Pawan Dhir Eye Institute and Research Centre, BHIWANI V. ITO Ward-1, Bhiwani

ITA 644/DEL/2023

AI Insights

The case involves Pawan Dhir Eye Institute and Research Centre, which appealed against the order of the Commissioner of Income Tax (Appeals) and the Assessing Officer's assessment order for the Assessment Year 2019-20. The primary contention was the denial of exemption under Sections 11 and 12 of the Income Tax Act, 1961, and the incorrect assessment of gross receipts as income. The Tribunal focused on whether the expenses incurred for charitable activities should be deducted from the gross receipts for tax purposes, despite the absence of registration under Section 12A for the relevant assessment year. The Tribunal found merit in the assessee's plea and restored the matter to the Assessing Officer for verification of expenses and depreciation allowances.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121763 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-04-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 08-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 11; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A No.644/DEL/2023 Assessment Year 2019-20 Pawan Dhir Eye Institute and Research Centre, Bhiwani. v. ITO, Ward-1, Bhiwani. TAN/PAN: AAFAP6702J (Appellant) (Respondent) Appellant by: Shri Sanjeev Kumar, Adv. Respondent by: Shri Om Parkash, Sr.DR Date of hearing: 24 04 2023 Date of pronouncement: 24 04 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The capt i oned appe al has been fi l ed b y t he Assessee agai nst th e orde r of the C o mmi ssi oner of I nco me Ta x ( Appeals), NFA C, Del hi ( ‘C I T(A ) ’ i n s hort) dat ed 11. 01. 2023 ari si ng f r o m the assessment or der dat ed 08.0 2.2 021 passe d b y t he Assessi ng Of fi cer ( AO) under Secti on 143( 3) of t he Inco me Tax Act, 1961 (t he Act ) concer ni ng AY 2019- 20. 2. The gr ou nds of appeal r ai sed b y the assessee reads as under: 1 . Th at on t h e f a c t s a n d c ir c um s t a n c e s o f th e c a s e an d i n l aw , t h e L d. C I T (A ) a n d t h e L d. A O , h av e w r o ng l y d e n ie d e x e m pt i o n W s 1 1 ( 1 )( a ) o f t h e A c t i n v i o l at i o n o f 1 s t p r ov i s o t o s e c t i o n 1 2A (2 ) of t h e A c t a nd p ar a 8 ( 3 ) o f t h e C B D T C i r c u l a r N o 1 o f 2 0 15 . B e c au s e a s p e r p r o v i s i on of t h e 1 s t pr ov i s o t o s e c t i on 1 2 A (2 ) o f t h e A c t a s I.T.A No.644/Del/2023 2 e x p l ai n e d v i de p a r a 8 (3 ) o f C B D T c i r c u la r , t he a p p ell a n t i s e l i g i bl e f o r e x e m pt i o n. 2 . T h a t on t h e f a c t s an d c i r c u m s t a nc e s of t h e c a s e a nd i n l a w , t he Ld . C I T ( A ) ha s e r r e d i n d i s m i s s i n g t h e a pp e al w i t h ou t a d j u d i c at i n g g r o u n d N o 4 a nd 5 o f t h e ap pe a l , w h i l e h o l di n g th a t, " Th e s e g r ou n d s a r e g e n e r a l i n n at u r e , n o s e pa r a t e a d j ud i c at i o n i s r e q u i r e d . " 3 . T h at t he a p pe l l an t c r a v e s l e a v e t o add, am e n d , mo d i fy , r e s c i n d, s u p pl e m e n t , or al t e r a n y of t h e g r ou n ds s t at e d h e r ei na bo v e b e f o r e o r a t th e t i m e o f he a r i ng . 4 . T h a t on t h e f a c t s an d c i r c u m s t a nc e s of t h e c a s e a nd i n l a w , t he Ld . C I T ( A ) h as e r r e d i n d i s m i s s i ng a p pe a l a g ai n s t as s e s s m e n t or d e r d t . 0 8. 0 2 . 20 2 1 , w h e r e by t he Ld . A s s e s s i ng O f f i c e r , v i o la t i n g p r o v i s io n s o f s e c t io n 2 (4 5 ) r e a d w i t h s e c t i o n 5 o f t he I n c o m e T ax A c t , h a s a s s e s s e d t h e a pp e l l an t 's gr os s r e c e i p t R s . 8 , 51 , 7 9 0 / - as i t s t o ta l i n c o m e . A s s u c h , t h e as s e s s m e n t o r de r da t e d 08 . 0 2 . 2 0 2 1 a n d t h e i m p u gn e d a p p e l l a t e o r d e r dt . 1 1. 0 1. 2 0 23 ar e b ad i n la w a n d d e s e r v e t o b e s e t a s i de / q u as h e d . 5 . T h a t on t h e f a c t s an d c i r c u m s t a nc e s of t h e c a s e a nd i n l a w , t he Ld . C I T ( A ) h a s e r r e d i n d i s m i s s i ng g r ou n d N o . 1 o f th e a pp e al a ga i n s t t h e Ld . A O ' s o r d e r d i s a l l ow i ng e nt i r e e x pe ns e s at R s . 7 , 33 , 8 4 8 / - i nc u r r e d f o r c ha r i t ab l e p u r po s e de f i n e d u/ s . 2 (1 5 ) of t he A c t , i r r e l e v a nt l y h o l d i n g t h a t t he a p pe l l a nt i s e l igi b l e f o r c l ai m of e x e m p t i on on l y w i t h e f f e c t f r om t h e A s s e s s m e n t Ye a r 2 0 20 - 2 1 . ” 3. When t he mat t er was call ed for hear ing, t he l d. c ouns el for the assessee point ed out t hat as per the grou nds of appeal, the assessee has t wo f old object io ns; • f irst l y, the benefi t of Secti ons 11 and 12 o ught to have been gi ven t o t he assessee when t he assessment in que sti on was pendi ng at the t i me of re gi st rati on granted under Sect ion 12A r. w. Secti on 12AA of the Act al bei t in t he subse quent assessment year 2019- 20; • secondl y, on me ri t s, t he assessee has i ncurr ed expenses of Rs. 7, 33, 848/ - f or carr yi ng out chari table act ivi t ies agai nst t he gr oss r ecei pts of Rs. 8, 51, 790/ -. I.T.A No.644/Del/2023 3 3. 1 The l d. counsel t hus poi nted out t hat not wit hsta ndi ng t he denial of be nef it under Sect io ns 11 and 12, the expe nses incur r ed need t o be set of f agai nst t he gr oss r eceipt s t o det er mi ne t he real inco me for t axati on pur p ose. 4. I n t he course of f urt her inquiri es and discussion at t he t i me of heari ng, the l d. counsel conce ded t hat t he rel evant grounds relatabl e t o fir st i ssue t owar ds avai labil i t y of benefi ts under Secti ons 11 and 12 wit hout regist rat i on of Tr ust in r el at ion t o Assess ment Year 2019- 20 in quest ion i s not pr essed a nd theref ore, nee d not be adj udi cate d. 5. I n t he li ght of t he concessi on gi ven on behal f of the assessee, t he onl y quest ion t hat re mai ns for adj udicati on is whet her the Reve nue Aut hori t ies were just if ied i n taxi ng t he gr oss receipt s i gnor ing t he c orr es pondi ng expenses i ncu rred i n the cour se of char i tabl e acti vi ti es. We st rai ght away f i nd for ce i n the pl ea of the assessee for all owabi l it y of expe ndi t ur e i n relati on t o r ecei pts generate d i n t he cour se of chari ta bl e acti vi ti es not wit hst andi ng no n avai labil i t y o f re gist rati on unde r Secti on 12A f or t he Assess me nt Year 2019- 20 i n quest i on. We do not see an y rat i onal e i n t he act ion of t he Reve nue i n den yi ng the expendit ure incur red f or generati ng t he c orr espondi ng receipt on fir st pri ncipl es. We t her ef or e, consi der i t expedie nt t o rest ore t he i ssue bac k to t he fi le of t he Assessing Offi cer f or ver if icat ion of expenses and de pre ci at i on al l owances i ncu rre d, i f consi dered ne cessar y. T he ex penses and all owances incurre d f or the pur poses of chari tabl e acti vi ti es shal l be al l owe d whe re it is found t o ha ve been i ncur red f or ca rr yi ng out chari ta bl e I.T.A No.644/Del/2023 4 acti vi ti es. 6. The or der of t he CIT( A) is set asi de acc or di ngl y a nd t he issue i s rest ored to t he fi le of the Assessi ng Of ficer f or adj udi cati on in t er ms of the di rect i o ns not ed abo ve. N eedl ess t o sa y, a reasonabl e opport u nit y s hal l be given t o the assessee whil e deter mi ni ng the issue. 7. I n the result , the appeal of t he assessee i s al lowed f or stati sti cal purpose s. Order dictated and pronounced in the open Court on 24/04/2023. Sd/- Sd/- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /04/2023 Prabhat