Ashrfi Devi Memorial Trust, Solan V. ITO, Ward, Parwanoo

ITA 293/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1192 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 12-03-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDERSHAN
• Keywords: Charitable institution; Maximum Marginal Rate; Capital expenditure
• Section: 12A; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO.293/CHD/2019 / ASSESSMENT YEAR : 2010-11 ASHARFI DEVI MEMORIAL TRUST, VILL SIHARDI P.O. DHARAMPUR TEH. KASULI DISTT. SOLAN (H.P.) VS. THE ITO, WARD PARWANOO PARWANOO (H.P.) ./PAN NO.AACTA4908R / APPELLANT /RESPONDENT /ASSESSEE BY : NONE ! / REVENUE BY : SH. ARVIND SUDERSHAN, JCIT ' #$ /DATE OF HEARING : 12.03.2020 %&'($ / DATE OF PRONOUNCEMENT : 21.05.2020 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 17.12.2012 OF THE COMMISSIONER OF INCOM E TAX (APPEALS), PALAMPUR [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- THE APPELLANT IS CHARITABLE TRUST UNDER SECTION 11 OF THE INCOME TAX ACT, 1961. ITA NO. 293/CHD/2019- ASRAFI DEVI MEMORIAL TRUST, SOLAN 2 THE INVESTMENT IN SHAPE OF FDR MADE U/S 11(5) RS. 800000.00 THE APPELLANT RECEIVED THE CORPUS FUND FROM CHAIRMAN FATHER SH. HARSARANDASS. CORPUS DONATIONS TOWARDS CORPUS FUND ARE FULLY EXEMPT AND THERE IS NO REQUIREMENT OF FULFIMENT OF THE STIPULATED CRITERIA OF APPLICATION OF AT LEA ST 85% FOR SUCH CORPUS DONATIONS SECTION 11 (L)(D) 3. NO ONE HAS COME PRESENT ON BEHALF OF THE ASSESSE E DESPITE SERVICE OF NOTICE, HENCE, I PROCEED TO DECIDE THIS APPEAL O N MERITS EX-PARTE OF THE ASSESSEE. 4. A PERUSAL OF THE IMPUGNED ORDER OF THE CIT(A) RE VEALS THAT THE SAME IS ALSO AN EX-PARTE ORDER OF THE CIT(A). THE L D. CIT(A) HAS GIVEN A CHART OF THE DETAILS OF PROCEEDINGS WHEN THE ASSE SSEE WAS CALLED UPONBUT DESPITE GIVING SUFFICIENT OPPORTUNITIES, NO ONE APPEARED ON BEHALF OF THE ASSESSEE, HENCE, THE LD. CIT(A) DECID ED THE APPEAL EX- PARTE OF THE ASSESSEE. 5. THE BRIEF FACTS OF THECASE ARE THAT THE ASSESSEE TRUST WAS FORMED ON7.3.29009. SHRI DINESH KUMAR SHARMA S/O SHI HARSA RAN DASS IS THE FOUNDER / CHAIRMAN OF THE TRUST. ON 18.6.2009, THE FATHER OF THE CHAIRMAN OF THE TRUST NAMELY SHRIHARSARANDASS DONAT ED AN AMOUNT OF RS. 7,35,135/- TO THE TRUST WHICH WAS INVESTEDBY TH E ASSESSEE TRUST IN THE FDRS UPON WHICH THE ASSESSEE TRUST EARNED INTE REST INCOME OF RS. ITA NO. 293/CHD/2019- ASRAFI DEVI MEMORIAL TRUST, SOLAN 3 47,137/-, HOWEVER, THE ASSESSEE TRUSTAPPLIED ONLY R S. 28785/ - ONCHARITABLEACTIVITIES. THE ASSESSING OFFICER NOTI CED THAT THE MANDATORY 85% OF THE TOTAL DONATIONS RECEIVED WAS N OT APPLIED BY THE ASSESSEE TRUST ON CHARITABLE ACTIVITIES. HE, THEREF ORE, SHOW CAUSED THE ASSESSEE TRUST THAT AS TO WHY THE SAID AMOUNT BENO T TAXED AT MAXIMUM MARGINAL RATE. IN REPLY, IT WAS SUBMITTED THAT THE ASSESSEE TRUST WAS REGISTERED U/S 12A OF THE INCOME TAX ACT, 1961. THA T THE DONATIONAMOUNT RECEIVED FROM ONE SHRI HARSARAN DASS WAS CORPUS DONATION TOWARDS CORPUS FUNDS, 85% OF WHICHWASNOT R EQUIRED TO BE APPLIED AS PER THE PROVISIONS OFSECTION 11(1)(D) O F THE INCOME TAX ACT. IT WAS SUBMITTED THAT THE ENTIRE ACTIVITIES OF THE TRUST WERE BEING RUN FROM THE INTEREST RECEIVED FROM CORPUS FUNDS DONAT ED BY SHRI HARSARAN DASS AND PLACED IN THE FDRS. HOWEVER, THE ASSESSEE TRUST COULD NOT PRODUCE ANY DOCUMENT TO PROVE THAT THE SAID AMOUNT OF RS. 7,35,135/- WAS RECEIVED BY THE ASSESSEE TRUST AS DONATION TOW ARDS CORPUS FUNDS OF THE TRUST. THE LD. ASSESSING OFFICER, THEREFORE, FA XED THE RECEIPT OR RS. 7,01,487/- AFTER DEDUCTING THE EXPENSE OF RS. 28,78 5/- AT MAXIMUM MARGINAL RATE. THE RELEVANT PART OF THE FINDINGS GI VEN BY THE ASSESSING OFFICER IS AS UNDER:- THE COUNSEL FOR THE ASSESSEE HAS INFORMED THAT THE ENTIRE ACTIVITIES OF THE TRUST ARE BEING RUN FROM INTEREST EARNED FROM THE FDRS BUT THE TRUST DEED DOES NOT SPEAK ABOUT IT. THE COUNSEL OF THE ASSESSE E ITA NO. 293/CHD/2019- ASRAFI DEVI MEMORIAL TRUST, SOLAN 4 TRUST WAS FURTHER ASKED TO FILE THE DETAILS OF THE AMOUNT OF RS. 735135/-RECEIVED AS DONATION AND RS. 47137/- EARNED INTEREST ON FDRS. THE COUNSEL OF THE ASSESSEE VIDE REPLY DATED 22-10-2012 INFORMED THAT THE TRUST HAS NO DOCUMENT REGARDING GIVING OF DONATION TO THE TRUST BY SH. HARSARAN DASSWHO DONATED RS. 735135/- TO THE TRUST. VIDE ORDER SHEET ENTRY DATED 08-10-2012 &22- 10-2012, THE TRUST WAS ASKED TO EXPLAIN WHY THE ENTIRE RECEIPTS OF THE TRUST MAY NOT BE TREATED AS INCOME OF THE TRUST, AS THE 85% OF THE TOTAL RECEIPTS WERE NOT APPLIED FOR CHARITABLE PURPOSES. THE COUNSEL OF THE ASSESSEE FILED REPLY ON 22-10-2012 MENTIONING THEREIN THAT THE TRUST HAS NO DOCUMENT, REGARDING DONATION GIVEN TO THE TRUST BY SH. HARSARAN DASS. FURTHER TH E PLEA OF THE ASSESSEE COUNSEL, THAT THE MAKING OF FDRS FROM THE RECEIPTS OF DONATION SHOULD BE TREATED AS CAPITAL EXPENDITURE, CAN NOT BE ACCEPTED. KEEPING IN VIEW THE REPLIES AND FACTS OF THE CASE, THE ENTIRE RECEIPTS OF TRUST, AT RS. 771487/- AFTER DEDUCTING THE EXPENSES OF RS. 28785/ DURING THE YEAR UNDER CONSIDERATION IS BEING TAXED AT MAXIMUM MARGINAL RATE AS THE ASSESSEE FAILED TO APPLY 85% OF THE TOTAL RECEIPTS. PENALTY PROCEEDINGS U/S 271(L)(C) OF THE IT.ACT, 1961 ARE ALSO INITIATED AS I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HER INCOME. THE ASSESSEE FAILED TOPRODUCE ANY DOCUMENT SHOWING THAT THE DONATIONS MADE BY SHRI HARSASRAN DASS WERE TOWARDS CORPUS FUN D OF THE TRUST. EVEN NO EVIDENCE IN THIS RESPECT HAS BEEN PRODUCED EITHER BEFORE THE LD. CIT(A) OR BEFORE US. THEREFORE, IN MY VIEW THE ASSESSING OFFICER HAS RIGHTLY TAXED THE SAID AMOUNT AS THE ASSESSEE H ADFAILED TO APPLY ITA NO. 293/CHD/2019- ASRAFI DEVI MEMORIAL TRUST, SOLAN 5 85% OF THE DONATIONS FOR CHARITABLE ACTIVITIES AS PER THE PROVISIONS OF THE SECTION 11 OF THE INCOMETAX ACT. 6. IN VIEW OF THIS, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DISMISSING THE APPEAL OF THE ASSESSEE. 7. THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE AND THE SAME IS ACCORDINGLY DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.05.2020 SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 21.05.2020 .. &* +,-, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' . / CIT 4. ' . ( )/ THE CIT(A) 5. ,/0 2 , $ 2 , 34506 / DR, ITAT, CHANDIGARH 6. 057# / GUARD FILE &* ' / BY ORDER, 8! / ASSISTANT REGISTRAR