IncomeTax Officer (Exemption), Lucknow V. Dargahah Syed Salar Masood Gazi Rahmatuhhah Alliah, Bahraich

ITA 347/LKW/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3603 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 26-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K KAPOOR
• Assessee Lawyers: C K SINGH
• Keywords: Earning of tax free income
• Section: 12; 11; 143(3); 12A; 12AA

Judgement Text

I.T.A. NO.347/LKW/2018 ASSESSMENT YEAR:2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.347/LKW/2018 ASSESSMENT YEAR:2012-13 INCOME TAX OFFICER (EXEMPTION) LUCKNOW. VS. DARGHAH SYED SALAR MASOOD GAZI RAHMATULLAH ALLIAH, DARGAH ROAD, BAHRAICH. PAN:AAAAD 8771 A (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A), LUCKNOW DATED 13/03/2018 PERTAINING TO ASSE SSMENT YEAR 2012- 2013. IN THIS APPEAL THE REVENUE HAS TAKEN THE FOL LOWING GROUNDS OF APPEAL: 1. THE LD. CIT(APPEAL)-4, LUCKNOW HAS ERRED ON FAC TS AND LAW IN ALLOWING THE EXEMPTION U/S12A OF THE INCOME TAX ACT, 1961 AS THE ASSESSEE HAD NOT PRODUCED CERTIFIC ATE U/S 12AA OF THE INCOME TAX ACT, 1961 DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961, CONSEQUENTLY THE ASSESSMENT WAS COMPLETE D AT TOTAL INCOME OF RS.1,18,80,950/- IN THE STATUS O F AOP AFTER DISALLOWING THE ASSESSEE'S CLAIM FOR EXEMPTIO N U/S 11 OF THE INCOME TAX ACT, 1961 AND SURPLUS INCOME O F RS.1,03,32,771/- WAS ALSO TAXED RIGHTLY BY THE AO. THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 W AS APPELLANT BY SHRI C. K. SINGH, D.R. RESPONDENT BY SHRI P. K. KAPOOR, C. A. DATE OF HEARING 12/02/2019 DATE OF PRONOUNCEMENT 22 / 02 /201 9 I.T.A. NO.347/LKW/2018 ASSESSMENT YEAR:2012-13 2 COMPLETED ON 26.03.2015 WHEREAS ORDER U/S 12A OF TH E INCOME TAX ACT, 1961 WAS PASSED ON 29.05.2015 AFTER COMPLETION OF ASSESSMENT U/S 143(3) OF THE INCOME T AX ACT, 1961 WAS COMPLETED ON 26.03.2015. 2. THE LD. CIT(APPEAL)-4, LUCKNOW HAS ERRED ON FACT S AND LAW IN DELETING THE ADDITION MADE BY THE AO ON ACCO UNT OF ADMINISTRATIVE EXPENSES, OFFICE CONTINGENT EXPEN SES, GENERATOR & TUBEWELL EXPENSES AND MISC. EXPENSES OF RS.15,48,178/-. 2. LEARNED D. R., AT THE OUTSET, HEAVILY PLACED HIS RELIANCE ON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT SINCE AT TH E TIME OF ASSESSMENT THE ASSESSEE DID NOT SUBMIT COPY OF REGISTRATION U/S 12 A OF THE ACT, THE ASSESSING OFFICER HAD RIGHTLY HELD THE ASSESSEE TO BE NOT ELIGIBLE FOR EXEMPTION U/S 11 WHICH THE LEARNED CIT(A) HAS WRONG LY ALLOWED. LEARNED D. R. FURTHER ARGUED THAT IN THE ABSENCE OF VOUCHERS T HE ASSESSING OFFICER HAD RIGHTLY MADE THE ADDITION TO THE EXTENT OF 20% OF E XPENSES WHICH LEARNED CIT(A) HAS WRONGLY ALLOWED. 3. LEARNED A. R., ON THE OTHER HAND, PLACED HIS REL IANCE ON THE ORDER OF LEARNED CIT(A) AND SUBMITTED THAT THE ORDER OF REGI STRATION U/S 12AA DATED 29/05/2015 WAS FILED, ACCORDING TO WHICH THE ASSESS EE WAS GRANTED REGISTRATION U/S 12A WITH EFFECT FROM 01/04/2011 AN D THE ASSESSING OFFICER, VIDE REMAND REPORT DATED 15/12/2016, HAD ALSO ACKNO WLEDGED THE SAME AND THEREFORE, THE LEARNED CIT(A) HAS RIGHTLY GRANT ED THE EXEMPTION U/S 11 OF THE ACT. 3.1 AS REGARDS THE OTHER ISSUE OF DISALLOWANCE TO T HE EXTENT OF 20% OF EXPENSES, LEARNED A. R. SUBMITTED THAT THE ASSESSIN G OFFICER HAS NOT SPECIFIED AS TO WHICH EXPENSES COULD NOT BE VERIFIE D AND NOT EVEN A SINGLE VOUCHER HAS BEEN IDENTIFIED BY THE ASSESSING OFFICE R WHEREAS THE ASSESSEE HAS SUBMITTED ALL THE INFORMATION AND THEREFORE, LE ARNED CIT(A), RELYING ON A NUMBER OF CASE LAWS, HAS RIGHTLY DELETED THE ADDITI ON. I.T.A. NO.347/LKW/2018 ASSESSMENT YEAR:2012-13 3 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ONLY REASON FOR NOT GRANTING EXEMPTION U/S 11 IS THAT THE COPY OF REGISTRATION CERTIFICATE U/S 12A WAS NOT TRACEABLE WITH THE ASSESSEE WHICH WAS FILED BEFORE CIT(A) AND CIT(A) OBTAINED REMAND REPORT FROM THE ASSESSING OFFICER WITH RESPE CT TO THE CERTIFICATE OF REGISTRATION AND ASSESSING OFFICER, VIDE REMAND REP ORT DATED 15/12/2016, HAS ALSO ACKNOWLEDGED THE SAME THEREFORE, LEARNED C IT(A) HAS RIGHTLY ALLOWED EXEMPTION TO THE ASSESSEE AND WE DO NOT FIN D ANY INFIRMITY IN THE SAME. THE CONTENTION OF REVENUE, WHICH HAS BEEN TA KEN IN GROUND NO. 1 THAT THE ASSESSMENT WAS COMPLETED ON 26/03/2015 AND THE ORDER U/S 12A WAS PASSED ON 29/05/2015 I.E. AFTER COMPLETION OF A SSESSMENT U/S 143(3), DO NOT HOLD MUCH FORCE IN VIEW OF THE FACT THAT THE REGISTRATION WAS GRANTED TO THE ASSESSEE VIDE ORDER DATED 29/05/2015 WITH EF FECT FROM 01/04/2011. THIS FACT HAS BEEN NOTED BY LEARNED CIT(A) IN HIS O RDER AT PAGE 2 AND THE SAID ORDER WAS ALSO CONFRONTED TO THE ASSESSING OFF ICER WHICH, VIDE REMAND REPORT DATED 15/12/2016, HAD ALSO ACKNOWLEDGED THE SAME. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED C IT(A) IN THIS RESPECT. 4.1 AS REGARDS THE ISSUE OF DISALLOWANCE ON AD HOC BASIS, WE FIND THAT LEARNED CIT(A) HAS DELETED THE ADDITION BY HOLDING THAT THE ASSESSING OFFICER HAS NOT POINTED OUT ANY PARTICULAR VOUCHER WHICH WAS NOT VERIFIABLE AND CIT(A), RELYING ON A NUMBER OF CASE LAWS, HAS R IGHTLY DELETED THE ADDITION. THE FINDINGS OF LEARNED CIT(A) IN THIS R ESPECT ARE REPRODUCED BELOW: THE ISSUE OF AD HOC DISALLOWANCE OF EXPENDITURE HA S BEEN DECIDED UPON BY HON'BLE JURISDICTIONAL I.T.A.T. IN THE BELOW MENTIONED JUDGMENTS. THE HON'BLE I.T.A.T., LUCKNOW BENCH IN U.P. CORPORA TIVE FEDERATION VS. DEPTT. OF INCOME TAX IN I.T.A. NO.33 /LKW/2011 I.T.A. NO.347/LKW/2018 ASSESSMENT YEAR:2012-13 4 DATED 22/03/2011 HELD THAT THERE WAS NO JUSTIFICATI ON IS SUSPECTING THE NESS OF ENTIRE CLAIM AND RESORTING T O ESTIMATED DISALLOWANCE. THE ASSESSING OFFICER HAS NOT GIVEN ANY REASON FOR ESTIMATING THE DISALLOWANCE AT 5% OF THE CLAIM. THE AO HAS NOT DOUBTED THE CORRECTNESS OF BOOKS OF ACCOUNTS RE GULARLY MAINTAINED BY THE ASSESSEE. NONE OF THE AUDITORS HA VE GIVEN ANY ADVERSE COMMENT IN THE REPORT. THE DISALLOWANCE WAS MADE FOR SAKE OF DISALLOWANCE WITHOUT GIVING ANY COGENT REASONS. THE ADHOC ADDITION MADE BY AO HAS BEEN RIGHTLY DELETED BY LD. CIT(A). THE HON'BLE ITAT, LUCKNOW BENCH IN JUDGEMENT DATED 13.07.2011 IN CASE OF RAJ MAT A DEVI, BASTI HELD TH AT AO HAS NOT POINTED OUT SINGLE INSTANCE OF EXPENDITURE WHICH IS NOT SUPPORTED BY VOUCHER. IT SEEMS THAT AO HAS MADE THE DISALLOWANCE WITHOUT BRINGING ANY SUPPORTING EVIDEN CE TO JUSTIFY HIS ACTION. CONSIDERING THE ENTIRE FACTS AND CIRCUM STANCES OF THE PRESENT CASE, WE DELETED THE DISALLOWANCE. IN THE PRESENT CASE ALSO THE AO HAS DISALLOWED EXPE NSES WITHOUT PIN POINTING ANY SPECIFIC DEFECT IN BILL/VOUCHER PR ODUCED. DUE TO THE REASONS OUTLINED ABOVE AND THE JUDGMENTS OF HON 'BLE JURISDICTIONAL ITAT AS OUTLINED ABOVE, THE DISALLOW ANCE MADE BY THE AO CANNOT BE SUSTAINED. MOREOVER, WE FIND THAT EVEN IF DISALLOWANCE IS SUST AINED, THE INCREASED INCOME OF THE ASSESSEE BEING ITS EXEMPT INCOME U/S 11, WILL NOT MAKE ANY EFFECT IN THE TAX LIABILITY OF THE ASSESSEE. THERE FORE ALSO WE DO NOT FIND ANY INFIRMITY AND DISMISS GROUND NO. 2. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 22/02/2019) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:22/02/2019 *SINGH