Income Tax Officer-2(3), Lucknow V. State Urban Development Agency, Lucknow

ITA 531/LKW/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9122 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 02-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K KAPOOR
• Section: 12A; 12AA; 11

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 NO.531/LKW/2014 ASSESSMENT YEAR:2009 - 10 STATE URBAN DEVELOPMENT AGENCY, NAVCHETNA KENDRA, 10, ASHOK MARG, LUCKNOW. PAN:AABAS9089F VS INCOME TAX OFFICER - 2(3), LUCKNOW. (RESPONDENT) (APPELLANT) SHRI VIVEK MISHRA, C.I.T., D. R. APPELLANT BY SHRI P. K. KAPOOR, C.A. RESPONDENT BY 02/12/2014 DATE OF HEARING 23 /01/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I, LUCKNOW DATED 19/03/2014 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. GROUND NO. 1.1 & 1.2 ARE AS UNDER: 1.1 THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DIRECTING THE A.O. TO COMPUTE THE INCOME IN THE MANNER SPECIFIED IN SECTION 11 TAKING INTO ACCOUNT INFORMATION GIVEN IN THE AUDIT REPORT IN FORM 10B. 1.2 FOR DOING SO THE LD. CIT (A) ERRED IN NOT APPRECIATING T HAT THE CASE WAS SELECTED UNDER SCRUTINY AS PER BOARD'S GUIDELINES TO EXAMINE THE CHARITABLE ACTIVITIES. THE INSTITUTION MAY BE REGISTERED U/S 12AA STILL THEY MAY NOT BE ELIGIBLE FOR EXEMPTION U/S 11 OF THE I.T. ACT IF THE ACTIVITIES OF THE ASSESSEE ARE NO T FOUND IN ACCORDANCE WITH THE AIM AND OBJECTS OF THE ASSESSEE 2 DURING THE COMPREHENSIVE SCRUTINY FOR THE YEAR UNDER CONSIDERATION. 3. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) AS PER PARA 6.2 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 6.2 I HAVE CONSIDERED THE MATTER. ONCE THE REGISTRATION HAS BEEN GRANTED UNDER SECTION 12AA AFTER DETAILED SCRUTINY OF ITS OBJECTS AND ACTIVITIES BY THE HIGHER AUTHORITIES, THE AO IS PRECLUDED FROM MAKING FURTHER PROBE INTO ITS OBJECTS AND ACTIVITIES SO AS TO HOLD THAT IT IS NOT CARRYING OUT ANY CH ARITABLE ACTIVITY. THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. SURAJ CITY GYMKHANA REPORTED IN (2008) 300 ITR 214 (SC) IS SQUARELY APPLICABLE ON THIS POINT, WHEREIN IT HAS BEEN HELD THAT THE REGISTRATION OF A TRUST UNDER SECTION 12A OF TH E ACT ONCE DONE IS A FAIT ACCOMPLI AND THE AO CANNOT THEREAFTER MAKE FURTHER PROBE INTO THE OBJECTS OF THE TRUST. IN THIS VIEW OF THE MATTER, THE ASSESSING OFFICERS ACTION IS NOT IN ACCORDANCE WITH LAW. ONCE REGISTRATION HAS BEEN GRANTED UNDER SECTION 1 2A, SHE CANNOT HOLD THAT THE APPELLANT HAS NOT DONE ANY CHARITABLE ACTIVITY WITHOUT BRINGING ANY MATERIAL ON RECORD TO PROVE THAT THE ACTIVITIES CARRIED OUT BY THE APPELLANT WERE NOT IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY. IN VIEW OF THE ABOVE IT IS HELD THAT THE AO IS REQUIRED TO COMPUTE THE INCOME OF THE APPELLANT SOCIETY AS PER PROVISIONS OF SECTION 11 TO 13 OF THE ACT TAKING INTO ACCOUNT THE AUDIT REPORT IN FORM 10B. 4.1 FROM THE ABOVE PARA FROM THE ORDER OF CIT(A), WE FIND THAT THIS ISSUE WAS DECIDED BY HIM BY FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF ACIT VS. SURAJ CITY GYMKHANA (SUPRA). HE HAS ALSO GIVEN A FINDING THAT THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY ADVERSE MATERIAL TO PROVE THAT THE ACTIVITIES CARRIED OUT BY THE ASSESSEE WERE NOT IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY. THIS FINDING OF CIT(A) COULD NOT BE 3 CONTROVERTED BY LEARNED D.R. OF THE REVENUE. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. THESE GROUND S ARE REJECTED. 5. GROUND NO. 2 AND 4 ARE AS UNDER: 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING THE ADDITION OF RS.2,00,00,000/ - MADE UNDER AMRIT DHARA MINI TUBE - WELL SCHEME WITHOUT APPRECIATING THE FACT THAT THIS EXPENSE RELATES TO EARLIER YEAR AS PER UTILIZATION CERTIFICATE ISSUED BY NEDA VIDE LETTER DATED 16.12.2005. 4. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING THE ADDITION OF RS.1,40,00,000/ - MADE UNDER PMIUPEP SCHEME WITHOUT APPRECIATING TH E FACT THAT THIS EXPENSE RELATES TO EARLIER YEAR AS PER UTILIZATION CERTIFICATE FURNISHED BY CONSTRUCTION & DESIGN SERVICES, U. P. JAL NIGAM, LUCKNOW VIDE LETTER DATED 18.11.1999. 6. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEA RNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT REGARDING THESE TWO AMOUNTS, IT IS NOTED BY ASSESSING OFFICER ON PAGE 4 OF THE ASSESSMENT ORDER THAT THE AMOUNT OF RS.200 LAC WAS SANCTIONED AS GRANT IN THE YEAR 2002 - 03 FOR IMPLEMENTATION OF THE SCHEME AMRIT DHARA MINI TUBE - WELL. IT IS ALSO NOTED THAT THE UTILIZATION CERTIFICATE PROVIDED BY NEDA IS THROUGH LETTER DATED 16/12/2005. HE HAS FURTHER NOTED THAT EVIDENTLY, THE IMPLEMEN TING AGENCY IS NEDA FOR WHICH FUNDS WERE GIVEN IN THE YEAR 2002 - 03 AND COMPLETED BY 2005 AND ACCORDINGLY UTILIZATION CERTIFICATE SUBMITTED ON 16/12/2005. THIS IS THE OBJECTION OF THE ASSESSING OFFICER THAT HOW THIS EXPENSE CAN BE ALLOWED IN THE PRESENT YE AR. SIMILARLY, REGARDING ANOTHER AMOUNT OF RS.140 LAC, PAID AS ADVANCE TO UP JAL NIGAM UNDER PMIUPEP 4 SCHEME, IT IS SEEN THAT AS PER UT ILIZATION CERTIFICATE FURNISHED, THE AMOUNT OF RS.105 LAC WAS GIVEN IN THE YEAR 1996 - 97 AS FIRST INSTALLMENT AND RS.35 L AC IN THE YEAR 1999 - 2000 AS SECOND INSTALLMENT. THE UTILIZATION CERTIFICATE HAS BEEN FURNISHED BY CONSTRUCTION & DESIGN SERVICES, U.P. JAL NIGAM, LUCKNOW VIDE LETTER DATED 18/11/1999. SINCE THESE TWO AMOUNTS WERE SPENT LONG BACK, THESE AMOUNTS CAN BE C ONSIDERED AS APPLICATION OF INCOME IN THE PRESENT YEAR F OR THE PURPOSE OF COMPUTING INCOME U/S 11 TO 13 IN THE PRESENT YEAR. THE FINDING OF CIT(A) ON THIS ASPECT IS NOT VERY CLEAR BUT CONSIDERING THE FACTS, AS DISCUSSED ABOVE, WE HOLD THAT IN VIEW OF THES E FACTS, THESE AMOUNTS CANNOT BE CONSIDERED AS APPLICATION OF INCOME IN THE PRESENT YEAR FOR COMPUTING THE INCOME OF THE ASSESSEE U/S 11 TO 13 OF THE ACT. ACCORDINGLY, GROUND NO S . 2 & 4 ARE ALLOWED. 8. GROUND NO. 3 IS GENERAL FOR WHICH, NO SEPARATE ADJUDICATION IS CALLED FOR. 9 . IN THE RESULT, THE APPEAL OF THE REVENU E STANDS PARTLY ALLOWED. (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: 23 /01/2015. *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