ITO (Exemptions), New Delhi V. M/s. RR Mehta Educational Trust, New Delhi

ITA 3197/DEL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5467 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR TIWARI
• Assessee Lawyers: B K ANAND
• Keywords: Capital receipt; Onus to prove
• Section: 143(3)

Judgement Text

1 ITA NO. 3197/DEL/2016 IN THE INCOME TAX APPELLA TE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT ME MBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO. 3197 /DEL/2 016 (A.Y 2011-12) ITO (EXEMPTIONS) WARD-2(2), ROOM NO. 2417, E-2, BLOCK, 24 TH FLOOR, PRATYAKSH KAR BHAWAN, CIVIL CENTRE, JAWAHAR LAL NEHRU MARG NEW DELHI (APPELLANT) VS RR MEHTA EDUCATIONAL TRUST C/O. RED CROSS PUBLIC SCHOOL, D-BLOCK, SAKET NEW DELHI AAATS1375E (RESPONDENT) APPELLANT BY SH. VIJAY KUMAR TIWARI, SR. DR RESPONDENT BY SH. B. K. ANAND, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 09/03/2016 PASSED BY CIT(A)- 36 NEW DELHI FOR ASSESSMENT YEAR 2011-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE D EVELOPMENT FUND HAS BEEN DIRECTLY TAKEN IN THE BALANCE SHEET WHEREAS IT SHOU LD HAVE BEEN TAKEN IN THE INCOME & EXPENDITURE A/C. THOUGH THERE IS NO CONCE ALMENT OF INCOME BUT THE DATE OF HEARING 01.05.2018 DATE OF PRONOUNCEMENT 02.05.2018 2 ITA NO. 3197/DEL/2016 ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME AND IS COVERED UNDER EXPLANATION 1 TO 271(1)(C) OF THE I.T ACT. 3. THE TRUST IS ENGAGED IN EDUCATIONAL ACTIVITIES. THE ASSESSEE, DURING THE YEAR UNDER CONSIDERATION, EARNED INCOME FROM TUITIO N FEE, ADMISSION FEES, COMPUTER FEES, ACTIVITIES FEES, ADDITIONAL SUBJECT FEES, BANK INTEREST, TRANSPORT ETC. THE RETURN OF INCOME FOR THE A.Y. 2011-12 WAS FILED ON 28.09.2011 DECLARING TOTAL INCOME AT NIL. THE ASSESSING OFFICE R NOTICED THAT ASSESSEE SOCIETY HAD ACCEPTED DEVELOPMENT FEES AMOUNTING TO RS. 38,77,220/- WHICH WAS CREDITED DIRECTLY IN THE DEVELOPMENT FUND FORMI NG PART OF THE BALANCE SHEET, HENCE, IN THE I & E ACCOUNT THE SAME WAS NOT TREATED AS INCOME. THE ASSESSING OFFICER OBSERVED THAT EVEN IF IT WAS FIXE D AS PER THE RULES AND REGULATIONS FRAMED BY GOVT. OF NCT OF DELHI, THE NA TURE OF RECEIPT WOULD NOT CHANGE. MERELY STATING DEVELOPMENT FEE AS CAPITAL R ECEIPT WHICH IS NOWHERE RECOGNIZED IN EXEMPTION PROVISIONS WILL NOT SUFFICE AND ACCORDINGLY, THE TREATMENT AS CAPITAL FEE WAS DENIED AND WAS TREATED AS REVENUE RECEIPT. THUS THE SAME WAS ASSESSED U/S 143(3) ON 11.03.2014, AT NIL INCOME AFTER ADDING RS. 38,77,220/- AS REVENUE RECEIPT INSTEAD OF CAPIT AL RECEIPT. THE ASSESSEE DID NOT FILE APPEAL AGAINST ASSESSMENT ORDER. IN THE ME ANWHILE PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT . DURING PENALTY PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FA ILED TO DISCHARGE ITS ONUS TO PROVE THAT IT HAD NOT FURNISHED INACCURATE PARTICUL ARS OF INCOME/CONCEALED PARTICULARS OF INCOME & THAT ALL THE CONDITIONS OF PENALTY U/S 271(L)(C) WERE FULFILLED. THUS, THE PENALTY OF RS. 10,47,680/- WAS IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESS EE FILED APPEAL BEFORE THE CIT(A) AND THE CIT(A) ALLOWED THE APPEAL OF THE ASS ESSEE. THE REVENUE FILED APPEAL BEFORE US. 3 ITA NO. 3197/DEL/2016 5. THE LD. DR RELIED UPON THE ORDER OF THE PENALTY U/S 271(1)(C) AND SUBMITTED THAT THE CIT(A) WAS NOT CORRECT AND TOTA LLY IGNORED THE FACT THAT THE DEVELOPMENT FUND WAS DIRECTLY TAKEN IN THE BALANCE- SHEET WHEREAS IT SHOULD HAVE BEEN TAKEN IN THE INCOME AND EXPENDITURE ACCOU NT. THUS, THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME AND THE SAME IS COMING UNDER THE PURVIEW OF EXPLANATION 1 TO 271(1)(C) OF THE ACT. 6. THE LD. AR RELIED UPON THE DECISION OF THE HONB LE APEX COURT IN CASE OF CIT VS. RELIANCE PETRO PRODUCTS 322 ITR 158 SC AND ALSO RELIED UPON THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE FIND THAT THE CIT(A) WHILE CANCELLING THE PENALTY HELD AS UNDER: 6. I HAVE CONSIDERED THE PENALTY ORDER, ASSESSMEN T ORDER AND THE SUBMISSIONS OF ASSESSEE. I AM INCLINED TO AGREE WIT H THE ARGUMENTS OF THE ASSESSEE ON VARIOUS ACCOUNTS VIZ. THERE WAS NO CONC EALMENT OR FURNISHING INACCURATE PARTICULARS AS THE ASSESSEE HAD SHOWN TH E INCOME & SOURCE CORRECTLY. THE AO MERELY CHANGED THE NATURE OF RECE IPT. EFFECTIVELY, THERE WAS NO LOSS OF REVENUE ALSO AS THERE WAS NO TAX TO BE A VOIDED. THE UTILISATION OF INCOME WAS MORE THAN 85 PER CENT WHETHER THE RECEIP T WAS CAPITAL OR REVENUE. THUS, THERE WAS NO REASON ALSO FOR THE ASS ESSEE TO FURNISH INACCURATE PARTICULARS. IT HAS ALSO BEEN RIGHTLY PO INTED OUT THAT THIS WAS BEING ACCEPTED AS CAPITAL RECEIPT IN ALL OTHERS A.Y.'S TH E AO HAS NOT CLEARLY BROUGHT OUT AS TO WHAT WAS CONCEALED & WHY. THE PENALTY MAY THEREFORE BE DELETED. THE CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE PRESENT CASE IS COVERED BY NEITHER THE SUB CLAUSE (C) AS IT NEITHER IS A CASE OF LOSS RETURN NOR THAT TO WHICH EXPLANATION 3 OF THE SECTION APPLIES. IN FACT FROM THE PERUSAL OF THE ASSESSMENT ORDER AS WELL AS THE PENALTY ORDER IT CAN BE SEEN T HAT THERE IS NO CONCEALMENT OF INCOME OR INACCURATE FURNISHING OF DOCUMENTS BY THE ASSESSEE. FROM THE RECORDS IT CAN BE SEEN THAT THIS WAS BEING ACCEPTED AS CAPITAL RECEIPT IN ALL THE EARLIER A.Y.'S. FURTHER, THE ASSESSING OFFICER HAS NOT CLEARLY BROUGHT OUT AS TO WHAT WAS CONCEALED & WHY. IN THE PRESENT CASE, THE ASSESSEE HAS DISCLOSED ALL 4 ITA NO. 3197/DEL/2016 THE FACTUAL ASPECTS BEFORE THE ASSESSING OFFICER WH ICH CANNOT BE STATED THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR T HE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME. THE PRESENT CASE THEREFORE IS COVERED BY THE RATIO LAID DOWN BY THE HONBLE APEX COURT AND HIGH COURT IN CASES OF RELIANCE PETRO CHEMICALS 322 ITR 158 WHEREIN IT IS HELD THAT MAKING INCORRECT CLAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS. TH EREFORE, THERE IS NO NEED TO INTERFERE WITH THE FINDINGS OF THE CIT(A). HENCE, APPEAL OF THE REVENUE IS DISMISSED. 8. IN RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2ND MAY, 20 18 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 02/05/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 3197/DEL/2016 DATE 1. DRAFT DICTATED ON 01/05/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 01/05/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 2.05.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 .05.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 6 ITA NO. 3197/DEL/2016