ACIT(E), New Delhi V. Care India Solutions for Sustainable Development, New Delhi

ITA 4483/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8814 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 22-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Charitable institution; Rule of consistency; Set aside
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4483/DEL./2016 (ASSESSMENT YEAR : 2012-13) DCIT (E), CIRCLE 1 (1), VS. CARE INDIA SOLUTIONS F OR NEW DELHI SUSTAINABLE DEVELOPMENT, E-46/12, OKHLA INDL. AREA, PHASE II, NEW DELHI 110 020. (PAN : AADCC3639H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, ADVOCATE REVENUE BY : MS. NIDHI SRIVASTAVA, CIT DR DATE OF HEARING : 09.07.2019 DATE OF ORDER : 11.07.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, DCIT (E), CIRCLE 1 (1), NEW DELHI (HERE INAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 02.06.2016 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-40, NEW DELHI QUA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA T HAT :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING TH E APPEAL OF THE ASSESSEE AGAINST DISALLOWANCE IN RESP ECT OF ITA NO.4483/DEL./2016 2 PAYMENT OF FUNDREAMZ AMOUNTING TO RS. 1,07,96,9591- BY IGNORING THE FACT THAT SHORT-TERM LOAN/ADVANCE F ROM FCRA ACCOUNT IS A VIOLATION OF PROVISION OF FCRA GUIDELINES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING TH E APPEAL OF THE ASSESSEE AGAINST DISALLOWANCE IN RESP ECT OF CONSULTANCY FEE TO IPE AMOUNTING TO RS.17,24,06,389 /- BY IGNORING THE FACT THAT AMOUNT WERE RECEIVED BY T HE ASSESSEE AS COMMERCIAL FEE IN ITS ACCOUNTS. IF THE AMOUNT WAS TO BE RECEIVED AS DONATION OR GRANT, THE SAME SHOULD HAVE BEEN RECEIVED THROUGH FOREIGN CONTRIBUTION REGULATION ACCOUNT AFTER OBTAINING PERMISSION FROM THE MINISTRY OF HOME AFFAIRS, GOVERNMENT OF INDIA. 3. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE.ARI~ IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOW ING THE APPEAL OF THE ASSESSEE IN ALLOWING CLAIM OF BEN EFITS U/S 11 &12 OF THE I.T. ACT BY IGNORING THE FACT THA T ASSESSEE ITSELF HAS ACCEPTED THAT IN RESPECT OF PRO JECTS, AS CLAIMED CHARITABLE BY ASSESSEE, THESE PROJECTS A RE NOT FOR UNDERTAKING ANY CHARITABLE ACTIVITY BUT FOR PRO VIDING ANCILLARY PROFESSIONAL SERVICES TO THE AGENCIES / GOVERNMENT DEPARTMENTS IN UNDERTAKING THE CHARITABL E ACTIVITIES. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE, A TRUST REGISTE RED UNDER SECTION 12A OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT ) AND ALSO ACCORDED CERTIFICATE U/S 80G(5)(VI) OF THE ACT, WAS ALLOWED EXEMPTION U/S 11 & 12 OF THE ACT FOR AY 2009-10 ONW ARDS EXCEPT AYS 2011-12 & 2012-13. AO NOTICED THAT THE ASSESSE E TRUST HAS MADE PAYMENT OF RS.2,15,93,918/- TO FUNDREAMZ AS FE E FOR THE REPORTED SERVICES WHICH WAS DISALLOWED BEING UNREAS ONABLE AS PER ITA NO.4483/DEL./2016 3 OBJECT NO.V(5) OF THE MEMORANDUM OF ASSOCIATION OF THE COMPANY AND THEREBY DISALLOWED 50% THEREOF I.E. RS. 1,07,96,959/- AND MADE ADDITION THEREOF TO THE TOTAL INCOME OF TH E ASSESSEE. AO ALSO DISALLOWED 20% OF RS.17,24,06,389/- PAID BY TH E ASSESSEE (CSSID) TO INFRASTRUCTURE PROFESSIONALS ENTERPRISES (IPE) PVT. LTD. WHICH IS 76% OF THE TOTAL EXPENDITURE ON THE GROUND THAT THE ASSESSEE HAS BECOME CLANDESTINE AGENT TO TRANSFER O F FOREIGN FUNDS PERTAINING TO PRIVATE LIMITED COMPANY I.E. IPE. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITIONS BY ALLOWI NG THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE T HE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. AT THE VERY OUTSET, LD. AR FOR THE ASSESSEE BROU GHT TO THE NOTICE OF THE BENCH THAT IMPUGNED ORDER HAS BEEN PA SSED BY THE LD. CIT (A) BY FOLLOWING EARLIER YEARS ORDER OF AY 201 1-12, WHICH HAS BEEN CONFIRMED BY THE COORDINATE BENCH OF THE T RIBUNAL VIDE ORDER DATED 08.03.2019 PASSED IN ITA NO.1248/DEL/20 12 FOR AY ITA NO.4483/DEL./2016 4 2011-12 , THUS THE ISSUE IN CONTROVERSY IS COVERED. THIS F ACT HAS NOT BEEN CONTROVERTED BY THE LD. DR FOR THE REVENUE. 6. COORDINATE BENCH OF THE TRIBUNAL VIDE ORDER DATED 08.03.2019 (SUPRA) CONFIRMED THE ORDER OF LD. CIT (A) ALLOWIN G THE PAYMENT MADE TO FUNDREAMZ FOR RENDERING SERVICES TO THE ASSESSEE AND ALLOWED THE PAYMENT TO IPE FOR CONSULTANCY FEE BY RETURNING FOLLOWING FINDINGS :- 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT DEPARTMENTAL APPEAL HAS NO MERIT. THE ASSESSING OFFICER IN SUBSEQUENT ASSESSMENT YEARS 20 13- 2014 AND 2014-2015 CONSIDERED SIMILAR OBJECTS OF ASSESSEE AND AFTER EXAMINING THE DETAILS FOUND THAT ASSESSEE IS REGISTERED UNDER SECTION 12AA OF THE INCOME-TAX ACT, 1961 AND THAT OBJECTS OF THE ASSESS EE COMPANY ARE CHARITABLE, WITHIN THE MEANING OF SECTI ON 2(15) OF THE INCOME TAX ACT, 1961. THE RETURNED NIL INCOME WAS THUS ACCEPTED. IT IS WELL SETTLED LAW TH AT THOUGH THE PRINCIPLES OF RES JUDICATA DO NOT APPLY TO THE INCOME TAX PROCEEDINGS, BUT, RULE OF CONSISTENCY SH ALL HAVE TO BE APPLIED BY THE INCOME TAX AUTHORITIES. W E RELY UPON DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RADHA SOAMI SATSANG 193 ITR 321 (SC). SINCE , SIMILAR CLAIM OF ASSESSEE FOR EXEMPTION UNDER SECTI ON 11 OF THE I.T. ACT HAVE BEEN ACCEPTED BY THE ASSESS ING OFFICER ON SAME FACTS IN SUBSEQUENT ASSESSMENT YEAR S, THEREFORE, THERE WAS NO JUSTIFICATION TO TAKE A CON TRARY VIEW IN THE PRESENT APPEAL. FURTHER, THE LD. CIT(A) EXAMINED THE ENTIRE ISSUE IN DETAIL AND HAVE GIVEN A SPECIFIC FINDING OF FACT IN FAVOUR OF THE ASSESSEE THAT THE ASSESSEE IS ENGAGED IN THE CHARITABLE ACTIVITIES AN D THAT THE AMOUNT IN QUESTION HAVE BEEN SPENT FOR CHARITAB LE ACTIVITIES. EVEN IF SOME AMOUNT HAVE BEEN RECEIVED BY ASSESSEE, THAT WAS RECEIVED FOR CHARITABLE PURPOSES ONLY AND NO PERSONAL GAIN HAVE BEEN OBTAINED BY THE ASSESSEE COMPANY. THE FINDING OF FACT RECORDED BY T HE LD. CIT(A) HAVE NOT BEEN REBUTTED THROUGH ANY ITA NO.4483/DEL./2016 5 EVIDENCE ON RECORD. WE, THEREFORE, DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(A) IN ALLOWING EXEMPTIO N UNDER SECTION 11 OF THE INCOME TAX ACT, 1961. WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE DEPARTMENT. 7. FOLLOWING THE ORDER PASSED BY THE COORDINATE BEN CH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2011-12 HAVI NG IDENTICAL FACTS, WE ARE OF THE CONSIDERED VIEW THAT WE FIND N O ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT (A). CONSEQUENTLY, THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 11 TH DAY OF JULY, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 11 TH DAY OF JULY, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-40, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.