SACRED HEART EDUCATIONAL RELIGIOUS & CHARITABLE SOCIETY, LUDHIANA V. INCOME-TAX OFFICER (EXEMPTIONS) WARD, JALANDHAR

ITA 561/ASR/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6084 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 22-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revenue expenditure; Capital expenditure
• Section: 143(3); 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 561/Asr/2019 Assessment Year: 2014-15 Sacred Heart Educational Religious & Charitable Society 327-C, BRS Nagar, Ludhiana [PAN: AADTS 6498M] Vs. The Income Tax Officer (Exemptions) Ward – Jalandhar, CR Building, New Wing, Opp. Skylark, Jalandhar (Appellant) (Respondent) Appellant by : Sh. Jasleen Singh Khera, Adv. Respondent by: Sh. S. M. Surendranath, Sr. DR Date of Hearing: 03.03.2022 Date of Pronouncement: 25.03.2022 ORDER Per Anikesh Banerjee, JM: The instant appeal is filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-4, Ludhiana [in brevity the CIT(A)], bearing Appeal No. 02/ROT/IT/CIT(A)-4/LDH/2017-18 dated 04.06.2019 passed u/s 143(3) of the Income Tax Act,1961 in relation to Assessment Year 2014-15. 2. The assessee has raised the following grounds of appeal:- “1. That the Ld. Commissioner of Income- Tax (Appeals) has wrongly erred on facts and on law by confirming the addition of a sum of Rs. 12,46,640/ being the amount of Income Tax paid- for Assessment Year 2010-11 which was inadvertently debited to Receipt and Expenditure Account of the assessee, debatable addition as income of the assessee, after ITA No. 561/Asr/2019 Sacred Heart Educational Religious & Charitable Society v. The ITO 2 ignoring the fact that the utilization of funds even after excluding this amount exceeds the mandatory limit of 85%. 2. That the Ld. Commissioner of Income- Tax (Appeals) has erred in failing to consider various replies and submissions placed on record in the proceedings before her which is arbitrary and unjustified. 3. That the order of Ld. Commissioner of Income-Tax (Appeals) is erroneous, arbitrary, opposed to the facts of the case and is unsustainable in law. 4. That the appellant craves for permission to amend or add any other ground of appeal, before the appeal is finally heard and disposed of. 3. The brief fact is that the assessee filed its return u/s 139(1). In the income expenditure account, the assessee claimed expenses amount of Rs. 12,46,640/- for payment of direct tax related to financial year 2009-10 relevant to assessment year 2010-11 as utilization/application of income. Accordingly, the Ld. Assessing Officer [in brevity the AO] disallowed the violation of condition of section 12A r.w.s. 11 of the Act regarding 85% utilization for charitable purpose. In fact, the assessee’s gross receipt was amount of Rs. 3,53,58,892.71/- and total utilization of fund amount to Rs. 4,24,89,568.91/- after reducing the income tax paid amount of Rs. 12,46,640/-. This payment of income tax amount to Rs.12,46,640/- was added if the assessee’s total income by the Ld AO. The assessee filed appeal before the ld. CIT(A). But the Ld. CIT(A) did not consider the same and took the income tax liability payment as addition of income and the addition was sustained accordingly. 4. After the order of the Ld. CIT(A), the assessee filed an appeal before us. 5. During the hearing the assessee filed a paper book and the following calculation was filed which is reproduced as under: “Computation of income Gross Receipts 3,53,58,892,.71 ITA No. 561/Asr/2019 Sacred Heart Educational Religious & Charitable Society v. The ITO 3 Less utilization of funds after reducing Rs. 12,46,460/- for income tax paid Revenue Expenditure 2,78,69,956.91 Capital Expenditure 1,46,19,612.00 4,24,89,568.91 ------------------ Total income (-) 71,30,676.2” 6. The assessee’s total utilization of fund after reducing the payment is amount of Rs. 4,24,89,568.91/-. So the assessee’s utilization fund is more than 85% accordingly no violation of section 11 of the Act. In this moment we are not able to verify the details calculation of assessee. So, the direction is made to the Ld. AO to verify the only the utilization of fund in the context of above mentioned discussion. 7. It is to be directed to the ld Assessing Officer to consider the total utilization of fund of the assessee which is more than 85% of Gross Receipt and calculate the tax accordingly with due consideration of section 11 of the Act after deducting the payment of income tax amount of Rs. 12,46,460/-. So, the ground of the assessee is allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 25.03.2022 Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member Date: 25.03.2022 *GP/Sr. PS* Copy of the order forwarded to: ITA No. 561/Asr/2019 Sacred Heart Educational Religious & Charitable Society v. The ITO 4 (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order