Dy.Commissioner of Income Tax, Lucknow V. Swami Janki Saran Public School, Raibareli

ITA 49/LKW/2014

• Counselvise Citation: 4923714 RSA 2014
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 24-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARE BEING DISPOSED OF
• Keywords: Unexplained investment
• Section: 147; 69; 148; 10

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.49 & 50/LKW/2014 A.YRS.:2007 - 08 & 2005 - 06 DY.C.I.T., RANGE - 1, LUCKNOW. VS. SWAMI JANKI SARAN PUBLIC SCHOOL, KUCHERY ROAD, BAIBAREILLY. PAN:AADAS0656A (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE REVENUE, WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED CIT(A) - II, LUCKNOW BOTH DATED 30/10/2013 FOR THE ASSESSMENT YEARS 2005 - 06 AND 2007 - 2008. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE REVENUE IN I.T.A. NO.49/LKW/2014 FOR ASSESSMENT YEAR 2007 - 08 ARE AS UNDER: 1. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING THE EXEMPTION U/S 10(23C)(IIIAD) OF THE I.T. ACT, 1961, WITHOUT APPRECIATING THE FACT THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT FOUND RELIABLE BY THE A.O. APPELLANT BY SHRI AMIT NIGAM, D. R. RESPONDENT BY SHRI K. R. RASTOGI, C. A. DATE OF HEARING 06/01/2015 DATE OF PRONOUNCEMENT 1 2 /02/2015 2 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN IGNORING TH E FACTS AND FINDINGS OF A.O. REGARDING PROFIT MAKING ACTIVITIES OF THE SCHOOL MENTIONED IN THE ASSESSMENT ORDER. 3. THE GROUNDS RAISED BY THE REVENUE IN I.T.A. NO.50/LKW/2014 FOR ASSESSMENT YEAR 2005 - 06 ARE AS UNDER: 1. THE LD CIT(A) HAS ERRED IN LAW A ND ON FACTS OF THE CASE IN ALLOWING THE EXEMPTION U/S 10(23C)(IIIAD) OF THE I.T. ACT, 1961, WITHOUT APPRECIATING THE FACT THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT FOUND RELIABLE BY THE A.O. 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.9,60,031/ - MADE BY THE A.O. U/S 69 OF THE I.T. ACT, 196 ION ACCOUNT OF UNEXPLAINED INVESTMENT IN LAND. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A) IN BOTH THE YEARS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN ASSESSMENT YEAR 2005 - 06, THE ISSUE IN DISPUTE WAS DECIDED BY LEARNED CIT(A) AS PER PARA 21 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 21. LIKEWISE THE LEGALITY OF ISSUING THE NOTICE UNDER SECTION 148, THE ASSESSEE HAS RAISED ADDITIONAL GROUND MENTIONED ABOVE AND CHALLENGED THE PROCEEDING INITIATED U/S 147 BY ISSUING NOTICE U/S 148 OF L.T . ACT. ON PERUSAL OF REASON RECORDED FOR INITIATION OF PROCEEDING U/S 147 REVEAL THAT THE ASSESSING OFFICER HAS MENTION THAT DURING ASSESSMENT YEAR UNDER CONSIDERATION THE ASS ESSEE HAS SHOWN SURPLUS RS. 10 , 10 , 468/ - BESIDE THE ADDITION OF RS.17 , 29 , 006/ - IN IMMOVABLE ASSET. THE SOCIETY/SCHOOL WAS NOT GRANTED THE REGISTRATION U/S 12AA. THEREFORE THE SURPLUS DECLARED IS TAXABLE. DURING APPELLATE PROCEEDINGS ASSESSEE HAS FILED WRITTE N SUBMISSION ON ADDITIONAL 3 GROUND MENTIONED IN PARA 17 & 18. I FOUND FORCE IN THE CONTENTION MENTIONED IN WRITTEN SUBMISSION THAT ASSESSING OFFICER HAS NOT CORRECTLY APPRECIATED THE RELEVANT PROVISIONS OF INCOME TAX LAW NOT ONLY FILING OF INCOME TAX RETURN IN EDUCATIONAL SOCIETY ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR. THERE WAS NO OBLIGATION ON ASSESSEE TO FILE L.T . RETURN UP TO ASSESSMENT YEAR A.Y 2005 - 06 WHERE THE ASSESSE E DID THE EDUCATIONAL ACTIVITY AND ITS GROSS RECEIPTS BELOW ONE CRORE. FURTHER THE ASSESSING OFFICER HAS NOT BRING ON RECORD ANY MATERIAL WHICH COULD SUGGEST THAT ANY KIND OF INCOME OTHER THAN EDUCATIONAL ACTIVITY HAVE BEEN EARNED AND NOT DISCLOSED IN REGULAR BOOKS OF ACCOUNTS/AUDITED FINANCIAL STATEMENT. THE FIGURE OF SURPLUS AMOUNT OF EDUCATIONAL ACTIVITY OF RS.10 , 10 , 468/ - HAS TAKEN BY A.O FROM THE AUDITED FINANCIAL STATEMENT. FURTHER THE INVESTMENT RS.17 , 29 , 006/ - IS ALSO DULY REFLECTED IN AUDITED FINANCIAL STATEMENT FOR RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. THIS FIGURE TOO TAK EN FROM AUDITED FINANCIAL STATEMENT OF ASSESSEE. THESE FACTS CLEARLY PROVES THAT THE INITIATION OF PROCEEDINGS U/S 147 ON THE REASON RECORDED FOR ISSUE OF NOTICE U/S 148, BASED ON INFORMATION AVAILABLE IN AUDITED FINANCIAL STATEMENT OF ASSESSEE FOR RELEVAN T ASSESSMENT YEAR WHICH CANNOT BE SAID THAT ANY KIND OF INCOME OR INVESTMENT HAS ESCAPED OR CONCEALED BY THE ASSESSEE FOR RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. THE ADDITIONS WERE MADE BY A.O HAVE BEEN DELETED AS DISCUSSED ABOVE AND EXEMPTI ON U/S 10 (23C0(IIIAD) HAS ALREADY BEEN ALLOWED TO THE APPELLANT. THUS THE GROUNDS TAKEN 3,4,5,6,7 AND ADDITIONAL GROUNDS 1,2, 3 ARE ALLOWED. 5.1 FROM THE ABOVE PARA FROM THE ORDER OF CIT(A), WE FIND THAT A CLEAR FINDING HAS BEEN GIVEN BY LEARNED CIT(A) THAT THE INITIATION OF PROCEEDINGS U/S 148 AND THE REASONS RECORDED FOR ISSUE OF SUCH NOTICE U/S 148 ARE BASED ON INFORMATION AVAILABLE IN AUDITED FINANCIAL STATEMENTS OF THE ASSESSEE FOR RELEVANT ASSESSMENT YEAR, FROM WHICH IT CANNOT BE SAID THAT ANY KIND OF INCOME OR INVESTMENT HAS ESCAPED BY THE ASSESSEE. HE HAS ALSO GIVEN A FINDING THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD WHICH COULD SUGGES T THAT ANY KIND OF INCOME OTHER THAN EDUCATIONAL ACTIVITY HAVE BEEN EARNED AND NOT DISCLOSED IN REGULAR BOOKS OF ACCOUNTS/AUDITED FINANCIAL STATEMENT. HE HAS FURTHER GIVEN A FINDING THAT THE FIGURE OF SURPLUS 4 AMOUNT OF EDUCATIONAL ACTIVITY OF RS.10,10,468 / - WAS T AKEN BY ASSESSING OFFICER FROM THE AUDITED FINANCIAL STATEMENT AND THE INVESTMENT OF RS.17,29,006/ - IS ALSO DULY REFLECTED IN AUDITED FINANCIAL STATEMENT FOR RELEVANT ASSESSMENT YEAR . REGARDING THE ALLOWABILITY OF EXEMPTION U/S 10(23C)(IIIAD), IT IS NOTED BY CIT(A) IN PARA 19 OF HIS ORDER THAT THIS ISSUE HAS BEEN DISCUSSED IN LENGTH BY HIM WHILE FRAMING THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2007 - 08. HE HAS FURTHER NOTED IN PARA 19 THAT FOR THE YEAR UNDER CONSIDERATION, THE RUNNING OF SCHOOL HAS NOT BEEN DENIED BY THE ASSESSING OFFICER. HE HAS ALSO NOTED THAT RECENTLY, THE CCIT HAS GRANTED EXEMPTION U/S 10(23C)(VI) OF THE ACT TO THE ASSESSEE VIDE ORDER DATED 26/08/2013 CONSIDERING THE PAST HISTORY AND PROLONGED EDUCATIONAL ACTIVITIES OF SOCI ETY. HE HAS ALSO NOTED THAT THE ASSESSEE IS RUNNING A SCHOOL NAMELY SJS PUBLIC SCHOOL AT RAI BAREILLY WHICH IS AFFILIATED TO CBSE BOARD, NEW DELHI AND WHERE MORE THAN ONE THOUSAND STUDENTS ARE STUDYING. HE HAS ALSO NOTED THAT THE GROSS RECEIPT OF THE SO CIETY IS AT RS.90,12,230/ - , WHICH IS LESS THAN RS. ONE CRORE. AS PER SECTION U/S 10(23C)(VI), APPROVAL FROM PRESCRIBED AUTHORITY IS REQUIRED IF THE SAME IS NOT COVERED BY SECTION U/S 10(23C)(IIIAD). AS PER SECTION 10(23C)(IIIAD), THOSE INSTITUTIONS ARE C OVERED WHERE ANNUAL RECEIPT DID NOT EXCEED THE AMOUNT OF RS. ONE CRORE. SINCE IN THE PRESENT CASE, THE ANNUAL RECEIPT DID NOT EXCEED RS. ONE CRORE, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAD) BECAUSE IT COULD NOT BE SHOWN BY THE ASSESSING OF FICER THAT THE ASSESSEE IS NOT RUNNING EDUCATIONAL INSTITUTION. CONSIDERING ALL THESE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2005 - 06 IS DISMISSED. 7. IN ASSESSMENT YEAR 2007 - 08 ALSO, THE FACTS ARE SIMILAR BECAUSE IN THIS YEAR ALSO, THE ANNUAL FEES COLLECTION WAS ONLY RS.94.76 LAC AS HAS BEEN 5 NOTED BY THE ASSESSING OFFICER ON PAGE NO. 3 OF THE ASSESSMENT ORDER AND THEREFORE, IN THIS YEAR ALSO , THE ANNUAL FEES COLLECTION DID NOT EXCEED RS. ONE CRORE AND THEREFORE, ASSESSEE WAS ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT IN THIS YEAR ALSO. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) IN THIS YEAR ALSO. 8. IN THE RESUL T, THE APPEAL OF THE ASSESSEE FOR THIS YEAR ALSO STANDS DISMISSED. 9. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 2 /02/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR