M/s Independent School's Federation of India, Ghaziabad V. Addl. CIT, Ghaziabad

ITA 5099/DEL/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97696 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 29-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 11-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Opportunity of being heard; Rule of consistency
• Section: 143(3); 37(1); 12A

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC-2: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 5099/DEL/2015 A.Y. : 2010-11 INDEPENDENT SCHOOLS FEDERATION OF INDIA VS. ADDL . CIT, RANGE-1 C/O AKHILESH KUMAR, ADVOCATE, GHAZIABAD CHAMBER NO. 206-207, ANSAL SATNAM RDC RAJ NAGAR, GHAZIABAD (PAN : AAATT4223R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. AKHILESH KUMAR, ADV. DEPARTMENT BY : SH. P. DAM KANUNJNA, SR. DR DATE OF HEARING : 29-10--2015 DATE OF ORDER : 29-10-2015 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-GHAZIABAD PE RTAINING TO ASSESSMENT YEAR 2010-11. 2. THE GROUNDS OF APPEAL READ AS UNDER:- 1. BECAUSE, LEARNED COMMISSIONER OF INCOME TAX (APP EALS) GROSSLY ERRED IN DISMISSING THE CLAIM OF ASSESSEE THAT THE SOCIET Y IS MUTUAL CONCERN WITH INDEPENDENT IDENTITY OF MEMBER SCHOOLS WITH NO BUSI NESS ETC. BY WRONGLY STATING THAT THERE IS NO EVIDENCE IN SUPPORT OF CLA IM AGAINST THE FACTS ON THE RECORD. 2 2. BECAUSE, LEARNED COMMISSIONER OF INCOME TAX (APP EALS) FURTHER ERRED IN HOLDING THE ACTIVITIES OF ASSESSEE FOR SAFEGUARD IN TEREST OF SCHOOLS ETC. IS NOT FALLING WITHIN ANY OF THE CLAUSES OF S. 2(15) OF THE ACT DESPITE HOLDING THAT ID. CONSIDERED INCORRECT OBJECTS OF ASSESSEE. HENCE ORD ER IS PERVERSE. 3. BECAUSE, WITHOUT PREJUDICE TO ABOVE AND ONLY AS AN ALTERNATIVE, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO CONSIDER THE FACT THAT REGNO U/S 12A IS SUBSISTING AND WITH IDENTICAL FACT S EXEMPTION IS GRANTED MAY BE U/S 143(1) SINCE INCEPTION, HENCE ORDER IS AGAINS T THE PRINCIPLE OF CONSISTENCY. 4. BECAUSE, WITHOUT PREJUDICE TO ABOVE AND ONLY AS AN ALTERNATIVE, ON MERITS LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING TAXING OF ~ RS. 2,35,377/- WHICH WAS MERELY A UNSPE NT CONTRIBUTION OF MEMBERS AND NOT OF INCOME NATURE. 5. BECAUSE, ON MERITS LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 2,84,000 /-,BEING THE LEGAL EXPENSES, WHILE ADMITTEDLY INCURRENCE OF EXPENSES I S NOT DOUBTED, BY WRONGLY HOLDING THAT ASSESSEE FAILED TO PROVE WITH EVIDENCE THAT SUCH EXPENSES ARE ALLOWABLE U/S 37(1) OF THE ACT. 6. BECAUSE, LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IS UPHOLDING THE DISALLOWANCE UP TO RS. 50,0001 OUT OF CONVEYANCE EXPENSES MERELY WITH GENERAL EXPENSES AND WITHOUT CONSIDERIN G THAT THE BOOK OF ACCOUNTS ARE ACCEPTED. 3 'THEREFORE, IT IS PRAYED THAT FINDING OF LOWER AUTH ORITIES THAT ACTIVITY OF ASSESSEE IS BUSINESS' BEING NEITHER A 'MUTUAL CONCE RN' NOR COVERED U/S 2(15) OF THE ACT MAY KINDLY BE QUASHED AND DISALLOWANCE. AND COMPUTATION OF TAXABLE SURPLUS OF RS. 5,69,377/- MAY KINDLY BE HEL D ILLEGAL AND PRAYED TO BE QUASHED. 3. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 4. LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT THE AO VIDE ORDER DATED 20.3.2015 PASSED U/S. 143(3) OF THE I.T. ACT FOR THE A SSTT. YEAR 2012-13 HAS ALLOWED THE SIMILAR RELIEF INVOLVED IN THE PRESENT APPEAL B Y COMPLETING THE ASSESSMENT IN THE CASE OF THE ASSESSEE. HE REQUESTED TO FOLLOW THE R ULE OF CONSISTENCY, THE AO MAY BE DIRECTED TO ALLOW THE RELIEF IN DISPUTE TO THE A SSESSEE. HE FURTHER STATED THAT THE ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPE AL MAY ALSO BE READJUDICATED BY THE AO BY ALLOWING THE RELIEF TO THE ASSESSEE. HE HAS FILED THE WRITTEN SUBMISSION ALONGWITH THE PAPER BOOK CONTAINING THE PAGES 1-93, IN WHICH HE HAS ATTACHED THE COPY OF B/S & INCOME / EXP. A/C WITH AN NEXURES FOR AY 10-11; COPY OF MEMORANDUM OF AIMS AND OBJECTIVE; COPY OF LEDGER A/C OF ANNUAL SUBSCRIPTION, LEGAL FEES AND CONFERENCE FEE; COPY O F LEDGER A/C OF LEGAL EXP.; COPY OF LEDGER A/C OF VEHICLE EXP.; COPY OF LIST OF MEMBERS; STATEMENT OF COMPARATIVE EXP. AND COPY OF LATEST ASSESSMENT ORD ER. HE HAS ALSO FILED THE LIST OF VARIOUS FOLLOWING CASE LAWS SUPPORTING THE CASE OF THE ASSESSEE:- A. PRINCIPLE OF CONSISTENCY SHALL BE FOLLOWED WHEN FACTS REMAINS UNCHANGED. (I) RADHSOAMI SATSANG VS. CIT (1992) 193 321 (SC) 4 (II) CIT VS. NEO POLY PACK (P) LTD. (2000) 245 ITR 492 (DEL). B. RECEIPTS/SURPLUS OF ENTITIES WHICH ARE GOVERNED BY PRINCIPLES OF MUTUALITY IS NOT INCOME. (I) CIT VS. CHLMSFORD CLUB VS. CIT (2000) 243 ITR 89 (S C) (II) CIT VS. CAWNPORE CLUB LTD. (2004) 140 TAXMAN 378 (SC) (III) CIT VS. STANDING CONFERENCE OF PUBLIC ENTERPRIS ES (SCORES) 186 TAXMAN 142 (DELHI) (IN THIS CASE SLP WAS DISMISSED B Y THE APEX COURT) (IV) DIT VS. ALL INDIA ORIENTAL BANK OF COMMERCE WELF ARE SOCIETY 130 TAXMAN 142 (DELHI). (V) CIRCULAR NO. 11/2008 DATED 19.12.2008. C. LEGAL ISSUE CAN BE RAISED AT ANY TIME. POWER OF CIT(A) ARE CO-TERMINUS WITH AO TO CONDUCT ENQUIRY. I) NTPC LTD. VS. CIT 229 ITR 383 (SC) II) RAJ RANI GULATI (SMT.) VS. CIT (2002) 346 ITR 543 (ALL.) III) SMT. PRABHAVATI S. SHAH VS. CIT (1998) 231 ITR 1 (B OM) FINALLY, HE REQUESTED THAT THE ISSUE IN DISPUTE MAY BE SET ASIDE TO THE AO TO DECIDE THE SAME, KEEPING IN VIEW OF THE DECISION S AS WELL AS WRITTEN SUBMISSION ALONGWITH DOCUMENTARY EVIDENCE FILED IN THE SHAPE O F PAPER BOOK. 5. LD. DR OPPOSED THE REQUEST OF THE LD. COUNSEL OF THE ASSESSEE AND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES ON THE ISSUE IN DIS PUTE AND PERUSED THE RELEVANT RECORDS, ESPECIALLY THE ORDERS PASSED BY THE REVENU E AUTHORITIES, PAPER BOOK FILED BY THE ASSESSEES COUNSEL AND THE ISSUE RAISED BY T HE ASSESSEE IN THE GROUNDS OF 5 APPEAL ALONGWITH THE ASSESSMENT ORDER DATED 20.3.20 15 FOR THE ASSTT. YEAR 2012- 13 IN ASSESSEES OWN CASE PASSED BY THE AO U/S. 143( 3) OF THE I.T. ACT, 1961 WHEREIN THE AO HAS ACCEPTED THE EXACTLY SIMILAR R ELIEF INVOLVED IN THE PRESENT APPEAL. I AM OF THE CONSIDERED VIEW THAT WITHOUT CO MMENTING UPON THE MERITS OF THE CASE THE ISSUE IN DISPUTE REQUIRES TO BE THOROU GHLY EXAMINED AT THE LEVEL OF THE AO WITH THE DIRECTIONS TO DECIDE THE ISSUE IN DISPU TE AFRESH, UNDER THE LAW, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE A SSESSEE, ESPECIALLY AFTER EXAMINING ALL THE DOCUMENTARY EVIDENCES FILED BY TH E ASSESSEE IN THE SHAPE OF PAPER BOOK, CASE LAWS AND THE ISSUES RAISED BY THE ASSESSEE IN THE GROUNDS OF THE PRESENT APPEAL. I HOLD AND DIRECT ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/10/2015 . SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 29/10/2015 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 6