GURU GOBIND SINGH EDUCATIONAL SOCIETY, MOGA V. INCOME TAX OFFICER EXEMPTIONS, JALANDHAR

ITA 576/ASR/2018

AI Insights

The case involves the Guru Gobind Singh Educational Society, which appealed against the order of the Commissioner of Income Tax (Appeals)-4, Ludhiana, confirming an addition of Rs. 3,884,300 to the income of the assessee for the Assessment Year 2011-12. The addition was initially made by the Income Tax Officer (Exemption), Jalandhar, due to the corpus fund received by the assessee, which was not registered under section 12AA of the Income Tax Act and not approved under section 10(23C)(vi). The CIT(A) upheld the addition without considering the merits of the case, leading to the appeal before the Tribunal. The Tribunal found procedural lapses in the handling of the case by the CIT(A) and remanded the matter for a fresh examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115015 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2023
• Appeal Filed By: Assessee
• Order Result: AllowedAllowedAllowed
• Bench Allotted: DB
• Next Hearing Date: 01-03-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 26-11-2018
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 11; 12AA; 250; 10(23C)

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.576/Asr/2018 Assessment Year: 2011-12 Guru Gobind Singh Educational Society, G.N. Convent School VPO Bhaloor Distt. Moga. [PAN:AABTG2865L] (Appellant) Vs. ITO (Exemption) Jalandhar. (Respondent) Appellant by Sh. P. N. Arora, Adv. Respondent by Sh. S. R. Kaushik, CIT. DR Date of Hearing 02.03.2023 Date of Pronouncement 10.04.2023 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals)-4,Ludhiana,[in brevity the ‘CIT (A)’] I.T.A. No.576/Asr/2018 Assessment Year: 2011-12 2 order passed u/s 250 (6) of the Income Tax Act 1961, for A.Y. 2011-12.The impugned order was emanated from the order of the Income Tax Officer (Exemption), Jalandhar order passed u/s 148/147/143(1) of the Act date of order 28.03.2016. The assessee has taken the following grounds: - “1. That Ld Cit (A) Has Erred In Facts And Law In Confirming Addition Of Rs. 3884300 Toward The Income As Against Nil Income Declared By Assessee. 2. That theLd Cit (A) Erred In Confirming The Aforesaid Addition,Whereas The Appellant had Duly Submitted Its Reply To The Satisfaction Of Assessing Authority And Also Furnished The Required Evidence As Demanded By The Assessing Authority During The Assessment Proceedings In Support Of The Claim Of Donation Being Exempt In Terms Of Section 11(1)(d) Of The Income Tax Act And Confirmation Of Addition By Ld CIT (A) Is Bad In Law. 3. That The Appellant Had Legitimate Source Of Donation Of Rs.388430Q/-Received As Corpus Fund Of The Society And Also Submitted Detailed List Of All The Donors Along With Their Names And Addresses As Required By Assessing Authority And All The Donors Had Also Admitted Before The Assessing Authority That They I.T.A. No.576/Asr/2018 Assessment Year: 2011-12 3 Made Corpus Donation Supported By The Affidavits Along With Relevant Evidence Of Donations Made By Them To The Society To The Assessing Authority During The Assessment Proceeding And Ld CIT (A) Erred In Confirming In The Same. 4. That The Amount Of Donations Received As Corpus Fund Were Duly Utilized For Construction Of School Building As Per The Objects Of The Society And Confirmation Of Addition By Ld Cit(A) Is Opposed To Facts And Law And Circumstances Of Case. 5. Ld Cit (A)Completely Ignored The Facts, Supported With Decided Case Law That Corpus Donations Are Capital Receipts And Confirmation Of Addition Is Bad In Law. 6. That Ld Cit (A) Erred In Dismissing The Appeal Whereas On Certain Dates A.R. Of Assessee Did Not Appear. 7. That Order Pass ByLd Cit(A) Is Bad In Law.” 2. Brief fact of the case is that the assessee’s case was reopened U/s 148 of the Act, and addition was made amount of Rs.38,84,300/- related to corpus fund received by the assessee during the impugned assessment year. The assessee is an educational society and claimed exemption u/s 11 of the Act. But assessee was not registered u/s 12AA of the Act. The ld. AO placed that the assessee was also not approved u/s 10(23C) (vi). The entire corpus donation was added back with the I.T.A. No.576/Asr/2018 Assessment Year: 2011-12 4 total income of the assessee. Aggrieved assessee filed an appeal before the ld. CIT(A). But the ld. CIT(A) pass the order ex parte and upheld the decision of the ld. AO. Being aggrieved assessee filed an appeal before us. 3. The ld. counsel filed adjournment petitionand requested to fix another date. But during the hearing the ;d. Counsel for assessee has withdrawn the adjournment petition and taken part in hearing before the bench. The ld. Counsel placed that the assessee is an educational society and do not require to register u/s 12AA or any approval u/s 10(23C)(vi) for this impugned assessment year. The ld. Counsel further mentioned that the educational society is already immune for taking approval of section 12AA subject to the turnover is below 1 crore. The ld. Counsel further claimed that the assessee was not get inform from the CIT(A) about fixation od hearing. The appeal hearing was not presented before the authority and ex parte order was passed. 4. The ld. Counsel further mentioned that the ld. CIT(A) had passed the order without considering the merit of the case. The ld. Counsel invited our attention in para 6 of the CIT(A) order: I.T.A. No.576/Asr/2018 Assessment Year: 2011-12 5 “6. On careful consideration of the material on record, it has been noticed that the assessee has failed to furnish any submissions in support of the grounds of appeal taken by it. It is observed that the assessing officer has passed well-reasoned order after considering all the relevant facts of the case. The assessee has not filed any reply or evidence to controvert the findings of the assessing officer. Therefore, for reasons recorded in the order the assessing officer, the assessment order is upheld and appeal of the assessee is dismissed.” 5. The ld. Sr. DR argued and relied on the order of the revenue authorities. 6. We heard the rival submission and relied on the documents available in the record. The claim of the assessee before the bench that the assessee had received the corpus donation. The nature of donation and identity of the donationwereexplained. But the ld. AO without considering the proper fact and in wrong idea did not accept the donation and added back the amount with the total income. The ld. CIT(A) without considering the merit of the case, passed the order ex parte. It is found that the reasonable opportunity for verificationof merit of the case is denied by the revenue authority. Accordingly, we remit back the matter to I.T.A. No.576/Asr/2018 Assessment Year: 2011-12 6 the ld. CIT(A) for further adjudication de novo on merit. It is to be directed that the assessee should corporate with the revenue in set aside proceeding. Needless to say, the assessee should get reasonable opportunity in hearing in the said proceeding. 7. In the result, the appeal of the assessee bearing ITA No. 576/Asr/2018 is allowed for statistical purposes. Order pronounced in the open court on 10.04.2023 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE ) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order