MESERS GURU RAVIDAS AYURVED UNIVERSITY, HOSHIARPUR V. COMMISSIONER OF INCOME TAX, (EXEMPTIONS), CHANDIGARH

ITA 603/ASR/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2913 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 04-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Set aside
• Section: 12; 10; 11

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. 603/Asr/2018 Assessment Year: 2018-19 M/s Guru Ravidas Ayurved University, Una Road, Hoshiarpur [PAN: AAAJG 1758M] Vs. CIT (Exemptions), Chandigarh (Appellant) (Respondent) Appellant by : Sh. Vineet Krishan, Adv. Respondent by: Sh. Ram Mohan Singh, CIT DR Date of Hearing: 28.04.2022 Date of Pronouncement: 06.05.2022 ORDER Per Anikesh Banerjee, JM: The instant appeal was filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Exemptions), Chandigarh [in brevity CIT(E)], bearing Appeal No. CIT(E)/Chd/10(23C)(vi)/AAAJG1758M/2018-19/5920 dated 29.09.2018 passed u/s 10(23C)(vi) of the Income Tax Act, 1961 [in brevity the Act], in respect of Assessment Year 2018-19. 2. The brief fact is that the assessee is a trust and establish for uniformity in the standards of education in all faculties of AYUSH and various paramedical and para-dental disciplines, such as, nursing, medical laboratory technology, pharmacy, panch-karma techniques, physiotherapy and speech therapy with a view to ITA No. 603/Asr/2018 Guru Ravidas Ayurved University v. CIT 2 enhancing the quality of such education and consistently aiming to modernize, improve and achieve the highest standards of academic excellence at all levels. The assessee trust filed an application before the Revenue authority for approval u/s 10(23C)(vi) as a educational organization and non-profit making concern. The Revenue authority rejected the claim in the reason that from financial year 2013- 14, the assessee is generating surplus of income/profit over expenditure which was not utilized for its assets addition but to invest in fixed deposit. Due to unutilize surplus of the educational institution, the Revenue authority rejected the application of registration of assessee & treated the assessee as non charitable organisation. On the other hand, the assessee received grant of Rs.6,01,00,000/- from Government of India and claimed that this particular project is genuine and achieving to its financial aim within very short period. They also claim this AYUSH Medical College under the guidance of the Ministry of UGC and the grant of Rs.6.01 crore was received as a grant for capital works on 50-50 basis from Central Government and State Government. The grant was received in financial year 2011-12 from Central Government and from State Government for financial year 2012-13. The assessee’s claim was rejected and the application of the registration is turned out by the Revenue. 3. Aggrieved the assessee filed an appeal before us. 4. The ld counsel of the assessee submitted a paper book with all relevant documents dated 24.03.2022. As per the ld. counsel, the certificate of utilization related the project was filed before the ld CIT(E) and also the copy of the certificate is annexed here: ITA No. 603/Asr/2018 Guru Ravidas Ayurved University v. CIT 3 ITA No. 603/Asr/2018 Guru Ravidas Ayurved University v. CIT 4 5. The ld. CIT-DR vehemently argued and pointed out that the assessee trust is not doing any charitable work even not utilizing his surplus for the development of the trust activities. He relied on the order of the ld. CIT(E) which is extracted as follows: 8.4. It is also worth mentioning here that as the applicant has itself stated that the applicant university is controlled by the UGC as well as Ministry of AYUSH, New Delhi and Rs. 3.01 crore has been received from Ministry of Health and Family Welfare AYUSH Government of India. The applicant has filed the copy of the letter through which it has received Rs. 3.01 crore. From the said letter it was observed that the applicant did not even comply the condition provided by the Ministry of Health and Family Welfare. No relevant documents in regard with the following condition were filed by the applicant:- (i) A separate Bank account with the scheduled nationalized bank in tiie name of applicant, in which grant was received. (ii) The audited Statement of the Account furnished to Ministry, after utilization of grant in aid. (iii) An achievement- cum- performance of progress work six monthly to the Department of A YUS H. iv) Record of assets created after such grant. 9. From the perusal of balance sheet , further it was found that upto 31st March 2016, the applicant has shown specific grant, building fund for construction of Rs. 6.01 crore on liability side and Rs. 6.52 crore under the head of Ex. EN B&R (Advances for building construction) on assets side but despite these above said advances of Rs. 6.52 crore, no addition in fixed assets had been made under the head of building or construction of building but in the schedule o f f i x e d assets annexed to balance sheet as on 31 st March March 2017. ITA No. 603/Asr/2018 Guru Ravidas Ayurved University v. CIT 5 Schedule of fixed assets annexed to balance sheet as on 31 Match 2017 Sr. No Name of the assets Depreciation rate WDV as on 01.04.2016 Addition I s1 half Addition 2 nd half Adjusted during the year 21. Building under Construction 0% 9.05,87,407/ 24,75,454/- -------- 9,30,62,861/- 22. Building 10% --------- 9,30,62,861/ - ------- --------- From the above schedule of fixed assets, it was noticed that the applicant has shown opening balance of WDV as on 01.04.2016 of Rs. 9,05,87,407/- under the head building under ' construction but there were no such entry found in the closing balance in the balance sheet as on 31st March 2016. This shows that the applicant's books of account are not reliable. One more relevant point here comes in the mind that if there is no building upto 31st March 2016 then on what basis the applicant is charging various fees and shown receipts of Rs 11.83 crore in F.Y 2015-16. Without building what kind of education the applicant is providing and for what are the students are being charged is not decipherable. 10. Additionally it is seen that the applicant is also involved in claiming wrong exemption. From the perusal of ITRs along with the computation, filed by the applicant, it was found that I he applicant has wrongly claimed exemption u/s 11 of IT Act for A.Y. 2014- 15, 2015-16 and 2016-17, The notable fact is that the applicant is claiming exemption u/s 11 of IT Act without any registration/ approval u/s 10 or 12 of IT Act. Such Adoption of methods do not imbue any charitable character on the applicant and severely dent its genuineness.” 6. The ld. CIT-DR had draw our attention in the following judicial pronouncements which are as under: (1) Ashwini Sahakari Rugnalaya & Res. Centre v. CCIT & Ors in Civil Appeal No. 3453/2007 dated 15 th September, 2021 (2) M/s Rajah Sir Annamalai v. The Chief Commissioner of Income Tax in WP Nos. 29475/2012, 34234/2013 & 1739/2015 and M. P. Nos. 1 of 2012, 1 of 2013 and 1 of 2015 dated 26 th September, 2012 ITA No. 603/Asr/2018 Guru Ravidas Ayurved University v. CIT 6 (3) Indian Institute of Engg. Technology, Chennai v. The Dy. Director of Income Tax in ITA Nos. 2092 & 2093/Chny/2016 dated 22.06.2018 7. The ld. counsel vehemently argued & pointed out in the order of the ld. CIT(E) in point no. 9. As per the ld. counsel, the Revenue made the remark in its order which is further extracted here:- “it was noticed that the applicant has shown opening balance of WDV as on 01.04.2016 of Rs. 9,05,87,407/- under the head building under ' construction but there were no such entry found in the closing balance in the balance sheet as on 31st March 2016” The ld Counsel vehemently opposed on the observation of the ld CIT(E). He mentioned that the order was drafted in wrong fact. The particular entry is in the said balance sheet which was placed during the hearing before revenue. 8. The ld. counsel took cognizance in the balance sheet of the assessee trust which was filed before the Revenue authorities and also before us. Here we are reproducing the copy of the balance sheet for the year ended 31 st March, 2016 is as under: ITA No. 603/Asr/2018 Guru Ravidas Ayurved University v. CIT 7 ITA No. 603/Asr/2018 Guru Ravidas Ayurved University v. CIT 8 9. The ld. counsel also pointed out that the assessee-trust had invested in fixed assets of Rs.2,603,232.39 and capital work in progress of building works of Rs.25,360,031.00. He also placed that the assessee-trust is paying rent for accommodation of its office staff and students. So the ld. CIT(E) did not make proper observation in this issue. 10. We heard the rival submissions and considered the documents available on record. It is correct that the assessee is maintaining a huge surplus in its bank account which is correctly pointed out by the ld. CIT-DR. But on the other hand, the activity of the assessee-trust is not discussed by the ld. CIT(E) in respect of the object of the trust mentioned in its main object. The genuinety of the trust and relation of the activity with main object was not properly discussed by the Revenue in its order. 11. The observation of the ld. CIT(E) is not proper related to addition of the fixed asset and work in progress in building works which are already reflected in the Balance sheet as at 31/03/2016. So, the observations of the Revenue authority is not without lacuna. The facts are discussed without considering the proper documents of assessee-trust. 12. The impugned order is set aside and the matter is restored back to ld. CIT(E) for denovo adjudication after considering the assessee’s evidences. The assessee, in turn, is directed to substantiate its case. Needless to add that adequate opportunity of hearing shall be granted to the assessee. ITA No. 603/Asr/2018 Guru Ravidas Ayurved University v. CIT 9 13. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 06.05.2022 Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member Date: 06.05.2022 *GP/Sr. PS* Copy of the order forwarded to: (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