SATNAM SINGH MEMORIAL TRUST, JALANDHAR V. INCOME TAX OFFICE WARD-III(2), JALANDHAR

ITA 478/ASR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7082 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 24-04-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 18-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ROHIT BHARDWAR
• Keywords: Charitable institution; Additional evidence
• Section: 143(3); 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 478/ASR/2017 A SSESSMENT YEAR: 2010-11 SATNAM SINGH MEMORIAL TRUST, 611-R MODEL TOWN, JALANDHAR [PAN: AADTS 2243J] VS. INCOME TAX OFFICER, (EXEMPTIONS), JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ROHIT BHARDWAR (AD V.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 24.04.2019 DATE OF PRONOUNCEMENT: 19.07.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, JALANDHAR ( 'CIT(A)' FOR SHORT) DATED 19.04.2017, DISMISSING THE ASSESSEES APPEAL CONTES TING ITS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) DATED 28.3.2013 FOR THE ASSESSMENT YEAR (AY) 2010-11. 2.1 IT SHALL BE NECESSARY TO RECOUNT THE BACKGROUND FACTS OF THE CASE. THE ASSESSEE, A TRUST REGISTERED AS A CHARITABLE INSTIT UTION U/S. 12AA OF THE ACT, FILED ITS RETURN OF INCOME FOR THE RELEVANT YEAR ON 14.10.201 0, AT NIL INCOME; ITS OPERATING STATEMENT REFLECTING A LOSS OF RS. 29,530 (PB PG. 3 ). EXAMINING THE SAME IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) FOUND THAT WHILE EXPENDITURE AGGREGATING TO RS.18,29,435, I.E., ON ELECTRICITY, SALARY, BONUS AND EPF, WAS ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 2 PROPERLY VOUCHED, THE BALANCE EXPENDITURE OF RS.18, 03,397 THE TOTAL EXPENDITURE CLAIMED PER THE INCOME & EXPENDITURE ACCOUNT BEING AT RS. 36,32,832, WAS NOT VERIFIABLE. THE ASSESSEE HAD, DESPITE ABUNDANT OPPO RTUNITY, FAILED TO PRODUCE THE BOOKS OF ACCOUNT, OR EVEN THE VOUCHERS IN SUPPORT O F THE CLAIM FOR EXPENDITURE TO THAT EXTENT. HE, ACCORDINGLY, DISALLOWED FIFTY PER CENT. (50%) THEREOF, I.E., RS. 9,01,699, ASSESSING THE INCOME FOR THE RELEVANT YEA R AT RS. 8,72,169 (RS. 9,01,699 RS.29,530), RELYING ON THE DECISION IN SAFDARJUNG ENCLAVE EDUCATIONAL SOCIETY V. MUNICIPAL CORPORATION OF DELHI [1990] 181 ITR 154 (DEL). IN APPEAL, THE LD. CIT(A), AFTER SEEKING A REMAND REPORT, CONFIRMED TH E SAME, HOLDING AS UNDER: 5.6. HAVING CONSIDERED THE SUBMISSIONS MADE IN THI S REGARD AND MATERIAL AVAILABLE ON RECORD, I FIND THAT THE APPELLANT HAS NOT BEEN A BLE TO PRODUCE ANY EVIDENCE TO SUBSTANTIATE THE CLAIM OF EXPENSES IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. FURTHER, I FIND THAT IN THE COURSE OF REMAND PROCEEDINGS THE APPELLANT HAS AGAIN FAILED TO FURNISH ANY EVIDENCE TO SUPPORT THE CLAIM OF HAVING INCURRED THE EXPENSES . THE APPELLANT HAS ONLY MADE HOLLOW SUBMISSIONS WITH OUT BOTHERING TO FILE THE EVIDENCE DESPITE HAVING BEEN PROVIDED SPECIFIC OPPO RTUNITY TO DO SO. THE INCOME OF THE TRUST IS EXEMPT BUT IT IS SUBJECT TO MAINTAININ G COMPLETE BOOKS OF ACCOUNT WITH SUPPORTING DOCUMENTS AND THESE BOOKS HAVE TO BE DUL Y AUDITED. THIS EXEMPTION OF INCOME DOES NOT MEAN MAKING A CLAIM OF EXPENSES WHI CH HAVE NOT BEEN INCURRED AND FOR WHICH NO SUPPORTING DOCUMENTS/VOUCHERS COULD BE FILED EITHER AT THE ASSESSMENT STAGE OR AT THE APPELLATE STAGE . 5.7 IN VIEW OF THE ABOVE FACTS, I HOLD THAT (THE) A O WAS FAIR AND JUSTIFIED IN MAKING A DISALLOWANCE OF ONLY 50% OF THE EXPENSES C LAIMED FOR WHICH NO CORRESPONDING VOUCHERS/DOCUMENTS COULD BE PRODUCED. ACCORDINGLY, I CONFIRM THE DISALLOWANCE OF RS. 9,01,699 MADE BY THE AO UNDER T HIS HEAD. (EMPHA SIS, SUPPLIED) AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL, RAISIN G THE FOLLOWING GROUNDS: ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 3 1. THAT NO NOTICE OF DEMAND VALID IN LAW HAS BEEN SERVED UPON THE APPELLANT. 2. THAT THE LD. INCOME TAX OFFICER HAS ERRED IN MAK ING THE IMPUGNED ADDITION OF RS. 9,01,699/- ON CONJECTURES AND SURMISES. 3. THAT WHILE MAKING THE IMPUGNED ADDITION OF RS. 9 ,01,699/-, THE LD. INCOME TAX OFFICER HAS FAILED TO POINT OUT EVEN A SINGLE DEFEC T IN THE RELEVANT ACCOUNTS AND FAILED TO APPRECIATE THE FACTUAL ASPECTS OF THE CASE. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) AND LD. INCOME TAX OFFICER FAILED TO APPRECIATE THE FACT OF THE CASE WHERE THE ASSESSEE FILED FOR BOOKS OF ACCOUNT AND VOUCHERS UNDER RULE 46A AND NOT ALLOWING THE AS SESSEE FILE THE DOCUMENTS AT THE TIME OF THE APPEAL PROCEEDINGS AND FINALIZING THE O RDER IN SUDDEN RUSH WITHOUT PROPER OPPORTUNITY TO THE ASSESSEE. 5. THAT DESPITE BEING THE CASE OF A HOSPITAL, THE L D. ITO HAS ERRED IN NOT ALLOWING EXEMPTION OTHERWISE ADMISSIBLE UNDER THE PROVISION OF SEC. 10(23)(IIIAE) OF THE ACT. 6. THAT THE APPELLANT HEREBY SPECIFICALLY MAKES THE CLAIM FOR EXEMPTION OF ITS INCOME UNDER THE PROVISION OF SEC. 10(23C)(IIIAE) OF THE A CT AT THE STRENGTH IN THE CASE OF M/S. JUTE CORPORATION OF INDIA LTD. V. COMMISSIONER OF I NCOME TAX & ANR. (SC) DECIDED ON 04.09.1990 AND REPORTED AT 1991 AIR 241, 1990 SC R SUPL. (1) 340 AND 1991 SCC SUPPL. (2) 744 IT 1990 346. 7. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) ERRED WHILE NOT DEALING THE APPLICATION OF THE ASSESSEE UNDER RULE 46A. 8. THAT THE APPELLANT STRONGLY OBJECTS TO THE INCOM E ASSESSED AND THE FURTHER DEMAND ON ACCOUNT OF TAX AND INTEREST DETERMINED THEREON. 9. THAT THE LD. INCOME TAX OFFICER HAS ERRED IN CHA RGING INTEREST UNDER SECTION 234A, B, C AND D. 10. THAT THE LD. DY. CIT HAS ERRED IN INITIATING PE NALTY PROCEEDINGS BY ISSUE OF PENALTY NOTICE UNDER SEC. 271(L)(C). 2.2 BEFORE THE TRIBUNAL, THE ASSESSEES PRINCIPAL C ONTENTION (THROUGH ITS COUNSEL, SH. BHARDWAR), WAS THAT THE LD. CIT(A) HAD FAILED T O ADJUDICATE GROUND 4 OF THE ASSESSEES APPEAL BEFORE HIM, WHICH READS AS UNDER: 4. THAT DESPITE BEING THE CASE OF A HOSPITAL, THE LD. ITO HAS ERRED IN NOT ALLOWING EXEMPTION OTHERWISE ADMISSIBLE UNDER THE PROVISION OF SEC. 10(23C)(IIIAE) OF THE ACT. ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 4 THE MATTER, ACCORDINGLY, BE REMITTED BACK TO THE FI LE OF THE FIRST APPELLATE AUTHORITY FOR THE SAME. THE ASSESSEES RECEIPT FOR THE RELEVA NT YEAR, IT WAS ARGUED BY SH. BHARDWAR, DRAWING ATTENTION TO THE INCOME AND EXPEN DITURE STATEMENT (PB PGS. 3), IS AT RS.34.88 LACS, I.E., MUCH BELOW THE PRESCRIBE D LIMIT U/S. 10(23C)(IIIAE) (WHICH IS, U/R. 2BC, AT RS.100 LACS). IN THE ALTERNATIVE, HE WOULD ADD, THE FACTS BEING ADMITTED, AND THE ISSUE BEING LEGAL, EXEMPTION U/S. 10(23C)(IIIAE) BE ALLOWED BY THE TRIBUNAL. HE COULD NOT ANSWER THE QUESTION POSE D BY THE BENCH AS TO HOW DOES THE ASSESSEE JUSTIFY ITS EXISTENCE FOR PHILANTHROP IC PURPOSES, AND NOT FOR THE PURPOSES OF PROFIT, THE TWO, MUTUALLY CONSISTENT, C ONDITIONS PRECEDENT FOR THE GRANT OF BENEFIT U/S. 10(23C)(IIIAE), I.E., COULD NOT FUR NISH ANY ANSWER, MUCH LESS SATISFACTORY. THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) WOULD SUBMIT THAT THE LD. CIT(A) HAS ALSO CONSIDERED THE ASSESSEES CLAIM U/S . 10(23C)(IIIAE), REFERRING TO PARA 5.5 OF HIS ORDER, I.E., EVEN AS HE MAY NOT HAV E EXPLICITLY STATED SO IN HIS ADJUDICATION, WHICH ACCORDINGLY COVERS THE ASSESSEE S CLAIM THEREUNDER AS WELL. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. 3.1 AS APPARENT FROM THE FORE-GOING, THE FOLLOWING QUESTIONS ARISE FOR DETERMINATION: (A) WHETHER THE ASSESSEE HAD VALIDLY RAISED THE QUESTIO N OF EXEMPTION U/S. 10(23C)(IIIAE) BEFORE THE FIRST APPELLATE AUTHORITY FOR THE FIRST TIME, I.E., IN THE FACTS AND CIRCUMSTANCES OF THE CASE; (B) ASSUMING A VALID RAISING BEFORE THE LD. CIT(A), HAS HE ADJUDICATED THE SAME AND, IF SO, THE MERITS OF THE SAID ADJUDICATION; (C) WHETHER THE ASSESSEES CLAIM U/S. 10(23C)(IIIAE), E VEN ASSUMING AS NOT RAISED BEFORE THE LD. CIT(A), OR NOT DECIDED BY HIM , COULD BE RAISED BEFORE THE TRIBUNAL, THE SECOND APPELLATE AUTHORITY, FOR T HE FIRST TIME, I.E., IN VIEW OF THE ASSESSEES ALTERNATE PLEA; AND (D) IN ANY CASE, IS THE DISALLOWANCE, AS EFFECTED, EXCE SSIVE. ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 5 3.2 I SHALL BEGIN WITH QUESTION (B). THIS IS AS IF THE LD. CIT(A) HAS ANSWERED THE ASSESSEES GROUND 4 BEFORE HIM, QUESTION (A) BECOME S FACILE AS WELL AS FUTILE; THE ONLY QUESTION SURVIVING IN THAT CASE BEING THE MERI TS OF THE SAID ADJUDICATION. VIDE PARA 5.5 OF HIS ORDER, THE LD. CIT(A) CLEARLY NOTES THE ASSESSEES CLAIM U/S. 10(23C)(IIIAE). HE WAS, THUS, CLEARLY CONSCIOUS OF THE ASSESSEES SAID CLAIM WHILE DECIDING ITS APPEAL. THE FINDINGS BY THE LD. CIT(A ) STAND REPRODUCED HEREINBEFORE. IN MY CLEAR VIEW, THOUGH HE HAS NOT EXPLICITLY STAT ED OF THE ASSESSEE BEING NOT ENTITLED TO RELIEF U/S. 10(23C)(IIIAE), HIS ADJUDIC ATION COVERS THE ASSESSEES SAID CLAIM AS WELL. THE REASON IS SIMPLE. THE ASSESSEE H AS, DESPITE SUFFICIENT OPPORTUNITY, BOTH AT THE ASSESSMENT AND THE FIRST A PPELLATE STAGE WHICH INCLUDED REMAND PROCEEDINGS AS WELL, BEEN UNABLE TO SUBSTANT IATE ITS CLAIM OF HAVING INCURRED EXPENDITURE FOR RS.18.03 LACS, BOOKED UNDE R VARIOUS ACCOUNT HEADS, WHICH BEING THEREFORE UNVERIFIABLE, WAS ESTIMATED AS INFL ATED AT 50% THEREOF, I.E., DOES NOT REPRESENT EXPENDITURE INCURRED BY THE ASSESSEE. IT IS IN VIEW THEREOF THAT HE HOLDS (VIDE PARA 5.7 OF HIS ORDER) OF THE AO BEING FAIR A ND JUSTIFIED IN MAKING A DISALLOWANCE OF ONLY 50% OF THE EXPENSES CLAIMED FO R WHICH NO CORRESPONDING VOUCHERS/DOCUMENTS COULD BE PRODUCED, HAVING EARLIE R (IN PARA 5.6) NOTED THE SAID FAILURE TO OBTAIN AT THE APPELLATE STAGE AS WELL. UNVERIFIABLE EXPENDITURE, IT MAY BE APPRECIATED, BY DEFINITION IMPLIES THAT THE ASSESSEE IS UNABLE TO SHOW THAT THE SAME HAD INDEED BEEN INCURRED, MUCH LESS FOR THE OBJECTS OF THE TRUST/SOCIETY. HOW, ONE MAY ASK, AN ENTITY, BEING IN FACT IMBUED WITH PUBLIC CHARACTER, UNABLE TO ACCOUNT FOR FUNDS TO THE EXTENT OF RS. 18.03 LACS, COULD BE SAID TO EXIST FOR PHILANTHROPIC PURPOSES? IN FACT, IN THE ABSENCE OF BOOKS OF ACCOUNT, IT IS DIFFICULT TO SAY THAT EXPENDITURE TO THAT EXTENT WAS EVEN BOOKED. THAT IS, THOUGH STATED AS AN EXPENSE, COULD NOT BE SHOWN TO BE SO, SO THAT, BY NECESSARY IMPLICATION, THE AMOUNT STANDS SIPHONED O FF . COULD THE ASSESSEE, THUS, BE ALLOWED EXEMPTION EITHER U/S. 11(1), OR U/S. 10(23C )(IIIAE) FOR THAT MATTER? OR AT ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 6 LEAST QUA MONIES, ADMITTEDLY AVAILABLE WITH IT, AND NOW NO L ONGER SO, EVEN AS THE SAME COULD NOT, DESPITE ABUNDANT OPPORTUNITY, BE SH OWN TO HAVE BEEN SPENT FOR RUNNING THE HOSPITAL, I.E., THE STATED PURPOSE FOR WHICH THE SAME ARE CLAIMED TO HAVE BEEN SPENT/INCURRED. THE ANSWER TO THIS QUESTION WO ULD CLEARLY BE IN THE NEGATIVE. NO DOUBT, SH. BHARDWAR, ON BEING ASKED DURING HEARI NG, ADMITTED THAT THE SAID MONEYS TO THE EXTENT DEEMED NOT SPENT (RS.9.02 LACS ) COULD NOT BE APPLIED FOR CHARITABLE PURPOSES IN FUTURE. IT IS, IN FACT, FOR THIS VERY REASON THAT SECTION 11(4) CLEARLY PROVIDES THAT THE INCOME OF A CHARITABLE IN STITUTION ASSESSED IN EXCESS OF THAT SHOWN IN THE ASSESSEES ACCOUNTS, IS TO BE DEE MED AS APPLIED FOR OTHER THAN CHARITABLE PURPOSES. SURE, THOUGH THE DEEMING IS AP PLICABLE WHERE THE PROPERTY HELD UNDER TRUST IS A BUSINESS UNDERTAKING, THE QUE STION IS HOW COULD MONEY, OSTENSIBLY AND ADMITTEDLY SPENT, POSSIBLY BE EXPEND ED OR APPLIED AGAIN, EVEN AS NOTED BY THE TRIBUNAL IN MAHARAJA RANJIT SINGH WAR MUSEUM SOCIETY V. ITO (IN ITA NO. 618/ASR/2017, DATED 28.8.2018). THE ASSESSEE HAS NO CASE ON MERITS, HAVING BEEN IN FACT ALLOWED ABUNDANT OPPORTUNITY BOTH AT THE ASSESSMENT AND THE FIRST AP PELLATE STAGE. NO CONTENTION IN THIS REGARD WAS IN FACT MADE BEFORE ME DURING HEARI NG, NOR ANY ARGUMENT, MUCH LESS MATERIAL, LED TO REBUT THE DEFINITE FINDINGS B Y THE LD. CIT(A). THIS IS APART FROM THE FACT THAT AN INCOME OF RS.7.57 LACS (I.E., RS. 8.72 LACS LESS MISCELLANEOUS INCOME OF RS. 1.15 LACS), ON A TOTAL RECEIPT OF RS. 34.88 LACS, ONLY IMPLIES THE HOSPITAL TO BE RUN ON COMMERCIAL LINES, I.E., AS A BUSINESS VENTURE, SO AS TO BE REGARDED AS A BUSINESS UNDERTAKING. HOWEVER, BEING INCIDENTAL TO THE ATTAINMENT OF THE OBJECTS OF THE TRUST/SOCIETY, I.E., MEDICAL REL IEF, A CHARITABLE PURPOSE BY DEFINITION, ITS INCOME WOULD, SUBJECT TO THE CONDI TIONS OF SECTION 11 TO 13, BE EXEMPT U/S. 11(1), EVEN AS CLARIFIED PER A NUMBER O F DECISIONS, AND TOWARD WHICH REFERENCE BE MADE TO THE DECISION BY THE TRIBUNAL I N LORD SHIVA EDUCATIONAL WELFARE SOCIETY V. CIT(E) (IN ITA NO. 605/ASR/2017, DATED 10.09.2018), RENDE RED ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 7 WITH REFERENCE TO A HOST OF DECISIONS BY THE HONBL E APEX COURT AS WELL AS BY THE HONBLE JURISDICTIONAL HIGH COURT, AS IN PINE GROUP INTERNATIONAL CHARITABLE TRUST V. UNION OF INDIA [2010] 327 ITR 273 (P&H). THE CONDITION WITH REGAR D TO S. 10(23C)(IIIAE) IS, HOWEVER, DIFFERENT, I.E., THE AS SESSEE IS TO BE SHOWN TO EXIST SOLELY FOR PHILANTHROPY AND NOT FOR PROFIT. MUCH LESS THIS BEING SHOWN, WHICH ARE MATTERS OF FACT, FOR ITS CLAIM UNDER THE SAID PROVISION CO NSIDERED, MONIES TO THE EXTENT OF RS. 18.03 LACS BELONGING TO THE ASSESSE-TRUST COULD NOT BE SHOWN TO HAVE BEEN, AS CLAIMED, EXPENDED FOR THE PURPOSES OF ITS OBJECTS. FUNDS TO THAT EXTENT, ADMITTEDLY NOT AVAILABLE, ARE THUS UNACCOUNTED FOR; THE ASSESS EE BEING UNABLE TO ACCOUNT FOR THE SAME THE STATED MANNER OF ACCOUNTING BEING UN PROVED. THE SAME WOULD IMPINGE ADVERSELY BOTH ON ITS CLAIM U/S. 11 AS WELL AS S. 10(23C)(IIIAE). THE ASSESSEE, AND IN FACT NOT SURPRISINGLY, DOES NOT DI SPUTE THE DENIAL OF THE CLAIM U/S. 11, RAISING AN ALTERNATE CLAIM U/S. 10(23C)(IIIAE). IN FACT, THE FUNDS TO THAT EXTENT CAN ONLY BE REGARDED AS SIPHONED OFF, TO THE SAME C ONSEQUENCE, I.E., AS FAR AS THE ASSESSMENT PROCEEDINGS ARE CONCERNED. QUESTION (B) IS ANSWERED ACCORDINGLY. 3.3 IF, HOWEVER, IT IS ASSUMED THAT THE LD. CIT(A) HAS NOT ADJUDICATED THE ASSESSEES CLAIM U/S. 10(23C)(IIIAE), IN MY VIEW, T HE SAID ISSUE COULD NOT BE RAISED BEFORE HIM, GIVEN THAT THE FACTS NECESSARY FOR ADJU DICATING THE SAME ARE NOT BORNE OUT BY THE RECORD, AND, IN ANY CASE, NOT UNDISPUTED . THIS, THOUGH, IN VIEW OF THE EXAMINATION ON MERITS (PER PARA 3.2), IS NOT REQUIR ED, AND IS CONSIDERED ONLY FOR THE SAKE OF COMPLETENESS OF THIS ORDER. SECTION 10(23C)(IIIAE) READS AS UNDER: INCOMES NOT INCLUDED IN TOTAL INCOME. 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR O F ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOWING CLAUSES SHALL NOT BE IN CLUDED (1).. ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 8 (23C) ANY INCOME RECEIVED BY ANY PERSON ON BEHALF O F (IIIAE) ANY HOSPITAL OR OTHER INSTITUTION FOR THE R ECEPTION AND TREATMENT OF PERSONS SUFFERING FROM ILLNESS OR MENTAL DEFECTIVENESS OR FOR THE REC EPTION AND TREATMENT OF PERSONS DURING CONVALESCENCE OR OF PERSONS REQUIRING MEDICAL ATTEN TION OR REHABILITATION, EXISTING SOLELY FOR PHILANTHROPIC PURPOSES AND NOT FOR PURPOSES OF PROF IT , IF THE AGGREGATE ANNUAL RECEIPTS OF SUCH HOSPITAL OR INSTITUTION DO NOT EXCEED THE AMOU NT OF ANNUAL RECEIPTS AS MAY BE PRESCRIBED, OR (EMPHASIS, SUPPLIED) AS AFORE-NOTED, AN ASSESSEE HAS TO BE SHOWN TO BE E XISTING FOR, AND ONLY FOR, PHILANTHROPIC PURPOSES AND NOT FOR PROFIT, TO BE ENTITLED TO EXEMPTION ON ITS INCOME U/S. 10(23C)(IIIAE). MUCH LESS THIS BEING SHOWN, TH ERE IS NO CLAIM TO THIS EFFECT IN THE INSTANT CASE. THAT IS, THE ASSESSEES CASE FOR BENEFIT U/S. 10(23C)(IIIAE) IS A BALD CASE. ON THE CONTRARY, AS ARGUED, THE EARNING OF PR OFIT, FOR WHICH THE LD. COUNSEL WOULD MAKE REFERENCE TO THE ASSESSMENT ORDERS FOR T HE SUBSEQUENT YEARS AS WELL AND WHICH IMPLIES CHARGE FOR THE SERVICES RENDERED AT REMUNERATIVE RATES, IS NO BAR FOR THE CLAIM OF RELIEF U/S. 11. THIS IS CLEARLY IN CONSISTENT WITH THE TERMS OF SECTION 10(23C)(IIIAE). THE ARGUMENT OF THE ASSESSEE BEING A PUBLIC CHARITABLE INSTITUTION WOULD THEREFORE BE OF NO ASSISTANCE TO IT IN-SO-FAR AS ITS CLAIM U/S. 10(23C)(IIIAE) IS CONCERNED, WHICH REQUIRES IT TO EXIST ONLY FOR PHIL ANTHROPIC PURPOSES AND NOT FOR THE PURPOSE OF PROFIT, I.E., STIPULATES THE TWIN CO NDITIONS, WHICH THOUGH ARE MUTUALLY CONSISTENT. NOT SO CONSTRUING WOULD BE TO DISREGARD THE CLEAR AND PLAIN LANGUAGE OF THE PROVISION, I.E., APART FROM THE SCHEME OF THE A CT, WHICH PROVIDES FOR A CONDITION OF PHILANTHROPY AND NOT FOR PROFIT AS THE BASIS FOR EXEMPTION. IN FACT, THE FACTS ON RECORD RESULTING IN THE INFER ENCE AS TO THE SIPHONING OF FUNDS, DISENTITLES THE ASSESSEES CLAIM, BOTH U/S. 11 AND S. 10(23C)(IIIAE). THAT IS, THE FACTS ON RECORD, RATHER THAN SUPPORTING, DISPRO VE THE ASSESSEES CLAIM FOR BENEFIT U/S. 10(23C)(IIIAE). THE RAISING OF A LEGAL ISSUE F OR THE FIRST TIME BEFORE AN APPELLATE AUTHORITY COULD ONLY BE, AT THE DISCRETION OF THE S AID AUTHORITY, WHERE THE CLAIM IS MADE BONA FIDE , WITH ALL THE FACTS NECESSARY FOR THE SAME ON RECO RD AND NOT ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 9 DISPUTED ( JUTE CORPORATION OF INDIA V. CIT [1991] 187 ITR 688 (SC)). THE ASSESSEES CLAIM SUFFERS ON BOTH COUNTS. THERE IS C LEAR LACK OF BONA FIDES INASMUCH DESPITE ABUNDANT OPPORTUNITY TO PROVE ITS CLAIM, BA SED OSTENSIBLY ON ITS AUDITED BOOKS OF ACCOUNT, UNPRODUCED, IS UNABLE TO DO SO, N AY, IMPROVE ITS CASE IN ANY MANNER. THE FINDINGS BY THE REVENUE AUTHORITIES REM AIN UNREBUTTED. THERE IS ALSO NO EXPLANATION FOR NOT BEING ABLE TO SUBSTANTIATE I TS CASE BEFORE THEM AND, CONCOMITANTLY, OF BEING ALLOWED AN OPPORTUNITY TO D O SO NOW, EVEN AS SUCH A CLAIM, EVEN IF MADE, WOULD NOT BE SUBJECT TO AN AUTOMATIC ACCEPTANCE, BUT ONLY WITH REFERENCE TO THE SETTLED LAW IN THE MATTER. RATHER, AS AFORE-NOTED, THE ASSESSEE DOES NOT SERIOUSLY DISPUTE ITS CLAIM U/S. 11, MAKING AN ALTERNATE BID U/S. 10(23C)(IIIAE). THE INCURRING OF EXPENDITURE TO THE STATED EXTENT B EING UNPROVED, IMPLYING SIPHONING OF FUNDS WHICH ARE TO BE REGARDED AS PU BLIC FUNDS, THE CLAIM AS TO BONA FIDES IS EVEN OTHERWISE MISPLACED. THERE IS NO CLAIM TO PHILANTHROPY, NAY, COULD NOT BE UNDER THE CIRCUMSTANCE, I.E., WHERE A SUBSTA NTIAL PART OF THE EXPENDITURE (RS. 9.02 LACS) IS UNPROVED. THE FINDINGS BY THE LD. CIT (A) HAVE NOT BEEN REBUTTED IN ANY MANNER. THE CLAIM IS UNDER THE CIRCUMSTANCES IN ADMISSIBLE IN LAW NOR ACCEPTABLE ON MERITS. THIS ANSWER QUESTIONS (A) AND (C). 3.4 FINALLY, I MAY ADDRESS THE ASSESSEES CASE UNDE R QUESTION (D). THE SAME STANDS NEITHER RAISED PER THE GROUNDS OF APPEAL NOR DURING ARGUMENTS. THE SAME IS, NEVERTHELESS, INCLUDED FOR THE SAKE OF COMPLETE NESS OF THIS ORDER, WITH A VIEW TO CONSIDER THE MATTER IN ALL ITS ASPECTS. NO BASIS FO R RECKONING THE SAME AS EXCESSIVE STANDS ADVANCED AT ANY STAGE OF THE PROCEEDINGS. TH E MATTER IS PURELY FACTUAL, WITH NOTHING HAVING BEEN BROUGHT ON RECORD TO SHOW AS TO HOW THE EXPENDITURE BEING UNVERIFIABLE, OUGHT TO BE ESTIMATED FOR INFLATION A T A RATE LOWER THAN 50%. THAT IS, WHY IT SHOULD BE REGARDED AS EXCESSIVE. A RATE OF 5 0% IMPLIES EVENING OF SCALES, I.E., DESPITE BEING NOT PROVED TO HAVE BEEN INCURRE D, THE PROBABILITY OF IT BEING NOT ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 10 INCURRED IS RESTRICTED TO 1/2, I.E., THE SAME AS OF HAVING BEEN INCURRED. CLEARLY, AN EXPENDITURE IS EITHER INCURRED OR NOT, SO THAT THE SAID RATIO IN EFFECT IMPLIES THE EXTENT TO WHICH THE EXPENDITURE IS REGARDED AS NOT INCURRED. THE SAME IS, UNDER THE CIRCUMSTANCES, FAIR AND REASONABLE. I, ACCORDINGLY, DECLINE INTERFERENCE. 3.5 NO OTHER GROUND WAS PRESSED DURING HEARING, WIT H, IN FACT, ALL THE ISSUES POSSIBLY ARISING BEING DISCUSSED, WITH, AS AFORE-ST ATED, A VIEW OF GIVING A COMPREHENSIBLE AND OBJECTIVE CONSIDERATION TO THE I SSUES EMANATING, INCLUDING THE GROUND QUA NON-ADMISSION OF ADDITIONAL EVIDENCE U/R. 46A. TH E SAME, THOUGH CONSIDERED IN THE ADJUDICATION AFORE-SAID, IS NEVER THELESS, SPECIFICALLY ADDRESSED. THE SAID GD. IS DE HORS ANY MATERIAL ON RECORD; THE ASSESSEE EVEN NOT PLAC ING ON RECORD THE APPLICATION U/R. 46A, BESIDES, AS AFORE- STATED, NOT REBUTTING THE SPECIFIC FINDINGS BY THE LD. CIT(A) IN ANY MANNER. 4. IN SUM THE ASSESSEE, A TRUST REGISTERED U/S. 12AA OF THE A CT AS A CHARITABLE INSTITUTION, WAS UNABLE TO, IN ASSESSMENT, SUBSTANTIATE OR OTHERWISE EVIDENCE EXPENDITURE TO THE EXTENT OF RS.18.03 LACS, CLAIMED PER ITS OPERATING STATEMENT, AND, ACCORDINGLY, DENIED CLAIM IN ITS RESPECT TO THE EXTENT OF 50% TH EREOF, WHICH WAS BROUGHT TO TAX. THE ASSESSEE, DESPITE THE PROCEEDINGS BEING REMANDE D AT THE FIRST APPELLATE STAGE, COULD NOT IMPROVE ITS CASE; THE FINDINGS BY THE LD . CIT(A) REMAINING UNREBUTTED. IN FACT, THE ASSSESSEES PRINCIPAL CONTENTION IN SE COND APPEAL IS FOR BEING ALLOWED EXEMPTION U/S. 10(23C)(IIIAE) IN-AS-MUCH AS ITS, R UNNING A HOSPITAL, RECEIPT WAS BELOW THE LIMIT OF RS.100 LACS; A PLEA RAISED BEFOR E THE FIRST APPELLATE AUTHORITY AS WELL, WHO WAS CONTENDED TO HAVE NOT DECIDED THE SAM E. THE MATTER WAS ACCORDINGLY EXAMINED FROM THE STANDPOINT OF BOTH, I .E., S. 11 AND S. 10(23C)(IIIAE), TO FIND IT AS INELIGIBLE ON BOTH; THE FUNDS TO TH E EXTENT OF RS.18.03 LAKHS BEING ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 11 UNACCOUNTED INASMUCH AS THE SAME COULD NOT BE SHOWN TO BE, AS CLAIMED, EXPENDED, MUCH LESS FOR THE STATED PURPOSES, I.E., THE OBJECTS OF THE TRUST. THE TERMS OF SEC. 10(23C)(IIIAE) WERE IN FACT MORE STRINGENT, REQUIRING THE ENTITY TO EXIST SOLELY FOR PHILANTHROPIC PURPOSES AND NOT FOR PROFI T, ON WHICH THERE IS NO CLAIM, MUCH LESS MATERIAL ESTABLISHING THE SAME. NO CLAIM ON FACTS QUA THESE TWO ASPECTS, REPRESENTING THE PERQUISITE CONDITIONS FOR THE APPL ICATION OF THE PROVISION, WAS MADE, MUCH LESS SHOWN. THE CLAIM WAS ACCORDINGLY IN ADMISSIBLE AT APPELLATE STAGE. IT WAS NEVERTHELESS ALSO EXAMINED ON MERITS. THE EXPENDITURE BEING UNPROVED HAD BEEN RIGHTLY DISALLOWED; WITH RATHER F UNDS TO THAT EXTENT BEING, BY NECESSARY IMPLICATION, UNACCOUNTED FOR. THE BOOKS O F ACCOUNT AND THE DOCUMENTS SUPPORTING THE ENTRIES RECORDED THEREIN, CONSTITUTE THE PRIMARY EVIDENCE WITH THE ASSESSEE QUA A CLAIM, NOT FURNISHED IN THE INSTANT CASE. THE CL AIM AS REGARDS INVOCATION OF R. 46A, IS AGAIN WITHOUT MERIT, IN VI EW OF THE REMAND PROCEEDINGS. THOUGH NOT PLEADED, THE CLAIM AS TO THE DISALLOWANC E BEING EXCESSIVE, HAS ALSO BEEN CONSIDERED, TO FIND IT AS REASONABLE IN THE GI VEN FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEES CASE IS THUS WITHOUT MERIT, RE QUIRING THEREFORE NO INTERFERENCE. I DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN CO URT ON JULY 19, 2019 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 19.07.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: SATNAM SINGH MEMORIAL TRUST, 611-R MODEL TOWN, JALANDHAR (2) THE RESPONDENT: INCOME TAX OFFICER, (EXEMPT IONS), JALANDHAR (3) THE CIT(APPEALS)-2, JALANDHAR ITA NO. 478/ASR/2017 (AY 2010-11) SATNAM SINGH MEMORIAL TRUST V. ITO 12 (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER