DCIT, New Delhi V. Neeraj Aggarwal, New Delhi

ITA 5494/DEL/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2674 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 25-04-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 08-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR MEET
• Assessee Lawyers: S K GUPOTA
• Keywords: Charitable institution
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.5494/DEL/2011 ASSESSMENT YEAR : 2007-08 DCIT, SHRI NEERAJ AGARWAL, CIRCLE-21 (1), 232, RG COMPLEX,-II, NEW DELHI. V. SECTOR-14, ROHINI, N. DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AEEPA AEEPA AEEPA AEEPA- -- -8990 8990 8990 8990- -- -D DD D APPELLANT BY : SHRI PRADEEP KUMAR MEET, SR. DR. RESPONDENT BY : SHRI S.K. GUPOTA, C.A. ORDER PER TS KAPOOR, AM: THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF REVE NUE AGAINST THE ORDER OF LD CIT(A) DATED 2 ND SEPTEMBER, 2011 PASSED FOR ASSESSMENT YEAR 2007-08. IN THE SOLITARY SUBSTANTIAL GROU ND OF APPEAL THE REVENUE HAVE PLEADED THAT THE LD CIT(A) HAS ERRE D IN DELETING THE ADDITION OF ` .10,00,000/- WHICH WAS ADDED BY THE ASSESSING OFFICER BY MAKING A DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S 35 AC OF THE INCOME TAX ACT, 1961 . 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PROPRIETOR ENGAGED IN THE BUSINESS OF WHOLESALE TRADING OF CHEMIC ALS UNDER THE NAME AND STYLE OF M/S RAMESHWARAM POLYMER & CHEMICALS. HE HAS FILED HIS RETURN OF INCOME ON 31.10.2007 DECLARING A N INCOME OF ` .38,29,917/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SC RUTINY AND ITA NO5494/DEL/2011 2 NOTICES U/S 143(2) & 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS IT REVEALED TO THE ASSESSING OFFICER THAT ASSESSEE HAD DONATED A SUM OF ` .15,00,000/- TO SHREE MEDICAL & CHARITABLE TRUST WHICH IS REGISTERED UNDER SECTION 35A C OF THE IT ACT. THE LD ASSESSING OFFICER TOOK COGNIZANCE OF THE DETAILS OF PAYMENT ON PAGE 2 OF THE ASSESSMENT ORDER AND OBSERVED THAT NOTI FICATION U/S 35AC TO THE INSTITUTION WAS GRANTED ON 15.2.2007. TH E DONATION UP TO ` .10,00,000/- WERE MADE BY THE ASSESSEE PRIOR TO THIS DA TE I.E. DONATIONS WERE MADE ON 7.2.2007 AND 14.2.2007. ACCOR DING TO THE ASSESSING OFFICER, THE DONATIONS MADE PRIOR TO THE ISSUE O F NOTIFICATION TO THE INSTITUTION CANNOT BE CLAIMED AS A DEDUCTION B Y THE ASSESSEE. HE, ACCORDINGLY, MADE AN ADDITION OF ` .10,00,000/-. 3. ON APPEAL, THE LD CIT(A) HAS DELETED THE DISALLOW ANCE ON THE GROUND THAT ONCE A NOTIFICATION HAVE BEEN ISSUED U/S 3 5AC, IT WILL NOT BE APPLICABLE PROSPECTIVELY RATHER IT WILL BE APPLIC ATION FOR WHOLE OF THE YEAR. THE LD CIT(A) FOR COMING TO THE CONCLUSION FOL LOWED THE DECISION OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT V. ASIA BROWN BOVERI LTD. REPORTED IN 316 ITR 450. 4. THE REVENUE HAVE PLEADED THAT HON'BLE KARNATAKA HIGH COURT IS NOT A JURISDICTIONAL HIGH COURT OF THE ASSESSEE. THEREF ORE, LD CIT(A) OUGHT TO HAVE NOT FOLLOWED THE DECISION. 5. THE LD COUNSEL, ON THE OTHER HAND, RELIED UPON TH E ORDER OF LD CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE QUESTION BEFORE THE HON'BLE KARNATAKA HIGH COURT WAS AS UNDER: - WHETHER THE APPELLATE AUTHORITIES WERE CORRECT IN H OLDING THAT DONATION MADE BY THE ASSESSEE TO HOSPITAL PRIOR TO ITS BE ING ITA NO5494/DEL/2011 3 DECLARED AS ELIGIBLE UNDER A NOTIFICATION AS PR SECTIO N 35AC OF THE ACT WILL ALSO ENTITLED TO CLAIM THE DEDUCTION AS THE NOTIFICATION WOULD NOT ONLY ACT PROSPECTIVELY BUT ALSO RETROSPECTI VELY. THE HON'BLE HIGH COURT HAS REPLIED THIS QUESTION BY O BSERVING THAT THE NOTIFICATION WILL NOT BE APPLICABLE PROSPECTIVELY R ATHER IT IS APPLICABLE FOR WHOLE OF THE YEAR. IT IS ADVANTAGEOUS TO TAKE NOT E OF THE BRIEF FINDING OF THE HON'BLE COURT. IN REGARD TO QUESTION NO.1 IS CONCERNED, BOTH THE AU THORITIES HAVE CONCURRENTLY HELD THAT THE DONATION PAID BY TH E ASSESSEE TO VIDYA SAGAR HOSPITAL HAS TO BE ALLOWED AS DEDUCTION I N VIEW OF THE EXEMPTION GRANTED TO VIDYA SAGAR HOSPITAL FOR TH ESE CONSECUTIVE ASSESSMENT YEARS. CONSIDERING THE EXEMPTION OR DER GRANTED TO VIDYA SAGAR HOSPITAL, THE AUTHORITIES HAV E COME TO THE CONCLUSION THAT THE EXEMPTION WAS NOT OPERATING F ROM A PARTICULAR DATE AND THE SAME WAS EFFECTIVE FOR ALL TH E FULL ASSESSMENT YEAR. THE LD DR WAS UNABLE TO POINT OUT ANY OTHER CONTRARY DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT OR OF THE SUPREME COURT. THEREFORE, WE DO NOT SEE ANY REASON TO DEFER WITH THE CONCLUSION OF THE LD CIT(A) OR NOT TO FOLLOW THE DECISION OF HON'BLE KARNATAKA H IGH COURT. 7. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE RE VENUE IS DISMISSED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH APRIL, 2013. SD/- SD/- (RAJPAL YADAV) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 25.4.2013. HMS ITA NO5494/DEL/2011 4 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 25.4.2013 DATE OF DICTATION 25.4.2013 DATE OF TYPING 25.4.2013 DATE OF ORDER SIGNED BY 25.4.2013 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET 26.4.2013 & SENT TO THE BENCH CONCERNED.