Asstt.Commissioner of Income Tax-1, Kanpur V. M/s. Rama Shiv Hospital Sansthan, Kanpur

ITA 300/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75118 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 25-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K DEY
• Assessee Lawyers: B P YADAV
• Keywords: Business income; Charitable institution; Benefit of exemption
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 300/LKW/2012 ASSESSMENT YEAR: 2006 - 07 ASSTT. CIT 1 KANPUR V. M/S RAMA SHIV HOSPITAL SANSTHAN KANPUR PAN: AAATR7895J (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. P. K. DEY, D.R. RESPONDENT BY: SHRI. B. P. YADAV, ADVOCATE DATE OF HEARING: 08.01.2014 DATE OF PRONOUNCEMENT: 10.01.2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS WHICH ARE AS UNDER: - 1 . THE LD. COMMISS IONER OF INCOME TAX (APPEALS) - II , KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 17 , 4 8, 658/ - O N ACCOUNT OF EXCESS OF INCOME OVER EXPENDITURE, WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NEITHER ENCLOSED ACCOUNTS PERTAINING TO RECEIPT AND EXPENDITURE OF THE SOCIETY (RAMA SHIV HOSPITAL) WITH THE RETURN, NOR PRODUCED THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS/REMAND REPORT PROCEEDINGS, FOR : - 2 - : EXAMINATION OF THE DETAILS OF THE RECEIPTS AND GENUINENESS OF EXPENDITURE MADE FOR CHARITABLE PURPOSE S )IN ACCORDANCE WITH THE PROVISIONS OF LAW. 2 . THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - I I, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2 , 28,445 / - (RS. 1,14,345 / - + RS. 1,14,100 / - ) ON ACCOUNT OF PAYMENTS OF LI C PREMIUM OF THE OFFICE BEARERS, WITHOUT APPRECIATING THE FACT THAT THESE WERE MADE IN VIOLATION OF THE SECTION 13 ( 1) (C) OF THE INCOME TAX ACT, 1961 AND THE ASSESSEE SOCIETY WAS NOT ENTITLED FOR DEDUCTION IN RESPECT OF THE SAME U/S 11 OF THE I.T. ACT, 1961. 3 . THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.2 , 79,392/ - ON ACCOUNT OF INCOME FROM PETROL PUMP WITHOUT APPRECIATING THE FACTS AND MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TO SHOW THAT THE BUSINESS OF THE PETROL PUMP WAS NOT INCIDENTAL T O THE ATTAINMENT OF THE OBJECTS OF THE TRUST. 4 . THAT THE ORDER OF THE LD. CIT (A) - II , KANPUR DATED 16.02.2012 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 28.11.2008 BE RESTORED. 2 . DURING THE COURSE OF HEARING OF THE APPEAL, THE LD . D.R. HAS INVITED OUR ATTENTION TO THE ORDER OF THE ASSESSING OFFICER WITH THE SUBMISSION THAT DESPITE VARIOUS OPPORTUNITIES, THE ASSESSEE HAS NOT FILED COMPLETE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER. MOREOVER, EXCEPT ON FEW DATES, HE DID NOT APP EAR BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER WAS CONSTRAINED TO PASS EX - PARTE ORDER. BEFORE THE LD. CIT(A) THE ASSESSEE HAS FILED REQUISITE INFORMATION, ON WHICH REMAND REPORT WAS CALLED FOR BY THE LD. CIT(A) FROM THE ASSESSING OFFICER. IN THE REMAND : - 3 - : REPORT, THE ASSESSING OFFICER HAS CATEGORICALLY STATED THAT THE ASSESSEE HAS NEITHER PRODUCED THE BOOKS OF ACCOUNT AND DETAILS OF DONATIONS DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOR DURING THE REMAND PROCEEDINGS. BUT THE LD. CIT(A) HAS GRA NTED RELIEF TO THE ASSESSEE HAVING ACCEPTED THE CONTENTIONS OF THE ASSESSEE. THE LD. D.R. FURTHER CONTENDED THAT THE ASSESSEE WAS RUNNING A PETROL PUMP AND GENERATING BUSINESS INCOME THOUGH THE LD. CIT(A) HAS OBSERVED I N HIS ORDER THAT IT IS INCIDENT AL TO THE ACHIEVEMENTS OF OBJECTS OF THE SOCIETY. THE LD. D.R. HAS FURTHER SUBMITTED THAT NO EVIDENCE WAS PLACED BY THE ASSESSEE TO SHOW THAT IT WAS ENGAGED IN CHARITABLE ACTIVITIES. THEREFORE, IN THE INTEREST OF JUSTICE, THE MATTER MAY BE RESTORED TO THE ASS ESSING OFFICER FOR ADJUDICATION OF THE ISSUE IN THE LIGHT OF THE DONATIONS RECEIVED AND THE BOOKS OF ACCOUNT OF THE ASSESSEE. 3 . THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT THE ASSESSEE HAS FURNISHED COMPLETE DETAILS BEFORE THE LD. CIT(A) AND HAVING EXAMINED THE SAME THE LD. CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE PETROL PUMP WAS BEING RUN AS AN INCIDENTAL TO THE ACHIEVEMENTS OF OBJECTS OF THE SOCIETY. HE HAS ALSO CONTENDED THAT THE LD. CIT(A) IS ARMED WITH CO - TERMINUS POWE R OF THE ASSESSING OFFICER AND HE HAS EXAMINED THE NATURE OF ACTIVITIES OF THE ASSESSEE WHILE GRANTING BENEFIT OF SECTION 11 OF THE INCOME - TAX ACT, 1961. 4 . HAVING CAREFUL LY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES AND FROM A CAREFUL PERUSAL OF THE MATERI AL AVAILABLE ON RECORD, WE FIND THAT UNDISPUTEDLY THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS DENIED BENEFIT OF EXEMPTION UNDER SECTION 11 OF THE ACT AND COMPUTED THE BUSINESS INCOME FROM PE TROL PUMP. ACCORDING TO THE ASSESSEE THE ASSESSEE HAS PRODUCED THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER , BUT NO EVIDENCE IS AVAILABLE IN THIS REGARD. THE REMAND REPORT WAS CALLED FOR BY THE LD. CIT(A) AND IN THE REMAND REPORT THE ASSESSING OFFIC ER HAS CATEGORICALLY OBSERVED : - 4 - : THAT THE ASSESSEE HAS NEITHER PRODUCED THE BOOKS OF ACCOUNT AND THE LIST OF DONATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOR IN THE REMAND PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT PLACE ANY EVIDENCE TO CONTROVERT THIS OBSERVATION OF THE ASSESSING OFFICER. IN THE ABSENCE OF COMPLETE DETAILS, IT HAS BECOME VERY DIFFICULT TO EXAMINE THE NATURE OF ACTIVITIES ACTUALLY UNDERTAKEN BY THE ASSESSEE. THE ASSESSEE HAS TAKEN THE HOSPITAL ON LEASE AND WAS ALSO RUNN ING A PETROL PUMP, BUT FROM THESE ACTIVITIES IT IS NOT DISCERNIBLE THAT THE ASSESSEE WAS ENGAGED IN THE CHARITABLE ACTIVITIES. WE ARE , HOWEVER, OF THE VIEW THAT IN THE INTEREST OF JUSTICE THIS MATTER REQUIRES A FRESH ADJUDICATION BY THE ASSESSING OFFICER. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RE - EXAMINE THE ENTIRE ISSUE IN THE LIGHT OF THE BOOKS OF ACCOUNT AND OTHER RECORDS. THE ASSESSEE IS ALSO DIRECTED TO EXT END ALL SORT OF CO - OPERATION TO THE ASSESSING OFFICER AND TO PRODUCE COMPLETE BOOKS OF ACCOUNT AND LIST OF DONATIONS AND OTHER RECORD AS DESIRED BY THE ASSESSING OFFICER. 5 . IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 10.1.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.1.2014 JJ: 0801 : - 5 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR