SHRI MERH KSHTRIYA SABHA, AJMER V. INCOME TAX OFFICER (EXEMPTION), AJMER

ITA 587/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6345 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 26-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Additional evidence; Assessment record; Capital expenditure; Set aside
• Section: 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 587/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2016-17 SHRI MERH KSHTRIYA SABHA, PATTI KATLA, NAYA BAZAR, AJMER-305001 CUKE VS. ITO, (EXEMPTION), AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAFTS9079J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. SUNIL PORWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 21/09/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 22/09/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), AJMER DATED 01.03.2019 WHEREIN THE ASSESSEE HAS TAK EN FOLLOWING GROUNDS OF APPEAL:- UNDER THE FACTS & CIRCUMSTANCES OF CASE THE LD. CI T(A) HAS ERRED IN:- (1) APPLICATION OF RULE 46A AND DISMISSING THE APPEAL I S BAD IN LAW. (2) THAT CONFIRMING VOLUNTARY CONTRIBUTION RECEIVED OF RS. 31,69,001/- AS ANONYMOUS DONATION UNDER SECTION 115BBC IS BAD IN LAW. (3) THAT NOT CALCULATING THE INCOME OF TRUST BEING CHAR ITABLE IN TERMS OF SECTION 11 AND 12 OF ACT. ITA NO. 587/JP/2019 SH. MERH KSHTRIYA SABHA, AJMER VS. ITO(E XEMPTION), AJMER 2 2. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSEE IS AGGRIEVED WITH THE FOLLOWING FINDINGS OF THE LD. CI T(A) WHICH ARE CONTAINED AT PARA 4.3 OF HIS ORDER WHICH READ AS UNDER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STAT EMENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSION CAREFULLY. IT IS SEEN THAT THE APPELLANT HAD INTRODUCED SUM OF RS. 31,69,001/- IN THE BALANCE SHEET UNDER THE HEAD RECEIVED SAHAYOG RASHI FROM PATTI K ATLA BHAWAN. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS PROV IDED MORE THAN ONE OPPORTUNITY TO THE APPELLANT TO EXPLAIN NATURE AND SOURCE OF THIS AMOUNT TAKEN DIRECTLY IN THE BALANCE SHEET WITHOUT ROUTING THE SAME THROUGH THE INCOME & EXPENDITURE ACCOUNT. THE APPEL LANT DID NOT BOTHER TO FURNISH ANY EXPLANATION OR DETAIL EVEN AF TER SHOW CAUSE NOTICE HAVING BEEN ISSUED BY THE AO ON 09.11.2016. THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS HAS NOT FILED ANY APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UN DER RULE 46A. THEREFORE, THE ADDITIONAL EVIDENCES SUBMITTED BY TH E APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS ARE NOT ADMITTE D UNDER RULE 46A, AS THE APPELLANT HAS FAILED TO SHOW THAT THE CASE O F THE APPELLANT WAS COVERED UNDER ANY CLAUSE OF RULE 46A. AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAD NOT FILED ANY EXPLANATION OR DETAIL WITH REGARD TO THE AMOUNT OF RS. 31,69,001/- TAKEN DIRECTLY IN THE BALANCE SHEET WIT HOUT ROUTING THE SAME THROUGH THE INCOME & EXPENDITURE ACCOUNT, THER EFORE, I AM OF THE CONSIDERED VIEW THAT THE AO HAS RIGHTLY TREATED THE SAME AS INCOME U/S 2(24)(IIA). ACCORDINGLY, THE ADDITION OF RS. 31,69,001/- MADE BY THE AO IS HEREBY CONFIRMED. 3. THE LD A/R SUBMITTED THAT THE ASSESSEE TRUST IS REGISTERED U/S 12A(A) VIDE ORDER DATED 19.12.2001 AS A CHARITABLE TRUST A ND TRUSTS ACCOUNTS ARE ITA NO. 587/JP/2019 SH. MERH KSHTRIYA SABHA, AJMER VS. ITO(E XEMPTION), AJMER 3 SUBJECT TO AUDIT AND SAID AUDITED ACCOUNTS ALONG WI TH AUDIT REPORT WERE FURNISHED ALONG WITH THE RETURN OF INCOME. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT A SUM OF RS. 31,6 9,000/- HAS BEEN RECEIVED BY THE ASSESSEE AS SAHYOG RASHI BEING CORP US DONATION WHICH HAS BEEN DIRECTLY CREDITED IN BALANCE-SHEET AND NOT ROU TED THROUGH INCOME AND EXPENDITURE ACCOUNT HOWEVER SHOWN AS RECEIPTS/INCOM E IN COMPUTATION OF INCOME. AGAINST THE SAID RECEIPT, THE ASSESSEE HAS INCURRED A SUM OF RS. 31,57,085/- TOWARDS CAPITAL EXPENDITURE. DUE TO DIF FERENCE WITH CA/AR OF THE TRUST AND THE ONLINE ASSESSMENT PROCESS, THE E-MAIL FOR SHOW-CAUSE AND NOTICES WERE RECEIVED BY CA/AR BUT NO REPLY THEREOF COULD BE FILED AND THUS THE AO HAS DECIDED THE CASE EX-PARTE QUA THE ASSESS EE. IN THIS BACKGROUND, AN AFFIDAVIT WAS FILED BEFORE THE LD. CIT(A) AND AS SESSEE REQUESTED HIM TO CONSIDER THE FACTS AND EVIDENCE PLACED ON RECORD. IT WAS SUBMITTED THAT A LIST OF PERSONS WITH THEIR NAME & ADDRESS WERE FILE D WITH THE AO, HOWEVER, THE AO HAS NOT TAKEN COGNIZANCE OF THE SAID DETAILS SUBMITTED BY THE ASSESSEE IN SUPPORT OF THE VOLUNTARY CONTRIBUTIONS OF RS. 31,69,001/- RECEIVED BY THE ASSESSEE AND THE VO LUNTARY CONTRIBUTION SO RECEIVED WAS TREATED AS ANONYMOUS DONATION IN TERMS OF SECTION 2(24)(IIA) READ WITH SECTION 115BBC OF THE ACT. 4. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WENT IN APPEAL AGAINST THE SAID FINDINGS AND AN AFFIDAVIT WAS FILED BEFORE THE LD. CIT(A) AND ASSESSEE REQUESTED HIM TO CONSIDER THE FACTS AND EVIDENCE PL ACED ON RECORD AND THE SAID DETAILS WERE AGAIN SUBMITTED BEFORE THE LD. CI T(A). HOWEVER, THE LD. CIT(A) HAS TREATED THE SAID DETAILS AS ADDITIONAL E VIDENCES AND HAS NOT ADMITTED THE SAME INVOKING THE PROVISIONS OF RULE 4 6A. IT WAS SUBMITTED THAT THESE WERE NOT ADDITIONAL EVIDENCES WHICH WAS SUBMITTED FOR THE FIRST TIME BEFORE THE LD. CIT(A) RATHER THESE DOCUMENTS W ERE DULY SUBMITTED BEFORE THE ASSESSING OFFICER. A FACT WHICH HAS BEEN CONFIRMED BY THE AO ITA NO. 587/JP/2019 SH. MERH KSHTRIYA SABHA, AJMER VS. ITO(E XEMPTION), AJMER 4 SUBSEQUENTLY VIDE LETTER NO. 519 DATED 21.01.2019. IT WAS ACCORDINGLY SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN INVOKING THE PROVISIONS OF RULE 46A AND DISMISSING THE APPEAL OF THE ASSESSEE. IT WAS F URTHER SUBMITTED THAT THE PROVISIONS OF SECTION 115BBC OF THE ACT HAVE BEEN W RONGLY INVOKED BY THE ASSESSING OFFICER AS SUCH PROVISIONS DOES NOT APPLY TO TRUST OR INSTITUTIONS ESTABLISHED WHOLLY FOR CHARITABLE OR RELIGIOUS PURP OSES AND THE ASSESSEE BEING A CHARITABLE TRUST NOT ESTABLISHED FOR ANY ED UCATIONAL OR MEDICAL PURPOSES AND IN SUPPORT, THE RELIANCE WAS PLACED ON THE CBDT CIRCULAR NO. 14/2006 DATED 28.12.2006. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS DULY TAKEN THE SAID RECEIPTS IN ITS COMPUTATION OF INCOME WHILE FILING ITS RETURN OF INCOME AND AGAINST THE SAID RECEIPT, THE ASSESSEE HAS INCURRED A SUM OF RS. 31,57,085/- TOWARDS CAPITAL EXPENDITURE. 5. PER CONTRA, THE LD. DR SUBMITTED THAT FROM PERUS AL OF THE ASSESSMENT ORDER, IT IS CLEAR THAT THE ASSESSEE HAS NOT RESPON DED TO ANY OF THE SHOW- CAUSE NOTICES ISSUED BY THE ASSESSING OFFICER. THER EFORE, THE CONTENTION OF THE ASSESSEE THAT THE COMPLETE PARTICULARS ABOUT TH E DONORS WERE SUBMITTED BEFORE THE ASSESSING OFFICER CANNOT BE ACCEPTED. IT WAS ACCORDINGLY SUBMITTED THAT THESE WERE CLEARLY ADDITIONAL EVIDEN CES WHICH WERE SUBMITTED BEFORE THE LD. CIT(A) FOR THE FIRST TIME AND IN ABS ENCE OF ANY APPLICATION SEEKING PERMISSION TO FILE ADDITIONAL EVIDENCES UND ER RULE 46A AND IN ABSENCE OF SATISFACTION OF ANY CONDITION SPECIFIED THEREIN, THE LD. CIT(A) HAS RIGHTLY DISMISSED THE APPEAL OF THE ASSESSEE BY NOT ADMITTING THE ADDITIONAL EVIDENCES. IT WAS FURTHER SUBMITTED THAT ONE OF THE OBJECTS OF THE ASSESSEES TRUST BEING SETTING UP OF EDUCATIONAL INSTITUTIONS AND CARRYING OUT ACTIVITIES IN THE FIELD OF EDUCATION AND WHICH WAS CONSIDERED WHI LE GRANTING THE APPROVAL UNDER SECTION 12A(A) OF THE ACT, MERELY BECAUSE THE ASSESSEE HAS NOT SET UP ANY EDUCATIONAL INSTITUTION OR HAS NOT CARRY ON ANY ACTIVITIES IN THE EDUCATIONAL SPHERE DOESNT MEAN THAT THE ASSESSEE T RUST IS NOT SETUP FOR ITA NO. 587/JP/2019 SH. MERH KSHTRIYA SABHA, AJMER VS. ITO(E XEMPTION), AJMER 5 EDUCATIONAL PURPOSES AND THEREFORE, THE PROVISIONS OF SECTION 1115BBC ARE CLEARLY APPLICABLE AS THE ASSESSEE HAS FAILED TO SU BMIT THE IDENTITY AND OTHER REQUISITE DETAILS ABOUT THE DONORS FROM WHOM THE DO NATION HAS BEEN RECEIVED DURING THE YEAR. THE LD DR ACCORDINGLY SU PPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LIMITED ISSUE UNDER CONSID ERATION IS THE TAXABILITY OF AN AMOUNT OF RS. 31,69,001/- RECEIVED BY THE ASSESS EE WHICH HAS BEEN TREATED AS ANONYMOUS DONATIONS BY THE ASSESSING OFF ICER BY INVOKING THE PROVISIONS OF SECTION 115BBC IN ABSENCE OF REQUISIT E DETAILS OF THE DONORS WHICH HAVE CONTRIBUTED THE SAID AMOUNT TO THE ASSES SEE TRUST. THE LD. AR HAS SUBMITTED THAT THE DETAILS WERE DULY SUBMITTED BEFORE THE ASSESSING OFFICER AND WHICH HAS BEEN CONFIRMED BY THE ASSESSI NG OFFICER SUBSEQUENTLY, VIDE LETTER NO. 519 DATED 21.01.2019. ON PERUSAL O F THE SAID LETTER, WE FIND THAT IT IS A LETTER WRITTEN BY THE ITO(EXEMPTION), AJMER TO THE TREASURER OF THE ASSESSEE TRUST WHICH HE HAS ENCLOSED A COPY OF THE LEDGER ACCOUNT FOR THE PERIOD 1 ST APRIL 2015 TO 31 ST MARCH, 2016 CONTAINING ENTRIES RELATING TO INDIVIDUAL DONORS. TO WHAT EXTENT, THE LEDGER CONT AINS THE IDENTITY OF THE DONORS IN TERMS OF NAME AND ADDRESS AND OTHER REQUI SITE PARTICULARS AS PRESCRIBED AS SO SOUGHT BY THE AO IS NOT CLEAR BUT IT IS A MATTER OF RECORD THAT THE SAID LEDGER WAS PRODUCED BEFORE THE ASSESS ING OFFICER AND IS PART OF THE ASSESSMENT RECORDS AND THEREFORE, DOESNT QUALI FY AS AN ADDITIONAL EVIDENCE. THEREFORE, WE FIND THAT THESE DETAILS SO SUBMITTED BY THE ASSESSEE NEEDS TO BE DULY EXAMINED AND BASIS SUCH EXAMINATIO N, A FINDING SHOULD BE CLEARLY RECORDED AS TO WHETHER AND TO WHAT EXTENT, THE DONATIONS SO RECEIVED QUALIFY AS ANONYMOUS DONATIONS OR NOT. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE SET ASIDE THE MATTER TO THE FILE OF LD. CIT(A) TO CONSIDER THE DETAILS SO SUBMITTED BY THE ASSESSEE AND DECIDE THE ITA NO. 587/JP/2019 SH. MERH KSHTRIYA SABHA, AJMER VS. ITO(E XEMPTION), AJMER 6 MATTER AFRESH ON MERITS AS PER LAW INCLUDING THE CO NTENTION OF THE ASSESSEE REGARDING APPLICABILITY OF SECTION 115BBC AFTER PRO VIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. GROUND NO. 2 AND 3 AR E DISPOSED OFF ACCORDINGLY. 7. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED THE COMPUTATION OF INCOME IN TERMS OF SECTION 11 AND 12 OF THE ACT. SI NCE, WE HAVE SET ASIDE THE OTHER MATTER, THIS MATTER IS ALSO SET ASIDE TO THE FILE OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH AFTER PROVIDING REASONABLE O PPORTUNITY TO THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISPOS ED OFF IN LIGHT OF ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 22/09/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 22/09/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI MERH KSHTRIYA SABHA, AJMER 2. IZR;FKHZ@ THE RESPONDENT- ITO, (EXEMPTION), AJMER 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 587/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR