Allahabad High School Society, V. Commissioner of Income Tax (Exemption), Lucknow

ITA 298/LKW/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92187 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISRA
• Assessee Lawyers: B D GUPTA
• Keywords: Opportunity of being heard; Difference of opinion; Change of opinion
• Section: 143(3); 12AA; 10B; 131; 263; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.298/LKW/2015 ASSESSMENT YEAR:2010-11 ALLAHABAD HIGH SCHOOL SOCIETY 4, P.D. TANDON ROAD ALLAHABAD V. CIT (EXEMPTION) LUCKNOW TAN/PAN:AABTA2869A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. B.D. GUPTA, C.A. RESPONDENT BY: SHRI. VIVEK MISRA, CIT (DR) DATE OF HEARING: 26 06 2015 DATE OF PRONOUNCEMENT: 10 07 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX PASSED UNDER SECTION 263 OF THE INCOME- TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'), INTER ALIA, ON THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME-TAX HAS ERRED IN ISSUING NOTICE AND ORDER UNDER SECTION 263, THE ASSESSING OFFICER APPLIED HIS MIND TO ALL THE ASPECT ON THE AVAILABLE MATERIAL ON RECORD AND MADE ENQUIRIES AND INVESTIGATIONS AND CAME TO A PLAUSIBLE CONCLUSION AND JUDGMENT. 2. IT WAS SUBMITTED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX, LUCKNOW LINT NOTICE U/S 131 HAS NOT BEEN ISSUED TO HELP IN PRODUCING THE BOOKS OF ACCOUNTS PRAYED AND A LAWFUL OPPORTUNITY TO THE ASSESSEE WAS DENIED AND THE ASSESSMENT HAS BEEN MADE BY EXAMINING THE ITRS AND ASSESSMENT POSITION FROM THE LAST 10 YEARS :- 2 -: IN WHICH ALL THE RETURNS WERE ACCEPTED, AUDIT REPORT IN FORM 10B U/S 12A(B) PARTICULARLY FOR SECTION 13 AND WHOLE OF BOOKS OF ACCOUNT AND RECORDS, BANK STATEMENTS FOR THE ASSESSMENT YEAR 2010-11, AND THE CASE WAS DISCUSSED AT LENGTH AND NOTHING WAS FOUND AGAINST THE APPLICANT, BUT THE LEARNED CIT DID NOT MENTION ABOUT APPLICATION UNDER SECTION 131 IN THE ORDER U/S 263, THUS ACCEPTED THE PROCEDURE OF ASSESSMENT, AND THERE REMAINS NOTHING TO PROBE FURTHER EXCEPT ANY CHANGE OF OPINION. 3. IN VIEW OF THE ASSESSMENT ORDER HEAVY DISALLOWANCE OF RS.43,49,768/- WITHOUT FINDING ANY FAULT IN AMPLE QUANTITY OF RECORDS, QUERIES AND DISCUSSIONS IN THE FILE EXCEPT ON THE BASIS OF NON- PRODUCTION OF BOOKS OF ACCOUNT, IF CHANGED BY FRESH ASSESSMENT ORDER WILL AMOUNT TO TWO VIEWS POSSIBLE AND THE VIEW FAVOURABLE TO ASSESSEE WILL BE APPLICABLE. 4. THE APPLICANT, ITSELF, FEELS AGGRIEVED AND IS OF THE VIEW THAT NO DISALLOWANCE SHOULD HAVE BEEN MADE. 2. DURING THE COURSE OF HEARING OUR ATTENTION WAS INVITED TO THE FACT THAT THE ASSESSING OFFICER HAS FRAMED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT AND ALLOWED EXEMPTION UNDER SECTION 11 OF THE ACT AFTER MAKING NOMINAL DISALLOWANCE WITHOUT REALIZING THE FACT THAT THE ASSESSEE-SOCIETY COULD NOT PRODUCE THE BILLS AND VOUCHERS IN SUPPORT OF THE EXPENSES CLAIMED BY THE ASSESSEE. THE LD. COMMISSIONER OF INCOME-TAX HAVING NOTED THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE PROVISIONS OF SECTION 13 OF THE ACT, HELD THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND HE ACCORDINGLY SET ASIDE THE SAME AND DIRECTED THE ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH CONSIDERING THE ABOVE ISSUES AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. :- 3 -: 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE BOOKS OF ACCOUNT WERE NOT AVAILABLE WITH THE ASSESSEE AS IT WAS TAKEN BY THE ACCOUNTANT OR AUDITOR AND THE ASSESSEE MADE A REQUEST TO THE ASSESSING OFFICER TO SUMMON HIM, BUT INSTEAD OF SUMMONING HIM THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT. THEREFORE, THERE IS NO ERROR IN THE ASSESSMENT ORDER. MOREOVER, THE ASSESSING OFFICER HAS EXAMINED THE CLAIM OF THE ASSESSEE JUDICIOUSLY BEFORE ALLOWING THE EXEMPTION UNDER SECTION 11 OF THE ACT. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT EVEN WITHOUT VERIFYING THE NATURE OF EXPENSES CLAIMED BY THE ASSESSEE IN THE ABSENCE OF BOOKS OF ACCOUNT. THE ASSESSING OFFICER HIMSELF HAS NOTED IN THE ASSESSMENT ORDER THAT THE BOOKS OF ACCOUNT ARE NOT PRODUCED BEFORE HIM DESPITE SEVERAL OPPORTUNITIES PROVIDED TO THE ASSESSEE. THE ASSESSING OFFICER HAS ALLOWED THE BENEFIT OF SECTION 11 OF THE ACT TO THE ASSESSEE AFTER MAKING NOMINAL DISALLOWANCES OF DIFFERENT EXPENDITURES. IN THE CASE OF A SOCIETY, WHICH HAS BEEN REGISTERED UNDER SECTION 12AA OF THE ACT, THE ASSESSING OFFICER IS REQUIRED TO EXAMINE THE CLAIM OF THE ASSESSEE IN THE LIGHT OF PROVISIONS OF SECTION 13 OF THE ACT AND THE CLAIM CAN ONLY BE EXAMINED IN THE LIGHT OF THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT CAN ONLY BE ALLOWED WHERE THERE IS NO VIOLATION OF THE PROVISIONS OF SECTION 13 OF THE ACT AND THE SAME CANNOT BE EXAMINED IN THE ABSENCE OF THE BOOKS OF ACCOUNT. THEREFORE, IT IS A CASE OF LACK OF ENQUIRY ON THE PART OF THE ASSESSING OFFICER WHICH MAKES THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5. DURING THE COURSE OF HEARING, A SPECIFIC QUERY WAS RAISED AS TO WHY THE BOOKS OF ACCOUNT WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER AND IN RESPONSE THERETO, IT WAS CONTENDED THAT THE BOOKS OF ACCOUNT WERE TAKEN :- 4 -: BY THE ACCOUNTANT OR THE AUDITOR, BUT IN ORDER TO ESTABLISH THESE FACTS NO EVIDENCE WAS FILED. SINCE THE BOOKS OF ACCOUNT ARE THE PROPERTY OF THE ASSESSEE, A COMPLAINT OUGHT TO HAVE BEEN LODGED WITH THE POLICE IF THE SAME WERE TAKEN AWAY BY THE ACCOUNTANT OR THE AUDITOR AND IS NOT RETURNING TO THE ASSESSEE. THEREFORE, THIS CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED. THE LD. COMMISSIONER OF INCOME-TAX HAS CANCELLED THE ASSESSMENT AND DIRECTED THE ASSESSING OFFICER TO RE-EXAMINE THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 11 OF THE ACT IN THE LIGHT OF PROVISIONS OF SECTION 13 OF THE ACT AND WE FIND NO INFIRMITY IN THIS DIRECTION OF THE LD. COMMISSIONER OF INCOME-TAX, AS THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE ACCORDINGLY CONFIRM THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX PASSED UNDER SECTION 263 OF THE ACT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT N THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH JULY, 2015 JJ:2606 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR