School of Engineering & Applied Technology, New Delhi V. ITO (E) -WARD - 2(1), New Delhi

ITA 2969/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6618 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NONR
• Keywords: Revision of order; Opportunity of being heard; Wrong claim; Corroborative evidences; Set aside
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE, SMT. DIVA SINGH, JUDICIAL MEMBER I.T.A NO.2969/DEL/201 9 (ASSESSMENT YEAR: 2009-10) SCHOOL OF ENGINEERING & APPLIED TECHNOLOGY, A-41, M.C.I.E., MATHURA ROAD, NEW DELHI-110 044 PAN-AACT5 8615D VS. INCOME TAX OFFICER (EXEMPTION), TRUST WARD-2(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY NONR RESPONDENT BY SMT. R.K. GUPTA, SR. DR DATE OF HEARING 16.08.2021 DATE OF PRONOUNCEMENT 09/09/2021 HEARING CONDUCT ED VIA WEBEX ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASS ESSEE WHEREIN THE CORRECTNESS OF THE ORDER DATED 18.04.2017 OF CIT(A) -40, DELHI PERTAINING TO 2009-10 ASSESSMENT YEAR IS ASSAILED ON VARIOUS GROU NDS. 2. AT THE TIME OF HEARING, NO ONE WAS P RESENT ON BEHALF OF THE ASSESSEE. THE APPEAL WAS PASSED OVER. IN THE NEXT ROUND ALSO THE ASSESSEE REMAINED UNREPRESENTED. ON A CONSIDERATION OF THE MATERIAL AVAILABLE ON RECORD IT WAS DEEMED APPROPRIATE TO PROCEED WITH THE PRESENT APPE AL EX-PARTE QUA THE APPELLANT ON MERITS AFTER HEARING THE LD. SR. DR. 3. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT IT IS BORNE OUT FROM THE ORDER ITSELF THAT AN EFFECTIVE REPRESENTATION WAS N OT MADE ON BEHALF OF THE ITA NO.2969 /DEL/ 2019 SCHOOL OF ENGINEERING & APPLIED TECHNOLOGY VS . ITO PAGE 2 OF 6 ASSESSEE. IT IS SEEN THAT SOME ADDITIONAL GROUND WA S RAISED, HOWEVER, THE DISCUSSION IN THE ORDER IS LARGELY FOCUSED ON THE F ACT THAT THE ORDER PASSED BY THE CIT U/S 263 ORDER DATED 28.03.2014 HAD BECOME F INAL FOR WANT OF ANY CHALLENGE BY THE ASSESSEE. BE THAT AS IT MAY THE F ACT IS THAT ADDITIONS MADE BY THE AO PURSUANT TO THE SAID REVISIONARY ORDER WERE UNDER CHALLENGE. HENCE, WHAT WERE THE SUBMISSIONS OF THE ASSESSEE BEFORE TH E CIT(A) IN THESE PROCEEDINGS IS THE ISSUE. THE ORDER WAS SILENT THE REON. 4. THE LD. SR. DR WAS REQUIRED TO ADDRESS FROM THE ORDER WHAT WERE THE SUBMISSIONS OF THE ASSESSEE ASSAILING THE FINDINGS ARRIVED AT IN THE ASSESSMENT ORDER. THE LD. SR. DR SUBMITTED THAT IT WAS A CASE OF NO EVIDENCE BEFORE THE ASSESSING OFFICER AND THOUGH THE ASSESSE E CAME IN APPEAL, HOWEVER, FAILED TO FILE ANY EVIDENCE AND REITERATED THE SUBM ISSIONS MADE BEFORE THE ASSESSING OFFICER. EMPHASIS WAS LAID DOWN ON THE FA CT THAT IN THE FINDING ARRIVED AT PARA 5.1, IT HAS BEEN MENTIONED THAT NO EVIDENCE WAS FILED, HENCE, IT WAS HIS PRAYER THAT THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. THE RELEVANT FINDING OF THE CIT(A) IS EXTRACTED FROM PARA 5.1 TO 5.4 OF THE CIT (A) AND REPRODUCED HEREUNDER FOR THE SAKE OF COMPLETENESS: 5.1. I HAVE CONSIDERED THE IMPUGNED ORDER A ND ALSO THE SUBMISSIONS OF THE APPELLANT 1 HAVE ALSO SEEN THE ORDER UNDER SECTION 263 DATED 28.03.2 014 PASSED BY THE ID. DIT (E) AGAINST WHICH NO APPEAL HAS BEEN TILED IN THE [TAT]. IN THE CASE OF THE ASSESSEE THE ASSESSMENT WAS COMPLETED AT NIL INCOME SUBSEQUENTLY, ON GOING THROUGH RECORDS, THE ID. DIT(E) NOTICE THAT THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED TOTAL DONATION OF RS. 20 LAKHS FOR M THE MEADOWS AND HAD ALSO PAID RS. 30 LAKHS TO THE MEADOWS. IT WAS ALSO NOTICED THAT THE ASSESSEE HAD CLAIMED TO HAVE GIVEN CERTAIN SUMS OF MONEY TO THE NATIONAL INSTITUTE OF ENGINEERING AND MANAGE MENT MOUNTING TO RS. 9,42,000/ -. IT WAS ALSO NOTICED THAT THE ASSESSEE- WAS IN RECEIPT OF DONATI ONS OF RS. 6 LAKHS FROM NATIONAL INSTITUTE OF ENGINEERING AND MANAGEMENT. IT WAS OBSERVED BY THE LD, DIT(E) THAT THE ASSESSEE HAD MADE A BOGUS CLAIM OF RECEIVING DONATIONS OF RS 26 LAKHS, I.E. RS. 20 LAKHS FROM MEADOWS AND RS. 6 LAKHS ITA NO.2969 /DEL/ 2019 SCHOOL OF ENGINEERING & APPLIED TECHNOLOGY VS . ITO PAGE 3 OF 6 FROM NIEM. IT WAS ALSO HELD THAT ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY IN THIS REGARD AND MADE AN ERRONEOUS ASSESSMENT CAUSING PREJUDICE TT R EVENUE AMOUNTING TO RS. 26 LAKHS. IT WAS ALSO NOTICED THAT THE ASSESSEE HAS CLAIMED THAT IT IS RU NNING AN EDUCATIONAL INSTITUTION AT BANGALORE BUT THE ASSESSEE IS NETHER OWNS ANY BUILDING NOR IS PAY ING ANY RENT FOR THE SPACE FOR RUNNING INSTITUTE AT BANGALORE- IT WAS ALSO OBSERVED THAT NO DOCUMENT ARY EVIDENCE IN SUPPORT OF ADDITION TO FIXED ASSETS WERE SUBMITTED. AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, AN ORDER WAS PASSED UNDER SECTION 263 BY THE ID DIT (E) HELD AS UNDER: '4. I HAVE GONE THROUGH FACTS OF THE CASE. IT IS CLAIMED BY THE ASSESSEE THAT IT HAS RECEIVED TEMPORARY ADVANCES AMOUNTING TO RS. 30,00,000/- FROM THE TRUST 'THE MEADOWS'' ON DIFFERENT DATES DURING THE YEAR, IN ADD ITION TO DONATION OF RS. 20,00,000/-. SIMILARLY, IN RESPECT OF N ATIONAL INSTITUTE OF ENGINEER & MANAGEMENT, IF IS CLAIME D THAT IT HAS RECEIVED ADVANCE OF RS. 50,00,000/- DURING THE YEAR, IN ADDITION TO DONATION OF RS. 6 ,00,000/-.IN THIS CONNECTION, IT IS NOTED THAT .40 HAS FAILED TO EXAMINE THE GENUINENESS OF THE TRANSACTIONS AND ALSO WHETHER THE SAME WERE IN ACCORDANCE WITH AIMS AND OBJECTIVE S OF THE TRUST. IT IS SEEN THAT THERE ARE LARGE NUMBER OF C ASH TRANSFER BETWEEN ASSESSEE AND THE MEADOWS AND NIFM. THE FLOW OF FUNDS BETWEEN THE ASSESSEE AND SOURCES AND JUS! IDEATION THEREOF HAS NOT BEEN NOT BEEN ENQUIRED INT O BY AO. THE PURPOSE AND UTILIZATION OF THE AMOUNT BORROWED TOO HAS NOT BEEN ENQUIRED BY THE .40. AS THE AO HAS ACCEPTED BOGUS CLAIM OF RECEIPT OF DONATION OF RS. 26,00,000/-. IT HAS RESULTED M AN ERRONEOUS ASSESSMENT IN AS MUCH AS IT IS PREJUDICIAL TO THE INTERESTS OF REV ENUE. 4.2 SIMILARLY, DETAILS OF ADDITI ON TO FIXED ASSETS OF RS. 7,34.303/- HAS BEEN OBTAINED BY THE O WITHOUT AM/ SUPPORTING EVIDENCE IN FORM OF RILLS AN VOU CHERS AND SOURCES FINDING OF TIN SAME 4.3 IT IS ALSO NOTED THAT AO HAS ALSO FADED TO MAKE NECESSARY ENQUIRIES REGARDING THE PREMISES, WHERE THE ASSESSEE IS RUNNING ITS INSTITUTE. AS PER ASSESSEE, T HE INSTITUTE WAS RUN FROM THE PREMISES OWNED I - NATIONAL INSTITUTE OF ENGINEERING AND MANAGEMENT (NIEM) AND NO R ENT WAS PAID BY THE ASSESSOR. HOWEVER, THIS IS AN UNSUBSTANTIATED CLAIM OF THE ASSESSEE. WHICH HAS NOT HEM VERIFIED BY THE AO. THE AO SHOULD VERIFY THE CLAI M OF THE ASSESSEE M THIS REGARD. IT IS CLAIMED BY THE ASSESSEE THAT THERE ARE NO COMMON T RUSTEES M THESE INSTITUTION, BUT T>N TRANSACTION OF GIVING RENT FREE ACCOMMODATION TO RUN A COLLEGE FROM A PREMI SES WHERE THE OTHER TRUST IS ALREADY RUNNING AN EDUCATIONAL INSTITUTE IS BEYOND COMPREHENSIBLE HUMAN BEHA VIOR NR TEST HUMAN PROBABILITY. THIS NEEDS VERIFICATION AND OTHER SUPPORTING DETAILS TO SEE, IF ANY E DUCATIONAL ACTIVITY WAS ACTUALLY EARNED OUT BY THE ASSESSEE DURING THE YEAR AS CLAIMED BY IT. THE AO FAILED TO CARRY OUT NECESSARY ENQUIRIES IN THIS REGARD AND ALLOWED THE CLAIM OF EXEMPTION TO INCOME STATED TO BE DERI VED ROW THIS EDUCATIONAL ACTIVITY. HENCE, THE ORDER OF THE AO IS ERRONEOUS AS VEIL PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS ACCOUNT TOO.' 5.2 IT IS SEEN FROM THE ABOVE THAT THE ID. DIT (E) GA VE A DEFINITE FINDING IN THE MATTER AND SET ASIDE THE MATTER TO TO THE ASSESSING OFFI CER TO EXAMINE AND FRAME THE ASSESSMENT ORDER AFTER CALLING AND EXAMINING NECESSARY DETAILS/EVIDE NCES AND AFTER GIVING THE ASSESSEE DUE OPPORTUNITY OF BEING HEARD. NO APPEAL HAS BEEN FILE D AGAINST THE ORDER UNDER SECTION 263 PASSED BY THE ID. DIT (F) IN THE ITAT. 5.3 IN THE CASE OF HERDILLIA CHEMICALS LTD VS. COMMISS IONER OF INCOME TAX [(19971 93 TAXMAN 314 (BOM.)], THE HON'BLE BOMBAY HIGH COURT H AVE HELD THAT THOUGH APPEAL WAS MAINTAINABLE FROM THE FRESH ORDER PASSED BY THE ASS ESSING OFFICER TO GIVE EFFECT TO A REVISIONAL ORDER OR AN APPELLATE ORDER, ONLY SUCH ISSUES COULD BE AGITATED IN SUCH APPEAL WHICH HAD NOT ATTAINED FINAJITV BY VIRTUE OF EARLIER ORDERS OF RE VISIONAL OR APPELLATE AUTHORITIES. IT WAS NOT OPEN IN SUCH AN APPEAL TO AGITATE AM POINT WHICH HAD ALR EADY BEEN DECIDED BY THE REVISIONAL APPELLATE AUTHORITIES IN THEIR ORDER. THE HONBLE COURT HAVE LIE ID AS UNDER: 10, ...THE TRIBUNAL, IN THIS CASE , IN OUR OPINION, WAS RIGHT IN HOLDING THAT THE REVISIONAL OR DER, WHEREIN A DEFINITE FINDING IS RECORDED ON BOTH THE POINTS AT ISSUE , HAVING BECOME FINAL ON ACCOUNT OF THE FAILURE OF THE ASSESSEE TO PURSUE THE STATUTORY REMEDIES PROVIDED IN TH E ACT AGAINST THAT ORDER, THE ASSCSSEE CANNOT BE ITA NO.2969 /DEL/ 2019 SCHOOL OF ENGINEERING & APPLIED TECHNOLOGY VS . ITO PAGE 4 OF 6 ALLOWED TO CHALLENGE SUCH CONCLUDED FINDINGS COLLATERALLY I N AN APPEAL FILED AGAINST THE FRESH ORDER PASSED BY THE !TO WITH A VIEW TO GIVING EFFECT TO THE SAME. 11. IN OUR OPINION , THOUGH APPEAL IS MAINTAINABLE FROM THE ORDER PASSED BY THE ITO TO GIVE EFFECT TO A REVISIONAL ORDER OR AN APPELLATE ORDER, ONLY SUCH ISSUES CAN BE AGITATED IN SUCH APPEAL WHICH HAVE NOT ATTAINED FINALITY BY VIRTUE OF EARLIER ORDERS OF THE REV ISIONAL OR APPELLATE AUTHORITIES. IT IS NOT OPEN IN SUCH AN APPEAL TO AGITATE ANY POINT WHICH HAS ALREADY BEEN DECIDED BY THE REVISIONAL THE APPELLATE AUTHORITIES IN THEIR ORDER., 5.4 IN THE CASE UNDER CONSIDERATION, NO APPEAL HAS BEEN FILED AGAINST THE ORDER OF THE ID. DL L (E) UNDER SECTION 263 AND HENCE THE ISSUES ADJUDICATED IN THE ORDER UNDER SECTION 263 HAVE BECOME FINAL. IN VIEW OF THE DECISION OF THE HONBLE BOMAL N HIGH COURT IN THE CASE OF HERDIILIA CHEMICALS LTD. VS. COMMISSIONER OF INCOME-TAX (SUPR A), THESE ISSUES CANNOT BE AGITATED IN APPEAL. 5. ON READING OF THE ABOVE, IT IS EVIDENT THAT THE CONCLUSION HAS BEEN ARRIVED AT IN VIEW OF FACT THAT CERTAIN OBSERVATION S WERE MADE IN THE ORDER PASSED U/S 263 WHICH WERE NOT CHALLENGED BY THE ASS ESSEE. IT IS SEEN THAT IN THE REVISIONARY ORDER PASSED VERIFICATION OF SUPPOR TING DETAILS WERE DIRECTED. ADMITTEDLY BEFORE THE ASSESSING OFFICER EVIDENCES W ERE NOT AVAILABLE. IN THE LIGHT OF FACT THAT APPEAL WAS FILED BEFORE THE CIT( A) WHETHER ANY SUPPORTING DOCUMENTS OR ARGUMENTS WERE ADVANCED IS NOT COMING OUT FROM THE ORDER. NOTWITHSTANDING THE FINALITY ARRIVED AT ON THE ISSU E BY VIRTUE OF THE ORDER PASSED U/S 263 THE ISSUES AS EMANATING FOR THE CONS EQUENT ASSESSMENT MADE NEED TO BE CONSIDERED JUDICIOUSLY. THE ASSESSEE MA Y BE WELL ADVISED TO MAKE GOOD ITS DEFICIENCIES/SHORTCOMING IN THE CONSEQUENT ASSESSMENT AND NOT ARGUE ON THE FINALITY OF THE 263 ORDER WHICH IT HAS ATTAINED ON ACCOUNT OF LACK OF ANY CHALLENGE. HENCE, IN THE INTERESTS OF SUBST ANTIAL JUSTICE, IT IS DEEMED APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER BACK TO THE FILE OF THE CIT(A) DIRECTING THE SAID AUTHORITY TO SPECIFICALLY CONFRO NT THE ASSESSEE WITH THE NEED TO FILE SUPPORTING EVIDENCES ETC. IF ANY AND THEREA FTER PASS AN ORDER IN ITA NO.2969 /DEL/ 2019 SCHOOL OF ENGINEERING & APPLIED TECHNOLOGY VS . ITO PAGE 5 OF 6 ACCORDANCE WITH LAW. THE ORDER PASSED IN THE ABSEN CE OF ANY SPECIFIC CHALLENGE ON RELEVANT ISSUES AND PROCEEDING ON THE FOOTING THAT THE ORDER U/S 263 WAS NOT CHALLENGED IS NOT SUFFICIENT. IT CANNO T BE IGNORED THAT IN THE SAID ORDER IT WAS DIRECTED THAT VERIFICATION ON FACTS BE CARRIED OUT FOR WHICH PURPOSES THE ASSESSEE NEEDS TO FOCUS ON MAKING AVAI LABLE RELEVANT FACTS AND NOT ARGUE ON IRRELEVANT ISSUES. THE LD. SR. DR IN THE CONTEXT OF THE FACTS WHICH NEEDED VERIFICATION SOUGHT TO PLACE RELIANCE UPON THE PRINCIPLES OF LAW AS SETTLED BY THE APEX COURT IN THE CASE OF CIT(E) VS. BATANAGAR EDUCATION AND RESEARCH TRUST IN CIVIL APPEAL NO.4451 OF 2021 DATE D 2 ND AUGUST, 2021. IN TERMS OF THE ABOVE, THE IMPUGNED ORDER IS SET ASIDE AND RESTORED BACK TO THE FILE OF LD. CIT(A) FOR DECISION AFRESH IN ACCORDANC E WITH LAW BY PASSING A SPEAKING ORDER AFTER GIVING THE ASSESSEE A REASONAB LE OPPORTUNITY OF BEING HEARD. SAID ORDER WAS PRONOUNCED AT THE TIME OF VIR TUAL HEARING ITSELF IN THE PRESENCE OF THE PARTIES WEBEX. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 09 TH SEPTEMBER, 2021 SD/- (D IVA SINGH) JUDICIAL MEMBER DATED: 09/09/2021 PK/PS *KAVITA ARORA, SPS ITA NO.2969 /DEL/ 2019 SCHOOL OF ENGINEERING & APPLIED TECHNOLOGY VS . ITO PAGE 6 OF 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI