JCIT, Noida V. M/s. Nitya Educational Society, Gautam Budh Nagar

ITA 6048/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91155 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 15-06-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 07-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Section: 143(3); 147; 12

Judgement Text

ITA NO S . 6048 & 6049/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A.NO S . 6048 & 6049 /DEL/201 3 A.Y RS . : 200 2 - 0 3 & 200 3 - 0 4 JOINT COMMISSIONER OF INCOME TAX, RANGE - 1, AAYAKAR BHAVAN, 3 RD FLOOR, PLOT NO. A - 2D, SECTOR - 24, NOIDA 201 301 (U.P.) VS. M/S NITYA EDUCATIONAL SOCIETY, B - 43, SECTOR - 56, NOIDA, GAUTAMBUDH NAGAR (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI P. DAM KANUNJNA, SR. DR ASSESSEE BY : NONE DATE OF HEARING : 15 - 0 6 - 201 5 DATE OF ORDER : 16 - 0 6 - 201 5 ORDER PER H.S. SIDHU : J M THE REVENUE HAS FILED THE SE APPEALS AGAINST THE SEPARATE IMPUGNED ORDER S BOTH DATED 13.8.2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), NOIDA . SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS ARE COMMON, HENCE, WE ARE DISPOSING OF THE APPEALS BY THIS CONSOLIDATED ORDER FOR THE SAKE OF BREVITY, BY DEALING WITH THE ITA NO. 6049 /DEL/2013 (A.Y. 200 3 - 0 4 ) . 2. THE GROUNDS RAISED IN ITA NO. 6048 /DEL/2013 (A.Y. 200 2 - 0 3 ) READ AS UNDER: - 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW IN DELETING THE PENALTY IMPOSED AT RS. 1 0,15,900/ - U/S 271( 1) (C) ITA NO S . 6048 & 6049/ DEL/ 2013 2 WITHOUT APPRECIATING THE FACTS. WHICH AO HAS DISCUSSED IN ASSESS MENT ORDER AT L ENGTH. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW BY SIMPLY HOLDING THAT SINCE QUANTUM APPEAL HAS BEEN DECIDED IN FAVOUR OF APPELLANT ASSESSEE, THE VERY BASIS OF AO PASSING PENALTY ORDER U/S 271(I)(C) ALSO CEASES TO EXIST AND DELETED THE PENALTY U/S 271 (I)(C) WITHOUT APPRECIATING THAT THE REVENUE FILED APPEAL AGAINST THE ORDER OF THE H ON BLE ITAT WHEREIN FOLLOWING QUESTION OF IN BRIEF EMERGES AGAINST THE QUANTUM APPEAL RE LIEF, NAMELY : - A) WHETHER AN IN SITU A TION CAN BE TREATED AS AN ED UCATIONAL INSTITUTION AND BENEFIT OF SECTIO N 1 O(23C)(IIIAD) OF THE ACT BE ALLOWED THERETO WITHOUT AFFILIATION TO C B SE OR ANY OTHER BOARD. B) W HE T HER THE H ON BL E ITAT IS CORRECT IN ALLOWING BENEFIT OF SECTION IO(2 3 C)(IIIA D ) TO THE ASSESSEE WHEN IT DID NOT HAVE ANY AFFILIATION TO THE CBSE OR ANY OTHER, BOARD DURING THE YEAR AND DID NOT IMPART ANY EDUCATIONAL ACTIVITY DURING THE YEAR WHEREAS I N THE CASE LAW RELIED UPON BY ITAT OF DOON FOUNDATION (1985) 154 ITR 208 (CAL), REGULAR CLASSES FOR TEACHING HINDI WERE HELD AND INCOME THERE FROM WAS CONSIDERED WITHIN THE PURVIEW OF SECTION 10(23C)(IIIAD). C) WHETHER THE ASSESSEE CAN BE GIVEN THE BENEFIT OF SECTION 1O(23C)(IIIA D ) DESPITE HAVING NO REGISTRATION ITA NO S . 6048 & 6049/ DEL/ 2013 3 U/S 12 A AS RE GI STRATION WAS G RANTED ON 29.9.2009 EFFECTIVE 30.3.2009, HAVING NO AFFILIATION TO CBSE OR ANY OTHER EDUCATIONAL BOARD, HAVING NO EDUCATIONAL INFRASTRUCTURE, AND WAS ALSO NOT CONDUCTING ANY REGULAR CLASSES AS IN DOON FOUNDATION. 3. THAT THE APPELLANT CRAVES TO LEAVE, ADD, ALTER AND AMEND ANY OF THE GROUNDS OF APPEAL ON OR BEFORE HEARING. 4. THE ORDER OF THE LD. CIT(A) DESERVES TO BE SET ASIDE AND THE ORDER OF THE AO BE RESTORED. 3. THE GROUNDS RAISED IN ITA NO. 6049 /DEL/2013 (A.Y. 200 3 - 0 4 ) READ AS UNDER: - 1. THAT THE LEARNED CIT(A) HA S ERRED IN LAW IN DELETING THE PENALTY IMPOSED AT RS. 2 , 51 , 664/ - U/S 271( 1) (C) WITHOUT APPRECIATING THE FACTS , WHICH AO HAS DISCUSSED IN ASSESSMENT ORDER AT L ENGTH. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW BY SIMPLY HOLDING THAT SINCE QUANTUM APPEAL HAS BEEN DECIDED IN FAVOUR OF APPELLANT ASSESSEE, THE VERY BASIS OF AO PASSING PENALTY ORDER U/S 271(I)(C) ALSO CEASES TO EXIST AND DELETED THE PENALTY U/S 271 (I )(C) WITHOUT APPRECIATING THAT THE REVENUE FILED APPEAL AGAINST THE ORDER OF THE H ON BLE I TAT WHEREIN FOLLOWING QUESTION OF IN BRIEF EMERGES AGAINST THE QUANTUM APPEAL RE LIEF, NAMELY : - A) WHETHER AN IN SITU A TION CAN BE TREATED AS AN EDUCATIONAL INSTITUTION AND BENEFIT OF SECTIO N 1 O(23C)(IIIAD) OF THE ACT BE ALLOWED THERETO WITHOUT AFFILIATION TO C B SE OR ANY OTHER BOARD. ITA NO S . 6048 & 6049/ DEL/ 2013 4 B) W HE T HER THE H ON BL E ITAT IS CORRECT IN ALLOWING BENEFIT OF SECTION IO(2 3 C)(IIIA D ) TO THE ASSESSEE WHEN IT DID NOT HAVE ANY AFFILIATION TO THE CBSE OR ANY OTHER, BOARD DURING THE YEAR AND DID NOT IMPART ANY EDUCATIONAL AC TIVITY DURING THE YEAR WHEREAS I N THE CASE LAW RELIED UPON BY ITAT OF DOON FOUNDATION (1985) 154 ITR 208 (CAL), REGULAR CLASSES FOR TEACHING HINDI WERE HELD AND INCOME THERE FROM WAS CONSIDERED WITHIN THE PURVIEW OF SECTION 10(23C)(IIIAD). C) WHETHER THE ASSESSEE CAN BE GIVEN THE BENEFIT OF SECTION 1O(23C)(IIIA D ) DESPITE HAVING NO REGISTRATION U/S 12 A AS RE GI STRATION WAS G RANTED ON 29.9.2009 EFFECTIVE 30.3.2009 HAVING NO AFFILIATION TO CBSE OR ANY OTHER EDUCATIONAL BOARD, HAVING NO EDUCATIONAL INFRASTRUCT URE, AND WAS ALSO NOT CONDUCTING ANY REGULAR CLASSES AS IN DOON FOUNDATION. 3. THAT THE APPELLANT CRAVES TO LEAVE, ADD, ALTER AND AMEND ANY OF THE GROUNDS OF APPEAL ON OR BEFORE HEARING. 4. THE ORDER OF THE LD. CIT(A) DESERVES TO BE SET ASIDE AND THE ORDER OF THE AO BE RESTORED. 4. THE BRIEF FACTS OF THE CASE ARE THE RETURN FOR ASSESSMENT YEAR 2003 - 04 WAS FILED ON 24.9.2003 DECLARING INCOME AT RUPEES NIL. ON PERUSAL OF THE BALANCE SHEET IT WAS NOTICED THAT THE ASSESSEE SOCIETY DURING THE YEAR HAS RECEIVED DONATION OF RS 8,85,600 / . FURTHER DURING THE ASSESSMENT PROCEEDINGS FOR A. Y. 2004 - 05, IT WAS SEEN THAT AS PER THE BALANCE SHEET THE ASSESSEE HAD SHOWN CORPUS FUND OF RS . 42,79,700 / - AS ON 1.4.2003. AS PER RETURNS FOR A.Y 2002 - 0 3 AND 2003 - 04 AND AS PER THE DETAILS FURNISHED DURING THE ITA NO S . 6048 & 6049/ DEL/ 2013 5 ASSESSMENT PROCEEDINGS, CORPUS FUND OF RS 33,94,100 / AND RS 8,85,600 / - WAS RECEIVED DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2002 - 03 AND 2003 - 04 RESPECTIVELY. THE ENTIRE CORPUS FUND HAS BEEN RE CEIVED BY THE ASSESSEE IN CASH AND EVIDENCE IN THIS REGARD COULD NOT BE FURNISHED BY THE ASSESSEE SOCIETY. AS THE. INCOME OF RS 8,85,600 / - HAD ESCAPED ASSESSMENT DURING. THE A.Y. 2003 - 2004, PROCEEDING U / S 147 WERE INITIATED AND ASSESSMENT WAS COMPLETED ON AN INCOME RS 8,85,600 / - IN THE STATUS OF AOP U/S 143(3)/147 OF THE INCOME TAX ACT,1961 AND EXEMPTION U/S 1O(23C) (IIIAD) WAS NOT ALLOWED. ASSESSING OFFICER NOTED THAT IN THIS CASE EVIDENCES OF ESCAPEMENT OF INCOME OF RS. 8,85,600/ - FOR AY 2003 - 04 COULD BE DETECTED ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) FOR THE AT 2004 - 05. IF THE CASE FOR AY 2004 - 05 WOULD NOT HAVE BEEN SCRUTINIZED ABOVE INCOME OF RS. 8,85,600/ - WOULD NOT HAVE COME IN THE TAX NET. THUS IT IS CLEAR CUT CASE, RATHER A CASE OF CONSCIOUS CONCEALMENT OF INCOME AND OF FURNISHING INCORRECT AND INACCURATE PARTICULARS OF INCOME, ON WHICH PENALTY 271(1)(C) IS ATTRACTED. THEREFORE, THE AO HELD THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME THEREBY C ONCEALED TRUE PARTICULARS OF SUCH INCOME AND PENALTY U/S. 271(1)(C) IS LEVAIBLE IN THIS CASE AND IMPOSED A PENALTY OF RS. 2,51,664/ - ON THE ASSESSEE VIDE HIS ORDER DATED 1.3.2002. 4. 1 AGGRIEVED WITH THE PENALTY ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT (A), WHO VIDE IMPUGNED ORDER DATED 13 . 8 .2013 DELETED THE PENALTY IN DISPUTE BY ALLOWING THE APPEAL S FILED BY THE ASSESSEE. 5. N OW AGGRIEVED WITH THE IMPUGNED ORDER, REVENUE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. NOTICE OF HEARING WAS ISSUED B Y RPAD TO THE ASSESSEE FOR 15.6.2015. IN RESPONSE TO THE SAME NEITHER THE ASSESSEE NOR ITS ITA NO S . 6048 & 6049/ DEL/ 2013 6 AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE ITS CASES AND NOR ANY APPLICATION FOR ADJOURNMENT WAS FILED. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN. THEREFORE, WE ARE PROCEEDING EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 7 . AT THE TIME OF HEARING, LD. DR RELIED UPON THE OR DER OF THE AO AND REITERATED THE CONTENTION RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL AS WELL AS THE CITATIONS CITED BY THE AO IN THE ASSESSMENT ORDER AND THE PENALTY ORDER. 8 . T HE A SSESSEE IS A SOCIETY REGISTERED WITH REGISTRAR OF SOCIETY WITH T HE OBJECT OF SETTING UP OF AN EDUCATIONAL INSTITUTION. IN TH IS CASE, THE A SSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2003 - 04 ON 24/9/2003 DECLARING NIL INCOME. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME - TAX ACT ON 31/10 / 2007 AFTER MAKING AN ADDITION OF RS. 8,85,600/ - BY TREATING THE VOLUNTARY CONTRI B UTION DONATIONS OF RS.8,85,600 / - CREDITED TO CORPUS ACCOUNT OF THE SOCIETY AS REVENUE RECEIPTS. SUBSEQUENT TO PASSING OF ABOVE ASSESSMENT ORDER THE A.O. ON CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE INITIATED PENALTY PROCEEDINGS WITH RESPECT TO ABOVE ADDITION AND VIDE ORDER DATED 01/03/2012 PASSED U/S. 271 (1)(C) OF THE I.T. ACT., THE A.O. HELD THAT THE ASSESSEE WAS GUILTY OF FURNISHING INACCURA TE PARTICULARS OF SUCH INCOME AND IMPOSED PENALTY OF RS. 2,51,664 / - U/S. 2 7 1(1)(C) OF THE I. T. ACT. AGGRIEVED WITH ABOVE ORDER , THE ASSESSEE WAS IN APPEAL BEFORE THE LD. CIT(A). DURING THE APPELLATE PROCEEDINGS IT HAS BEEN BROUGHT TO THE NOTICE OF LD. CIT( A) THAT, AGGRIEVED WITH ABOVE ASSESSMENT ORDER OF JCIT, NOIDA, PASSED U/S. 143(3) DATED 31/10/2007 THE ASSESSEE HAD FILED APPEAL BEFORE C I T(A), GHAZIABAD, WHO VIDE HIS ORDER DATED 23/9/2010 IN APPEAL NO. 94/2007 - 08/GZB , ITA NO S . 6048 & 6049/ DEL/ 2013 7 NOIDA HAD CONFIRMED THE ACTION OF A .O. AND DISMISSED THE APPEAL. AGGRIEVED WITH THE SAID DECISION OF CIT(A), GHAZIBAD THE ASSESSEE FILED SECOND APPEAL WITH ITAT, DELHI. THE ITAT, DELHI AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE G RANTED THE BENEFIT OF SECTION 10(23C)(II IAD) OF THE INCOME TAX ACT TO THE ASSESSEE VIDE ORDER DATED 29/2/2012 IN APPEAL NO. ITA NOS . 1099 & 1100/0E1L2011. LD. CIT(A) FURTHER OBSERVED THAT I N THE LIGHT OF ABOVE DECISION OF THE ITAT, DELHI THE A SSESSEE HAS CONTENDED THAT SINCE THE VERY BASIS OF PE NALTY ORDER ULS 271 (1)(C) STANDS CANCELLED, THE PENALTY ORDER PASSED ULS 271(1)(C) BY JCIT, RANGE NOIDA IS IIABLE TO BE DELETED. THEREAFTER, LD. CIT(A) HAS CONSIDERED THE ASSESSEE'S SUBMISSION AND PERUSED THE ORDER OF I TAT, DELHI AND AFTER CONSIDERING TH E ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE HE WAS AGREE D WITH THE CONTENTION OF THE A SSESSEE THAT SINCE THE QUANTUM APPEAL HAS BEEN DECIDED IN FAVOUR OF THE A SSESSEE ASSESSEE, THE VER Y BASIS OF A.O. PASSING PENALTY ORDER U/S. 271(1)(C), ALSO CEASES TO EX IST AND THEREFORE, THE PENALTY ORDER PASSED BY THE AO TURNS INFRUCTUOUS AND THUS DESERVES TO BE DELETED , ACCORDINGLY, THE SAME RIGHTLY WAS DELETED VIDE IMPUGNED ORDER DATED 13.8.2013 PASSED BY THE LD. CIT(A). 8 . 1 KEEPING IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A), ACCORDINGLY, WE UPHOLD ACTION OF THE LD. CIT(A) OF DELETING THE PENALTY OF RS. 2,51,664/ - AND DECIDE THE ISSUE IN DISPUTE AGAINST THE REVENUE B Y DISMISSING THE APPEAL FILED BY THE REVENUE. ITA NO. 6048/DEL/2013 ((AY. 200 2 - 0 3 ) 9. SINCE THE FACTS OF THIS APPEAL ARE SIMILAR AND IDENTICAL TO THAT OF ITA NO. 6049/DEL/2013 (AY 2003 - 04) , AS AFORESAID. THEREFORE, IN THE PRESENT APPEAL BEARING NO. 6048/DEL/2013 AY 2002 - 03) ALSO WE ITA NO S . 6048 & 6049/ DEL/ 2013 8 FOLLOW THE SAME DECISION OF CONFIRMING THE ACTION OF THE LD. CIT(A) OF DELETING THE PENALTY MADE U/S. 271(1)(C) , BEING SIMILAR AND IDENTICAL FACTS. ACCORDINGLY, IN THIS CASE ALSO THE ACTION OF THE LD. CIT(A) OF DELETING THE PENALTY OF RS. 10,15, 000/ - IS UPHELD AND ISSUE IN DISPUTE IS DECIDED AGAINST THE REVENUE BY DISMISSING THE APPEAL FILED BY THE REVENUE. 10 . IN THE RESULT, BOTH THE A PPEAL S OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 16 / 0 6 /20 1 5 . SD/ - SD/ - [ J.S. REDDY] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 16 / 0 6 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO S . 6048 & 6049/ DEL/ 2013 9