M/s. Ardee Foundation, New Delhi V. CIT (Exemptions), New Delhi

ITA 2738/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2236 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 04-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Assessee Lawyers: U N MARWAH CA SHRI SUMIT SINGH
• Keywords: Depreciation; Set aside
• Section: 143(3); 12A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE HONBLE N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.2738/DEL./2017 (ASSESSMENT YEAR : 2012-13) M/S. ARDEE FOUNDATION, VS. CIT (EXEMPTIONS), 17 TH FLOOR, DR. GOPAL DASS BHAWAN, NEW DELHI. 28, BARAKHAMBHA ROAD, CONNAUGHT PLACE, NEW DELHI. (PAN : AAATA1829P) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.N. MARWAH, CA SHRI SUMIT SINGH, CA REVENUE BY : SHRI SATPAL GULATI, CIT DR DATE OF HEARING : 23.06.2021 DATE OF ORDER : 30.06.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. ARDEE FOUNDATION (HEREINAFTER REFER RED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 20.03.2017 PASSED BY THE COMMI SSIONER OF INCOME-TAX (EXEMPTIONS), NEW DELHI UNDER SECTION 26 3 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) QUA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA THAT :- ITA NO.2738/DEL./2017 2 1. THAT ORDER DATED 20.3.2017 U/S 263 OF THE ACT B Y LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION), NEW DELHI H AS BEEN MADE WITHOUT SATISFYING THE STATUTORY PRECONDI TIONS CONTAINED IN THE ACT AND IS THEREFORE WITHOUT JURIS DICTION AND THUS, DESERVES TO BE QUASHED AS SUCH. 1.1 THAT LEARNED COMMISSIONER OF INCOME TAX HAS ER RED BOTH IN LAW AND ON FACTS IN HOLDING THAT DEPRECIATI ON OF RS.37,70,021/- IS A CASE OF DOUBLE DEDUCTION AND HA S BEEN ALLOWED WITHOUT GETTING INTO THE DETAILS SINCE THE COST OF THE ASSETS HAS BEEN ALLOWED AS APPLICATION OF INCOME IN THE PAST. THIS FINDING IS FACTUALLY INCORRECT, LEGALLY MISCON CEIVED, CONTRARY TO RECORD AND UNTENABLE. 1.2 THAT CONCLUSION OF THE LEARNED COMMISSIONER OF INCOME TAX THAT 'SO FAR AS ISSUE OF DEPRECIATION IS CONCER NED, THE AO HAS NOT MADE ANY ENQUIRY BEFORE ALLOWING DEPRECIATI ON ON ASSETS TO KNOW WHETHER THE COST OF SUCH ASSETS HAVE BEEN ALLOWED AS APPLICATION ON INCOME IN THE PAST' IS ER RONEOUS BOTH FACTUALLY AND LEGALLY MISCONCEIVED. 1.3 THAT THE LEARNED COMMISSIONER OF INCOME TAX HA S FAILED TO APPRECIATE THAT ONCE THE LEARNED ASSESSIN G OFFICER ON EXAMINATION OF THE FACTS ON RECORD AND AFTER MAKING ALL POSSIBLE ENQUIRIES HAD ACCEPTED CLAIM OF THE APPELL ANT THEN SUCH AN ORDER OF ASSESSMENT COULD NOT BE REGARDED A S ERRONEOUS IN AS MUCH AS PREJUDICIAL TO THE INTEREST OF REVENUE MERELY BECAUSE THE LEARNED COMMISSIONER OF INCOME T AX HAD A DIFFERENT OPINION AND THAT TOO, WITHOUT HAVING ES TABLISHED IN ANY MANNER THAT, VIEW ADOPTED BY THE LEARNED ASSESS ING OFFICER WAS AN IMPOSSIBLE VIEW. 1.4 THAT FURTHER THE LEARNED COMMISSIONER OF INCOM E TAX HAS ALSO FAILED TO APPRECIATE THAT, U/S 263 OF THE ACT, AN ORDER OF ASSESSMENT CANNOT BE SET-ASIDE TO SIMPLY TO MAKE FU RTHER ENQUIRIES AND THEREAFTER PASS FRESH ORDER OF ASSESS MENT ON THE ISSUE OF DEPRECIATION AND AS SUCH, IMPUGNED ORDER I S CONTRARY TO LAW AND HENCE, UNSUSTAINABLE. IT IS THEREFORE PRAYED THAT, IMPUGNED ORDER MADE UN DER SECTION 263 OF THE ACT DATED 20.3.2017 BE HELD TO B E WITHOUT JURISDICTION AND, THEREFORE BE QUASHED AND APPEAL O F THE APPELLANT BE ALLOWED. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE SOCIETY BEING RE GISTERED UNDER SECTION 12A OF THE ACT FILED RETURN DECLARING NIL I NCOME WHICH WAS ITA NO.2738/DEL./2017 3 SUBJECTED TO SCRUTINY. ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE ACT BY TREATING ASSESSEES ACTIVITIES CHARITABLE IN NATURE AS PER SECTION 2(15) OF THE ACT. HOWEVER, L D. CIT (E) BY INVOKING THE PROVISIONS CONTAINED U/S 263 OF THE AC T SET ASIDE THE ASSESSMENT ORDER FRAMED IN THIS CASE ON THE GROUND THAT THE AO HAS NOT MADE ANY ENQUIRY BEFORE ALLOWING DEPRECIATION O N ASSETS TO KNOW WHETHER THE COST OF SUCH ASSETS ARE ALLOWABLE AS APPLICATION OF INCOME IN THE PAST AND THEREBY QUASHED THE ASSES SMENT ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3, FEELING AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT (E), THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDER CONTENDED THAT THE ISSUE OF CLAIMING DEPRECIATION O N ASSETS BEING ALLOWABLE AS APPLICATION OF INCOME HAS ALREADY BEEN SETTLED IN FAVOUR OF THE ASSESSEE IN VIEW OF THE JUDGMENT REND ERED BY HONBLE SUPREME COURT IN CASE OF CIT VS. RAJASTHAN & GUJRAT CHARITABLE FOUNDATION, PUNE 402 ITR 441 (SC) BY LD. CIT (E) ITA NO.2738/DEL./2017 4 IN ASSESSEES OWN CASE FOR AY 2011-12 VIDE ORDER DA TED 27.03.2018. LD. DR FOR THE REVENUE HAS FAILED TO C ONTROVERT THIS FACT. 6. WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT ( E) HAS MISDIRECTED HIMSELF WHILE TAKING THE VIEW THAT DEPR ECIATION OF RS.37,70,021/- HAS BEEN ALLOWED WITHOUT GETTING INT O THE DETAILS WHICH AMOUNTS TO DOUBLE DEDUCTION BY IGNORING THE F ACT THAT THE IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE A SSESSEE BY THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSMENT YEAR 2011-12 VIDE ORDER DATED 04.09.2018 IN ITA NO.3086/DEL/2016 IN WHICH ASSESSMENT FRAMED U/S 143(3) OF THE ACT WAS ALSO SE T ASIDE BY INVOKING THE PROVISIONS CONTAINED U/S 263 OF THE AC T BY RELYING UPON THE DECISION RENDERED BY HONBLE SUPREME COURT IN CASE OF CIT VS. RAJASTHAN & GUJRAT CHARITABLE FOUNDATION (S UPRA) AND AS SUCH, DEPRECIATION ON ASSETS HAS TO BE ALLOWED AS A PPLICATION OF INCOME. CONSEQUENTLY, WE HEREBY SET ASIDE THE ORDE R PASSED BY THE LD. CIT(E) U/S 263 OF THE ACT. RESULTANTLY, THE AP PEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 30 TH DAY OF JUNE , 2021. SD/- SD/- (N.K. BILLAIYA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 30 TH DAY OF JUNE, 2021/TS ITA NO.2738/DEL./2017 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(E), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.