The Income tax Office, Ward-2, Mehsana V. Mehsana District Education Foundation, Mehsana

ITA 68/AHD/2010

• Counselvise Citation: 6820514 RSA 2010
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-06-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 08-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D V SINGH
• Keywords: Search and seizure
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI A. MOHAN ALANKAMONY, AM SHRI KUL BHARA T, JM) ITA NO.68/AHD/2010 A. Y.: 2006-07 THE INCOME TAX OFFICER, WARD -2, MEHSANA, 2 ND FLOOR, APOLLO ENCLAVE, HIGHWAY, MEHSANA VS MEHSANA DISTRICT EDUCATION FOUNDATION, C/O. GANPAT VIDHYANAGAR, AT. KHERVA, TALUKA MEHSANA PA NO. AAATM 3228 M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI D. V. SINGH, SR. DR RESPONDENT BY SHRI SUNIL TALATI, AR DATE OF HEARING: 06-06-2012 DATE OF PRONOUNCEMENT: 15-06-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A ) IN APPEAL NO.CIT(A)/GNR/62/2009-10 DATED 15-10-2009 PASSED U/ S 271 (1) ( C ) OF THE ACT READ WITH SECTION 250 FOR ASSESSME NT YEAR 2006-07. 2. THE REVENUE HAS RAISED THREE GROUNDS IN ITS APPE AL WHEREIN GROUNDS NO.2 AND 3 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. THE LONE SURVIVING GROUND NO.1 IS REP RODUCED HEREIN BELOW: 1. THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING T O RECOMPUTED THE PENALTY U/S. 271 (1) (C) OF THE I T ACT ON 15% OF RS.39,90,155/- I.E. RS.5,98,253/-. ITA NO.68/AHD/2010 (AY: 2006-07) ITO, WAD-2, MEHSANA VS MEHSANA DISTRICT EDUCATION F OUNDATION 2 3. BRIEF FACTS: - THE ASSESSEE IS A TRUST REGISTERE D WITH THE CHARITY COMMISSIONER, MEHSANA ON 29-08-1996 ENGAGED IN THE FIELD OF IMPARTING EDUCATION BY OWINING VARIOUS EDUCATIONAL INSTITUTIONS AT KHERVA IN ITS CAMPUS KNOWN AS GANPAT VIDYANAGAR. THE ASSESSEE HAS BEEN MAINTAINING ACCOUNTS FOR EACH OF SUCH INST ITUTIONS SEPARATELY WHICH ARE FURTHER CONSOLIDATED IN THE TR USTS ACCOUNT. ON EXAMINING THE TRUST ACCOUNT THE LEARNED AO OBSERVED THAT THE ASSESSEE HAD SHOWN BUILDING MAINTENANCE CHARGES OF RS.39,90,155/- AS ITS INCOME RECEIVED FROM VARIOUS INSTITUTIONS OW NED BY THE ASSESSEE. ON FURTHER VERIFICATION, IT WAS OBSERVED BY THE LEARNED AO THAT THESE EDUCATIONAL INSTITUTIONS OF THE ASSESSEE HAD CLAIMED THE MAINTENANCE CHARGES PAYMENTS AS APPLICATION OF FUND S IN THEIR RESPECTIVE BOOKS. THE LEARNED AO HELD THIS CONTRA E NTRY SHOWN IN THE STATEMENT OF AFFAIRS OF THE ASSESSEE TO BE FICTITIO US. THE LEARNED AO FURTHER HELD THAT THE ASSESSEE HAD MADE SUCH DISCLO SURE IN ITS ACCOUNTS IN ORDER TO CLAIM EXEMPTION U/S 11 OF THE IT ACT FOR ACCUMULATING 15% OF THE TOTAL INCOME. DUE TO THE AF ORESAID REASONS THE LEARNED AO INCREASED THE INCOME OF THE ASSESSEE TO THE EXTENT OF RS.39,90,155/- AND INITIATED PENALTY PROCEEDINGS WH EREIN PENALTY WAS LEVIED. AGGRIEVED BY THE ORDER OF THE LEARNED AO, T HE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A) WHEREI N THE LEARNED CIT(A) CONFIRMED THE PENALTY LEVIED TO 15% OF RS.39 ,90,155/- I.E. RS.5,38,523/- WITH THE FOLLOWING OBSERVATIONS: 6. THE MATTER HAS BEEN CONSIDERED AND I AM AFRAID I CANNOT AGREE WITH THE AUTHORISED REPRESENTATIVE. WHILE IT IS TRUE THAT THE ASSESSEE IS AT THE LIBERTY TO MAINTAIN ACCOUNTS IN THE MANNER IT THINKS APPROPRIATE AND IN THE INSTANT CAS E, BECAUSE OF ITA NO.68/AHD/2010 (AY: 2006-07) ITO, WAD-2, MEHSANA VS MEHSANA DISTRICT EDUCATION F OUNDATION 3 THE VARIOUS REQUIREMENT, THE APPELLANT MAY HAVE SHO WN INTER- INSTITUTIONAL TRANSFERS IN DETAIL BUT WHAT HAS TO B E SEEN IS THE WAY THE MATTER HAS BEEN PRESENTED AT THE TIME OF IN COME-TAX ASSESSMENT. CLEARLY, AS FAR AS THE TRUST IS CONCERN ED, THE SUM OF RS.39,90,155/- IS NOT AN INCOME AND THEREFORE TO SHOW IT AS INCOME FROM HOUSE PROPERTY IS POSITIVELY AN INACCUR ATE DESCRIPTION. THE REASONS ADVANCED BY THE APPELLANT, NAMELY GRANTS TO BE OBTAINED FROM THE GOVERNMENT ETC., ARE NOT DEPENDENT ON THE MANNER IN WHICH THE INCOME-TAX RET URN WAS TO BE FILED. SINCE THE INCOME BEING SHOWN GETS CANCELL ED BY AGGREGATE APPLICATION OF INDIVIDUAL INSTITUTION, TH E ONLY REASON FOR THIS APPEARS TO BE THAT BY ENHANCING ITS RECEIP TS, THE APPELLANT WANTED TO HAVE A BIGGER MARGIN OF 15% ALL OWED BY SECTION 11 (1) (A) FOR THE AMOUNTS ALLOWED TO REMAI N UNSPENT. HENCE, IT IS QUITE CLEAR THAT THE APPELLANT HAS FUR NISHED INACCURATE PARTICULARS ON THIS ACCOUNT. THEREFORE, THE INACCURATE PARTICULARS FURNISHED BY THE APPELLANT HAS OR WOULD HAVE LED HIM TO THE BENEFIT OF 15% OF THE AMOUNT OF RS.39,90,155 /- AND THEREFORE THE INACCURATE PARTICULARS HAVE TO BE TRE ATED AS 15% OF RS.39,90,155/- ONLY. 4. THE LEARNED DR VEHEMENTLY ARGUED BEFORE US STATI NG THAT THE ASSESSEE HAD DELIBERATELY MADE SUCH DISCLOSURE IN I TS ACCOUNTS IN ORDER TO FALSELY CLAIM EXEMPTION U/S 11 OF THE ACT TO THE TUNE OF 15% OF SUCH INCOME. IT WAS ARGUED BY THE LEARNED DR THA T THE PROVISIONS OF SECTION 271(1) (C) OF THE ACT ARE ATTRACTED CONS IDERING THE FACTS OF THE CASE AND THE PENALTY LEVIED BY THE LEARNED AO M AY BE SUSTAINED. 5. ON THE OTHER HAND, THE LEARNED AR STOUTLY ARGUED STATING THAT IT IS ONLY A DISCLOSURE MADE IN THE STATEMENT OF AFFAI RS OF THE ASSESSEE TRUST CLEARLY SHOWING IT TO BE A CONTRA ENTRY. THE LEARNED AR FURTHER SUBMITTED THAT THE ASSESSEE TRUST DID NOT HAVE ANY MALA FIDE INTENTION FOR SUCH DISCLOSURE IN THE STATEMENT OF ACCOUNTS AN D SUCH PRESENTATION WAS MADE ONLY FOR A PROPER UNDERSTANDI NG OF THE AFFAIRS ITA NO.68/AHD/2010 (AY: 2006-07) ITO, WAD-2, MEHSANA VS MEHSANA DISTRICT EDUCATION F OUNDATION 4 OF THE TRUST. IT WAS ALSO SUBMITTED BY THE LEARNED AR THAT THE ASSESSEE HAD ONLY SUFFERED DEFICIT DURING THE PREVI OUS YEAR AND, THEREFORE THERE WAS NO SCOPE OF ACCUMULATION OF INC OME THEREBY DERIVING BENEFIT U/S 11 OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIAL ON RECORD. FROM THE STATEMENT OF AFFAIRS O F THE TRUST IT IS APPARENT THAT THE ASSESSEE TRUST DID NOT HAVE ANY S URPLUS DURING THE PREVIOUS YEAR IN ORDER TO CLAIM DEDUCTION U/S 11 OF THE ACT. THEREFORE, THE APPREHENSION OF THE REVENUE THAT THE ASSESSEE H AD MADE SUCH DISCLOSURE IN ORDER TO CLAIM BENEFIT U/S 11 OF THE ACT IS NOT TENABLE. FURTHER, ON PERUSING THE STATEMENT OF TOTAL INCOME OF THE ASSESSEE, WE OBSERVED THAT THE ASSESSEE HAD MADE SUCH DISCLOS URE IN THE NATURE OF CONTRA ENTRY, THUS THERE WAS NO SCOPE TO MISLEAD ANY FACTS. HOWEVER, THE ASSESSEE IS NOT IN APPEAL BEFORE US. I N THESE CIRCUMSTANCES, WE HAVE NO OTHER OPTION BUT TO DISMI SS THE APPEAL OF THE REVENUE. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-06-2012 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ ITA NO.68/AHD/2010 (AY: 2006-07) ITO, WAD-2, MEHSANA VS MEHSANA DISTRICT EDUCATION F OUNDATION 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: DIRECT DICTATION ON AMS COMP UTER 06-06-12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: -06-12 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: