ACIT, Balasore V. Satya Sai Education Trust, Balasore

ITA 265/CTK/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0819 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 18-11-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 23-11-2009
• Court: TRIBUNAL
• Department Lawyers: I T A NOS CTK CTK; CTK C O
• Keywords: Unexplained investment; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK () BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO S . 265/CTK/2009, 139/CTK/2007 AND 140/CTK/2007 (C.O.NOS. 1/CTK/2010, 22/CTK/2008 AND 23/CTK/2008 FILED BY ASSESSEE) / ASSESSMENT YEAR 1. ACIT, BALASORE CIRLE, BALASORE. 2. INCOME - TAX OFFICER,BHUBANESWAR - - - VERSUS - 1. SATYASAI EDUCACTION TRUST, I.T.I.CHHAK,BALASORE. 2. SHRI PADMALOCHAN PANDA, C - 77/3, PALASPALI, BHUBANESWAR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI S.C.BHADRA/P.K.MISHRA, ARS / FOR THE RESPONDENT: / SHRI A.K.GAUTAM, DR / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER. ITA NO.265/CTK/2009 AND C.O.NO. 1/CTK/2010 : O N THE BASIS OF INFORMATION OBTAINED FROM THE STATE VIGILANCE DEPARTMENT THAT THE ASSESSEE MADE SUBSTANTIAL DEPOSITS IN VARIOUS BANKS, THE ASSESSING OFFICER ASKED TO EXPLAIN THE SOURCE OF THE DEPOSITS OF 95,50,000 WHICH REMAINING UNEXPLAINED, THE ASSESSI NG OFFICER MADE ADDITION OF THE SAID SUM AS UNEXPLAINED INVESTMENT. MATTER WENT UPTO THE TRIBUNAL AND THE TRIBUNAL, CUTTACK BENCH VIDE ORDER DT.29.5.2006 IN ITANO.747/CTK/2004 RESTORED THE MATTER TO THE ASSESSING OFFICER FOR IN - DEPTH EXAMINATION OF THE ISS UE AS PER LAW. PURSUANT TO SUCH ORDER, THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER EXPARTE U/S.143(3)/144/147/254 AND REPEATED THE SAID ADDITION, AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE LEARNED CIT(A) THE ASS ESSEE FOUND THAT THE FIXED DEPOSITS MADE BY THE I. .T.A.NOS. 265/CTK/2009, 139/CTK/2007 AND 140/CTK/2007 C.O.NOS. 1/CTK/2010, 22/CTK/2008 AND 23/CTK/2008 2 ASSESSEE WERE NOT IN ONE YEAR BUT ARE IN SEVERAL YEARS VIZ., 28,00,000 IN ASSESSMENT YEAR 1999 - 2000 , 33,00,000 IN ASSESSMENT YEAR 2000 - 01 AND 17,50,000 IN ASSESSMENT YEAR 2001 - 02. THE GROSS RECEIPTS OF TH E ASSESSEE WERE BELOW 1 CRORES AND THE ASSESSEE TRUST WAS CREATED FOR THE PURPOSE OF EDUCATION. THEREFORE, HE HELD THAT THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S.10(23C)(IIIAD) AND ALSO WAS NOT REQUIRED TO FILE RETURN OF INCOME FROM THE DATE THE SECTION WAS BROUGHT ON THE STATUTE I.E., 1.4.1999 TILL 1.4.2006 WHEN THE AMENDMENT IN SEC.139(4C)(E) WAS INTRODUCED. ACCORDINGLY, HE HELD THAT THE INCOME DURING THIS YEAR WAS NOT TAXABLE UNDER THE INCOME - TAX ACT. 2. BEFORE US, THE LEARNED DR CONTENDED BEFORE US THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN ALLOWING EXEMPTION U/S.10(23C)(IIIAD) WHICH WAS NEVER CLAIMED BY THE ASSESSEE EARLIER. THE LEARNED AR OF THE ASSESSEE, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A) AS THE ASSESSEE IS EN TITLED TO SUCH EXEMPTION AS PER LAW. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE MATTER HAVING BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE ISSUE AS PER LAW, THE IMPUGNED ASSESSMEN T WAS PASSED, OF COURSE EX PARTE. HOWEVER, THE ASSESSEE PRODUCED NECESSARY EVIDENCES IN SUPPORT BEFORE THE LEARNED CIT(A) WHICH JUSTIFY ITS ENTITLEMENT OF EXEMPTION U/S.10(23C)(IIIAD). THIS BEING PURELY A LEGAL ISSUE AS TO THE TAXABILITY OF THE INCOME, WE DO NOT FIND ANY NON - JUSTIFICATION IN THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN ALLOWING THE EXEMPTION AFTER PROPER VERIFICATION OF FACTS. WE, THEREFORE, CONFIRM THE SAID ORDER OF THE LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. THE CROSS OBJECTI ON FILED BY THE ASSESSEE SUPPORTING THE ORDER OF THE LEARNED CIT(A) IS ALLOWED. I. .T.A.NOS. 265/CTK/2009, 139/CTK/2007 AND 140/CTK/2007 C.O.NOS. 1/CTK/2010, 22/CTK/2008 AND 23/CTK/2008 3 ITA NOS.139 AND 140/CTK/2007 AND C.O.NOS.22 AND 23/CTK/2008 4. THE ASSESSEE DEPOSITED IN FIXED DEPOSITS OF 33 LAKHS I.E., 23 LAKHS IN DISTRICT COOPERATIVE CENTRAL BANK, BALASORE AND 10 LAKHS IN THE DISTRICT COOPERATIVE CENTRAL BANK, SIMULIA IN THE NAME OF SATYASAI EDUCATION TRUST DURING THE ASSESSMENT YEAR 2000 - 0 1 AND 17,50,000 IN HDFC BANK, BHUBANESWAR IN THE ASSESSMENT YEAR 2001 - 02. THE ASSESSING OFFICER IN ABSENCE OF ANY EVIDENCES BEING PRODUCED BY THE ASSESSEE DISCARDED THE EXPLANATION OF THE ASSESSEE THAT THOSE DEPOSITS WERE THE INCOME OF THE SATYASAI EDUCAT ION TRUST. ACCORDINGLY, HE TREATED THE SAID DEPOSITS AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. BEFORE THE LEARNED CIT(A) THE ASSESSEE SUBMITTED THAT THE AMOUNTS WERE COLLECTED AS DONATION FROM THE PUBLIC FROM VARIOUS VILLAGES. IN ORDER TO TEST THE VERACITY OF SUCH CLAIM, THE LEARNED CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. CONSIDERING THE INSPECTORS REPORT DT.28.3.2003 THAT NEARLY 100 PERSONS WHO HAD BEEN CONTA CTED BY THE ENQUIRY TEAM HAVE CONFIRMED OF HAVING DONATED SMALL AMOUNTS TO SATYASAI EDUCATION TRUST FOR CONSTRUCTING THE ENGINEERING COLLEGE IN THEIR LOCALITY, THE LEARNED CIT(A) OBSERVED THAT IT WAS PROVED BEYOND DOUBT THAT SMALL AMOUNTS WERE COLLECTED FR OM DIFFERENT PERSONS NUMBERING ABOUT 1200 ON DIFFERENT DATES AGAINST ISSUE OF RECEIPTS. ACCORDINGLY HE HELD THE ADDITION OF THE ABOVE AMOUNTS IN THE HANDS OF THE ASSESSEE TO BE UNJUSTIFIED AND THEREFORE, THE DELETED THE ADDITION MADE IN BOTH THE AYS UNDER CONSIDERATION. 5. BEFORE US, THE LEARNED DR SUBMITTED THAT THE LEARNED CIT(A) HAS ERRED IN LAW BY ENTERTAINING ADDITIONAL EVIDENCE IN THE FORM OF THE REPORT OF THE INSPECTOR WHICH WAS NOT CONFRONTED TO THE ASSESSING OFFICER DESPITE THE I. .T.A.NOS. 265/CTK/2009, 139/CTK/2007 AND 140/CTK/2007 C.O.NOS. 1/CTK/2010, 22/CTK/2008 AND 23/CTK/2008 4 REQUIREMENT OF THE PROVISIONS OF RULE 46A OF THE INCOME - TAX RULES,1962. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, CONTENDED THAT SEVERAL OPPORTUNITIES WERE ALLOWED TO THE ASSESSING OFFICER ON 28.12.2006, 5.1.2007,11.01,2007, 19.1.2007 AND 24.1.2007 AFTER RECEI PT OF THE REPORT FROM THE INSPECTOR TO PRODUCE THE CASE RECORD AND TO AUTHENTICATE THE REPORT IF HE HAD ANY DOUBT ABOUT THE SAME. BUT THE ASSESSING OFFICER REMAINED SILENT. MOREOVER, BY EXERCISING HIS CO - TERMINOUS POWER WITH THAT OF THE ASSESSING OFFICER T HE LEARNED CIT(A) ACCEPTED AND ACTED UPON THE ENQUIRY REPORT SUBMITTED BY THE INSPECTOR OF INCOME - TAX TO GIVE SUBSTANTIAL JUSTICE TO THE ASSESSEE, THE ACTION OF THE LEARNED CIT(A) CANNOT BE SAID TO BE IN VIOLATION OF RULE 46A. THEREFORE, THE LEARNED COUNS EL FOR THE ASSESSEE FULLY SUPPORTED THE IMPUGNED ORDERS OF THE LEARNED CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE DO NOT FIND ANY FORCE IN THE ARGUMENT OF THE LEARNED DR THAT ADDITIONAL EVIDENCE HAS BEEN ACCEPTED AND ACTED UPON BY THE LEARNED CIT(A) IN VIOLATION OF RULE 46A. THE UNDISPUTED FACTS ARE THAT I T WAS TO ASCERTAIN THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE THAT THE AMOUNT IN QUESTION BELONGED TO THE TRUST AND NOT TO THE ASSESSEE, THE LEARNED CIT(A) CALLED FOR REMAND REPORT AND ENQUIRED THROUGH INSPECTOR OF INCOME - TAX AND GAVE SUFFICIENT OPPORTUN ITY TO THE ASSESSING OFFICER TO HAVE HIS SAY ON THE SAID REPORT. BUT THE ASSESSING OFFICER CHOSE TO REMAIN SILENT. IT IS WELL SETTLED LAW THAT THE POWER OF THE APPELLATE AUTHORITY IS CO - TERMINOUS WITH THAT OF THE ASSESSING OFFICER AND HE CAN DO WHAT THE A SSESSING OFFICER FAILED TO DO IN ORDER TO GIVE SUBSTANTIAL JUSTICE TO THE ASSESSEE AND WHAT THE LEARNED CIT(A) HAS EXACTLY DONE IN THE PRESENT CASE. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNE D ORDERS OF THE LEARNED CIT(A), WHICH WE CONFIRM AND DISMISS THE APPEALS OF THE I. .T.A.NOS. 265/CTK/2009, 139/CTK/2007 AND 140/CTK/2007 C.O.NOS. 1/CTK/2010, 22/CTK/2008 AND 23/CTK/2008 5 REVENUE AND ALLOW THE CROSS OBJECTIONS FILED BY THE ASSESSEE SUPPORTING THE ORDER OF THE LEARNED CIT(A). 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED AND THE ALL THE CROSS OBJECTIONS FILED BY THE ASSESSEE SUPPORTING THE IMPUGNED ORDERS OF THE LEARNED CIT(A) ARE ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 21.01.2011 S D/ - S D/ - ( . . . ), ( K.S.S.PRASAD RAO), JUDICIAL MEMBER (. . ), , (K.K.GUPTA), ACCOUNTANT MEMBER. () DATE: 21.01.2011 - COPY OF THE ORDER FORWARDED TO: 1. / THE APPELLANT : 1. ACIT, BALASORE CIRLE, BALASORE. 2. INCOME - TAX OFFICER,BHUBANESWAR 2 / THE RESPONDENT: 1. SATYASAI EDUCACTION TRUST, I.T.I.CHHAK,BALASORE . 2. SHRI PADMALOCHAN PANDA, C - 77/3, PALASPALI, BHUBANESWAR. 3. / THE CIT, 4. ()/ THE CIT(A), 5. / DR, CUTTACK BENCH 6. GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.