PAWAN TANAY EUCATION SOCIETY, Jaipur V. ITO, BEHROR

ITA 547/JPR/2014

• Counselvise Citation: 54723114 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Keywords: Unexplained cash credit; Opportunity of being heard; Source of fund; Additional evidence
• Section: 12A; 68; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 547/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 M/S. PAWAN TANAY EDUCATION SOCIETY, VILLAGE SUNDERPURA, TEHSIL KOTPUTLI. (RAJ.) CUKE VS. THE INCOME TAX OFFICER, BEHROR, DISTT. ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABTP 3761 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/10/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE LD. CIT (A), ALWAR DATED 06.05.2014 FOR THE ASSESSMENT YEAR 2009-10. T HE GROUND RAISED BY THE ASSESSEE IS AS UNDER :- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS), HAS ERRED ON FACTS & IN LAW IN CONFIRMING THE ADDITION OF RS. 3, 01,000/- OUT OF RS. 4,23,500/- MADE BY THE AO BY TREATING THE MEMBE RSHIP FEES RECEIVED FROM VARIOUS PERSONS AS UNEXPLAINED DEPOSI TS U/S 68. 2 ITA NO. 547/JP/2014 A.Y. 2009-10 M/S PAWAN TANAY EDUCATION SOCIETY VS. ITO 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS), HA S FURTHER ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID AD DITION BY INCORRECTLY STATING THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR IGNORING THE CONFIRMATION AND AFFIDAVIT OF THE DEPO SITORS FILED BEFORE HIM. HE HAS FURTHER ERRED IN CONFIRMING THE ADDITIO N EVEN WHEN THE AO IN THE REMAND REPORT HAS ACCEPTED THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF ALL THE CASH CREDITORS. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS), HA S ERRED ON FACTS & IN LAW IN CONFIRMING THE ABOVE ADDITION IGN ORING THAT THE ENTIRE INCOME OF THE ASSESSEE IS EXEMPT U/S 10(23C) (IIIAD) OF THE ACT. 2. THE APPEAL IN QUESTION IS DELAYED BY 3 DAYS. ASS ESSEE HAS FILED AN APPLICATION FOR CONDONATION CITING THE REASON FOR DELAY ON THE PART OF THE ASSESSEES CHARTERED ACCOUNTANT. 3. THE LD. D/R IS HEARD. 4. AFTER HEARING BOTH THE PARTIES, I AM OF THE VIEW THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE, 3 DAYS DELAY IS CONDONED. 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRUST WHICH IS NOT REGISTERED UNDER SECTION 12A CLAIMING TO BE EXCLUSIVELY AN EDU CATIONAL INSTITUTION. RETURN OF INCOME OF RS. 7,46,357/- WAS FILED CLAIMING EXEMPTI ON UNDER SECTION 10(23C)(IIIAD) OF THE IT ACT, 1961. ASSESSEE IN THIS YEAR INDUCTED N EW MEMBERS IN THE TRUST AND CHARGED A MEMBERSHIP FEE OF RS. 8,08,500/- WHICH IS CREDITED TO CAPITAL FUND. OUT OF THE MEMBERS, IN RESPECT OF 17 PERSONS, THE AO DID N OT BELIEVE ASSESSEE VERSION AND HELD THAT BOGUS CASH DEPOSIT/CREDIT HAVE BEEN INTRO DUCED IN THEIR NAMES BY THE ASSESSEE. 3 ITA NO. 547/JP/2014 A.Y. 2009-10 M/S PAWAN TANAY EDUCATION SOCIETY VS. ITO 6. IN FIRST APPEAL, THE LD. CIT (A), HOWEVER, ACCEP TED THE DEPOSITS OF RS. 1,22,500/- IN THE NAME OF 6 PERSONS QUA WHICH THE ASSESSEE HAD FILED THE COPY OF ITR. IN RESPECT OF REMAINING DEPOSITS OF RS. 3,01,000/- IN THE NAME OF 11 PERSONS, HE HELD THAT ASSESSEE HAS FAILED TO FILE THEIR COPY OF BANK STAT EMENT, SOURCES OF INCOME, COPY OF ITRS, PROOF OF IDENTITY AS REQUIRED U/S 68 OF THE I T ACT WERE NOT SUBMITTED AND ACCORDINGLY CONFIRMED THE ADDITION OF RS. 3,01,000/ -. 7. LD. COUNSEL FOR THE ASSESSEE CONTENDS (I) THAT THE INCOME OF THE ASSESSEE SOCIETY IS EXEMPT U /S 10(23C)(IIIAD) OF THE IT ACT, 1961. THE WORDS INCOME CANNOT BE GIVE N A RESTRICTIVE MEANING BUT ITS NATURAL MEANING. THEREFORE, THE ASS ESSEE IS ENTITLED TO BENEFIT U/S 20(23C) EVEN IN RESPECT OF INCOME WHICH IS HELD AS UNEXPLAINED CASH CREDIT AND ADDED U/S 68. FOR THIS RELIANCE IS PLACED ON ITAT JUDGMENT IN CASE OF ACIT VS. MUSLIM EDUCATIONAL SOCIETY (2010) 1 ITR 0527 (COCHIN)(TRIB.) (II) AS THE INSTITUTION COVERED U/S 10(23C)(IIIAD), THER E IS SEPARATE PROVISION FOR CHARGING ANONYMOUS DONATION U/S 115BC PROVIDING THAT ANONYMOUS DONATION MEANS ANY VOLUNTARY CONTRIBUTION REFERRED IN SEC. 2(24)(IIA) WHERE A PERSON RECEIVING SUCH CONTRIBUTION DOES NOT MAINTAIN A RECORD OF THE IDENTITY INDICATING THE NAME AND ADDRESS OF THE PERSON MAKING SUCH CONTRIBUTION AND SUCH OTHER PARTICULARS AS MAY BE P RESCRIBED. IN THE PRESENT CASE, THE ASSESSEE HAS FURNISHED NAMES AND ADDRESS OF ALL THE PERSONS FOR WHICH ADDITION IS CONFIRMED BY LD. CIT (A). THEREFORE, SUCH 4 ITA NO. 547/JP/2014 A.Y. 2009-10 M/S PAWAN TANAY EDUCATION SOCIETY VS. ITO AMOUNT CANNOT BE CATEGORIZED AS ANONYMOUS DONATION AND THEREFORE SUCH AMOUNT CANNOT BE CHARGED TO TAX BY INVOKING SEC. 68 . (III) CONFIRMATIONS ON ACCOUNT OF ALL THE 11 DEPOSITOR FO R WHICH ADDITION IS CONFIRMED BY CIT (A) WAS FURNISHED. ALL THESE MEMBE RS HAVE CONFIRMED GIVING MEMBERSHIP FEES TO THE ASSESSEE BY FILING AF FIDAVIT. IN CASE OF SH. VIKAS GAUTAM, HIS STATEMENT WAS ALSO RECORDED. IN T HE REMAND PROCEEDINGS, AO ACCEPTED THE GENUINENESS, IDENTITY AND CREDITWORTHINESS OF ALL THESE PERSONS. THEREFORE, THE ADDITION CONFI RMED BY CIT (A) U/S 68 IS AGAINST THE PROVISIONS OF LAW. 8. THE LD. D/R ON THE OTHER HAND CONTENDS THAT THE ASSESSEE HAS NOT RAISED AN ISSUE OF ADDITION OF RS. 3,07,500/- AS COVERED UNDE R THE PURVIEW OF EXEMPTION U/S 20(23C). NO SUCH GROUND WAS RAISED BY THE ASSESSEE BEFORE LD. CIT (A) OR BEFORE THE TRIBUNAL. 9. LD. COUNSEL FOR THE ASSESSEE AT THIS JUNCTURE FI LED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE AND CONTENDS THAT THE SAME BEIN G PURELY LEGAL IN NATURE NOT REQUIRING FRESH VERIFICATION OF FACTS, MAY BE ADMIT TED. 10. ON MERITS, THE LD. D/R SUPPORTED THE ORDER OF L D. CIT (A). 11. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE BEING LEGA L IN NATURE NOT REQUIRING VERIFICATION OF FURTHER FACTS, IS ADMITTED. THE LD. COUNSEL FOR THE ASSESSEE WAS ASKED AS TO WHETHER BY-LAWS EMPOWER THE ASSESSEE TRUST TO CHARGE MEMBER SHIP FEE FROM THE TRUSTEES. THE 5 ITA NO. 547/JP/2014 A.Y. 2009-10 M/S PAWAN TANAY EDUCATION SOCIETY VS. ITO LD. COUNSEL CONTENDS THAT THE SAME WAS CREDITED TO CORPUS FUND. THEREFORE, SHALL BE DEEMED AS DONATION HOWEVER, BY-LAWS OF THE SOCIETY COULD NOT BE PRODUCED. 12. SINCE THE ADDITIONAL GROUND HAS BEEN ADMITTED W HICH HAS NOT BEEN EXAMINED BY THE LOWER AUTHORITIES AND THE ASSESSEE COULD NOT PR ODUCE COPY OF BY-LAWS AT THE TIME OF HEARING, I AM INCLINED TO SET ASIDE THE ISSUE TO THE AO FOR DECIDING THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE ADEQU ATE OPPORTUNITY OF BEING HEARD. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/10/201 5. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 /10/ 2015 DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. PAWAN TANAY EDUCATION SOCIETY, KOTPUTLI. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO WARD BEHROR, ALWAR. 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.547/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. 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