ITO, New Delhi V. Sarti Devi Charitable Trust, New Delhi

ITA 4290/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7207 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 02-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Keywords: Charitable institution
• Section: 12A

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH E, NEW DELHI BEFORE : SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 4290/DEL./2015 ASSESSMENT YEAR: 2011-15 INCOME - TAX OFFICER, WARD 2(1), NEW DELHI. (APPELLANT) VS. SARTI DEVI CHARITABLE TRUST, C-101, SAI BABA APARTMENT SECTOR-9, ROHINI, NEW DELHI. PAN - AAKTS3862Q (RESPONDENT) A PPELLANT BY SH. S.R. SENAPATI, SR. DR RESPONDENT BY SH. PIYUSH KUMAR KAMAL & SH. LALIT MOHAN, ADVOCATES. ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-40 (EXEMPTION) DATED 13.04.2015 FOR THE ASSESSMENT YEA R 2011-12 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSES SEE BY IGNORING THE FACT THAT FIGURES PROVIDED IN THE ANNUAL RETURN FIL ED WITH RNI CANNOT BE TERMED AS HYPOTHETICAL AND IMAGINARY FIGURES AS ACC EPTANCE OF THIS CONTENTION OF THE ASSESSEE WILL RESULT IN VIOLATION OF PROVISIONS AND RULES OF PRESS AND REGISTRATION OF BOOK ACT 1867. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSES SEE WITHOUT APPRECIATE THE FACT THAT ASSESSEE HAS HIMSELF QUESTIONED THE A CCURACY OF THE RETURN FILED WITH RNI BY THE ASSESSEE. DATE OF HEARING 26.06.2018 DATE OF PRONOUNCEMENT 06 .07.2018 ITA NO. 4290/DEL./2015 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSES SEE BY IGNORING THE FACT THAT ADDITIONS MADE BY THE AO WERE DULY SUPPOR TED BY SUFFICIENT EVIDENCE AND NOTHING CONCRETE WAS PROVIDED BY THE A SSESSEE DURING ASSESSMENT PROCEEDING EVEN AFTER SUFFICIENT OPPORTU NITIES HAD BEEN PROVIDED. 2. FROM THE FACTS ON RECORD AND ABOVE GROUNDS OF AP PEAL, THE DISPUTE WHICH NEEDS ADJUDICATION IN THIS APPEAL IS WITH RES PECT TO DELETION OF FOLLOWING ADDITIONS MADE BY THE ASSESSING OFFICER : (I). ADDITION OF RS.32,68,850/- AS UNDISCLOSED SAL E CONSIDERATION OF NEWSPAPER. (II). ADDITION OF RS.16,45,270/- AS UNDISCLOSED INC OME FROM ADVERTISEMENT. 3. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE IS A TRUST NOT REGISTERED U/S. 12A OF THE ACT. THE MAIN OBJECT OF THE ASSESSE E TRUST IS STATED TO PROMOTE THE CLASSICAL SANSKRIT LANGUAGE AND HENCE, THE ASSE SSEE STARTED PUBLISHING A SANSKRIT NEWSPAPER IN THE NAME OF VIJAYATE, WHICH STOOD DISCONTINUED DUE TO LACK OF PATRONAGE FROM THE PUBLIC. AS STATED BY THE LD. CIT(A), THE TRUST WAS PROMOTED BY PROF. R.K. RATHI, WHOS IS A SANSKRIT SC HOLAR. THE ASSESSEE FILED ITS RETURN OF INCOME ON 28.09.2011 DECLARING TOTAL LOSS AT RS.39,480/-. THE ASSESSEE DECLARED NET SALE OF SANSKRIT NEWSPAPER AT RS.47,53,030/- AND RECEIPT OF RS.3,60,200/- FROM ADVERTISEMENT AND SPO NSORSHIP. THE LD. ASSESSING OFFICER OBSERVED THAT THERE WAS DIFFERENC E IN THE SALE OF NEWSPAPER SHOWN BY THE ASSESSEE IN ITS ANNUAL RETURN FILED BE FORE THE REGISTRAR OF NEWSPAPERS FOR INDIA (RNI) AND THAT SHOWN IN INCOME & EXPENDITURE ACCOUNT SUBMITTED BEFORE THE ASSESSING OFFICER, INASMUCH AS THE SALE SHOWN BEFORE RNI WAS AT RS.80,21,880/- AS AGAINST THE SALE SHOWN IN INCOME & EXPENDITURE ITA NO. 4290/DEL./2015 3 ACCOUNT AT RS.47,53,030/-. THE ASSESSING OFFICER, T HEREFORE, ADDED THE DIFFERENCE OF RS.32,68,850/- BACK TO THE INCOME OF ASSESSEE AS UNDISCLOSED SALE CONSIDERATION OF NEWSPAPER. 4. THE ASSESSING OFFICER FURTHER NOTICED THAT IN AN NEXURE-X SUBMITTED TO RNI, THE ASSESSEE HAD SHOWN THE INCOME FROM SALE CO NSIDERATION OF NEWSPAPER AND INCOME FROM ADVERTISEMENT IN THE RATI O OF 80% : 20% OF THE TOTAL INCOME. THE ASSESSING OFFICER THEREFORE, WORK ED OUT THE INCOME FROM ADVERTISEMENT AT RS.20,05,470/- AS AGAINST RS.3,60, 000/- ADMITTED BY THE ASSESSEE. HE, THEREFORE, MADE ADDITION OF DIFFERENC E OF RS.16,45,270/- TO THE INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) A FTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE AND THE ADHOC NATURE OF ADDITIONS, ALLOWED THE APPEAL OF THE ASSESSEE VIDE IMPUGNED ORDER. AGGRIEV ED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. DR SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE IMPUGNED ADDITIONS WITHOUT CONSIDERING THE DETAILS OF SALE AND ADVERTISEMENT FURNISHED TO RNI, AS RIGHTLY CONSIDERED BY THE ASSE SSING OFFICER. HE, THEREFORE, URGED FOR RESTORATION OF THE ASSESSMENT ORDER AND T O SUSTAIN THE IMPUGNED ADDITION. 6. THE LD. AR OF THE ASSESSEE REITERATING THE SUBMI SSIONS MADE BEFORE THE LD. CIT(A), SUBMITTED THAT THE LD. CIT(A) WAS JUSTI FIED IN DELETING THE IMPUGNED ADDITIONS MADE BY THE ASSESSING OFFICER WITHOUT ANY MATERIAL ON RECORD. THIS WAS THE FIRST YEAR OF PUBLICATION THAT TOO IN A SPE CIFIC LANGUAGE, I.E., SANKRIT, WHICH WAS NOT PATRONIZED BY THE PUBLIC RESULTING IN TO CLOSURE OF PUBLICATION. THEREFORE, IT IS NOT PROPER TO DETERMINE THE SALE R ECEIPT OF SUCH NEWSPAPER AT ITA NO. 4290/DEL./2015 4 THEIR MRP AS DECLARED IN THE RETURN FILED WITH RNI. HE, THEREFORE, SUBMITTED THAT IMPUGNED ADDITIONS MADE ON THE BASIS OF DETAIL S FURNISHED TO RNI ARE NOT JUSTIFIED AT ALL. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF T HE ASSESSMENT ORDER REVEALS THAT THE MATERIAL, WHICH LED THE ASSESSING OFFICER TO MAKE THE IMPUGNED ADDITIONS, IS THE DETAILS FURNISHED BY THE ASSESSEE IN ITS ANNUAL RETURN FILED WITH RNI. NOW, THE QUESTION ARISES AS TO WHETHER TH E DETAILS FURNISHED BY THE ASSESSEE TO THIRD PARTY WOULD BE JUSTIFIED TO BE CO NSIDERED FOR THE PURPOSE OF ASSESSMENT PROCEEDINGS BY THE INCOME-TAX AUTHORITIE S. IN THIS CONTEXT, WE ARE OF THE OPINION THAT THE ASSESSEES INCOME IS TO BE ASSESSED BY THE ASSESSING OFFICER ON THE BASIS OF THE MATERIAL WHICH IS REQUI RED TO BE CONSIDERED FOR THE PURPOSE OF ASSESSMENT AND ORDINARILY NOT ON THE BAS IS OF THE STATEMENTS WHICH THE ASSESSEE MAY HAVE GIVEN TO A THIRD PARTY UNLESS THERE IS MATERIAL TO CORROBORATE SUCH DETAILS GIVEN TO A THIRD PARTY. TH E MERE FACT THAT THE ASSESSEE HAD DECLARED SUCH OTHER DETAILS TO SOME OTHER DEPAR TMENT/THIRD PARTY, BY ITSELF CANNOT BE TREATED AS HAVING RESULTED IN AN I RREFUTABLE PRESUMPTION AGAINST THE ASSESSEE. IN SUCH SCENARIO, THE BURDEN OF SHOWING THAT THE ASSESSEE HAS UNDISCLOSED INCOME IS ON THE REVENUE, WHICH IN OUR OPINION CANNOT BE SAID TO BE DISCHARGED MERELY REFERRING TO THE STATEMENT OR DETAILS FURNISHED BY THE ASSESSEE TO A THIRD PARTY IN CONNE CTION WITH THE TRANSACTION, THEREBY MAKING SUCH DETAILS TO BE THE SOLE FOUNDAT ION FOR A FINDING THAT THE ASSESSEE HAS NOT DECLARED ITS TRUE INCOME. IN THE I NSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE TRUST TRIED TO PROMOTE TH E CLASSICAL LANGUAGE SANSKRIT BY LAUNCHING A NEWSPAPER IN THAT LANGUAGE. SUCH A N EWSPAPER IN SANSKRIT LANGUAGE IS NOT ORDINARILY SUPPOSED TO BE PATRONIZE D BY PUBLIC AT LARGE AND ITA NO. 4290/DEL./2015 5 THIS WAS THE REASON THAT THE ASSESSEE HAD TO DISCON TINUE ITS PUBLICATION IN THE YEAR UNDER CONSIDERATION ITSELF. IT IS ALSO A THING OF COMMON KNOWLEDGE THAT WHEN A PUBLICATION IS STARTED TO PUBLISH A NEW NEWS PAPER EVEN IN WELL VERSED LANGUAGE, THE PUBLISHERS USUALLY GIVE SUBSTANTIAL D ISCOUNTS IN THE SUBSCRIPTION THEREOF ON THE MRP OF NEWSPAPERS SO AS TO GET PATRO NAGE FROM THE PUBLIC, WHEREAS IN THE INSTANT CASE THE IMPUGNED NEWSPAPER LAUNCHED BY THE ASSESSEE WAS IN SANSKRIT LANGUAGE, WHICH IS NOT WEL L VERSED TO THE PUBLIC AT LARGE. IN SUCH STATE OF AFFAIRS, IN OUR CONSIDERED OPINION, THE ASSESSING OFFICER WAS NOT JUSTIFIED TO DETERMINE AND ENHANCE THE SALE CONSIDERATION OF NEWSPAPER AT ITS MRP AS SHOWN BY THE ASSESSEE IN AN NUAL RETURN FURNISHED TO RNI, PARTICULARLY WHEN HE HAS NOT REFERRED TO ANY O THER MATERIAL TO BELIE THE SALE CONSIDERATION DECLARED BY THE ASSESSEE IN ITS INCOME & EXPENDITURE ACCOUNT. SIMILAR IS THE POSITION WITH RESPECT TO TH E INCOME FROM ADVERTISEMENT SHOWN BY THE ASSESSEE. THE RATIO OF SUCH INCOME APP LIED BY THE ASSESSING OFFICER IS BASED ONLY ON THE DETAILS FURNISHED BY A SSESSEE TO RNI. MOREOVER, THE ADVERTISEMENT INCOME CANNOT BE SUPPOSED TO BE E ARNED ON A PARTICULAR RATIO, BUT IT DEPENDS ON THE RECEIPT OF ADVERTISEME NTS TO BE PUBLISHED. THERE BEING NO MATERIAL ON RECORD TO DISCARD SUCH INCOME SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT, WE DO NOT FIND IT JUSTIFIED T O SUSTAIN INCOME DETERMINED BY THE ASSESSING OFFICER UNDER THIS HEAD. THE ASSES SEE HAS GIVEN THE REASON AS TO WHY HE FURNISHED THE HYPOTHETICAL DETAILS BEFORE THE RNI, BUT THE ASSESSING OFFICER HAS NOT CONSIDERED THE SAME IN RIGHT PERSPE CTIVE, RATHER THE ASSESSING OFFICER HAS LAID MUCH EMPHASIS ON THE PROVISIONS OF PRESS AND REGISTRATION OF BOOKS ACT AND REGISTRATION OF NEWSPAPERS (CENTRAL) RULES. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPINION, THAT THE L D. CIT(A) HAS RIGHTLY DELETED THE IMPUGNED ADDITIONS, HOLDING THEM TO BE MADE ON ADHOC BASIS. WE, ITA NO. 4290/DEL./2015 6 ACCORDINGLY, DO NOT FIND ANY JUSTIFICATION TO INTER FERE WITH THE IMPUGNED ORDER. THE APPEAL OF THE REVENUE, THEREFORE, DESERVES TO F AIL, BEING DEVOID OF MERITS. 8. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JULY, 2018. SD/- SD/- (AMIT SHUKLA) (L. P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6 TH JULY, 2018 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI