M/s Takniki Shiksha Sansthan, Delhi V. M/s Addl. CIT, Ghaziabad

ITA 2924/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74274 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 20-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 13-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Business income; Charitable institution; Question of law; Fair market value; Reassessment proceedings
• Section: 143(3); 50C; 234B; 12AA; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA ITA NO. 2924/DEL/2013 ASSESSMENT YEAR: 2008-09 TAKNIKI SHIKSHA SANSTHAN, VS. ADDITIONAL CIT, C/O RAJ KUMAR & ASSOCIATES, CA RANGE-2. 4435/7, ANSARI ROAD, DARYAGANJ, GHAZIABAD. DELHI (PAN: AABAT4993R) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAJKUMAR CA RESPONDENT BY: SHRI SAMEER SHAR MA, SR. DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 28.02.2013 PASSED FOR ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, INITIAT ION OF PROCEEDINGS U/S. 147/148 IS UNSUSTAINABLE IN LAW AS WELL AS ON MERITS. 2. THAT WITHOUT PREJUDICE AS NO ADDITION STANDS SUSTAI NED ON THE ISSUES AS PER REASONS RECORDED FOR REOPENING IN ASS ESSMENT PROCEEDINGS U/S. 147/148, ANY OTHER ADDITION ON ANY OTHER ISSUE AND FOR ANY OTHER REASON CAN BE MADE IN SUCH REASSE SSMENT. 3. THAT UNDER THE FACTS AND CIRCUMSTANCES, THERE IS AB SOLUTELY NO JUSTIFICATION IN LAW AS WELL AS ON MERITS IN TAXING THE SALE OF 2 LAND AS CAPITAL GAIN AND IN NOT ALLOWING THE BENEFI T U/S. 1(23 C)(IIIAD) OF THE I.T. ACT. 4. THAT UNDER THE FACTS AND CIRCUMSTANCES, RS.3,700 HA S BEEN WRONGLY ASSESSED AS INCOME FROM BUSINESS OR PROFESS ION. 5. THAT UNDER THE FACTS AND CIRCUMSTANCES, NO INTEREST U/S.234A, 234B AND 234C SHOULD HAVE BEEN CHARGED. IN ANY CASE , THE CALCULATIONS ARE ERRONEOUS AND EXCESSIVE. 2. IN GROUND NOS. 1 AND 2, ASSESSEE IS CHALLENGING REOPENING OF THE ASSESSMENT. THE BRIEF FACTS ARE THAT ASSESSEE M/S. TAKNIKI SIKSHA SANSTHAN WAS FORMED ON 31.8.1998 WITH AN OBJECT TO HELP AND EDUCATE POOR AND NEEDY STUDENTS AT VILLAGE SHAHPUR BHAMARKA IN DISTRICT GH AZIABAD. IT WAS REGISTERED UNDER SOCIETIES REGISTRATION ACT VIDE RE GISTRATION NO. 738-98-99. IT HAS NOT FILED RETURN OF INCOME FOR ASSESSMENT YE AR 2008-09. LEARNED ASSESSING OFFICER OF SHAIL GARG SIKSHA SANSTHAN WHI LE FRAMING ASSESSMENT ORDER OF THAT SOCIETY CAME TO KNOW THAT ASSESSEE HA D DONATED A SUM OF RS.87 LACS TO M/S. SHAIL GARG SIKSHA SANSTHAN. THEREFORE, HE RECORDED THE REASONS FOR REOPENING OF ASSESSEES ASSESSMENT AND ISSUED A NOTICE UNDER SEC. 148 OF THE ACT. THE REASONS RECORDED BY THE LEARNED ASSESS ING OFFICER READ AS UNDER: 1.DURING THE COURSE OF SCRUTINY OF M/S. SHAILGARG SIKSHA SNASTHAN IT WAS SEEN THAT THE DONATION WAS RECEIVED WITH M/S. T AKNIKI SIKSHA SANSTHAN TO THE TUNE OF RS.87,00,000. ON PERUSAL OF SALE DEED IT WAS 3 FOUND THAT THE DONATION WAS MADE ON ACCOUNT OF SALE OF LAND OF THE TRUST OF M/S. TAKNIKI SIKSHA SANSTHAN. PERUSAL OF R EGISTERED DEED OF THE SALE OF LAND BY TAKNIKI SIKSHA SANSTHAN SHOWS T HAT THE SALE VALUE WAS @ OF RS.4,000 PER SQ. METER WHEREAS THE SALE WA S MADE @ RS.2400 PER SQ. METER. THUS, THERE WAS DIFFERENCE O F RS.49,12,000 (3070X1600). THEREFORE, THERE IS CLEAR CUT VIOLATIO N OF SEC. 50(C) OF THE I.T. ACT AND TO THAT EXTENT INCOME HAS ESCAPED FROM TAXATION IN THE HANDS OF M/S. TAKNIKI SIKSHA SANSTHAN. 2.IT IS FURTHER FOUND THAT M/S. TAKNIKI SIKSHA SANS THAN IS A SOCIETY REGISTERED UNDER SOCIETIES ACT WHICH HAS SOLD ITS C APITAL ASSET AND DONATION IS MADE THEREAFTER. SECTION 11(1A) OF THE INCOME-TAX CLEARLY SAYS THAT THE APPLICATION OF INCOME IN CASE OF CHAR ITABLE INSTITUTION ARISING ON ACCOUNT OF SALE OF CAPITAL ASSERT WILL B E TREATED AS APPLIED FOR THE PURPOSE ONLY WHEN CAPITAL ASSET HAS BEEN AC QUIRED BY THE SAME TRUST. IN THIS CASE RATHER THAN UTILIZING THE FUND BY THE SOCIETY THE SAME HAS BEEN DONATED TO ANOTHER TRUST WHICH CLEARLY VIO LATE THE PROVISION OF SECTION 11(1A). HENCE EXEMPTION WOULD NOT BE AVA ILABLE FOR SUCH APPLICATION AND ENTIRE GAIN WOULD BE SUBJECT TOT AX . HENCE TO THE EXTENT OF CAPITAL GAIN INCOME IS SOUGHT TO BE EVADE D IN THE HANDS OF M/S. TAKNIKI SIKSHA SANSTHAN. THE POINT FINDS SUPPO RT FROM CIRCULAR NO.12 DATED 30.12.1970, CIRCULAR NO. 72 DATED 06.11 .1972 AND VARIOUS DECISIONS OF HON'BLE HIGH COURTS NAMELY SAT YA VIJAY PATEL HINDU DHARAMSHALA TRUST VS. CIT (1972) 86 ITR 683 ( GUJ), CIT VS. AUROBINDO MEMORIAL FUND SOCIETY (2001_ 247 ITR 93 ( MAD.), CIT VS. AMBALA SARABHAI TRUST NO. 3 (1988) 173 ITR 683 (GUJ.), 4 JUDGMENT OF THE HON'BKLE GUJARAT HIGH COURT VIDE (1 989) 176 ITR (ST.) 236 (S.C). HENCE NOTICE U/S. 148 OF THE I.T. ACT IS HEREBY ISSUED. SD/- ADDITIONAL COMMISSIONER OF INCOME-TAX RANGE-2, GHAZIABAD. 3. THE ASSESSEE HAS CHALLENGED REASSESSMENT ORDER B EFORE THE LEARNED FIRST APPELLATE AUTHORITY, BUT LEARNED CIT(APPEALS) HAS UPHELD THE REOPENING. BEFORE US, LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE PLOT IN QUESTION WAS ACTUALLY SOLD @ RS.2400 PER SQ. MTR . FOR THE PURPOSE OF PAYMENT OF STAMP DUTY, THE CIRCLE RATE NOTIFIED BY THE REGISTERING AUTHORITY WAS RS.4,000 PER SQ. MTR. LEARNED ASSESSING OFFICER WAS OF THE OPINION THAT AS PER SEC. 50C, ASSESSEE OUGHT TO HAVE COMPUTED TH E CAPITAL GAIN BY TAKING THE RATE AT RS.4,000 PER SQ. MTR. ADOPTED FOR THE P URPOSE OF PAYMENT OF STAMP DUTY WHILE GETTING THE SALE DEED REGISTERED. THE VA LUE AT THE RATE OF RS.4,000 PER SQ. MTR. FOR A PLOT HAVING AREA 3070 SQ. MTR. C OMES OUT TO RS.122,80,000 WHEREAS THE SALES CONSIDERATION ACTUALLY RECEIVED B Y THE ASSESSEE WAS RS.88,12,128. WHEN A REFERENCE WAS MADE TO THE DVO FOR DETERMINATION OF THE MARKET VALUE OF THE PROPERTY AS CONTEMPLATED IN SEC. 50C(2) OF THE ACT, LEARNED DVO HAS DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY AT RS.91,79,300. THUS, THERE WAS NO SUBSTANTIAL DIFFER ENCE BETWEEN THE VALUE DECLARED BY THE ASSESSEE ON ACTUAL RECEIPT BASIS, V IS--VIS THE FAIR MARKET 5 VALUE DETERMINED BY THE DVO. LEARNED FIRST APPELLAT E AUTHORITY HAS ACCEPTED THE ACTUAL SALES CONSIDERATION DISCLOSED B Y THE ASSESSEE AND ALSO HELD THAT THE SALES CONSIDERATION ACTUALLY RECEIVED BY THE ASSESSEE NEED NOT TO BE REPLACED UNDER DEEMING PROVISIONS PROVIDED UNDER SEC. 50C. 4. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE TAKIN G US THROUGH THE REASONS FOR REOPENING POINTED OUT THAT ASSESSMENT W AS REOPENED ON THE GROUND THAT THERE WAS A DIFFERENCE OF RS.49,12,000 IN THE TOTAL SALES CONSIDERATION DEEMED TO HAVE BEEN DISCLOSED BY THE ASSESSEE FOR THE PURPOSE OF CALCULATION OF THE CAPITAL GAIN. THE INCOME FOR ASSESSMENT OF LONG TERM CAPITAL GAIN ON THIS AMOUNT HAS ESCAPED FROM TAXATI ON. HE EMPHASIZED THAT IN THE LAST LINE OF PARAGRAPH 1 OF THE REASONS, ASS ESSING OFFICER HAS OBSERVED THAT INCOME TO THAT EXTENT AS ESCAPED FROM TAXATION . ONCE, LEARNED CIT(APPEALS) HAS HELD THAT SEC. 50C IS NOT APPLICAB LE UPON THE ASSESSEE BECAUSE FAIR MARKET VALUE OF THE PLOT IN DISPUTE IS EQUIVALENT TO THE SALES CONSIDERATION DISCLOSED BY THE ASSESSEE, THEN, ASSE SSING OFFICER CANNOT TAKE UP ANY OTHER ISSUE IN THE REASSESSMENT, MEANING THE REBY, ONCE FOR THE REASONS ASSESSMENT PROCEEDINGS WERE REOPENED, NO MO RE AVAILABLE TO THE ASSESSING OFFICER THEN, HE CANNOT TAKE UP ANY OTHER ISSUE DISCOVERED DURING THE COURSE OF REASSESSMENT PROCEEDINGS,. FOR BUTTRE SSING HIS CONTENTIONS, HE 6 RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COUR T IN THE CASE OF RANBAXY LABORATORY VS. CIT REPORTED IN 336 ITR 136. HE ALSO RELIED UPON THE JUDGMENT OF THE HON'BLE MUMBAI HIGH COURT IN THE CA SE OF CIT VS. JET AIRWAYS LTD. REPORTED IN 331 ITR 236 (BOM.). HE FUR THER CONTENDED THAT ADDITIONS BASED ON REASONS RECORDED BY THE ASSESSIN G OFFICER, IF DELETED, DURING THE APPELLATE PROCEEDINGS, THEN, IT WOULD BE CONSTRUED THAT NO ADDITIONS ARE BEING MADE ON THOSE REASONS. IN THE P RESENT CASE, LEARNED CIT(APPEALS) HAS DELETED THE ADDITION MADE WITH THE HELP OF SEC. 50C, THEREFORE, IT BE CONSTITUTED THAT NO ADDITION IS BE ING MADE ON THE BASIS OF SEC. 50C. IN SUPPORT OF HIS CONTENTIONS, HE RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. LIVING MEDI A INDIA LTD. REPORTED IN 359 ITR 106. 5. ON THE OTHER HAND, LEARNED CIT(DR) HAS CONTENDED THAT ASSESSMENT WAS REOPENED FOR TWO REASONS, NAMELY, (A) FAILURE O F THE ASSESSEE TO DISCLOSE SALES CONSIDERATION FOR COMPUTING CAPITAL GAIN AS P ER SEC. 50C I.E. IT HAS TO DISCLOSE THE SALES CONSIDERATION EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY WAS PAID; (B) THE ASSESSING OFFICER HAS ALSO R EOPENED THE ASSESSMENT ON THE GROUND THAT THE SOCIETY IS NOT ENTITLED TO B ENEFIT OF SEC. 11(1A) OF THE ACT BECAUSE IT HAS NOT MADE INVESTMENT IN A CAPITAL ASSETS, OUT OF THE SALES OF 7 CAPITAL ASSETS, MEANING THEREBY, THE CAPITAL ON ALL EGED ACTUAL SALES CONSIDERATION DISCLOSED BY THE ASSESSEE HAS ALSO ES CAPED ASSESSMENT. FOR THAT REASONS, LEARNED CIT(APPEALS) HAS UPHELD THE ADDITI ON AND THE REASSESSMENT ORDER CANNOT BE QUASHED ON THE ARGUMENTS ADVANCED B Y THE LEARNED COUNSEL FOR THE ASSESSEE. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH REGARD T O THE PROPOSITION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT IF AN ASS ESSMENT IS REOPENED AND ON THE BASIS OF THE REASONS AND NO ADDITIONS ARE MADE BY THE A.O. THEN, THOSE ISSUES FOR WHICH IT WAS REOPENED, ASSESSING OFFICER WILL BE DENUDED FROM HIS POWERS TO MAKE ANY OTHER ADDITION ON THE ISSUES WHICH CAME TO HIS NOTICE DURING THE REASSESSMENT PROCEEDINGS. HOWEVER, IN TH E PRESENT CASE, LEARNED ASSESSING OFFICER HAS OBSERVED THAT ASSESSEE IS NOT ENTITLED TO EXEMPTION UNDER SEC. 11(1A). IT HAS NOT DISCLOSED THE CAPITAL GAIN ON SALE OF CAPITAL ASSETS. LEARNED CIT(APPEALS) HAS CONFIRMED THE ADDI TION TO THE EXTENT OF CAPITAL GAIN AROSE TO THE ASSESSEE ON ALLEGED ACTUA L SALES CONSIDERATION RECEIVED BY IT. THUS, THE ASSESSEE CANNOT TAKE ANY BENEFIT FROM THE DECISION OF THE HON'BLE DELHI HIGH COURT, REFERRED SUPRA. TH E ASSESSMENT WAS REOPENED FOR TWO REASONS AND ON ONE OF THE REASON, ADDITION WAS CONFIRMED 8 BY THE LEARNED CIT(APPEALS). IN VIEW OF THE ABOVE D ISCUSSION, WE REJECT GROUND NOS. 1 AND 2. 7. IN GROUND NO.3, GRIEVANCE OF THE ASSESSEE RELATE S TO DENIAL OF BENEFIT UNDER SEC. 10(23C)(IIIAD) OF THE INCOME-TAX ACT, 19 61. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE SOCIETY CAME INTO EXISTENCE ON 31.8.1998. THE ARTICLE 4 OF THE MEMORANDUM OF ASSOCIATION, EXHIBITS THE AI MS AND OBJECTS OF THE SOCIETY. THE MAIN OBJECT OF THE SOCIETY WAS TO HELP AND EDUCATE POOR AND NEEDY STUDENTS AND TO RUN EDUCATIONAL INSTITUTION W ITHOUT ANY PROFIT MOTIVE, AND APART FROM THESE OBJECTS, ONE OF THE OBJECTS IS TO GIVE DONATIONS OF MOVEABLE AND IMMOVEABLE PROPERTIES IN ORDER TO ACHI EVE THESE OBJECTS TO THOSE SOCIETIES WHICH ARE ALSO DOING WORK IN THE FI LED OF ASSESSEES OBJECTS. IN ORDER TO FULFILL ITS OBJECTS, IT HAS PURCHASED A PLOT OF LAND MEASURING 3070 SQ. MTR. ON 26.10.1999. THIS PLOT WAS SOLD BY THE A SSESSEE DURING THE ACCOUNTING PERIOD RELEVANT TO THIS YEAR AND THE SAL E PROCEED RECEIVED BY IT HAS BEEN GIVEN TO M/S. SUHAIL GARG SIKSHA SANSTHAN AS A CORPUS DONATION. ACCORDING TO THE ASSESSEE, THE SOCIETY IS EXISTING FOR THE PURPOSE OF EDUCATION AND, THEREFORE, ANY RECEIPT RECEIVED BY I T IS EXEMPT FROM TAXATION AS PER SEC. 10(23C)(IIIAD) OF THE ACT. LEARNED ASSE SSING OFFICER HAS REJECTED THIS CLAIM OF ASSESSEE ON THE GROUND THAT ASSESSEE FAILED TO BRING ANY EVIDENCE ON THE RECORD SUGGESTING THAT IT HAS TAKEN ANY STEP FOR RUNNING ANY 9 EDUCATIONAL INSTITUTION. THUS, IN THE OPINION OF TH E ASSESSING OFFICER, THE SOCIETY WAS NOT EXISTING FOR THE PURPOSE OF EDUCATI ON. 8. ON APPEAL, LEARNED FIRST APPELLATE AUTHORITY HAS CONFIRMED THE VIEW OF THE ASSESSING OFFICER BY OBSERVING THAT SOCIETY HAS NEVER BEEN REGISTERED UNDER SEC. 12AA NOR HAS EVER DONE ANY EDUCATIONAL A CTIVITY, THEREFORE, IT CANNOT CLAIM EXEMPTION UNDER SEC. 10(23C)(IIIAD) OF THE ACT. LEARNED FIRST APPELLATE AUTHORITY HAS RELIED UPON THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SCIENTIFIC EDUCAT IONAL ADVANCEMENT SOCIETY VS. UNION OF INDIA REPORTED IN 323 ITR 84. IT ALSO RELIED UPON THE ORDER OF THE ITAT IN THE CASE OF TRUSTEE OF HARI KI SHAN DASS TULSIDAS AGGARWAL CHARITABLE TRUST REPORTED IN 13 ITD 648. 9. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDER OF LEARNED CIT(APPEALS) CONTENDED THAT ASSESSEE SOCIET Y HAD PURCHASED A PLOT IN THE YEAR 1999 AND IT HAD APPLIED TO AICTE FOR ST ARTING AN EDUCATIONAL INSTITUTION. THE ASSESSEE HAD OBTAINED AN APPLICATI ON FORM BY PAYMENT OF RS.5,000 AS A FEE. THIS APPLICATION FORM WAS PURCHA SED ON 6 TH SEPTEMBER 1999 AND FEE WAS PAID THROUGH DD NO. 662000 DATED 0 2.09.1989. SINCE THE SOCIETY COULD NOT ARRANGE THE FUND AND, THEREFORE, COULD NOT CONSTRUCT THE BUILDING. ULTIMATELY, IT WAS RESOLVED BY THE EXECUT IVE COMMITTEE TO ADVANCE 10 THE FUND AVAILABLE WITH THE SOCIETY TO A SIMILAR SO CIETY. HE DREW OUR ATTENTION TOWARDS COPY OF THE RESOLUTION PASSED BY THE EXECUT IVE COMMITTEE IN ITS MEETING HELD ON 25.2.2008, COPY OF THE RESOLUTION I S AVAILABLE ON PAGE 39. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER RELIED UPON HIS SUBMISSIONS AS REPRODUCED BY THE LEARNED CIT(APPEALS) ON PAGE NOS. 13 TO 15 OF THE IMPUGNED ORDER. LEARNED COUNSEL FOR THE ASSESSEE AL SO RELIED UPON THE FOLLOWING JUDGMENTS: I) AR EDUCATIONAL SOCIETY VS. CIT 253 ITR 589; II) NITYA EDUCATION SOCIETY VS. JCIT 51 SOT 103; & III) ITO VS. DHALL EDUCATIONAL SOCIETY OF INDIA 27 SOT 391. 10. ON THE OTHER HAND, LEARNED DR RELIED UPON THE O RDER OF THE LEARNED CIT(APPEALS). 11. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. LEARNED ASSESSING OFFICER HAS DEN IED EXEMPTION UNDER SEC. 10(23C)(IIIAD) OF THE ACT TO THE ASSESSEE AND ASSES SED THE CAPITAL GAIN AROSE TO THE ASSESSEE ON SALE OF LAND. BEFORE TAKING INTO CONSIDERATION THE FACTS EMERGING OUT FROM THE RECORD, WE DEEM IT APPROPRIAT E TO TAKE NOTE OF RELEVANT STATUTORY PROVISIONS I.E. SEC. 2, (24) AND 10(23C)(IIIAD) OF THE INCOME-TAX ACT, 1961. THEY READ AS UNDER: SEC.2. IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIRES 11 XXX XXX XXX (24) INCOME INCLUDES - XXX XXX XXX (IIA) VOLUNTARY CONTRIBUTION RECEIVED BY A TRUST CR EATED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR B Y AN INSTITUTION ESTABLISHED WHOLLY OR PARTLY FOR SUCH PURPOSES OR B Y AN ASSOCIATION OR INSTITUTION REFERRED TO IN CLAUSE (2 1) OR CLAUSE (23), OR BY A FUND OR TRUST OR INSTITUTION REFERRED TO IN SUB-CLAUSE (IV) OR SUB-CLAUSE (V) OR BY AN UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION REFERRED TO IN SUB-CLAUSE (IIIAD) OR SU B-CLAUSE (VI) OR BY ANY HOSPITAL OR OTHER INSTITUTION REFERRED TO IN SUB-CLAUSE (IIIAE) OR SUB CLAUSE (23C) OF SECTION 10 OR BY AN ELECTORAL TRUST. SEC.10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOWING CLAUSES SHALL NOT BE INCLUDED - XXX XXX XXX (23C) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTI ON EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PR OFIT IF THE AGGREGATE ANNUAL RECEIPTS OF SUCH UNIVERSITY OR EDU CATIONAL INSTITUTION DO NOT EXCEED THE AMOUNT OF ANNUAL RECEIPTS AS MAY BE PRESCRIBED; OR. 12. THE FIRST ISSUE WHICH IS REQUIRED TO BE ADJUDIC ATED IS WHETHER THE ASSESSEE SOCIETY IS AN EDUCATIONAL INSTITUTION OR N OT? ACCORDING TO THE 12 LEARNED CIT(APPEALS), THE SOCIETY HAS NEITHER BEEN REGISTERED UNDER SEC. 12AA NOR HAS EVER DONE ANY EDUCATIONAL ACTIVITY. AS FAR AS REGISTRATION UNDER SEC. 12AA IS CONCERNED, IT IS NOT MANDATORY F OR AN EDUCATIONAL INSTITUTION TO OBTAIN. IF THE TOTAL RECEIPT OF AN I NSTITUTION SOLELY EXISTING FOR EDUCATION PURPOSE DO NOT EXCEED MORE THAN RS. 1 CRO RE THEN THAT INSTITUTION CAN CLAIM EXEMPTION UNDER SEC. 10(23C)(IIIAD) OF TH E ACT AND IT NEED NOT TO GET ITSELF REGISTERED UNDER SEC. 12AA. THUS, THIS R EASON IS A CORROBORATIVE REASONING FOR THE LEARNED CIT(APPEALS) IN REJECTING THE CLAIM OF THE ASSESSEE. THE NEXT POINT WEIGHED WITH THE LEARNED C IT(APPEALS) IS THAT IT HAD NEVER DONE ANY EDUCATIONAL ACTIVITY. ON A PERUS AL OF SEC. 10(23C)(IIIAD), IN THE LIGHT OF VARIOUS AUTHORITATIVE PRONOUNCEMENT S RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE, IT REVEALS THAT B ENEFIT UNDER SEC. 10(23C)(IIIAD) IS SOLELY NOT DEPENDENT ON THE ACTUA LLY FUNCTIONING OF AN EDUCATIONAL INSTITUTION. THE EXPRESSION EXISTING EMPLOYED IN THIS SECTION DOES NOT CONVEY THE MEANING OF ACTUAL FUNCTIONING O F THE INSTITUTION. A SOCIETY CAN BE CONSIDERED AS EXISTING FOR EDUCATION AL PURPOSES DURING THE CONSTRUCTION PERIOD OF THE BUILDING ETC. THUS, THE STAND OF THE REVENUE IS THAT SINCE ASSESSEE HAS NOT CARRIED OUT ANY MEANINGFUL A CTIVITY IN THE FIELD OF EDUCATION, THEREFORE, IT SHOULD NOT BE CONSIDERED A S AN INSTITUTION EXISTING FOR THE PURPOSE OF EDUCATION. ON THE OTHER HAND, STAND OF THE ASSESSEE IS THAT IT 13 CAME INTO EXISTENCE SOLELY FOR THE PURPOSE OF EDUCA TION. IT HAS PURCHASED A PLOT OF LAND FOR CONSTRUCTION OF BUILDING BUT SOMEH OW IT FAILED TO ARRANGE THE FUNDS AND COULD NOT ACTUALLY COMMENCED THE EDUCATIO NAL INSTITUTION. BOTH THESE ASPECTS HAVE BEEN CONSIDERED IN THE CASE OF N ITYA EDUCATIONAL SOCIETY BY THE ITAT. IT IS PERTINENT TO TAKE NOTE OF THE FO LLOWING DISCUSSION WHEREIN ITAT HAS CONSIDERED TWO JUDGMENTS OF HON'BLE MUMBAI HIGH COURT AS WELL AS OF HON'BLE KERALA HIGH COURT: 11. THE NEXT QUESTION ARISES FOR OUR CONSIDERATION IS WHETHER ASSESSEE HAS ACTUALLY WORKED IN THE FIELD OF EDUCAT ION OR GRANT OF BENEFIT UNDER SEC. 23C(IIIAD) IS DEPENDENT ON THE F ATE OF ACTUALLY FUNCTIONING OF THE SCHOOL OR IT CAN BE GRANTED TO T HE ASSESSEE DURING THE CONSTRUCTION PERIOD. THE MAIN EMPHASIS OF THE L EARNED COUNSEL FOR THE ASSESSEE IS THAT EXPRESSION EXISTING EMPLOYED IN SECTION 10(23C)(IIIAD) OF THE ACT DOES NOT CONVEY THE MEANI NG OF ACTUAL FUNCTIONING OF THE INSTITUTION. THE ASSESSEE IS A S OCIETY. IT IS EXISTING FOR EDUCATIONAL PURPOSES. IT HAS APPLIED FOR ALLOTM ENT OF LAND WHICH HAS BEEN ALLOTTED TO IT. IT HAS MADE PART PAYMENT F OR THE PLOT OF LAND, SITE PLAN WAS SANCTIONED AND IT STARTED CONSTRUCTIO N OF THE SCHOOL BUILDING. THE SCHOOL WAS ULTIMATELY BECAME FUNCTION AL WHEN AN APPROVAL FROM THE CBSE WAS GRANTED. THUS, ACCORDING TO THE LEARNED COUNSEL, THE EXPRESSION EXISTING IS ASSOCIATED WI TH THE SOCIETY AND NOT THE FUNCTIONALITY OF THE INSTITUTION. ON THE OT HER HAND, THE STRESS OF THE ARGUMENTS OF LEARNED DR IS THAT EXPRESSION EXI STING CONTEMPLATES THAT UNLESS AN INSTITUTION IS ACTIVE I N THE FIELD OF 14 EDUCATION, MERE FACT THAT IT IS IN THE PROCESS OF E STABLISHING ITSELF WOULD NOT MAKE SUCH INSTITUTION AS ELIGIBLE FOR BEN EFIT OF SEC. 10(23C(IIIAD) OF THE ACT. SHE EMPHASIZED THAT UNLES S EDUCATIONAL ACTIVITIES COMMENCED, IT CANNOT BE SAID THAT THE AS SESSEE SOCIETY IS EXISTING SOLELY FOR THE PURPOSE OF EDUCATION. SHE R EFERRED THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF DEVI ED UCATIONAL INSTITUTION WHICH HAS BEEN RELIED UPON BY THE LEARN ED ASSESSING OFFICER ALSO. THE RELEVANT OBSERVATIONS ARE AS UNDE R: THE TRIBUNAL HAS MERELY PROCEEDED ON THE BASIS TH AT SINCE THE ASSESSEE-SOCIETY HAS ALREADY TAKEN STEPS TO SET UP AN EDUCATIONAL INSTITUTION, IT SHOULD BE TAKEN TO COME WITHIN THE SCOPE OF SECTION 10(22). AS ALREADY STATED, WE FEEL THAT THE MERE TA KING OF THE PRELIMINARY OR NECESSARY STEPS FOR THE ESTABLISHMEN T OF AN EDUCATIONAL INSTITUTION CANNOT AMOUNT TO ACTUAL BRINGING INTO E XISTENCE OF AN EDUCATIONAL INSTITUTION. SINCE SECTION 10(22) USES THE EXPRESSION EXISTING SOLELY FOR EDUCATIONAL PURPOSES, THE ACT UAL EXISTENCE OF THE EDUCATIONAL INSTITUTION IS A PRECONDITION FOR THE A PPLICATION OF SECTION 10(22) AND THE MERE TAKING OF STEPS FOR THE ESTABLI SHMENT OF THE EDUCATIONAL INSTITUTION MAY NOT BE SUFFICIENT TO AT TRACT THE EXEMPTION UNDER SEC. 10(22).. HOWEVER, IN A SUBSEQUENT DECISION, HON'BLE MADRAS H IGH COURT HAS OBSERVED THAT THIS JUDGMENT REQUIRES RECONSIDERATIO N. THE OBSERVATIONS OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF AR EDU CATIONAL SOCIETY ARE AS UNDER: 15 THE JUDGMENT OF THIS COURT IN THE CASE OF DEVI EDU CATIONAL INSTITUTION CASE (SUPRA) LAID EMPHASIS ON THE WORD EXISTING IN SECTION 10(22) OF THE ACT, AND CONCLUDED THAT THE I NSTITUTION MUST HAVE BEEN FUNCTIONAL IN THE RELEVANT PREVIOUS YEAR. THE WORD EXISTING IS NOT THE SAME THING AS BEING FUNCTIONA L. THERE IS NO DOUBT AT ALL THAT THE EDUCATIONAL INSTITUTION EXISTS IN T HE SENSE THAT THE SOCIETY HAS BEEN FORMED, THE SOCIETY IS A LEGAL ENTITY, ITS OBJECTS ARE CLEARLY INTENDED TO BRING INTO EXISTENCE EDUCATIONAL INSTIT UTION, FOR WHICH PRELIMINARY STEPS HAVE BEEN TAKEN, AND THE OBJECT O F THE INSTITUTION IS NOT PROFIT. WE ARE OF THE PRIMA FACIE VIEW THAT THE WIDTH OF THE PROVISION IS NOT REQUIRED TO BE CUT DOWN BY INSISTI NG THAT THE EDUCATIONAL ACTIVITY MUST HAVE BEEN CARRIED ON IN T HE RELEVANT PREVIOUS YEAR, EVEN THOUGH THERE IS NO DOUBT WHATSOEVER THAT THE SOCIETY WAS ENGAGED IN TAKING THE STEPS REQUIRED TO MAKE THE ED UCATIONAL ACTIVITY OPERATIVE, THE STEPS SO TAKEN BEING THE CONSTRUCTIO N OF THE BUILDINGS AND OTHER FACILITIES IN WHICH THE TASK OF IMPARTING THE EDUCATION WAS TO BE CARRIED OUT XXX XXX XXX HAVING REGARD TO THESE FACTS, AND IN THE LIGHT OF P RIMA FACIE VIEW THAT THE EARLIER JUDGMENT OF THIS COURT REQUIRES RECONSI DERATION. WE DIRECT THE TRIBUNAL TO REFER THE FOLLOWING QUESTION OF LAW : 12. IN VIEW OF THE SUBSEQUENT DECISIONS, THE PREFER ENCE TO THE VIEW EXPRESSED EARLIER CANNOT BE GIVEN. A DIVISION BENCH OF HON'BLE CALCUTTA HIGH COURT IN DOON FOUNDATIONS CASE HAS E XAMINED THE QUESTION OF AN INCOME OF AN EDUCATIONAL INSTITUTION EXISTING SOLELY FOR 16 THE EDUCATIONAL PURPOSE AND NOT FOR PROFIT. IN THIS CASE, THE ASSESSEE HAD JUST BEGAN ITS ACTIVITIES AND IN THE RELEVANT Y EAR, IT WAS JUST STARTED PREPARATION OF REGULAR CLASSES FOR TEACHING OF HIND I AND PURCHASE SOME BOOKS. IN A WAY, ACTUALLY CLASSES HAD NOT BEGUN. TH E HONBLE COURT HAS OBSERVED AS UNDER: .THE CONDITION PRECEDENT FOR CLAIMING EXEMPTION U NDER SECTION 10(22) IS, WHETHER THE EDUCATIONAL INSTITUTION EXIS TS SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT . THERE IS NO DISPUTE NOR CAN IT BE DISPUTED THAT THE ASSESSEE-SO CIETY EXISTS SOLELY FOR EDUCATIONAL PURPOSES. THE ASSESSEE HAS COMMENCE D ACTIVITIES CONNECTED WITH THE IMPARTING OF EDUCATION. FOR THE PURPOSES OF HOLDING REGULAR CLASSES FOR TEACHING OF HINDI, THE ASSESSEE HAS TAKEN ALL PRELIMINARY STEPS INCLUDING PURCHASE OF BOOKS A ND PERIODICALS. SUCH ACTIVITIES ARE THE STEPS TOWARDS RUNNING OF A FULL-FLEDGED TEACHING COURSE. WE ARE, THEREFORE, UNABLE TO ACCEPT THE CON TENTION OF THE REVENUE THAT THE ASSESSEE DID NOT START RUNNING ANY EDUCATIONAL INSTITUTION DURING THE PREVIOUS YEAR IN QUESTION. 13. SIMILARLY, HON'BLE KERALA HIGH COURT HAS CONSID ERED THIS ASPECT IN THE CASE OF SHREE NARAYAN CHANDRIKA TRUST. IN TH IS CASE, THE FOUNDATION OF THE HOSPITAL WAS LAID DOWN IN THE YEA R 1973 THOUGH THE HOSPITAL STARTED ITS OPERATION IN 1978. HONBLE COU RT HAS HELD THAT INCOME DERIVED AT THE PRIMARY STAGE IS ENTITLED FOR EXEMPTION AND THE RELEVANT OBSERVATIONS OF THE HONBLE COURT READ AS UNDER: THE QUESTION, THEREFORE, ARISES WHETHER THE INCO ME OF THE ASSESSEE-TRUST DURING THESE YEARS IS EXEMPT, AS THE RE WAS NO HOSPITAL AS 17 SUCH IN EXISTENCE DURING THAT PERIOD. COUNSEL FOR T HE ASSESSEE REFERRED TO THE DECISIONS IN DOON FOUNDATIONS CASE (1985) 1 54 ITR 208 (CAL.) AND SECONDARY BOARD OF EDUCATION VS. ITO (1972) 86 ITR 408 (ORISSA). IN BOTH THESE CASES, THE INCOME DERIVED A T THE PRELIMINARY STAGES OF THE ESTABLISHMENT OF THE EDUCATIONAL INST ITUTIONS CONCERNED WAS HELD ENTITLED TO THE EXEMPTION. IN DOON FOUNDAT IONS CASE (1985) 154 ITR 208 (CAL.), THE ASSESSEE HAD ONLY TAKEN THE PRELIMINARY STEPS TOWARDS THE RUNNING OF A TEACHING COURSE; AND THE I NCOME DERIVED DURING THIS PERIOD WAS HELD TO BE THAT OF AN EDUCAT IONAL INSTITUTION. IN THE OTHER CASE, SECONDARY BOARD OF EDUCATIONS CASE (1972) 86 ITR 408 (ORISSA) HAD A FUND CONSTITUTED UNDER THE ORISS A SECONDARY EDUCATION ACT, 1953. ONE OF THE SOURCES OF THE INCO ME OF THE BOARD WAS THE PROFIT FROM COMPILATION, PUBLICATION AND PR INTING AND SALE OF TEXT BOOKS. THE INCOME WAS TO BE UTILIZED TOWARDS D EVELOPMENT AND EXPANSION OF EDUCATIONAL PURPOSES AND THE SURPLUS, IF ANY, WAS TO FORM PART OF A SINKING FUND TO BE DEVOTED TO THE CAUSE O F EDUCATION AS AND WHEN NECESSARY. THE INCOME DERIVED FROM THE ACTIVIT IES MENTIONED ABOVE WAS TREATED AS THAT OF AN EDUCATIONAL INSTITU TION AND EXEMPTED. 14. HON'BLE SUPREME COURT IN THE CASE OF ADDITIONAL CIT VS. SURAT ART SILK CLOTH MANUFACTURER ASSOCIATION REPORTED IN 121 ITR 1 HELD THAT THE TEST OF PRE-DOMINANT OBJECT OF THE ACTIVIT Y IS TO BE SEEN WHETHER IT EXISTS SOLELY FOR EDUCATION AND NOT TO E ARN PROFIT. HONBLE COURT HAS FURTHER OBSERVED THAT THE PURPOSES WOULD NOT LOOSE ITS CHARACTER MERELY BECAUSE SOME PROFIT ARISE FROM THE ACTIVITY BECAUSE IT IS PRACTICALLY NOT POSSIBLE TO CARRY ON EDUCATIONAL ACTIVITY IN SUCH A WAY THAT THE EXPENDITURE EXACTLY BALANCES THE INCOM E AND THERE IS NO 18 RESULTANT PROFIT, FOR, TO ACHIEVE THE OBJECT. IT WO ULD NOT ONLY BE DIFFICULT IN PRACTICE BUT WOULD ALSO REFLECT UNSOUN D PRINCIPLES OF MANAGEMENT. IN ORDER TO ASCERTAIN WHETHER THE INSTI TUTE IS CARRIED ON WITH THE OBJECT OF MAKING PROFIT OR NOT, IT IS DUTY OF THE PRESCRIBED AUTHORITY UNDER THE ACT TO ASCERTAIN WHETHER THE BA LANCE OF INCOME IS APPLIED WHOLLY AND EXCLUSIVELY TO THE OBJECTS FOR W HICH THE TRUST OR SOCIETY IS ESTABLISHED. THUS, IN A WAY, ONE HAS TO DETERMINE GENUINENESS OF THE ACTIVITIES OF A SOCIETY OR INSTI TUTION BY CONSIDERING ALL THE FACTS AND CIRCUMSTANCES AND IF IT IS ESTABL ISHED THAT PRE- DOMINANT OBJECT OF THE SOCIETY EXISTS SOLELY FOR ED UCATION AND NOT TO EARN PROFIT EVEN THOUGH THERE IS INCIDENTAL PROFIT, THE INSTITUTION WOULD GET BENEFIT OF THE DIFFERENT PROVISIONS OF THE INCO ME-TAX ACT, 1961. THE INCIDENTAL PROFIT WOULD NOT CHANGE THE CHARACTE R OR OBJECT OF THE SOCIETY THAT IT IS ONLY MEANT FOR EARNING PROFIT. 13. IN THE LIGHT OF THE ABOVE, WHEN WE EXAMINE THE FACTS OF THE PRESENT CASE, THEN, IT REVEALS THAT IN THE MEMORANDUM OF AS SOCIATION, ASSESSEE HAS ONLY PRESCRIBED THE OBJECTS PERTAINING TO EDUCATION OF POOR AND NEEDY PEOPLE. IT HAS PROVIDED THAT IN ORDER TO FULFILL IT S MAIN OBJECTS OF EDUCATION, TO GIVE DONATIONS TO THE SOCIETY/INSTITUTION, WHO A RE IN SIMILAR LINES. WHEN ASSESSEE HAD PURCHASED THIS PLOT IN THE YEAR 1999, NO ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT WAS MADE. IT WAS CONSIDERED FOR THE OBJECTS OF THE SOCIETY. THE ASSESSEE HAS GIVEN DONATIONS TO SUHAIL GARG SIKSHA SANSTHAN WHICH HAS ALREADY BEEN REGISTERED UNDER SEC. 12AA. THE ASSESSEE HAS 19 PRODUCED COPY OF THE LETTER DATED 04.02.2008, ASSE SSMENT ORDER OF SUHAIL GARG SIKSHA SANSTHAN FOR ASSESSMENT YEAR 2008-09 AN D COPY OF THE MINUTES OF THE ASSESSEE SOCIETY PASSING A RESOLUTION FOR GI VING EDUCATION. THE ASSESSMENT ORDER IN THE CASE OF SHAIL GARG HAS BEEN PASSED UNDER SEC. 143(3) OF THE ACT AND IT HAS BEEN CONSIDERED AS A SOCIETY EXISTING FOR THE PURPOSE OF EDUCATION, ITS INCOME HAS BEEN ASSESSED AT NIL, BEN EFIT OF SEC. 11 AND 12 HAS BEEN GRANTED. THE TOTAL INCOME AS PER INCOME AND EX PENDITURE ACCOUNT OF THIS SOCIETY FOR ASSESSMENT YEAR 2008-09 WAS RS.13, 85,59,927. IT HAD APPLIED RS.12,71,19,355 TOWARDS ITS OBJECTS. THE BALANCE WA S LESS THAN 15%. THUS, THIS SOCIETY HAS APPLIED 85% OF ITS RECEIPT TOWARDS ITS OBJECTS AND ASSESSING OFFICER HAS ASSESSED THE INCOME AT NIL. NOW, ADVERT ING TO THE FACTS OF PRESENT ASSESSEE, IF AT THE COMMENCEMENT OF THE SOCIETY, IT S OBJECTS ARE FOR EDUCATIONAL PURPOSES AND ITS INVESTMENT IN THE LAND WAS NOT CONSIDERED AS UNEXPLAINED INVESTMENT AND TREATED FOR ADVANCEMENT OF EDUCATIONAL OBJECTS THEN, HOW ON SALE OF THAT PLOT AND GIVING A CORPUS DONATION TO A SIMILAR SOCIETY AS PER THE AIMS AND OBJECTS, CAN BE WITHOUT EDUCATIONAL PURPOSES, NOT DISCERNIBLE IN THE ORDER OF THE LEARNED CIT(APPEALS ). IN THE PRESENT CASE, IT WAS SOLD AFTER A CONSIDERABLE TIME BUT IF, IN A SOC IETY, THERE WERE DONATIONS TOWARDS CORPUS FOR CONSTRUCTION OF BUILDING ETC. BU T THAT WAS NOT SUFFICIENT AND SOCIETY DECIDES TO CLOSE ITS ACTIVITY; AND GIVE THOSE AMOUNTS AS DONATION 20 TO ANOTHER SOCIETY HAVING CHARITABLE AND SIMILAR AC TIVITY THEN THOSE AMOUNTS WOULD NOT BE TAXABLE. 14. LEARNED CIT(APPEALS) HAS PUT RELIANCE UPON THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SCIENTIF IC EDUCATIONAL ADVANCEMENT SOCIETY. THE FACTS ARE QUITE DISTINGUIS HABLE; IN THAT CASE, A PIECE OF LAND BELONGING TO THE SOCIETY WAS SOLD AT A PROFIT TO A PRIVATE BUILDER, HOWEVER, THE BUILDER BUILT FLATS ON THE SA ID LAND AND ASSESSEE SOCIETY PURCHASED TWO FARM HOUSES CONSTRUCTED BY SAME BUILD ER WHO HAD BUILT RESIDENTIAL UNITS. THE CHAIRMAN OF THE SOCIETY ALON G WITH HIS FAMILY MEMBERS USED TO VISIT FARM HOUSES ON WEEK END. THE SOCIETY NEVER INTENDED TO CARRY OUT ANY EDUCATIONAL ACTIVITIES ON LAND PUR CHASED. IN THIS BACKGROUND. THE BENEFIT UNDER SEC. 10(23C) OF THE ACT WAS DENIE D. IN THE PRESENT CASE, ASSESSEE HAD DONATED THE FUNDS TO AN EDUCATIONAL SO CIETY WHOSE CREDENTIAL HAD NOT BEEN DOUBTED BY THE ASSESSING OFFICER WHO H APPENS TO BE THE SAME OFFICER. IN THIS WAY, THESE FACTS ARE NOT APPLICABL E ON THE CASE IN HANDS. 15. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SEC. 10(23C)(IIIAD) OF THE ACT ON THE ALLEGED CAPITAL GAIN ARISING TO IT. THIS GROUND OF APPEAL I S ALLOWED. 21 16. IN GROUND NO.4, ASSESSEE HAS PLEADED THAT LEARN ED ASSESSING OFFICER HAS WRONGLY ASSESSED A SUM OF RS.3,790 AS INCOME FR OM BUSINESS OR PROFESSION. IT IS EXCESS OVER EXPENDITURE. LEARNED ASSESSING OFFICER HAS REPRODUCED THE STATEMENT OF INCOME AND EXPENDITURE IN PARAGRAPH 10 OF THE ASSESSMENT ORDER, IT CANNOT BE A BUSINESS INCOME BE CAUSE ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS ACTIVITIES. THE EXEMPTION UNDER SEC. 10(23)(IIIAD) IS APPLICABLE TO THE ASSESSEE AS HELD IN THE FOREGOING PARAGRAPHS, THEREFORE, THIS AMOUNT IS ALSO NOT ASSESSABLE. 17. IN THE NEXT GROUND, ASSESSEE HAS CHALLENGED CHA RGING OF INTEREST UNDER SEC. 235A, B, AND C. NO ARGUMENTS HAVE BEEN ADVANCE D, ON THIS ISSUE. CHARGING OF INTEREST WOULD BE CONSEQUENT IN NATURE, THEREFORE, THIS GROUND OF APPEAL IS REJECTED. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 03 .03.20 14 SD/- SD/- ( SHAMIM YAHYA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03/03/2014 MOHAN LAL 22 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR