RAMA DEVI MEMORIAL EDUCATIONAL SOCIETY, NOIDA V. CIT(A)- 1, NOIDA

ITA 3181/DEL/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 2634 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 03-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S RAWAT
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.3181/DEL/2018 ASSESSMENT YEAR : 2010-11 RAMA DEVI MEMORIAL EDUCATIONAL SOCIETY, CITY PUBLIC SCHOOL, E-3, SECTOR-61, NOIDA, UTTAR PRADESH. VS. CIT(A)-1, NOIDA, UTTAR PRADESH. PAN : AAATR6940C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DEEPESH GARG, ADV. DEPARTMENT BY : SHRI D. S. RAWAT, SR. DR DATE OF HEARING : 10-10-2018 DATE OF PRONOUNCEMENT : 10-10-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 25.09.2017 OF THE CIT(A)- 1, NOIDA RELATING TO ASSE SSMENT YEAR 2010-11. 2. THE ASSESSEE, IN ITS VARIOUS GROUNDS OF APPEAL, HAS CHALLENGED THE ORDER OF THE LD. CIT(A) IN LEVYING THE PENALTY OF RS.77,85,1 20/- U/S 271(1)(C) ON THE ENHANCED INCOME OF RS.2,48,74,564/-. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER IN THE INSTANT CASE DENIED THE CLAIM OF EXEMPTION U/S 11 AND 12 AND DETERMINED THE TOTAL INCOME OF RS.12,40,589/-. 4. IN APPEAL, THE LD. CIT(A) ISSUED ENHANCEMENT NOT ICE U/S 251(A) AND DETERMINED THE TOTAL INCOME AT RS.2,61,15,153/- BY MAKING THE ADDITION OF RS.2,48,74,564/-. SUBSEQUENTLY, HE ISSUED PENALTY NOTICE U/S 271(1)(C) AT THE TIME OF DISPOSAL OF THE APPEAL FOR LEVY OF PENALTY ON THE ENHANCED INCOME. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASS ESSEE, THE LD. CIT(A) LEVIED 2 ITA NO.3181/DEL/2018 PENALTY AT THE RATE OF 100% OF TAX SOUGHT TO BE EVA DED ON THE INCOME OF RS.2,48,74,564/- WHICH WAS ENHANCED BY HIM ON THE G ROUND THAT THE ASSESSEE HAS CONCEALED ITS PARTICULARS OF INCOME. 5. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, FILED A COPY OF THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT THE TRIBUNAL AT PAR A 6 OF THE ORDER HAS REVERSED THE FINDINGS OF THE LD. CIT(A) BY HOLDING THAT THE INCOME BY WAY OF FEE CANNOT BE HELD TO BE DERIVED FROM PROPERTY HELD ON TRUST. THE TRIBUNAL HAS ALSO NOT APPROVED THE ORDER OF THE LD. CIT(A) WHEREIN HE HAS HELD THAT THE ENTIRE RECEIPTS ARE LIABLE TO BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) WAS SET-AS IDE AND THE ASSESSING OFFICER WAS DIRECTED TO GRANT EXEMPTION U/S 11 AND 12 OF THE I.T. ACT, 1961. SINCE THE ADDITION MADE BY THE ASSESSING OFFICER WH ICH WAS FURTHER ENHANCED BY THE LD. CIT(A) HAS BEEN SET-ASIDE BY THE TRIBUNA L, THEREFORE, PENALTY HAS NO LEGS TO STAND. HE ACCORDINGLY SUBMITTED THAT THE P ENALTY LEVIED BY THE ASSESSING OFFICER SHOULD BE DELETED. 6. THE LD. DR ON THE OTHER HAND SUBMITTED THAT SINC E NOBODY HAS APPEARED BEFORE THE LD. CIT(A), THEREFORE, THIS MATTER MAY B E SET-ASIDE TO THE FILE OF THE ASSESSING OFFICER OR THE LD. CIT(A) AS THE CASE MAY BE. 7. AFTER HEARING BOTH THE SIDES, I FIND THE ASSESSI NG OFFICER COMPLETED THE ASSESSMENT DETERMINING THE INCOME AT RS.12,40,589/- . THE LD. CIT(A) NOT ONLY UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER B UT ENHANCED THE INCOME BY RS.2,48,74,564/- AND THEREBY DETERMINED THE TOTAL I NCOME AT RS.2,61,15,153/-. SUBSEQUENTLY, HE INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY OF RS.77,85,120/- BEING 100% OF TAX SOUGHT TO BE EVADE D. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE TRIBUNAL IN ITA NO.4434/DEL/2017 ORDER DATED 25.07.2018 HAS ALREADY SET-ASIDE THE ORDER OF THE LD. CIT(A) AND DELETED THE ENTIRE ADDITION SUSTAINED BY THE LD. CIT(A) WHI CH INCLUDED THE INCOME ENHANCED BY THE LD. CIT(A). THEREFORE, THE PENALTY HAS NO LEGS TO STAND. I FIND 3 ITA NO.3181/DEL/2018 THE TRIBUNAL AT PARA 6 OF THE ORDER HAS DECIDED THE ISSUE AND DELETED THE ENTIRE ADDITION BY SETTING-ASIDE THE ORDER OF THE LD. CIT( A) AND DIRECTING THE ASSESSING OFFICER TO GRANT EXEMPTION U/S 11 AND 12 OF THE I.T . ACT. SINCE THE ENTIRE ADDITION HAS BEEN DELETED BY THE TRIBUNAL, THEREFOR E, THE VERY BASIS ON WHICH PENALTY HAS BEEN LEVIED DOES NOT SURVIVE. THEREFOR E, THE PENALTY LEVIED BY THE LD. CIT(A) IS DIRECTED TO BE DELETED. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. ON THIS 10 TH OCTOBER, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 10-10-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI