People's Awareness and Hilly Area Development (PAHAD), Kandhamala V. DCIT, Berhampur Circle, Berhampur

ITA 470/CTK/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7168 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 31-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: NIRANJAN MISHRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.470 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 PEOPLES AWARENESS AND HILLY AREA DEVELOPMENT (PAHAD, SUDRUKUMPA, PHULBANI, KANDHAMAL. VS. DCIT, BERHAMPUR CIRCLE, BERHAMPUR/INCOME TAX OFFICER (EXEMPTION) BERHAMPUR PAN/GIR NO. AAAAP 6193 J (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI NIRANJAN MISHRA, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 22 /03 / 2017 DATE OF PRONOUNCEMENT : 22 /03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSES SEE AGAINST THE ORDER OF CIT(A) - 3, BHUBANESWAR, DATED 9.8.2015 FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT( A) ERRED IN CONFIRMING THE ADDITION OF RS.9,16,535/ - MADE BY THE ASSESSING OFFICER . 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OF FICER FOUND THAT THE ASSESSEE HAS SHOWN TOTAL 2 ITA NO.470 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 RECEIPTS OF RS.15,76,980/ - IN THE INCOME AND EXPENDITURE ACCOUNT. THE ASSESSEE HAS DEBITED EXPENSES UNDER DIFFERENT HEADS FOR RS.14,76,267 AND HAS SHOWN EXCESS INCOME OVER EXPENDITURE OF RS.1,00,713/ - . THE AS SESSING OFFICER, DUE TO NON - COMPLIANCE OF THE ASSESSEE WITH THE NOTICES, ALLOWED DEDUCTION ONLY FOR ADMINISTRATIVE EXPENSES AND DISALLOWED BALANCE EXPENDITURE OF RS.14,59,460/ - AND ASSESSED THE ASSESSEE TO TAX ON THE SAID AMOUNT AS AN AOP. 4. ON APPEAL, IT WAS SUBMITTED THAT THE GRANT - IN - AID AS PER THE INCOME & EXPENDITURE ACCOUNT IS RS.12,26,515/ - AND AS PER RECEIPTS & PAYMENT ACCOUNT IS RS.20,46,200/ - . THE DIFFERENCE AMOUNT OF RS.9,16,535/ - WAS UNSPENT GRANT FOR UTILIZATION IN SUBSEQUENT YE AR AND THIS BEING A TEMPORARY RESTRICTED FUND, WAS NOT INCOME OF THE ASSESSEE. THE CIT(A) OBSERVED THAT THE ASSESSEE DID NOT FILE FORM NO.10 AS REQUIRED UND ER RULE 17 READ WITH SECTION 11( 2) ALONGWITH RETURN OF INCOME . THE APPELLANT HAS NOT FILE D IT EVEN IN THE C OURSE OF REMAND PROCEEDINGS. FILING OF FORM NO.10 BEFORE THE ASSESSING OFFICER IS MANDATORY AND WITHOUT PARTICULARS OF INCOME TO BE EXCLUDED AND SET APART FOR ACCUMULATION, THE ASSESSING OFFICER CANNOT ENTERTAIN THE CLAIM OF THE ASSESSEE U/S.11 O F THE ACT. THE CIT(A) FURTHER OBSERVED THAT THE UNSPENT GRANTS RELATES TO GRANT RECEIVED FROM THE PROJECTS CARE, WFP, ACA, AHVY. RESTRICTED GRANTS RECEIVED IS NOT A VOLUNTARY CONTRIBUTION IF GRANT COMES AS LEGAL OBLIGATION BACKED BY A LEGALLY ENFORCEABLE CONTRACT. IN THE ASSESSEES CASE, THE ASSESSEE FAILED TO PRODUCE THE LEGAL OBLIGATIONS THEREON BACKED BY LEGALLY ENFORCEABLE CONTRACT IN ANY 3 ITA NO.470 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 PROCEEDINGS UNDER THE ACT AND IN ABSENCE OF LEGAL OBLIGATIONS ATTACHED WITH SUCH SPECIFIC GRANTS/CONTRIBUTION, THE CIT(A) HELD THAT THE RESTRICTED GRANT AMOUNTING TO RS.9,16,535/ - IS VOLUNTARY CONTRIBUTION SUBJECT TO PROVISIONS OF UTILIZATION AND APPLICATION AS PER PROVISIONS OF LAW AND CONFIRMED THE ADDITION OF RS.9,16,535/ - . 5. BEFORE ME, LD AUTHORISED REPRESENT ATIVE OF THE ASSESSEE ARGUED AND SUBMITTED THAT THE ADDITION OF RS.9,16,535/ - WAS CONFIRMED BY THE CIT(A) ON THE GROUND THAT THE RESTRICTED CONDITIONS ON THE GRANT OF RS.9,16,535/ - WAS NOT PROVED BY FILING EVIDENCE BEFORE HIM. HE FILED AN AFFIDAVIT CONTEN DING THAT THAT TWO LETTERS OF MINISTRY OF TEXTILES, GOVERNMENT OF INDIA BOTH DATED 21.8.2009 FOR RS.5,43,000/ - AND RS.4,50,000/ - TOTALING TO RS.9,93,000/ - WERE NOT AVAILABLE TO BE PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS AND ALSO PROCEEDINGS BEFORE THE CIT(A). HENCE, HE PRAYED THAT MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER CONSIDERING THESE EVIDENCES. 6. LD DEPARTMENTAL REPRESENTATIVE HAD NO OBJECTION FOR THE SAME. 7. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) AS THE ASSESSEE FAILED TO PRODUCE THE GRANT LETTERS RECEIVED FROM THE MINISTRY OF TEXTILES , GOVERNMENT OF INDIA BEFORE THEM FOR THE RESTRICTED CONDITIONS. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS NOW FILED BEFORE ME COPIES OF THE SAID GRANT LETTERS BOTH DATED 21.8.2009. IN MY CONSIDERED VIEW, NO HARM WILL BE CAUSED IF ONE MORE OPPORTU NITY IS 4 ITA NO.470 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 ALLOWED TO THE ASSESSEE TO PRODUCE BOTH THE GRANT LETTERS ISSUED BY MINISTRY OF TEXTILES , GOVERNMENT OF INDIA FOR FRESH ADJUDICATION BY THE ASSESSING OFFICER. I, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND RESTORE THE MATTER BACK TO T HE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER CONSIDERING THE GRANT LETTERS FURNISHED BY THE ASSESSEE AS PER LAW. 8. IN THE RESULT, THE APPEAL F ILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 22 /03 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 2 2 /03 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : PEOPLES AWARENESS AND HILLY AREA DEVELOPMENT (PAHAD, SUDRUKUMPA, PHULBANI, KANDHAMAL. 2. THE RESPONDENT. DCIT, BERHAMPUR CIRCLE, BERHAMPUR/INCOME TAX OFFICER (EXEMPTION) BERHAMPUR - . 3. THE CIT(A) 3, BHUBANESWAR 4. PR.CIT - 3, BHUBANESWAR . 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//