Gawar Foundation, Haryana V. ITO (Exemptions), Rohtak

ITA 2808/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8203 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 01-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NAVEEN GUPTA
• Keywords: Charitable institution; Maximum Marginal Rate; Set aside
• Section: 143(3); 40(a)(ia); 12A; 12AA

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 2808/DEL/2019 (ASSESSMENT YEAR: 2015 - 16 ) GAWAR FOUNDATION, THROUGH S. K. JAIN, ADVOCATE, 696/8, GANGA BAGH, HANSI, HARYANA PAN: AACTG1482C VS. ITO(EXEMPTION), ROHTAK (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NAVEEN GUPTA, ADV REVENUE BY: SHRI R. K. GUPTA, SR. DR DATE OF HEARING 11/08 / 2021 DATE OF PRONOUNCEMENT 1 1 / 08 / 2021 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - HISAR, DATED 31.01.2019 FOR ASSESSMENT YEAR 2015 - 16 RAISING FOLLOWING GROUNDS OF APPEAL: - 1) THAT ON THE FACTS, IN THE CIRCUMSTANCES OF THE CASE AND UNDER LAW LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT DELETING DISALLOWANCE MADE BY LEARNED ASSESSING OFFICER UNDER S. 40(A)(IA) OF INCOME TAX ACT, 1961 AT RS. 37,800/ - BECAUSE THE APPELLANT DOES NOT FALL WITHIN THE PREVIEW OF THIS SECTION. 2) THAT ON THE FACTS, IN THE CIRCUMSTANCES OF THE CASE AND UNDER LAW LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING THE ACTION OF LEARNED ASSESSING O FFICER IN CHARGING TAX @30% ON INCOME ASSESSED AT RS. 3,95,610/ - (NET SURPLUS AT RS. 3,57,810/ - AND DISALLOWANCE MADE AT RS. 37,800/ - ) FROM APPELLANT AT MAXIMUM MARGINAL RATE WHEREAS THE APPELLANT WAS ASSESSED IN AOP STATUS AND AS SUCH SLAB RATE OF TAX AS APPLICABLE TO THE INDIVIDUAL SHALL BE APPLICABLE TO THE APPELLANT. 3) THAT ON THE FACTS, IN THE CIRCUMSTANCES OF THE CASE AND UNDER LAW LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING ACTION OF LEARNED ASSESSING OFFICER IN CHARGING INTERES T AT RS. 38,089/ - FROM APPELLANT ASSESSEE. 4) THAT APPEAL FEE AS PRESCRIBED UNDER S. 253(6)(C) OF INCOME TAX ACT, 1961 AT RS. 4,000/ - HAS BEEN DEPOSITED ON 25 - 03 - 2019 WITH PUNJAB NATIONAL BANK, HISAR. PAGE | 2 5) THAT APPEAL IS WITHIN LIMITATION AS ORDER UNDER APPE AL DATED 31 - 01 - 2019 WAS SERVED ON APPELLANT ASSESSEE ON 12 - 02 - 2019. 2. BRIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE IS A CHARITABLE TRUST FILED ITS RETURN OF INCOME ON 31.08.2015 DECLARED INCOME OF RS. 3,57,810/ - . 3. DURING THE COURSE OF ASSESSMENT THE LD A O ASKED THE ASSESSEE TO PRODUCE THE CERTIFICATE OF REGISTRATION U/S 12AA OF THE ACT FOR CLAIMING EXEMPTION U/S 11 AND 12. THE ASSESSEE COULD NOT PRODUCE THE SAME THEREFORE, THE STATUS OF THE ASSESSEE HAS BEEN CONSIDERED AS AOP ( BUSINESS ) INSTEAD OF AOP ( TR UST ) . CONSEQUENTLY, IT WAS FOUND THAT THE ASSESSEE HAS MADE A CASH PAYMENT OF RS. 37,800/ - TO THE CONTRACT OR WITHOUT DEDUCTION OF TAX AT SOURCE AND THEREFORE, IT WAS DISALLOWED U/S 40 (A) (IA) OF THE ACT. TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT RS. 3,95, 6 10 / - BY ORDER PASSED U/S 143(3) OF THE ACT ON 31.07.2012. 4. A SSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT ( A) WHO ALSO UPHELD THE DISALLOWANCE AS THE ASSESSEE DID NOT HAVE REGISTRATION U/S 12AA OF THE ACT AND THEREFORE, THE ASSESSEE IS IN APPEAL BEFO RE US. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED THAT NOW THE ASSESSEE HAS BEEN REGISTERED U/S 12AA OF THE ACT VIDE ORDER DATED 02.05.2019 AND THEREFORE IT IS ELIGIBLE FOR EXEMPTION U/S 11 AND 12 RWS 12A OF THE ACT . IT WAS FURTH ER STATED THAT THE ASSESSEE HAS ERRONEOUSLY SHOWN SURPLUS OF RS. 3 , 57 , 810/ - AS INCOME OF THE ASSESSEE AND THEREFORE, THE ASSESSEE MUST BE GRANTED BENEFIT OF THE PROVISION OF SECTION 11 AND 12 OF THE ACT . IT WAS FURTHER STATED THAT AS PER ORDER DATED 02.05 .2019 PASSED U/S 12AA OF THE ACT THE REGISTRATION HAS BEEN GRANTED TO THE ASSESSEE FROM ASSESSMENT YEAR 2015 - 16 OF THE ACT AND HENCE, THE INCOME OF THE ASSESSEE MUST BE NOW COMPUTED U/S 11 AND 12 OF THE ACT. HE OTHERWISE SUBMITTED THAT THERE CANNOT BE ANY ADDITION U/S 40 (A) (IA) OF THE ACT WHEN THE INCOME OF THE ASSESSEE IS REQUIRED TO BE COMPUTED U/S 11 AND 12 OF THE ACT. 6. THE LD DR SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS NO SUCH REGISTRATION CERTIFICATE WAS PRODUCED AND THEREFORE, NOW TH E ASSESSEE CANNOT TAKE BENEFIT OF THE SAME. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FIND THAT THE ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE U/S 40 (A) (IA) O F THE ACT TREATING THE ASSESSEE AS AOP CARRYING ON THE BUSINESS INSTEAD OF A OP BEING CHARITABLE TRUST. AT THAT PARTICULAR TIME THE FACT SHOWS THAT THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12AA OF THE ACT WAS REJECTED VIDE ORDER DATED 07.05.2015 BY LD CIT(E), CHANDIGARH. AGAINST SUCH ORDER THE ASSESSEE PREFERRED AN APP EAL BEFORE PAGE | 3 THE COORDINATE BENCH AND COORDINATE BENCH DIRECTED THE LD CIT(E) TO CONSIDER THE APPLICATION OF THE ASSESSEE AND TO GRANT REGISTRATION U/S 12AA OF THE ACT. SUBSEQUENTLY, THE LD CIT(E), CHANDIGARH PASSED AN ORDER ON 02.05.2019 GRANTING REGISTRATI ON TO THE TRUST U/S 12AA OF THE ACT FROM ASSESSMENT YEAR2015 - 16 . ACCORDINGLY, NOW THE INCOME OF THE ASSESSEE IS REQUIRED TO BE COMPUTED UNDER THE PROVISION OF SECTION 11 AND 12 OF THE ACT. THEREFORE, WE SET ASIDE THE APPEAL OF THE ASSESSEE TO THE FILE OF THE LD AO WITH A DIRECTION TO COMPUTE THE INCOME OF THE ASSESSEE APPLYING THE PROVISION OF SECTION 11 AND 12 OF THE ACT AND ALSO DIRECT THE LD AO TO NOT TO DISALLOW THE IMPUGNED SUM U/S 40 (A)( IA) OF THE ACT AS THOSE PROVISION ARE NOT APPLICABLE WHILE COMPUTING THE INCOME U/S 11 AND 12 OF THE ACT. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 1 / 08 / 2021 . - SD/ - - SD/ - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 1 / 08 / 2021 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI