DCIT (Exemptions), Chandigarh V. Apeejay Education Society, Ludhiana

ITA 64/CHANDI/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2212 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT LAL CHANDANI A
• Assessee Lawyers: C CHANDRAKANTA
• Keywords: Reopening of assessment; Bogus purchase; Depreciation; Tangible material; Difference of opinion; Accommodation entries; Sham transactions; Reason to believe; Change of opinion; Set aside
• Section: 143(3); 12AA; 13; 147; 148; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ACHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRIR.L NEGI, JUDICIAL MEMBER ./ ITA NO.64/CHD/2017 / ASSESSMENT YEAR :2009-10 THE DCIT, CIRCLE-1 (EXEMPTIONS), CHANDIGARH APEEJAY EDUCATION SOCIETY, JAWAHAR NAGAR, JALANDHAR ./PAN NO: AAAPA3534F / APPELLANT /RESPONDENT C.O. NO. 12/CHD/2017 (IN ITA NO. ./ ITA NO. 64/CHD/2017) / ASSESSMENT YEAR : 2009-10 APEEJAY EDUCATION SOCIETY, JAWAHAR NAGAR, JALANDHAR THE DCIT, CIRCLE-1 (EXEMPTIONS), CHANDIGARH ./PAN NO: AAAPA3534F / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING /ASSESSEE BY : SMT. C. CHANDRAKANTA, CIT / REVENUE BY : SHRI SALIL KAPOOR, ADVOCATE AND SHRI SUMIT LAL CHANDANI ADVOCATE /DATE OF HEARING : 17.12.2020 / DATE OF PRONOUNCEMENT : 22.02.2021 / ORDER PERR.L. NEGI, JUDICIAL MEMBER: THESE ARE THE APPEAL AND CROSS OBJECTION FILED BY T HE REVENUE AND THE ASSESSEE RESPECTIVELY AGAINST THE ORDER DATED 7 .10.2016 PASSED BY THE 2 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR LD. COMMISSIONER OF INCOME TAX (APPEALS)-2 JALANDHA R (FOR SHORT CIT(A), WHEREBY THE LD. CIT(A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER DATED 23. 3.2015 PASSED BY ASSTT. COMMISSIONER OF INCOME TAX (EXEMPTIONS) [FOR SHORT AO'] U/S 143(3) READ WITH SECTION 148 OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A SOCIETY REGISTERED U/S 12AA OF THE ACT, ENGAGED IN EDUCATIO NAL ACTIVITIES AND HAS BEEN RUNNING VARIOUS EDUCATIONAL INSTITUTIONS I N DIFFERENT PARTS OF THE COUNTRY. THE ASSESSEE SOCIETY FILED ITS RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING NIL INCOME. THE RET URN WAS ACCEPTED BY THE ASSESSING OFFICER VIDE ORDER DATED 23.3.2015, H OWEVER, TREATED THE SOFTWARE PURCHASED BY THE ASSESSEE AS ACCOMMODATION ENTRY. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE CIT(A). THE LD. CIT(A) VIDE ORDER DATED 07.10.2016 ALLOWED THE APPE AL OF THE ASSESSEE AND HELD THAT THE AO WAS NOT JUSTIFIED IN HOLDING T HAT THE PURCHASE OF SOFTWARE WAS BOGUS. THE LD. CIT(A) ACCORDINGLY DIRE CTED THE AO TO ALLOW THE CLAIM OF EXPENSES AMOUNTING TO RS. 2.35 C RORES ON ACCOUNT OF SOFTWARE PURCHASE DURING THE YEAR RELEVANT TO THE A SSESSMENT YEAR UNDER CONSIDERATION. SUBSEQUENTLY, ON THE BASIS OF INFORM ATION RECEIVED, REGISTRATION GRANTED U/S 12AA OF THE ACT WAS CANCEL LED ON 25.3.2013 W.E.F. 2004-05. IN VIEW OF CANCELLATION OF REGISTR ATION, THE ASSESSEES CLAIM U/S 11 OF THE ACT WAS WITHDRAWN AND THE ASSES SING OFFICER REOPENED THE CASE AND PASSED THE ASSESSMENT ORDER U /S 143(3) READ WITH 3 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR SECTION 148 OF THE ACT AND DETERMINED THE TOTAL INC OME OF THE ASSESSEE AT RS. 3,76,00,000/-AFTER MAKING ADDITION OF RS. 2,84, 51,943/-ON ACCOUNT OF AMOUNT ACCUMULATED AS PER PROVISIONS OF SECTION 11(5) OF THE ACT, RS. 2,35,00,000/- ON ACCOUNT OF BOGUS PURCHASES AND DEP RECIATION OF RS. 1,41,00,000/-. THE ASSESSEE CHALLENGED THE ASSESSME NT ORDER BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTERHEARING THE ASSESSE E, PARTLY ALLOWED THE APPEAL AND DELETED THE ADDITIONS MADE BY THE AS SESSING OFFICER HOLDING THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF EXEMPTION U/S 11 OF THE I.T. ACT, HOWEVER, UPHELD THE REOPENING OF THE CASE BY THE AO U/S 147 R/W SECTION 148 OF THE ACT. 3. AGGRIEVED BY THE IMPUGNED ORDER PASSED BY THE LD . CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. THE REVE NUE HAS CHALLENGED THE IMPUGNED ORDER ONTHE FOLLOWINGGROUNDS: - (I) WHETHER THE ID. CIT(A)-2, JALANDHAR HAS ERRED I N LAW WHILE ALLOWING THE BENEFIT UNDER SECTION 11 OF THE ACT WI THOUT APPRECIATING THAT THERE WAS A CLEAR VIOLATION OF SE CTION 13 OF THE INCOME TAX ACT. (II) WHETHER THE CIT(A)-2, JALANDHAR HAS ERRED IN L AW WHILE NOT CONSIDERING SECTION 13(1)(C) OF THE I.T. ACT, 1961, ACCORDING TO WHICH, ANY INCOME OF THE TRUST DIRECTLY OR INDIRECT LY APPLIED FOR THE BENEFIT OF ANY PERSON REFERRED TO IN SECTION 13(3) OF THE ACT SHALL NOT BE EXCLUDED FROM THE TOTAL INCOME AND PROVISION S OF SECTION 11 SHALL NOT APPLY TO THE SAME. (III) WHETHER THE CIT(A)-2, JALANDHAR IS RIGHT IN L AW AS THE FINDINGS RECORDED ARE PERVERSE AND CONTRARY TO THE EVIDENCE/MATERIAL/STATEMENTS AVAILABLE ON RECORD AN D DULY CONSIDERED BY THE AO. (IV) WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A)-2, JALANDHAR IS RIGHT IN DELETING THE ADDITI ON WHEN THE 4 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR STATEMENT OF SH. SANJAY D. SONAWANI WAS NOT RELIABL E WHEREAS HE HAD CLEARLY CONFIRMED THAT HE HAD PROVIDED ACCOMMOD ATION ENTRIES TO THE ASSESSEE AND HAD DEPOSED THAT NO SOFTWARE WA S SOLD TO THE ASSESSEE AND HIS COMPANY HAD NO INFRASTRUCTURE, MAN POWER AND EXPERTISE TO EVEN DEVELOP THE SOFTWARES. (V) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) -2, JALANDHAR IS RIGHT IN DELETING THE A DDITION EVEN WHEN A.O. HAS CLEARLY BROUGHT OUT THAT THE ASSESSEE COUL D NOT PRODUCE THE SOFTWARE DEVELOPED BY M/S WSL LIMITED DURING THE SU RVEY OPERATION AND IN FACT DID NOT FOLLOW THE NORMAL PRO CEDURE AND PROCUREMENT AS IN THE CASES OF OTHER PURCHASE. (VI) THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OFF. 4. SINCE THE LD. CIT(A) UPHELD THE ACTION OF THE AO IN REOPENING OF THE CASE U/S 147 R.W.S. 148 OF THE ACT, THE ASSESSE E HAS FILED CROSS OBJECTION BY RAISING THE FOLLOWING GROUNDS: - 1. THAT THE NOTICE ISSUED U/S 148 AND THE ASSESSMEN T ORDER PASSED U/S 147/143(3) ON 23.03.2015 OF THE INCOME TAX ACT. 1961 ARE ILLEGAL, BAD IN LAW, WITHOUT JURISDICTION. 2. THAT THE PROCEEDINGS INITIATED UNDER SECTION 147 /148 OF THE ACT ARE INVALID FOR WANT OF JURISDICTION AS THE PRE-CON DITIONS FOR INITIATION OF THE SAID PROCEEDINGS AS STIPULATED IN SECTION 147 OF THE ACT ARE NOT SATISFIED. 3. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE. CIT(A) HAS ERRED IN UPHOLDING THE REOPENING OF ASSESSMENT U/S 148 WHICH WAS FRAMED UNDER 143(3) AS THERE WAS NEITHER ANY FR ESH MATERIAL/ TANGIBLE MATERIAL IN FORMING THE BELIEF FOR REOPENI NG OF ASSESSMENT U/S 147 OF THE ACT. 4. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE THE NOTICE U/S 148 IS ISSUED ON THE BASIS OF CHANGE OF OPINION, WHICH IS NOT PERMISSIBLE. HENCE THE NOTICE U/S 148 IS ILLEGA L AND BAD IN LAW. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO ALLEGATION AS TO ANY FAILURE ON THE PART OF ASSESSE E TO PRODUCE MATERIAL FACTS TRULY AND AS SUCH NOTICE ISSUED AFTE R FOUR YEARS FROM 5 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR THE END OF RELEVANT ASSESSMENT YEAR IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 5. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITT ED BEFORE US THAT THE LD. CIT(A) HAS ERRED IN ALLOWING BENEFIT U NDER SECTION 11 OF THE ACT TO THE ASSESSEE WITHOUT CONSIDERING THAT ANY IN COME OF THE TRUST DIRECTLY OR INDIRECTLY UTILIZED FOR THE BENEFIT OF ANY PERSON REFERRED TO IN SECTION 13(3) OF THE ACT SHALL NOT BE EXCLUDED FROM TOTAL INCOME. THE LD. DR FURTHER CONTENDED THAT THE LD. CIT(A) HAS WR ONGLY DELETED THE ADDITION MADE BY THE AO ON ACCOUNT OF ACCOMMODATION ENTRIES OBTAINED FROM BOGUS PARTIES TO SHOW PURCHASE OF SOFTWARE BY IGNORING THE STATEMENT OF SH. SANJAY D. SONAWANI, WHO HAS CATEGO RICALLY STATED THAT NO SOFTWARE WAS SOLD BY THE COMPANY TO THE ASSESSEE SOCIETY. THE LD. DR FURTHER CONTENDED THAT SINCE THE FINDINGS OF THE LD. CIT(A) ARE PERVERSE AND CONTRARY TO THE EVIDENCE ON RECORD, TH E IMPUGNED ORDER MAY BE SET ASIDE AND THE ADDITIONS MADE BY THE AO M AY BE CONFIRMED. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THERE IS NO MERIT IN THE APPEAL OF THE REVENUE AS T HE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER. THE LD. COUNSEL FURTHER POINTED OUT THAT THE AMRITSAR BENCH OF THE ITAT HAS DECIDED THE ISSUE REGARDING CANCELLATION OF REGISTR ATION GRANTED UNDER SECTION 12AA (1) OF THE ACT IN FAVOUR OF THE ASSESS EE IN ASSESSEES OWN CASE ITA NO. 228(ASR)/2013VIDE COMMON ORDER DATED 0 8.05.2014. LD. COUNSEL FURTHER POINTED OUT THAT THE TRIBUNAL HAS A LSO DEALT WITH THE ISSUE REGARDING PURCHASE OF SOFTWARE AND DECIDED TH E SAME IN FAVOUR OF 6 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR THE ASSESSEE. THE REVENUE CHALLENGED THE SAID ORDER BEFORE THE HONBLE PUNJAB AND HARYANA HIGH COURT. THE HONBLE COURT DI SMISSED THE APPEAL OF THE REVENUE HOLDING THAT THE QUESTIONS OF LAW SO UGHT TO BE RAISED IN THIS CASE DO NOT ARISE.FURTHER THE LD. COUNSEL SUBM ITTED THAT IN THE ASSESSMENT YEARS 2008-09,2010-11 & 2011-12, THE AO DENIED THE BENEFIT U/S 11 OF THE ACT TO THE ASSESSEE. THE ASSESSEE CHA LLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT(A). HOWEVER, TH E LD. CIT(A) AFFIRMED THE ACTION OF THE AO. THE MATTER TRAVELLED TO THE AMRITSAR BENCH OF THE ITAT.THE ITAT SET ASIDE THE ORDER PASS ED BY THE LD. CIT(A). IN THE PRESENT CASES, AGAIN THE AO DENIED T HE BENEFIT OF SECTION 11 OF THE ACT TO THE ASSESSEE AND MADE ADDITION ON ACCOUNT OF BOGUS PURCHASE AND DISALLOWANCE OF DEPRECIATION APART FRO M ADDITION U/S 11(5) OF THE ACT, HOLDING THE SOFTWARE PURCHASE FROM WSL AS SHAM TRANSACTIONS. IN THE FIRST APPEAL, THE LD. CIT(A) S ET ASIDE THE ASSESSMENT ORDER HOLDING THAT MATTER RELATING TO PURCHASE OF S OFTWARE FROM WSL HAS ALREADY BEEN CONSIDERED BY THE AMRITSAR BENCH OF TH E TRIBUNAL IN ASSESSEES CASES ITA NO. 712 TO 714(ASR)2014 FOR TH E ASSESSMENT YEAR 2008-09, 2010-11 AND 2011-12. THE DEPARTMENT HAS FI LED THEPRESENT APPEAL AGAINST THE SAID ORDER 7. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE AND THE DECISIONS OF AMRITSAR BENCH OF THE TRIBUNAL, TH E LD. COUNSEL SUBMITTED THAT THERE IS NO MERIT IN THE APPEAL OF T HE ASSESSEE, THEREFORE THE SAME IS LIABLE TO BE DISMISSED. 7 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR DURING THE COURSE OF ARGUMENTS, THE LD. DR FAIRLY A DMITTED THAT THE AMRITSAR BENCH OF THE TRIBUNAL HAS DECIDED THE IDEN TICAL ISSUES IN FAVOUR OF THE ASSESSEE.HOWEVER, THE LD. DR SUPPORTE D THE PLEA OF THE DEPARTMENT THAT THE LD. CIT(A) HAS WRONGLY ALLOWED THE CLAIM OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE ASSES SING OFFICER. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE DECISIONS OF THE A MRITSAR BENCH OF THE TRIBUNAL RENDERED IN ASSESSEES OWN CASE IN ITA NO. 228(ASR) /2013(SUPRA), ITA NO 712 TO 714 (ASR)/2014 FOR THE ASSESSMENT YEARS 2008-09, 2010-11 & 2011-12. AS POINTED OUT BY THE LD. COUNSEL, THE ASSESSEE VIDE ITA NO. 228(ASR) /2013(SUPRA) CHALLEN GED THE ORDER DATED 25.03.2013 PASSED BY LD. CIT, JALANDHAR-11, WITHDRA WING THE REGISTRATION GRANTED U/S 12AA(1), BEFORE THE AMRITS AR BENCH OF THE TRIBUNAL. THE TRIBUNAL VIDE COMMON ORDER DATED 08.0 5,2014 ALLOWED THE APPEAL OF THE ASSESSEE AND SET ASIDE THE ACTION OF THE LD. CIT. WE FURTHER NOTICE THAT THE TRIBUNALALSO DEALT WITH THE ISSUE RELATING TO PURCHASE OF SOFTWARE BY THE ASSESSEE AND DECIDED TH E SAME IN FAVOUR OF THE ASSESSEE. THE FINDINGS OF THE AMRITSAR BENCH OF THE TRIBUNAL ARE AS UNDER: - 20) IN THE PRESENT CASE, THE ACTIVITIES OF THE AS SESSEE-TRUST WHICH ARE MAINLY OF IMPARTING EDUCATION TO THE STUDENTS UNDER VARIOUS INSTITUTIONS REFERRED IN THE ORDER OF LEARNED CIT, JALANDHAR-II, JALANDHAR, HAVE BEEN FOUND TO BE GENUINE AND NO ALL EGATION REGARDING NOT IMPARTING OF EDUCATION HAS BEEN FRAME D BY LEARNED CIT, JALANDHAR-II, JALANDHAR, IN ITS ORDER PASSED U NDER SECTION 12AA(3) OF THE ACT OR BY THE ASSESSING OFFICER IN H IS ORDER PASSED FOR THE ASSESSMENT YEARS 2004-05 & 2009-10, REFERRE D 8 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR HEREINABOVE. THE ACTIVITIES OF THE TRUST ARE FOUND TO BE GENUINE AND ACCORDING TO US THE ACTIVITIES OF THE TRUST ARE GEN UINE AND CANNOT BE SAID TO BE FOR NON-CHARITABLE PURPOSES, ESPECIAL LY THAT THERE IS NOT EVEN A WHISPER FROM LEARNED CIT, JALANDHAR-II, JALANDHAR, WITH REGARD TO THE NON-GENUINENESS OF THE ACTIVITIE S OF THE TRUST WHICH ARE FOUND TO BE IN CONSONANCE WITH THE OBJECT S OF THE TRUST AND THEREFORE, THE LEARNED CIT, JALANDHAR-II, JALAN DHAR, IS NOT JUSTIFIED IN CANCELLING AND WITHDRAWING THE REGISTR ATION GRANTED UNDER SECTION 12AA OF THE ACT I.E. W.E.F. THE ASSES SMENT YEAR 2004- 05. IN THE PRESENT CASE, LEARNED CIT, JALANDHAR-II, JALANDHAR, HAS NOT BROUGHT ON RECORD ANY MATERIALS THAT THE ACTIVI TIES OF 39 I.T.A. NO. 228 & 227(ASR)/2013 THE TRUST ARE NOT GENUINE O R ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. THUS, THE ORDER OF LEARNED CIT, JALANDHAR-II, JALANDHAR, CANCELLING THE REGISTRATION IS BAD IN LAW AND, THEREFORE, IS SET A SIDE. 21) RELIANCE HAS BEEN PLACED BY LEARNED COUNSEL FO R THE ASSESSEE IN THE CASES OF CHATURVEDI HAR PRASAD EDUCATION SOCIET Y (SUPRA), MAHARASHTRA ACADEMY OF ENGINEERING & EDUCATIONAL RE SEARCH (MAEER) (SUPRA), INSTITUTE OF SCIENCE AND MANAGEMEN T (SUPRA) AND AJIT EDUCATION TRUST, BHARUCH (SUPRA) AND THESE CAS E-LAWS SUPPORT OUR VIEWS AND ALL THE DECISIONS ARE PLACED ON RECOR D. 22) AS REGARDS THE PURCHASE OF SOFTWARE, MUCH HAS BEEN RELIED UPON THE STATEMENT OF ONE MR. SANJAY D. SONAWANI MANAGER OF M/S WASHINGTON SOFTWARE LTD. WHO STATED THAT HE HAS PRO VIDED ACCOMMODATION ENTRIES TO THE ASSESSEE SOCIETY. FROM THE STATEMENTS GIVEN TO THE DEPARTMENT FROM TIME TO TIM E DATED 16.03.2011, 12.04.2011, 12.05.2011 AND 30.12.2011, IT WAS ARGUED THAT MR. SANJAY D SONAWANI HAS CONTRADICTED HIS STA TEMENTS EVERY TIME AND AS REGARDS THE ARGUMENTS MADE BY LEARNED S R. DR MR. MAHAVIR SINGH THAT HIS STAND HAS ALREADY BEEN CONST ANT WITH REGARD TO PROVIDING ACCOMMODATION ENTRIES TO THE 40 I.T.A. NO. 228 & 227(ASR)/2013 ASSESSEE WHEREAS WHILE READING PAGE 26 OF ORDER OF LEARNED CIT, JALANDHAR-II, JALANDHAR, IN W HICH IT HAS BEEN CLEARLY MENTIONED BY HIM THAT MR. SONAWANI WAS THREATENED BY THE DEPARTMENT FOR THE STATEMENT DATED 16.03.201 1 WHICH IS REPRODUCED AS UNDER: I HAVE NOT MADE ANY FALSE STATEMENT IN PUNE ON 16. 03.2011. IN FACT, AT THAT TIME, I WAS TOLD THAT I WOULD HAVE A HEAVY LIA BILITY OF ROUGHLY 100 CRORES, SO I GOT FRIGHTENED AND TOOK THE NAME OF PA RAG MEHTA. 9 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR 23) THE AFORESAID STATEMENT RECORDED BY THE DEPART MENT WAS WHETHER UNDER THREAT OF TAX LIABILITY OF 100 CRORES IS NOT EVIDENCED BY ANY DOCUMENTARY EVIDENCE BY LEARNED A.R. IN THE PRESENT ISSUE, THE ASSESSEE HAS SUBMITTED THE EXPLANATION VIDE LETTER DATED 14.09.2012 AVAILABLE AT PAGE 8 TO 10 OF THE ORDER O F LEARNED CIT, JALANDHAR-II, JALANDHAR, IN WHICH IT WAS STATED THA T THE SOFTWARE PURCHASED FROM WASHINGTON SOFTWARE LIMITED THOUGH D EBITED TO VARIOUS INSTITUTIONS, IS INSTALLED IN THE CENTRAL S ERVER AT THE HEAD OFFICE OF UTMOST IMPORTANCE AND REQUIRED SECRECY. T HE SOFTWARE INCLUDES VARIOUS MODULES AND VARIOUS TYPES OF REPOR TS WHICH INCLUDE DATA OF STUDENTS AND ALSO ABOUT THE INSTITU TIONS. IT GENERATES REPORTS WHICH ARE VERY BIG AND CONTAIN LA RGE NUMBER OF PAGES. SOME OF THE REPORTS WERE PRODUCED BEFORE THE LEARNED CIT, JALANDHAR-II, JALANDHAR, AND ARE AVAILABLE ON RECOR D. SUCH REPORTS 41 I.T.A. NO. 228 & 227(ASR)/2013 HAVE BEEN STATED TO BE WRONG BY LEARNED CIT, JALANDHAR-II, JALANDHAR. THE ASSESSEE, FOR SUPPLEMENTING HIS CONTENTION, HAS ENCLOSED THE REPO RT OF TRIDENT INFORMATION SYSTEM PVT. LTD. CERTIFYING THAT THE SO FTWARE WERE DULY INSTALLED IN THE CENTRAL SERVER AT THE HEAD OFFICE AND THE SAID REPORT IS AVAILABLE ON RECORD AS MENTIONED HEREINABOVE. IT WAS ARGUED THAT THE SAID SOFTWARE SYSTEM HAS GENERATED THE REP ORTS RIGHT FROM 2004 TO 2011. 24) IN THIS REGARD AND KEEPING IN VIEW THE FACTS A ND CIRCUMSTANCES AS ABOVE, IT CANNOT BE A CASE FOR WITHDRAWAL/CANCELLAT ION OF REGISTRATION GRANTED UNDER SECTION 12AA(1) OF THE A CT AND THEREFORE, IN THESE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, OUR FINDINGS AS HEREINABOVE. LEARNED CIT, JALANDHAR-II, JALANDHAR, IS NOT JUSTIFIED IN WITHDRAWING OR CANCELLING THE REGI STRATION UNDER SECTION 12AA(3) OF THE ACT. ACCORDINGLY, ALL THE GR OUNDS OF THE ASSESSEE ARE ALLOWED. 9. FURTHER THE AMRITSAR BENCH HAS SET ASIDE THE ORD ERS PASSED BY THE CIT(A) UPHOLDING THE FINDINGS OF THE AO DENYING THE BENEFIT OF SECTION 11 OF THE ACT TO THE ASSESSEE BY INVOKING PROVISION S U/S 13(1)(C) AND ASSESSING THE ASSESSEES INCOME UNDER THE HEAD INCO ME FROM BUSINESS IN ASSESSEES APPEALS ITA NOS. 712 TO 714 (ASR)/2014 F OR THE ASSESSMENT YEARS 2008-09, 2010-11 AND 2011-12.THE LD. CIT(A) ALLOWED THE 10 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR APPEAL OF THE ASSESSEE ON MERITS BY FOLLOWING THE D ECISION OF THE AMRITSAR BENCH OF THE ITAT IN ASSESSEES OWN CASE ITA NO 712 TO 714 (ASR)/2014(SUPRA) .THE OPERATIVE PART OF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) READS AS UNDER: 5.5 I HAVE GONE THROUGH THE COPY OF ORDER OF THE H ONOURABLE ITAT AMRITSAR BENCH, IN THE CASE OF THE APPELLANT IN ITA NUMBER 712 TO 714/ASR/2014 DATED 12.08.2016 AND FIND THAT THIS IS SUE OF PURCHASE OF SOFTWARE FROM M/S WASHINGTON SOFTWARE LTD., WHIC H IS BASED AT PUNE HAS BEEN EXAMINED IN DETAIL BY THE HONOURABLE TRIBUNAL AND AFTER GOING THROUGH THE SAME IT WAS HELD THAT EXEMP TION UNDER SECTION 11 OF THE IT ACT WAS WRONGLY DENIED TO THE APPELLANT. THE ORDER PASSED BY THE AO AND CONFIRMED BY THE CIT-A W AS REVERSED. 5.6 IN VIEW OF THE ABOVE STATED FACTS, RESPECTFULLY FOLLOWING THE ORDER OF THE HONOURABLE ITAT AMRITSAR BENCH, SINCE THERE IS NO CHANGE IN THE FACTS OF THE CASE IN THIS YEAR, I HOL D THAT AO WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 2,35,00,000/ - ON ACCOUNT OF BOGUS PURCHASE OF SOFTWARE AND DISALLOWANCE OF THE DEPRECIATION OF RS. 1,41,00,000/- ON THAT ACCOUNT. FURTHER, I HO LD THAT APPLICANT IS ENTITLED TO THE CLAIM OF EXEMPTION U/S 11 OF THE IT ACT. ACCORDINGLY, THE ADDITIONS MADE BY THE AO OF RS. 3, 76,00,000 ARE DELETED. 10. WE NOTICE THAT THE ISSUES INVOLVED IN THE PRESE NT CASE ARE COVERED BY THE DECISIONS OF THE AMRITSAR BENCH OF THE TRIBU NAL IN ASSESSEES OWN CASES DISCUSSED ABOVE. THE LD. CIT(A) HAS PASSED TH E IMPUGNED ORDER BY FOLLOWING THE DECISIONS OF THE AMRITSAR BENCH OF THE TRIBUNAL RENDERED IN ASSESSEES OWN CASES PARTICULARLY IN IT A NO 712 TO 714 (ASR)/ 2014 (SUPRA). FURTHER, THE LD. CIT(A) HAS CA TEGORICALLY MENTIONED IN ITS ORDER THAT THERE IS NO CHANGE IN T HE FACTS OF THE PRESENT 11 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR CASE. HENCE, IN THE LIGHT OF THE AFORESAID DECISION S OF THE ITAT AMRITSAR BENCH, THERE IS NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). ON THE OTHER HAND, WE DO NOT FIND MERIT IN THE CONTENT ION OF THE REVENUE THAT THE LD. CIT(A) HAS WRONGLY ALLOWED THE BENEFIT U/S 11 OF THE ACT TO THE ASSESSEE SOCIETY. WE THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, W E UPHOLD THE DECISION OF THE LD. CIT(A) AND DISMISS THE APPEAL O F THE REVENUE. C.O. NO. 12/CHD/2017:- SO FAR AS THE CROSS OBJECTION FILED BY THE ASSESSEE IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US TH AT SINCE THE INITIATION OF THE PROCEEDINGS U/S 147 OF THE ACT IS CONTRARY T O LAW, THE LD. CIT(A) OUGHT TO HAVE QUASHED THE PROCEEDINGS AS VOID AB IN ITIO. THE LD. COUNSEL FURTHER POINTED OUT THAT THERE WAS NO FRESH MATERIAL / TANGIBLE MATERIALBEFORE THE AO TO FORM THE BELIEF THAT THE I NCOME OF THE ASSESSEE HAS ESCAPED, THE NOTICE ISSUED U/S 148 OF THE ACT W AS BAD IN LAW. THE LD. COUNSEL FURTHER SUBMITTEDAS PER THE SETTLED LAW ; THE ASSESSING OFFICER CANNOT ISSUE NOTICE U/S 148 ON THE BASIS OF CHANGE OF OPINION. THE LD. COUNSEL RELIED ON THE FOLLOWING CASE LAWS T O SUBSTANTIATE THE CONTENTION THAT THE NOTICE ISSUED U/S 148 OF THE AC T IS BAD IN LAW. THE LD. COUNSEL PLACING RELIANCE ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF AHMEDABAD URBAN DEVELOPME NT AUTHORITY VS. DEPUTY DIRECTOR OF INCOME TAX [2017] 82 TAXMANN.COM 177 (GUJ) SUBMITTED THAT AS PER THE RATIO LAID DOWN IN THE SA ID CASE, THE AO CANNOT 12 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR REOPEN ASSESSMENT SOLELY ON THE BASIS OF ORDER CANC ELLING REGISTRATION OF DEVELOPMENT AUTHORITY U/S 122AA(3) RETROSPECTIVELY. THE LD. COUNSEL FURTHER SUBMITTED THAT AS PER THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LT D. 310 ITR 661(SC), THE AO CAN REOPEN THE ASSESSMENT, PROVIDED THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. FURTHER THE REASON MUST HAVE A LIVE LIN K WITH FORMATION OF BELIEF. THE LD. COUNSEL FURTHER RELIED ON THE DECIS ION OF CIT VS. KELVINATOR OF INDIA LTD. [2002] 123 TAXMAN 433 (DEL HI) TO SUBSTANTIATE THE CONTENTION THAT THE AO CANNOT REOPEN THE ASSESS MENT ON THE BASIS OF CHANGE OF OPINION. IN VIEW OF THE LAW LAID DOWN IN THE AFORESAID CASES, THE LD. COUNSEL CONTENDED THAT SINCE THE AO HAD INI TIATED THE PROCEEDINGS U/S 148 R/W SECTION 147 OF THE ACT IN V IOLATION OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT AND THE HIGH COURTS, THE LD. CIT(A) HAS WRONGLY UPHELD THE REOPENING OF ASSESSME NT IN THIS CASE. ACCORDINGLY, THE LD. COUNSEL SUBMITTED THAT THE FIN DINGS OF THE LD. CIT(A) ON THIS ISSUE ARE LIABLE TO BE SET ASIDE. 2. ON THE OTHER HAND, THE LD. DR SUPPORTING THE VIE W TAKEN BY THE LD. CIT(A) SUBMITTED THAT SINCE THE ASSESSING OFFIC ER HAD REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED , THE LD. CIT(A) HAS RIGHTLY UPHELD THE ACTION OF THE ASSESSING OFFICER. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD. SINCE WE HAVE UPHELD THE FINDI NGS OF THE LD. 13 ITA NO. 64/CHD/2017 & C.O. NO. 12/CHD/2017 APEEJAY EDUCATION SOCEITY, JALANDHAR CIT(A) 0N MERITS, DELETING THE ADDITION MADE BY THE ASSESSING OFFICER AND ALSO UPHELD THE FINDINGS OF THE LD. CIT(A) THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S 11 OF THE ACT, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME ACADEMIC. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE RAISED BY THE ASSESSEE IN CROSS OBJE CTION DO NOT REQUIRE ADJUNCTION. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 22.02.2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED :22.02.2021 . . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR