The Vaish Aggarwal Education Society, New Delhi V. ADIT (E), New Delhi

ITA 6376/DEL/2012

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5709 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST IMPUGNED DATED PASSED
• Keywords: Depreciation; Charitable institution

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.:- 6376/DEL/2012 ASSESSMENT YEAR: 2008-09 O R D E R PER AMIT SHUKLA, J.M. THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 5.11.2012, PASSED BY LD. CIT ( APPEALS)XXI, NEW DELHI, IN RELATION TO THE PENALTY PROCEEDINGS U/S 271(1)(C) FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE IS MAINLY AGGR IEVED BY LEVY OF PENALTY OF RS. 9,39,260/- BY TREATING THE DEVELOPMENT F UND AS A PART THE VAISH AGGARWAL EDUCATION SOCIETY, CD-BLOCK, PITAMPURA, NEW DELHI 110 034 PAN AAATT0808N VS. ADIT, TC-IV, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI TARANDEEP SINGH, ADV. RESPONDENT BY : SHRI AMIT JAIN, SR. DR DATE OF HEARING 21/06/2018 DATE OF PRONOUNCEMENT 25/06/2018 2 OF INCOME AND EXPENDITURE ACCOUNT INSTEAD OF PART OF B ALANCE SHEET AS TAKEN BY THE ASSESSEE. 2. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT ASSESSEES SOCIETY IS NOT LIABLE PENALTY FOR CONCEAL MENT OF INCOME, BECAUSE IN THE COMPUTATION MADE U/S 11, EVEN IF THE AMO UNT OF FUNDS AMOUNTING TO RS. 2,76,342/- IS TREATED AS PART OF INCO ME AND EXPENDITURE ACCOUNT THEN SAME STOOD UTILISED BY THE ASSES SEE AND HENCE NO INCOME IS TAXABLE. THAT IS WHY ASSESSING OF FICER HAS COMPUTED THE INCOME AT NIL. IN SUPPORT HE DREW OUR ATTEN TION TO THE COMPUTATION MADE BY THE ASSESSING OFFICER, WHEREIN THE INCOME HAS BEEN COMPUTED AS NIL. HE SUBMITTED THAT, ONCE THERE IS NO TAXABLE INCOME, THEN THERE CANNOT ANY TAX WHICH CAN BE SAID TO BE EVADED BY THE ASSESSEE. ON THIS GROUND ALONE THE PENALTY SHOULD BE DELETED. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE AO AN D LD. CIT (A). 3. AFTER CONSIDERING THE AFORESAID SUBMISSION AND ON PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT IT IS NOT IN DISPUTE T HAT ASSESSEE IS A SOCIETY CARRYING ON ACTIVITIES WHICH FALL WITHIN T HE AMBIT OF CHARITABLE PURPOSES U/S 2(15). THE AO NOTED THAT THE A MOUNT OF FUNDS RECEIVED BY THE ASSESSEE FOR SUMS AMOUNTING TO RS. 27,63,342/- WHICH WAS FROM THE CONTRIBUTION RECEIVED FROM STUDENTS AS DEVELOPMENT FUNDS HAS BEEN TAKEN TO THE BALANCE SHEET I NSTEAD OF 3 ROUTING IT THROUGH INCOME AND EXPENDITURE ACCOUNT. AO HAS CONFIRMED THE INCOME AND EXPENDITURE ACCOUNT IN THE FOLLOWING MAN NER:- AMOUNT OF INCOME AS PER INCOME & EXPENDITURE ACCOU NT RS.28,585,182/- ADD: DEVELOPMENT FUND (AS PER BALANCE SHEET) RS. 27,63,342/- RS. 31,348,524/- 85% TO BE UTILIZED OF RS. 31,348,524/- RS.31,348,524/- EXPENDITURE AS PER INCOME & EXPENDITURE ACCOUNT R S.30,511,526/- LESS: DEPRECIATION RS.53,77,033/- ADD: FIXED ASSETS PURCHASED RS. 47,24,962/- ________________ UTILIZED RS. 29,859,455/- DEFICIT RS. 33,13,209/- T AXABLE INCOME NIL 4. THUS, EVEN THE SAID AMOUNT IS TREATED AS PART O F INCOME AND EXPENDITURE THEN LOOKING TO THE UTILISATION AS PER SECTIO N 11, THERE IS IN FACT DEFICIT AND TAXABLE INCOME IS NIL. ONCE THERE IS NO TAX COMPUTED BY THE AO ON THE BASIS OF COMPUTATION MADE U/S 11, THEN THERE IS COMPUTATION OF TAX LIABILITY OR COULD BE CASE OF TAX SO UGHT TO BE EVADED BY THE ASSESSEE SO AS TO WARRANT ANY KIND OF PENALTY U/S 271(1)(C). THEREFORE, ON THIS GROUND ALONE WE DELETE THE PENALT Y OF RS. 9,39,260/- 4 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE, 2018. SD/- SD/- (G.D. AGRAWAL) (AMIT SHUKLA) PRESIDENT JU DICIAL MEMBER DATED: 25/06/2018 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI