Vaish Model Senior Secondary School, Haryana V. ITO, Bhiwani

ITA 5301/DEL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1739 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 29-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDREKAR
• Assessee Lawyers: R P BASIA
• Keywords: Earning of tax free income; Capital receipt
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO S . 50 & 5301 /DEL/2012 ASSESSMENT YEAR S : 2008 - 09 & 2009 - 10 VAISH MODEL SENIOR SECONDARY VS. INCOME TAX OFFICER, SCHOOL, LOHARU ROAD, BHIWANI WARD - 1, BHIWANI HARYANA (PAN:AAATV6211C) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. R .P. BASIA, CA RESPONDENT BY : SH. J.P. CHANDREKAR, SR. DR DATE OF HEARING: 29.06.2015 DATE OF PRONOUNCEMENT: 12.08.2015 ORDER PER INTURI RAMA RAO, A.M. : THES E ARE APPEAL S FILED BY THE APPELLANT SOCIETY FOR THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 AGAINST DIFFERENT ORDERS OF LEARNED CIT(A) DATED 20.10.2011 AND 06.08.2012. IN ITA NO. 50/DEL/2012, THE APPELLANT SOCIETY HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I. THAT THE ADDITION OF RS 72,03,000/ - MADE BY THE LD. A.O. AND DENIAL OF BENEFITS U/S 10(23C)(VI) OF THE INCOME TAX ACT IS UNTENABLE, GIVEN THE FACTS OF THE CASE. II. THE LD. A.O. AND THE CIT(A) HAVE WRONGLY DENIED THE EXEMPTION U/S 10(23C)(VI) OF THE INCOME TA X ACT, 1961 WITHOUT GIVING APPROPRIATE OPPORTUNITY AND IGNORING ALL MERITS OF THE CASE. III. THAT APPLICATION FOR APPROVAL OF EXEMPTION HAS BEEN WRONGLY DENIED BY THE LD. CCIT, PANCHKULA DESPITE THE SAME HAVING BEEN ALLOWED BY THE HON BLE HIGH COURT OF PUNJAB & HARYANA, VIDE ITS ORDER DATED 2 17/08/2010. THE APPELLANT SOCIETY HAS RE - FILED A CIVIL WRITS PETITION WITH THE HON BLE HIGH COURT, THE DECISION IN WHICH CASE REMAINS PENDING AS ON DATE. THE LD. A.O. AND THE CIT(A) HAVE ERRED IN LAW BY NOT GIVING DUE CONSID ERATION TO THE ABOVE SITUATION. IV. THAT ON FACTS OF THE CASE THE LD. A.O. HAS ERRED IN ASSUMING THAT THE AMOUNT OF RS. 44,00,000 / - TRANSFERRED SCHOOL DEVELOPMENT FUND BEING CLAIMED AS EXPENSES IS TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS . IN THIS REGA RD WE WOULD LIKE TO POINT OUT THE FOLLOWING: - A. THE APPELLANT SOCIETY HAS TREATED THE SAME AS EXPENSES CONSIDERING THE SAME AS 'INCOME RECEIVED ON BEHALF OF , AS THE SAME WAS SET ASIDE FOR A PRE SPECIFIED PURPOSE AB INITIO. B. FURTHER, FULL AND ACCURATE DETAI LS OF THE SAME HAVE BEEN PROVIDED IN THE INCOME & EXPENDITURE ACCOUNT, AND THE RETURN HAS BEEN FILED ALONG WITH THE AUDIT REPORT PREPARED IN THE PRESCRIBED FORMAT. THIS MAKES IT AMPLY CLEAR THAT, NOR WAS THERE ANY MALAFIDE INTENTION ON PART OF ASSESSEE IN MAKING SUCH CLAIM, AND NEITHER ANY INFORMATION FURNISHED BY THE ASSEESSEE WAS FOUND TO BE INCORRECT. IT WAS ONLY, IF AT ALL, AN ERRONEOUS CLAIM WHICH UNDOUBTEDLY DOES NOT FALL INTO THE DEFINITION OF INACCURATE PARTICULARS. V. THAT THE RECEIPTS OF RS. 28,30,0 00 / - HAVE BEEN CLAIMED AS CAPITAL RECEIPTS AS THE SAME HAVE BEEN RECEIVED FOR THE PURPOSE OF CONSTRUCTION OF BUILDING. HOWEVER, EVEN IF ON A LATER STAGE, THE LD. A.O. DOES NOT ACCEPT THIS VIEW OF THE APPELLANT SOCIETY, HE CAN BY NO MEANS CONSIDER THE SAME AS A CASE OF FURNISHING INACCURATE PARTICULARS. VI. THE LD. ASSESSING OFFICER HAS WRONGLY CHARGED INTEREST U/S 234B ON THE EXCESS DEMAND CREATED. VII. THE LD. AO HAS ERRED IN INITIAT ING PENALTY PROCEEDINGS U/S 271(1) (C) AS THERE IS NO CASE OF FURNISHING OF INACCU RATE PARTICULARS. VIII. THE LD. A.O. AND THE CIT(A) HAVE PASSED THE ORDER IN HASTE, AGAINST THE FACTS, LAW AND PROVISIONS OF THE INCOME TAX ACT, 1 961 AND RULES MADE THERE UNDER. IX. THE APPELLANT TRUST WISHES TO FILE DETAILED ARGUMENTS/ PRODUCE DOCUMENTS AT THE TI ME OF HEARING OF APPEAL AND CRAVES TO ADD /MODIFY/ DELETE/ WITHDRAW THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2. IN ITA NO. 5301/DEL/2012, THE APPELLANT SOCIETY HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I. THAT THE ADDITION OF RS 90,24,540/ - MADE BY THE LD. A.O. AND DENIAL OF BENEFITS U/S 10(23C)(VI) OF THE INCOME TAX ACT IS UNTENABLE, GIVEN THE FACTS OF THE CASE. 3 II. THE LD. A.O. AND THE CIT(A) HAVE WRONGLY DENIED THE EXEMPTION U/S 10(23C)(VI) OF THE INCOME TAX ACT, 1961 WITHOUT GIVING APPROPR IATE OPPORTUNITY AND IGNORING ALL MERITS OF THE CASE. III. THAT APPLICATION FOR APPROVAL OF EXEMPTION HAS BEEN WRONGLY DENIED BY THE LD. CCIT, PANCHKULA DESPITE THE SAME HAVING BEEN ALLOWED BY THE HON BLE HIGH COURT OF PUNJAB & HARYANA, VIDE ITS ORDER DATED 17 /08/2010. THE APPELLANT SOCIETY HAS RE - FILED A CIVIL WRITS PETITION WITH THE HON BLE HIGH COURT, THE DECISION IN WHICH CASE REMAINS PENDING AS ON DATE. THE LD. A.O. AND THE CIT(A) HAVE ERRED IN LAW BY NOT GIVING DUE CONSIDERATION TO THE ABOVE SITUATION. IV. T HAT ON FACTS OF THE CASE THE LD. A.O. HAS ERRED IN ASSUMING THAT THE AMOUNT OF RS. 35,71,350/ - TRANSFERRED TO BUILDING AND BUILDING MAINTENANCE FUND BEING CLAIMED AS EXPENSES IS TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. IN THIS REGARD WE WOULD LIKE TO POINT OUT THE FOLLOWING: - A. THE APPELLANT SOCIETY HAS TREATED THE SAME AS EXPENSES CONSIDERING THE SAME AS 'INCOME RECEIVED ON BEHALF OF , AS THE SAME WAS SET ASIDE FOR A PRE SPECIFIED PURPOSE AB INITIO. B. FURTHER, FULL AND ACCURATE DETAILS OF THE SAME HA VE BEEN PROVIDED IN THE INCOME & EXPENDITURE ACCOUNT, AND THE RETURN HAS BEEN FILED ALONG WITH THE AUDIT REPORT PREPARED IN THE PRESCRIBED FORMAT. THIS MAKES IT AMPLY CLEAR THAT, NOR WAS THERE ANY MALAFIDE INTENTION ON PART OF ASSESSEE IN MAKING SUCH CLAIM , AND NEITHER ANY INFORMATION FURNISHED BY THE ASSEESSEE WAS FOUND TO BE INCORRECT. IT WAS ONLY, IF AT ALL, AN ERRONEOUS CLAIM WHICH UNDOUBTEDLY DOES NOT FALL INTO THE DEFINITION OF INACCURATE PARTICULARS. V. THAT THE RECEIPTS OF RS. 35,71,350/ - HAVE BEEN CL AIMED AS CAPITAL RECEIPTS AS THE SAME HAVE BEEN RECEIVED FOR THE PURPOSE OF CONSTRUCTION OF BUILDING. HOWEVER, EVEN IF ON A LATER STAGE, THE LD. A.O. DOES NOT ACCEPT THIS VIEW OF THE APPELLANT SOCIETY, HE CAN BY NO MEANS CONSIDER THE SAME AS A CASE OF FURN ISHING INACCURATE PARTICULARS. VI. THE LD. ASSESSING OFFICER HAS WRONGLY CHARGED INTEREST U/S 234B ON THE EXCESS DEMAND CREATED. VII. THE LD. AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS U/S 271 (1) (C) AS THERE IS NO CASE OF FURNISHING OF INACCURATE PARTICULAR S. VIII. THE LD. A.O. AND THE CIT(A) HAVE PASSED THE ORDER IN HASTE, AGAINST THE FACTS, LAW AND PROVISIONS OF THE INCOME TAX ACT, 1 961 AND RULES MADE THERE UNDER. IX. THE APPELLANT TRUST WISHES TO FILE DETAILED ARGUMENTS/ PRODUCE DOCUMENTS AT THE TIME OF HEARING O F APPEAL AND CRAVES TO ADD , MODIFY/DELETE/ WITHDRAW THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 4 3. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE CASES, THESE APPEALS ARE BEING DISPOSED OF BY COMMON ORDER. 4. BRIEFLY STATED FACTS OF THE CASE A RE THAT THE APPELLANT SOCIETY FORMED WITH THE OBJECTS OF SETTING UP AND RUNNING OF EDUCATIONAL INSTITUTIONS. FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE RETURNS OF INCOME WERE FILED DISCLOSING NIL INCOME AND THE EXCESS OF INCOME OVER EXPENDITURE WERE CLAIMED AS EXEMPT INCOME UNDER SECTION 10( 23C ) (VI) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) . THE ASSESSING OFFICER DENIED THE EXEMPTION UNDER SECTION 10(23C)(VI) OF THE ACT BY HOLDING THAT THE GROSS RECEIPTS OF THE SOCIETY EXCEEDED RS. 1 CRORE AND THEREFORE IN THE ABSENCE OF APPROVAL BY THE CHIEF COMMISSIONER OF INCOME TAX (CCIT) THE EXEMPTION WAS STATED TO HAVE BEEN DENIED. THE APPELLANT SOCIETY HAD APPLIED FOR EXEMPTION UNDER SECTION 10(23C)(VI) BEFORE THE CCIT, PANCHKULA, AND SIMILARLY FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL ON GROUND THAT THE CCIT, PANCHKULA DENIED THE EXEMPTION. AS A CONSEQUENCE OF THIS, THE APPEAL FILED BEFORE THE CIT(A) WERE DISMISSED. AGGRIEVED BY THE REJECTION OF THE EXEMPTION BY THE CCIT, PANC HKULA, A WRIT PETITION WAS FILED BEFORE THE HON BLE PUNJAB & HARYANA HIGH COURT. THE HON BLE HIGH COURT VIDE ITS ORDER DATED 9 TH APRIL, 2015 IN CIVIL WRIT PETITION N O. 7725 OF 2011 DIRECTED THE CHIEF COMMISSIONER OF INCOME TAX (EXEMPTION), CHANDIGARH, TO C ONSIDER THE MATTER AFRESH IN THE LIGHT OF DECISION OF HON BLE SUPREME COURT IN THE CASE OF M/S QUEEN EDUCATIONAL SOCIETY VS. COMMISSIONER OF INCOME TAX, DECIDED ON 16.03.2015. IN THESE CIRCUMSTANCES, WE ARE OF THE 5 CONSIDERED OPINION THAT THE ENDS OF JUSTIC E WOULD BE MADE , IF THE MATTERS ARE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSMENT SHALL BE COMPLETED AFTER THE CHIEF COMMISSIONER OF INCOME TAX (EXEMPTION) PASSES AN ORDER PURSUANT TO THE DIRECTIONS OF THE HON BL E HIGH COURT. ACCORDINGLY, WE REMIT THE MATTERS BACK TO THE FILE OF THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT ON THE TERMS STATED ABOVE. THUS, THE APPEALS ARE DISPOSED OF ACCORDINGLY. 5. IN THE RESULT, BOTH THE APPEAL S ARE ALLOWED FOR STATISTICAL P URPOSES . THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 1 2 T H A U G U S T , 2015. S D / - S D / - ( I.C. SUDHIR ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 2 T H A U G U S T , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI