Anant Mate, Pune V. Deputy Commissioner of Income-tax,

ITA 639/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7258 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: KETAN H SHAH
• Keywords: Search and seizure; Charitable institution; Documents seized
• Section: 143(3); 153A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 639 /P U N/20 1 5 / ASSESSMENT YEAR : 20 09 - 1 0 MR. ANANT MATE, FLAT NO.204, DAMODAR RESIDENCE, NEAR PINNAC MEMORIES, KOTHRUD, PUNE - 411038 . / APPELLANT PAN:A FBPM1869F VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), PUNE . / RESPONDENT / APPELLANT BY : S HRI KETAN H. SHAH / RESPONDENT BY : S HRI MUKESH JHA, J CIT / DATE OF HEARING : 29 .0 8 .2017 / DATE OF PRONOUNCEMENT: 30 . 1 0.2017 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF CIT(A) - 12 , PUNE , DATED 09 . 0 2 .201 5 RELATING TO ASSESSMENT YEAR 20 09 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) HAS ERRED IN CONFIRMING PROTECTIVE ADDITION OF RS.2,99,35,000/ - WITHOUT APPRECIATING THE FACTS OF THE CASE AND OVERLOOKING THE LEGAL PRECEDENTS RELIED UPON. 2 ITA NO. 639 /PUN/20 15 MR. ANANT MATE 2. THE CIT (A) ERRED IN OVERLOOKING : 2.1. THAT THE ASSESSING OFFICER (A.O.) WHILE MAKING PROTECTIVE ADDITION , HAD NO DOUBT THAT THE AMOUNT COULD BE INCOME OF THE APPELLANT. EVEN THE A.O. OF SHIKSHANA PRASARAKA MANDALI (TRUST) (HEREINAFTER KNOWN AS SPM) HAD NO DOUBT AND HE MADE STAND ALONE ADDITION IN THE CASE OF SPM WITHOUT NAMING IT AS SUBSTANTIVE ADDITION. 2.2. THAT PROTECTIVE ADDITION CAN BE MADE ONLY IN EXTREME CASES WHERE A.O. HAS GENUINE DOUBT ABOUT THE HANDS IN WHICH A PARTICULAR INCOME CAN BE TAXED AS HELD BY APEX COURT IN CASE OF LAL GI HARIDAS VS ITO 43 ITR 387 (SC). 2.3. THAT A.O. PROCEEDED TO MAKE PROTECTIVE ASSESSMENT WHEN THE ADDITION IN THE CASE OF SPM WAS ALREADY CONFIRMED BY CIT (A) AND CIT (C) CONSIDERING THE ALLEGED DONATION OF 2,99 , 35,000/ - IN THE HANDS OF SPM CANCELLED THE REGISTRATION OF TRUST U/S 12AA(3) OF THE ACT. 2.4. SEARCH ACTION DID NOT RESULT IN DISCOVERY OF ANY EVIDENCE EVEN REMOTELY CONNECTING TO THE APPELLANT WITH THE AMOUNT REFLECTED BY PAPERS SEIZED FROM THE PREMISES OF SPM OR WITH ANY OTHER OFFICIAL OF THE TRUST. 2.5. THAT A.O. REFUSED TO CONSIDER SUBMISSION OF THE APPELLANT THAT FIGURE OF RS.2,99,35 ,000 / - IS NOT CORRECT AS ONLY FEW STUDENTS FROM THE LIST IN SEIZED PAPER HAD TAKEN ADMISSION AND ONLY A SMALL AMOUNT OF DONATION WAS RECEIVED BY SPM AND THE SAME WAS ACCOUNTED ON THE GROUND THAT ADDITION MADE IN THE CASE OF SPM CANNOT BE REVIEWED WHILE MAKING ASSESSMENT IN THE CASE OF THE APPELLANT. 2.6. THE DECISIONS RELIED UPON BY THE APPELLANT DURING APPELLATE PROCEEDING AND A FEW WHICH WERE CONSIDERED WERE WRONGLY READ WHICH IS APPARENT FROM THE RECORD. 3. ON THE FAC TS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (A) ERRED IN NOT CONSIDERING THE ORDER OF ITAT (AGAINST ORDER U/S 12AA (3) IN CASE OF SPM WHERE APPELLANT WAS VICE PRESIDENT) WHICH GAVE THE FACTUAL FINDING THAT ONLY NINE STUDENTS WERE IDENTIFIED WHO ADM ITTED GIVING DONATION TO SPM AND THAT THE COLLECTIVE DONATION RECEIVED FROM THEM CAME TO RS . 16.60 LA KH WHICH WAS DULLY ACCOUNTED. 4. ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE CIT(A) ERRED IN PASSING A PROTECTIVE APPELLATE ORDER WHEN THE ORDER IN THE CASE OF SPM STOOD CONFIRMED IN FIRST APPEAL AS CIT(A) IS NOT ENTITLED TO PASS SUCH ORDER AND PASSING OF PROTECTIVE ORDER IS LIMITED TO ASSESSMENT STAGE. THE ORDER OF CIT(A) HAS RESULTED IN TWO APPELLATE ORDERS CONFIRMING ONE INCOME IN TWO HANDS AND THUS VI OLATING VERY PRINCIPLE OF TAXATION. 3. THOUGH THE ASSESSEE HAS FILED SEVERAL GROUNDS OF APPEAL, T HE ONLY ISSUE RAISED IN THE PRESENT APPEAL BY WAY OF GROUND OF APPEAL NO.1 IS AGAINST PROTECTIVE ADDITION OF RS.2,99,35,000/ - MADE IN THE HANDS OF ASSESSEE. 3 ITA NO. 639 /PUN/20 15 MR. ANANT MATE 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ADDITION ON SUBSTANTIVE BASIS HAS BEEN CONFIRMED IN THE HANDS OF SHIKSHANA PRASARAKA MANDALI AND THERE IS NO MERIT IN MAKING ANY PROTECTIVE ADDITION IN THE HANDS OF ASSESSEE. 5 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS THE TRUSTEE AND VICE CHAIRMAN O N HONOURARY BASIS, OF PUBLIC CHARITABLE TRUST VIZ. SHIKSHANA PRASARAKA MANDALI (HEREINAFTER REFERRED TO AS SPM) . SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON ONE OF THE PREMISES OF SPM ON 21.07.2008. CONSEQUENT TO THE SEARCH, ASSESSMENT ORDER UN DER SECTION 153A R.W.S. 143(3) OF THE ACT WAS MADE IN THE CASE OF SPM. ONE OF THE ADDITIONS MADE IN THE HANDS OF SPM WAS OF RS.2.99 CRORES BASED ON THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. THE ADDITION WAS CONFIRMED IN THE HANDS OF SPM BY THE CI T(A). THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT OF ASSESSEE ADDED SUM OF RS.2.99 CRORES IN THE HANDS OF ASSESSEE ON PROTECTIVE BASIS, WHICH WAS CONFIRMED BY THE CIT(A). 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 8. THE ISSUE OF SUBSTANTIVE ADDITION IN THE HANDS OF SPM AROSE BEFORE THE TRIBUNAL IN ITA NOS.1127 TO 1133/PN/2011, RELATING TO ASSESSMENT YEARS 2003 - 04 TO 2009 - 10 AND THE TRIBUNAL VIDE ORDER DATED 19.10.2016 HAS UPHELD THE ADDITION OF UNACCOUNTED DONATIONS I N THE HANDS OF SPM, THOUGH THE QUANTUM OF ADDITION HAS BEEN REDUCED. THE RELEVANT FINDINGS OF ORDER OF THE TRIBUNAL ARE IN 4 ITA NO. 639 /PUN/20 15 MR. ANANT MATE PARAS 101 AND 102 AT PAGES 59 AND 60 OF THE ORDER . THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS ONLY WITH REGARD TO PROTECTIVE A DDITION MADE ON ACCOUNT OF SUBSTANTIVE ADDITION MADE IN THE HANDS OF SPM AT RS.2.99 CRORES. ONCE THE ADDITION ON SUBSTANTIVE BASIS HAS BEEN CONFIRMED IN THE HANDS OF SPM, THOUGH THE QUANTUM OF ADDITION HAS BEEN REDUCED IN VIEW OF THE EVIDENCE ON RECORD, N O FURTHER ADDITION IS MERITED IN THE HANDS OF ASSESSEE ON PROTECTIVE BASIS. HENCE, THE SAME IS CANCELLED. ACCORDINGLY, WE HOLD SO. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 9 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF OCTO BER , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 30 TH OCTO BER , 201 7 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 12 , PUNE ; 4. THE C IT (CENTRAL) , PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE