Om Budhisatva Trust, V. DDIT, (Exemp),

ITA 3766/DEL/2001

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4034 (ITAT-DELHI)
• Duration Of Justice: 9 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-05-2011
• Assessment Year: 1997-1998
• Appeal Filed On: 18-09-2001
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: C S AGGARWAL; R P MALL
• Keywords: Opportunity of being heard; Additional evidence; Benefit of exemption
• Section: 142(1); 80G; 12A; 144; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI K. K.K. K.G.BANSAL G.BANSAL G.BANSAL G.BANSAL, AM , AM , AM , AM ITA NO. ITA NO. ITA NO. ITA NO.3766/DEL/2001 3766/DEL/2001 3766/DEL/2001 3766/DEL/2001 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 1997 1997 1997 1997- -- -98 9898 98 OM BODHISATVA TRUST, OM BODHISATVA TRUST, OM BODHISATVA TRUST, OM BODHISATVA TRUST, C CC C- -- -49, BALI NAGAR, 49, BALI NAGAR, 49, BALI NAGAR, 49, BALI NAGAR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 015. 110 015. 110 015. 110 015. VS. VS. VS. VS. DY.DIRECTOR OF INCOME TA DY.DIRECTOR OF INCOME TA DY.DIRECTOR OF INCOME TA DY.DIRECTOR OF INCOME TAX X X X (EXEMPTIONS), (EXEMPTIONS), (EXEMPTIONS), (EXEMPTIONS), TRUST CIRCLE TRUST CIRCLE TRUST CIRCLE TRUST CIRCLE- -- -I, I,I, I, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.S.AGGARWAL, SR.ADVOCATE AND SHRI R.P.MALL, ADVOCATE. RESPONDENT BY : MS.Y.KAKKAR, SR.DR. ORDER ORDER ORDER ORDER PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI, J , J, J , JM : M : M : M : THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 13.7.2001 PASSED BY LEARNED CIT(A) IN THE MATTER OF AN ASSESS MENT MADE BY THE AO U/S 144 OF THE INCOME-TAX ACT, 1961 (THE ACT) FO R THE AY 1997-98. 2. IN THIS APPEAL, THE ASSESSEE HAD TAKEN AN ADDITI ONAL GROUND BEFORE THE TRIBUNAL, WHICH WAS ADMITTED BY THE TRIB UNAL ON 27.9.2005. IN THE ADDITIONAL GROUND, THE ASSESSEE HAS TAKEN A PLEA THAT THE ASSESSMENT ORDER SHOULD BE QUASHED INASMUCH AS IT W AS BAD IN LAW AND WITHOUT JURISDICTION AS ADMITTEDLY NO NOTICE U/ S 143(2) WAS SERVED WITHIN THE STATUTORY PERIOD THOUGH ALLEGED TO HAVE BEEN ISSUED. THIS ADDITIONAL GROUND WAS ALLOWED BY THE TRIBUNAL BY HO LDING THAT THE DEPARTMENT HAS NOT PROVED THE SERVICE OF THE NOTICE ISSUED ON 14.10.1998 U/S 143(2) OF THE ACT AND, THEREFORE, TH E ASSESSMENT MADE ON THE ASSESSEE U/S 144 OF THE ACT DATED 31.1.2000 WAS ANNULLED. SINCE THE ASSESSMENT WAS ANNULLED, THERE WAS NO NEE D TO EXAMINE THE OTHER GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ON TH E JUSTIFICATION FOR THE ASSESSMENT U/S 144 OR THE MERITS THEREOF. THE TRIBUNAL DECIDED THIS APPEAL VIDE ORDER DATED 3.8.2007 AGAINST WHICH , THE DEPARTMENT ITA-3766/DEL/2001 2 PREFERRED AN APPEAL BEFORE THE HON'BLE DELHI HIGH C OURT. HON'BLE DELHI HIGH COURT IN ITA NO.693/2008 VIDE THEIR LORDSHIPS ORDER DATED 28.7.2009 HAS SET ASIDE THE TRIBUNALS ORDER DATED 3.8.2007 AND REMANDED THE CASE BACK TO THE TRIBUNAL FOR DECISION OF THE ASSESSEES APPEAL ON MERITS. THE HONBLE HIGH COURT HAS HELD THAT THE APPROACH ADOPTED BY THE ITAT IN DEALING WITH THE SUBMISSION OF THE ASSESSEE ABOUT THE NON-RECEIPT OF THE NOTICE IS CLEARLY ERRO NEOUS. IT IS THUS CLEAR THAT THE ASSESSEES ADDITIONAL GROUND OF APPEAL CHA LLENGING THE SERVICE OF NOTICE U/S 143(2) HAS NOT BEEN ACCEPTED BY THE H ONBLE HIGH COURT AND THE MATTER HAS BEEN REMANDED BACK TO THE TRIBUN AL FOR DECISION OF THE ASSESSEES APPEAL ON MERITS. WE, THEREFORE, PR OCEED TO DISPOSE OF THIS APPEAL ON MERITS. 3. THE ASSESSEES GROUNDS OF APPEAL ON MERITS REVOL VE AROUND THE FOLLOWING ISSUES:- (I) THAT AO HAS NOT GIVEN A FAIR AND PROPER OPPORTUNITY BEFORE MAKING THE ASSESSMENT U/S 144 OF THE ACT. (II) THAT AO HAS OVERLOOKED THE FACT THAT THE ASSESSEE T RUST IS DULY REGISTERED U/S 12A OF THE ACT AND IS ALSO GRAN TED EXEMPTION U/S 80G FROM YEAR TO YEAR. (III) THE AO HAS ERRED IN ASSESSING THE EXCESS OF INCOME OVER EXPENDITURE AMOUNTING TO `8.59,493/- AS TAXABLE INC OME OF THE ASSESSEE WITHOUT CONSIDERING THE APPLICATION OF INCOME OUT OF THE EXCESS OF INCOME. (IV) THE AO HAS ERRED IN MAKING THE ADDITION OF `11,25,7 00/- ON ACCOUNT OF CORPUS DONATION. (V) THE CIT(A) HAS ERRED IN NOT ADMITTING THE ADDITIONA L EVIDENCE FURNISHED BY THE ASSESSEE UNDER RULE 46A O F THE IT RULES. ITA-3766/DEL/2001 3 4. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE ORDERS OF THE AUTHORITIES BELOW. 5. IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF I NCOME ALONGWITH AUDIT REPORT AND AUDITED COPIES OF ACCOUNT ON 31.10 .1997 SHOWING TOTAL INCOME AT RS.NIL. THE RETURN WAS INITIALLY P ROCESSED U/S 143(1)(A) ON 31.5.1999. THEREAFTER, THE CASE WAS SELECTED FO R SCRUTINY AND NOTICE U/S 143(2) WAS ISSUED ON 14.10.1998. SUBSEQ UENTLY, NOTICES U/S 143(2) AND 142(1) WERE ISSUED FROM TIME TO TIME BUT THERE WAS NO COMPLIANCE. AO, THEREFORE, PROCEEDED TO COMPLETE T HE ASSESSMENT EX- PARTE U/S 144 OF THE ACT ON THE BASIS OF MATERIALS ON RECORD AND TO THE BEST OF HIS KNOWLEDGE. THE BENEFIT OF EXEMPTION U/ S 11 HAS BEEN DISALLOWED BY THE AO BY OBSERVING AS UNDER:- THE ASSESSEE HAS CLAIMED EXEMPTION U/S 11 OF THE A CT. NO DOCUMENTS RELATING TO REGISTRATION U/S 12A(A) AN D APPROVAL U/S 80-C HAVE BEEN FURNISHED WITH THE RETU RN. BESIDES, THE ACTIVITIES OF THE ASSESSEE WERE NOT VE RIFIABLE IN ABSENCE OF ANY BOOKS OF ACCOUNTS AND OTHER DOCUM ENTS. SO, THE BENEFIT OF EXEMPTION U/S 11 OF THE ACT HAS BEEN DENIED. 6. THE AO HAS ALSO MADE ADDITION OF `11,25,700/- BY OBSERVING AS UNDER:- BALANCE SHEET SHOWS ADDITION . TO THE EXTENT OF RS.1125700/-. IN ABSENCE OF ANY THE DONORS WITH SPECIFIC DIRECTION U/S 11(1)(D). THE CORPUS DONATION CREDITED BY THE ASSESSEE IS TREATED AS INCOME CHARGEABLE TO TAX. 7. FROM THE ABOVE OBSERVATION OF THE AO, IT IS THUS CLEAR THAT THE AO HAS NOT GIVEN THE BENEFIT OF EXEMPTION U/S 11 IN RE SPECT OF EXCESS OF INCOME AS PER INCOME AND EXPENDITURE ACCOUNT AMOUNT ING TO `8,59,493/- BECAUSE OF THE REASON THAT THE ACTIVITI ES OF THE ASSESSEE ITA-3766/DEL/2001 4 WERE NOT VERIFIABLE IN THE ABSENCE OF ANY BOOKS OF ACCOUNT AND OTHER DOCUMENTS. THE AO HAS NOT EXAMINED THE AUDIT REPOR T AND AUDITED COPIES OF ACCOUNT ENCLOSED WITH THE RETURN OF INCOM E TO ASCERTAIN THE ACTIVITIES OF THE ASSESSEE UNDERTAKEN IN THAT YEAR. THE AO HAS ALSO MADE THE ADDITION OF CORPUS DONATION OF `11,25,700/ - IN THE ABSENCE OF EVIDENCE. IT IS THUS CLEAR THAT ALL THESE ADDITION S WERE MADE BECAUSE ASSESSEE FAILED TO PRODUCE THE NECESSARY EVIDENCE I N THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE ASSESSEE MADE AN APPLICATION BEFORE THE LEARNED CIT(A) FOR ADMISSION OF CERTAIN ADDITIONAL EVIDENCES WHICH WERE REFUSED BY THE CIT(A) IN VIEW OF THE FAC T THAT SUFFICIENT OPPORTUNITY WAS GIVEN BY THE AO TO THE ASSESSEE TO FURNISH THE DETAILS. IN THE COURSE OF HEARING OF THIS APPEAL, THE LEARNE D COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE VARIOUS D OCUMENTS INCLUDING THE EVIDENCE OF CORPUS DONATION BY SUBMITTING A LIS T OF DONORS GIVING NAMES, ADDRESSES, MODE OF PAYMENT OF AMOUNT AND ALS O COPY OF RECEIPTS WHICH ARE PLACED AT PAGES 46 TO 95 OF THE PAPER BOOK FILED BY THE ASSESSEE. THE ASSESSEE HAS ALSO FURNISHED BEFO RE US THE COPIES OF INCOME AND EXPENDITURE ACCOUNT FOR THE YEARS 1995-9 6 TO 2004-05. HE HAS ALSO PLACED BEFORE US COPY OF REGISTRATION CERT IFICATE GRANTED U/S 12A. HE HAS ALSO BROUGHT TO OUR NOTICE THAT EXEMPT ION U/S 80G HAS ALSO BEEN GIVEN TO THE ASSESSEE FOR THE PERIOD UPTO 31.3.2004. ALL THESE DETAILS NOW FURNISHED BEFORE US WERE NOT BEFO RE THE AO WHILE MAKING THE ASSESSMENT. THE AO HAD NO OCCASION TO E XAMINE AND VERIFY ALL THESE DETAILS AT THE TIME WHEN HE COMPLE TED THE ASSESSMENT U/S 144 OF THE ACT. IN OUR CONSIDERED OPINION, ALL THESE DETAILS NOW FILED BY THE ASSESSEE BEFORE US ARE RELEVANT TO DECIDE TH E DISPUTE IN ITS RIGHT AND CORRECT PERSPECTIVE SO THAT A CORRECT AND JUST INCOME OF THE ASSESSEE CAN BE DETERMINED UNDER THE PROVISIONS OF THE ACT. WE, THEREFORE, FIND IT PROPER TO RESTORE THE ASSESSMENT BACK TO THE FILE OF THE AO FOR HIS FRESH ASSESSMENT AFTER PROVIDING REA SONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSE SSEE TO COOPERATE ITA-3766/DEL/2001 5 WITH THE AO IN FURNISHING ALL THE DETAILS AND IN CO MPLYING WITH THE REQUIREMENTS OF THE AO. THE ASSESSEE SHALL NOT IND ULGE IN DILATORY TACTICS BY TAKING UNNECESSARY ADJOURNMENTS AND SHAL L COOPERATE WITH THE AO IN FINALIZING THE ASSESSMENT AS PER LAW. WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2011. SD/- SD/- (K.G.BANSAL (K.G.BANSAL (K.G.BANSAL (K.G.BANSAL) )) ) (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI) )) ) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 06.05.2011. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR