As verified from the record, the Assessing Officer has not done the same.” 5. He thus submitted that when it is an admitted fact that the amounts of Rs.11,00,00,000/- were corpus donation, there is no necessity to include the same in the income and expenditure account. He submitted that there is no question of application of amount of corpus donation by treating it as voluntary contribution. Therefore, the order of ld CIT(E) is devoid of merits and deserves to be dismissed. 6. In reply, ld CIT DR supports the order of ld CIT(E) and submitted that in this order, the ld CIT(E) has directed the Assessing Officer to verify whether the amount received actually corpus donations or voluntary contributions during the year. He urged to confirm the order of ld CIT(E). ITA No.239/CTK/2023 Assessment Year : 2018-19 Page4 | 5 7. We have considered the rival submissions and perused the material on record. It is seen that the assessee has received Rs.11,00,00,000/- in two instalments from HAL, which was recorded as Corpus Donations in the books of account. In the order passed u/s.263 of the Act, ld CIT(E) has directed the Assessing Officer to verify the said amount as corpus donations or voluntary contributions and if the same is voluntary contributions, whether 85% of the amount has been set as application and whether the corpus donations were invested as specified u/s.11(5) of the I.T.Act. However, from the observation, we find that examination of the donation as corpus donation is not an action by the Assessing officer, which is erroneous and prejudicial to the interest of the revenue. When it is an admitted fact that the amount is received as corpus donation, its application towards object is not question to be verified. Therefore, the order cannot be said to be erroneous and prejudicial to the interest of the Revenue. In these circumstances, we set aside the order of the ld CIT (Exemptions) and allow the appeal of the assessee. 8. In the result, appeal of the assessee stands allowed. Order dictated and pronounced in the open court on 12/08/2024. Sd/- sd/- (George Mathan) (Manish Agarwal) JUDICIAL MEMBER ACCOUNTANT MEMBER Cuttack; Dated 12/08/2024 B.K.Parida, SPS (OS) ITA No.239/CTK/2023 Assessment Year : 2018-19 Page5 | 5 Copy of the Order forwarded to : By order Sr.Pvt.Secretary ITAT, Cuttack 1. The Appellant : The Aeronautics Education Society, Sunabeda, Koraput 2. The Respondent: Pr. CIT, Sambalpur 3. DR, ITAT, 4. Guard file. //True Copy//