ITO, Puri Ward, Puri, Puri V. M/s. Ghansyam Hemlata Vidyamandir Society, Puri

ITA 399/CTK/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3791 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B N DAS
• Assessee Lawyers: D K MOHANTY
• Keywords: Unexplained investment; Benefit of exemption
• Section: 142(1); 133(6); 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.399/CTK/2013 ASSESSMENT YEAR : 2008 - 09 INCOME TAX OFFICER, PURI WARD, PURI VS. M/S. GHANSHYAM HEMALTA VIDYAMANDIR SOCIETY, BALIAPANDA, PURI PAN/GIR NO. AAATG 0604 L (APPELLANT ) .. ( RESPONDENT ) C.O. NO.57/CTK/2013 (IN ITA NO.399/CTK/2013) ASSESSMENT YEAR :2008 - 09 M/S. GHANSHYAM HEMALTA VIDYAMANDIR SOCIETY, BALIAPANDA, PURI VS. INCOME TAX OFFICER, PURI WARD, PURI PAN/GIR NO. AAATG 0604 L (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI D.K.MOHANTY REVENUE BY : SHRI B.N.DAS , DR DATE OF HEARING : 31 /05/ 2017 DATE OF PRONOUNCEMENT : 31 /05/ 2017 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A)II, BHUBANESWAR , DATED 30.3.2013 , FOR THE ASSESSMENT YEAR 2008 - 09 . 2 ITA NO.399/CTK/2013 C.O.NO.57/CTK/2013 ASSESSMENT YEAR :2008 - 09 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN ALLOWING EXEMPTION U/S.11 TO THE ASSESSEE WHEN THE ASSESSEE DID NOT MAINTAIN PROPER BOOKS OF ACCOUNT AND THERE WERE VIOLATIONS U/S. 11 (5) AND U/S. 13(1 )(D). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING RS.62,62,539/ - ADDED BY THE AO ON ACCOUNT OF DISCREPANCY IN BANK DEPOSITS ACCOUNT OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) IS NOT JUSTIFIED IN ACCEPTING THE CONTENTIONS OF THE ASSESSEE AND NOT ACCEPTING THE FINDINGS OF THE AO IN VIOLATION OF RULE 46A OF THE IT RULES. 4. THE APPELLANT CRAVES TO ALTER, AMEND OR ADD ANY OTHER GROUND THAT MAY BE CONSIDERED NECESSARY I N COURSE OF THE APPEAL PROCEEDING . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 ON 23.5.1995 AT NEW DELHI AND SUBSEQUENTLY WAS S HIFTED TO PURI. DURING THE FINANCIAL YEAR , THE ASSESS EE BEING AN ASSOCIATION OF PERSONS (AOP) HAS INCOME FROM OTHER SOURCES AGGREGATING TO RS.6,96,23,140/ - AND FILED THE R ETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 ON 29.9.2008 AND CLAIMED EXPENDITURE OF RS.5,22,27,868/ - . SUBSEQUENTLY, THE CASE WAS SELE CTED FOR SCRUTINY AND NOTICES UNDER SECTION 143(2) AND 142(1) WERE ISSUED. THE LD A.R. IN COMPLIANCE TO NOTICES APPEARED BEFORE THE ASSESSING OFFICER FROM TIME TO TIME AND THE ASSES SEE BEING AN AOP ALSO OBTAINED A UDIT REPORT U/S.12A( B) OF THE ACT AND FURNISHED ALONGWITH THE RETURN OF IN COME. THE ASSESSING OFFICER PERUSED THE INCOME AND EXPENDITURE AND BALANCE SHEET AND FOUND 3 ITA NO.399/CTK/2013 C.O.NO.57/CTK/2013 ASSESSMENT YEAR :2008 - 09 THAT THE ASSESSEE HAS MADE ADVANCE PAYMENTS TO VARIOUS PARTIES AND ALSO INCURRED EXPENDITURE IN RESPECT OF MESS AND FOODING EXPENSES AND LD ASSESSING OFFICER RELIED ON PROVISION S OF SECTION 11 & 12 OF THE ACT AND APPLICATION O F SECTION 13(1)(D)OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE S UNDER SECTION 133(6) OF THE ACT TO PERSONS FOR TRANSA CTION IN WORK IN PROGRESS AND VEHICLE HIRE CHARGES E XPENSES AND T HE ASSESSING OFFICER HAS RECEIVED CONFIRMATION S AND INFORMATION OF THE PARTIES AND DISCUSSED IN THE ASSESSMENT ORDER ON THE INVESTMENT S MADE BY THE ASSESSEE WITH THE VARIOUS PARTIES AND DEAL T INDEPENDENTLY ON EACH E XPENSES AND INTEREST INCOME AND MADE ADDITION OF UNEXPLAINED INVESTMENT U/S.69 FOR FIXED DEPOSIT S AND ASSESSED TOTAL INCOME AT RS.2,36,57,710 VIDE ORDER U/S.143(3) ON 30.12.2010. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS, LD A.R. OF THE ASSESSEE APPEARED AND FILED WRITTEN SUBMISSIONS OF FOUR VOLUMES AND THE CIT(A) HAS SENT THE PAPER BOOK S/WRITTEN SUBMISSIONS TO THE ASSE SSIN G OFFICER FOR REMAND REPORT. T HE REMAND REPORT WAS RECEIVED BY THE CIT(A) AND A COPY WAS SUBMI TTED TO THE ASSESSEE TO FILE REJOINDER ON THE COMMENTS OF THE ASSESSING OFFICER. THE LD A.R. ALSO SUBMITTED THAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004 - 05 IN ITA NO.342/CTK/2011 ORDER DATED 21.10.2 011, THE TRIBUNAL HAS DECIDED THE SIMILAR ISSUE. THE CIT(A) CONSIDERED THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004 - 05 AND VOLUMINOUS 4 ITA NO.399/CTK/2013 C.O.NO.57/CTK/2013 ASSESSMENT YEAR :2008 - 09 DOCUMENTS FILED BY THE ASSESSEE, EXAMINED THE REMAND REPORT AN D JUDICIAL DECISIONS. THE CITA) WAS OF THE OPINION THAT THE SOCIETY WAS REGISTERED UNDER SECTION 12A OF THE ACT BY THE DIRECTOR OF INCOME TAX (EXEMPTION), NEW DEL HI AND WAS GRANTED REGISTRATION DATED 11.1.1996 W.E.F. 23.5.1995 . THE RETURN OF INCOME FOR T HE ASSESSMENT YEAR 1996 - 07 WAS FILED FOR THE FIRST TIME CLAIMING EXEMPTION U/S.11 OF THE ACT. THE ASSESSING OFFICER MADE A SCRUTINY ASSESSMENT AND ON CERTAIN CONJECTURES AND SURMISES DENIED THE EXEMPTION U /S.11 OF THE ACT. THE CIT(A) HAS GRANTED EXEMPTIO N AND WHEREAS ON APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 1996 - 97, THE TRIBUNAL UPHELD THE ORDER OF THE CIT(A) IN GRANTING EXEMPTION . F OR THE ASSESSMENT YEAR S 1997 - 98 TO 2003 - 04, THE ASSESSEE WAS ENJOYING THE BENEFIT OF EXEMPTION U/S.11 OF THE ACT WITHOUT ANY INTERRUPTION FROM THE DEPARTMENT BUT FOR THE ASSESSMENT YEAR 2004 - 05, THE ASSESSIN G OFFICER OBSERVED THAT THERE ARE NO PROPER BOOKS OF ACCOUNT MAINTAINED AND WHEREAS VOLUMINOUS INFORMATION WAS SUBMITT ED ALONGWITH LEGER ACCOUNT S IN RELATION TO 41 PARTIES ON WHOM THE ASSESSING OFFICER HAD MADE CERTAIN ADVERSE OBSERVATIONS IN THE ORIGINAL ASSESSMENT. THE THEN CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER AND THE ASSESSEE AGGRIEVED BY THE ORDER F ILED APPEAL BEFORE THE ITAT. THE ITAT IN ITA NO.342/CTK/2011 ORDER DATED 21.10.2011 REFERRED AT PAGES 6 TO 12 OF THE ITAT ORDER ALLOWED THE ASSESSEES APPEAL. 5 ITA NO.399/CTK/2013 C.O.NO.57/CTK/2013 ASSESSMENT YEAR :2008 - 09 5. SIMILARLY, FOR THE ASSESSMENT YEARS 2005 - 06, 2006 - 07 AND 2007 - 08, THE ASSESSEE WAS ENJOYI NG THE BENEFIT OF EXEMPTION U/S.11 OF THE ACT AND THERE WAS NO DISPUTE WHEREAS FOR THE ASSESSMENT YEAR 2008 - 09, THE ASSESSING OFFICER ISSUED SCRUTINY NOTICE AND AFTER VERIFYING THE RECORDS HAS MADE ELABO RATE DISCUSSION REFERRED AT PAR A 4 OF THE ORDER OF T HE CIT(A). WHEREAS THE CIT(A) FOUND THAT THE ASSESSING OFFICER HAS RESORTED TO AN ASSESSMENT WHICH WAS SIMILAR FOR ASSESSMENT YEAR 2004 - 05, MADE ALSO SIMI LAR OBSERVATIONS FOR THE CURRENT ASSESSMENT YEAR. WHEREAS THE CIT(A) HAS DISCUSSED AT PARAS 6 AND 7 OF THE ORDER IN RESPECT OF FINDINGS OF THE ASSESSING OFFICER AND ALSO ON GRANT OF BENEFIT U/S.11 OF THE ACT, WHICH READS AS UNDER: 7.1. THE ONLY POINT FOR DISCUSSION IS WHETHER THERE WAS EVIDENCE TO SHOW THAT PROVISION OF SEC. 11 (5) WERE NOT COMPLIED V /ITH AND HENCE THE APPELLANT WAS GUILTY OF VIOLATION OF SEC.13(1)(D) OF THE I.T. ACT. IN HIS LONG ORDER, THE AO HAS DEVOTED ONLY ONE SMALL PARAGRAPH (PARAGRAPH - 5) FOR THIS DISCUSSION. IT HAS BEEN OBSERVED THAT RS.36,88,927/ - WHICH WAS SHOWN IN THE BALANCE SHEET AS ADVANCES TO SUPPLIES/PARTIES, REPRESENTED THE SUM TOTAL OF DEBIT BALANCES OF 11 PARTIES. THE APPELLANT HAD EXPLAINED EACH OF THESE ADVANCES REGARDING THE PURPOSES. HOWEVER, INSTEAD OF EXAMINING THE PURPOSES, THE AO HAS EMPHASIZED ON THE FACT THAT HE DID NOT RECEIVE ANY CONFIRMATION F ROM 2 PARTIE S U/S.133(6() AND ONE PARTY (A.K. PATTNAIK) CONFIRMED CLO SING BALANCE AT N IL INSTEAD OF RS.12 LAKH SHOWN IN THE APPELLANTS BOOKS. IN MY VIEW THESE ACCOUNTS ALSO SUFFER FROM LACK OF CONCILIATION OF LEDGER ACCOUNTS RATHER THAN VIOLATION OF SEC.11 (5). THE ACCOUNT OF R. A.K. PATTNAIK HAS SINCE BEEN RECONCILED DURING THE REMAND. ON LY BECAUSE THERE WAS NO RESPONSE FROM SOME PARTIES TO THE LETTERS U/S. 133(6) OR THERE WAS NO RECONCILIATION FOR THE ACCOUNT OF ONE PARTY FOR THE CLOSING BALANCE, THE APPELLANT CANNOT BE HELD GUILTY OF VIOLATION OF SEC.13(1)(D). ACCORDINGLY, I DO NOT FIND ANY CASE FOR DENIAL OF BENEFIT U/S.11 TO THE APPELLANT ON SUCH AN ALLEGATION. 6 ITA NO.399/CTK/2013 C.O.NO.57/CTK/2013 ASSESSMENT YEAR :2008 - 09 ACCORDINGLY, THE CIT(A) UNABLE TO ACCEPT THE ALLEGATION AND FINDINGS OF THE ASSESSING OFFICER AND ALLOWED THE APPEAL OF THE ASSESSEE. 6 . AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE HAS FILED APPEAL WITH THE TRIBUNAL. AT THE TIME OF HEARING, LD D.R. ARGUED THAT THE CIT(A) WAS NOT JUSTIFIED IN ALLOWING EXEMPTION TO THE ASSESSEE IRRESPECTIVE OF THE FACT THAT THE ASSESSING OFFICER HAS MADE AN ELABORATE DISCUSSION AND FINDING S IN RESPECT OF THE DEFECTS IN THE BANK DEPOSITS AND THE CIT(A) IS NOT JUSTIFIED IN CONSIDERING THE CONTENTION OF THE ASSESSEE AND VOLUMINOUS PAPER BOOKS AND PRAYED TO SET ASIDE THE ORDER OF THE CIT(A). CONTRA, LD A.R. RELIED ON THE ORDER OF THE CIT(A) AND THE EARLIER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE. 7 . WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE ASSESSEE IS A REGISTERED SOCIETY AND GRANTED EXEMPTION U/S.11 FROM THE ASSESSME NT YEAR 1996 - 97 AND IN ASSESSMENT YEAR 2004 - 05, THE TRIBUNAL ON SIMILAR SET OF ISSUES GRANTED RELIEF TO THE ASSESSEE. ON A QUERY FROM THE BENCH TO LD D.R. WHY THE REVENUE HAS NOT DISPUTED THE RELIEF ALLOWED FOR THE ASSESSMENT YEARS 2005 - 06, 2006 - 07 AND 20 07 - 08, THERE WAS NO SATISFACTORY AND CONVINCING ANSWER FROM THE REVENUE . PRIMA FACIE, ON THE FACTS, IT APPEARS THAT THE REVENUE HAS ACCEPTED THE FINANCIAL STATEMENTS FROM THE ASSESSMENT YEARS 1996 - 97 AND FOR THE ASSESSMENT YEAR 2004 - 05 BASED ON ITAT ORDE R AND 7 ITA NO.399/CTK/2013 C.O.NO.57/CTK/2013 ASSESSMENT YEAR :2008 - 09 THERE IS NO DISPUTE IN RESPECT FOR THE ASSESSMENT YEARS 2005 - 06 TO 2007 - 08. WE ARE OF THE VIEW THA T THE ASSESSEE IS COMPLYING THE P ROVISIONS OF INCOME TAX AND THE OBJECTS OF THE SOCIETY WHICH IS NOT DISPUTED BY THE ASSESSING OFFICER. WE ARE OF THE OPINION THAT THE CIT(A) HAS DISCUSSED ELABORATELY AND FORWARDED THE FOUR VOLUMES OF THE WRITTEN SUBMISSIONS TO THE ASSESSING OFFICER AND REMAND REPORT WAS OBTAINED FROM THE ASSESSING OFFICER AND C OPY WAS FORWARDED TO THE ASSESSEE FOR FILING THE REJOINDER. PRIMA FACIE, THE CIT(A) HAS CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AND OPINED THAT THE ASSESSEE HAS NOT CONTRAVENED THE PROVISIONS OF SECTION 13(1)(D) OF THE ACT . WE, IN THE INTERE ST OF JUSTICE, FOLLOWING THE JUDICIAL PRECEDENCE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004 - 05,WHEREIN, THE TRIBUNAL HAS ALLOWED THE APPEAL OF THE ASSESSEE GRAN TING EXEMPTION U/S.11 OF THE ACT. ACCORDINGLY , ARE NOT INCLINED TO THE INTERFERE WITH THE ORDER OF THE CIT(A), WHO HAS CONSIDERED THE FACTS, PROVISIONS OF LAW, REMAND REPOR T OF THE ASSESSING OFFICER AND A LLOWED EXEMPTION U/S.11 OF THE ACT AND HOLD THE SAME AND DISMISS THE GROUND O F APPEAL OF THE REVENUE 8 . THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE CIT(A). SINCE WE HAVE UPHELD THE FINDINGS AND THE ORDER OF THE CIT(A), IN REVENUES APPEAL, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND IS DISMISSED. 8 ITA NO.399/CTK/2013 C.O.NO.57/CTK/2013 ASSESSMENT YEAR :2008 - 09 9 I N THE RESULT, APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. OR DER PRONOUNCED ON 31 /05/ 2017 SD/ - SD/ - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 31 /05/2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : INCOME TAX OFFICER, PURI WARD, PURI 2. THE RESPONDENT. /S. GHANSHYAM HEMALTA VIDYAMANDIR SOCIETY, BALIAPANDA, PURI 3. THE CIT(A) - II, BHUBANESWAR 4. PR.CIT - II , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//