M/s Kamal Shiksha Sanstan, Meerut V. ACIT, Meerut

ITA 6827/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3383 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 01-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 29-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Section: 12AA; 11

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 6827/DEL/2015 ASSESSMENT YEAR: 2010-11 KAMAL SHIKSHA SANSTAN B-13, SHANTI ASHRAM, SHAMBHU NAGAR, BAGHPAT ROAD, MEERUT PAN AABTK7896F VS. ACIT CIRCLE 1 MEERUT (APPELLANT) (RESPONDENT) O R D E R PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 4.12.2014 PASSED BY THE LD. CIT(A) MEERUT WHEREIN T HE LD. CIT(A) HAS ASSESSEE BY: SHRI V.K. GOEL, ADVOCATE DEPARTMENT BY : S HRI R.C. SR. DR DATE OF HEARING 21/08 /2017 DATE OF PRONOUNCEMENT 20/11/ 2017 ITA NO. 6827//DEL/2015 KAMAL SHIKSH SANSTAN VS. ACIT 2 HELD THAT THE ASSESSEE WAS NOT COVERED U/S 10(23C)( IIIAD) OF THE INCOME TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AS SESSEE IS A TRUST REGISTERED UNDER THE INDIAN REGISTRATION ACT, 1908. THE RETURN OF INCOME WAS FILED DECLARING NIL INCOME AND, THEREAFTER, THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE AO OBSERVED THAT ALTHOUGH THE ASSESSEE HAD CLAIMED TO HAVE ESTABLISHED EDUCATIONAL INSTITUTION IN THE NAME OF KAMAL INSTIT UTE OF TECHNOLOGY, THE ASSESSEE HAD NOT CARRIED OUT ANY CHARITABLE ACTIVIT Y TOWARDS ITS OBJECTS AND HAD SHOWN ONLY PURCHASE OF LAND AND BUILDING. T HE AO ALSO NOTED THAT THE TRUST CAME INTO EXISTENCE ON 22.12.2009. I T WAS FURTHER OBSERVED THAT THE ASSESSEE HAD RECEIVED DONATIONS / CONTRIBUTIONS OF RS. 39,51,653/- DURING THE YEAR UNDER CONSIDERATION FRO M SIX PERSONS. THE ASSESSEE FILED COPIES OF ITRS OF THE DONORS BEFORE THE AO. HOWEVER, THE AO WAS OF THE OPINION THAT ALTHOUGH THE IDENTITY AN D GENUINENESS OF THE DONATIONS/CONTRIBUTIONS WAS NOT DOUBTED, THE CAPACI TY OF THE DONORS TO MAKE THE DONATION WAS NOT PROVED. IT WAS ALSO NOTED BY THE AO THAT NO DECLARATION HAD BEEN FILED BY THE DONORS TO PROVE T HAT THE CONTRIBUTIONS HAD BEEN MADE TOWARDS THE CORPUS OF THE TRUST. THE AO WENT ON TO HOLD THAT THE ASSESSEE WAS NOT ENTITLED FOR EXEMPTION OF THESE CONTRIBUTIONS ITA NO. 6827//DEL/2015 KAMAL SHIKSH SANSTAN VS. ACIT 3 U/S 11 (1)(D) OR SECTION 10(23C) OF THE ACT AND ALS O HELD THAT SINCE NO EDUCATIONAL ACTIVITY WAS CARRIED OUT DURING THE YEA R, IN ABSENCE OF ANY ACTIVITY, IT COULD NOT BE HELD THAT THE ASSESSEE TR UST EXISTED SOLELY FOR EDUCATIONAL PURPOSES. THE AO PROCEEDED TO ADD THE A MOUNT OF RS. 39,51,653/- TO THE INCOME OF THE ASSESSEE. 2.1 ON APPEAL BEFORE THE LD. CIT(A), THE LD. C IT(A) HELD THAT THE ASSESSEE WAS NOT RUNNING THE EDUCATIONAL INSTITUTIO N DURING THE YEAR UNDER CONSIDERATION, AND, THEREFORE THE VOLUNTARY CONTRIBUTION INCLUDED BY THE AO IN TERMS OF SECTION 2(24)(IIA) OF THE ACT UNDER TAXABLE INCOME WAS IN ORDER. NOW, THE ASSESSEE HAS APPROACHED THE ITAT AND HAS CHALLENGED THE CONFIRMATION OF AOS ACTION BY THE L D. CIT (A). 4. THE LD. AUTHORISED REPRESENTATIVE SUBMITTE D THAT THE TRUST HAS RECEIVED REGISTRATION U/S 12AA OF THE ACT VIDE ORDE R DATED 18 TH JUNE, 2015 W.E.F 1 ST APRIL, 2014. OUR ATTENTION WAS DRAWN TO COPY OF TH E SAME IN THE PAPER BOOK. IT WAS FURTHER SUBMITTED THAT BO TH THE LOWER AUTHORITIES HAD NOT RECORDED A FINDING THAT THE ASS ESSE HAD NOT UTILISED THE DONATION FOR PURPOSES WHICH WERE NOT CHARITABLE IN NATURE AND, THEREFORE, THE DONATION RECEIVED FOR THE CORPUS FUN D COULD NOT BE DISALLOWED. IT WAS ALSO SUBMITTED THAT NO INDEPENDE NT INQUIRY WAS MADE BY THE AO TO SUBSTANTIATE THAT THE DONATION RECEIVE D FOR THE CORPUS WAS ITA NO. 6827//DEL/2015 KAMAL SHIKSH SANSTAN VS. ACIT 4 NOT GENUINE. IT WAS ALSO SUBMITTED THAT THE VIEW TA KEN BY THE AO THAT THE ASSESSEE COULD NOT PROVE THE SOURCE AND THE CRE DITWORTHINESS OF THE DONORS WAS AGAINST THE SETTLED LAW AS THE ASSESSEE IS NOT REQUIRED TO PROVE SOURCE OF SOURCE. 5. LD. SR. DR, IN RESPONSE, PLACED RELIANCE ON THE CONCURRENT FINDINGS OF BOTH THE LOWER AUTHORITIES AND SUBMITTE D THAT THE ISSUE DID NOT REQUIRE ANY FURTHER ADJUDICATION AS THE FINDINGS GIVEN BY THE LOWER AUTHORITIES COULD NOT BE SUCCESSFULLY NEGATED BY TH E ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HA VE PERUSED THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE A SSESSEE HAD RECEIVED DONATIONS FROM SIX PERSONS WHOSE IDENTITY HAS NOT B EEN DOUBTED BY THE AO. FURTHER, THE AO ALSO DOES NOT DOUBT THE GENUINE NESS OF THE TRANSACTIONS. THE POINT OF DIFFERENCE BETWEEN THE A SSESSEE AND THE DEPARTMENT IS THAT THE ASSESSEE CLAIMS THAT THE DON ATIONS WERE MADE TOWARDS THE CORPUS OF THE TRUST WHEREAS THE CONTENT ION OF THE DEPARTMENT IS THAT NO EVIDENCE WAS FILED TO PROVE T HAT THE CONTRIBUTIONS WERE MADE TOWARDS THE CORPUS OF THE TRUST. THUS, TH E ONLY QUESTION WHICH REMAINS IS WHETHER OR NOT THE DONATIONS WERE IN THE NATURE OF CORPUS DONATIONS. A PERUSAL OF THE AOS ORDER SHOW S THAT THIS ISSUE HAS NOT BEEN DECIDED BY THE AO IN A PROPER MANNER AND T HE FACTS HAVE NOT ITA NO. 6827//DEL/2015 KAMAL SHIKSH SANSTAN VS. ACIT 5 BEEN APPRECIATED IN THE JUDICIAL MANNER. THE LD. CIT (A) HAS ALSO DECIDED THE ISSUE IN HASTE BY PASSING A CRYPTIC ORD ER WHICH IS NOT SUSTAINABLE. IT IS SEEN THAT THE LD. CIT (A) HAS NO T PROPERLY CONSIDERED THE SUBMISSIONS AND FACTS OF THE CASE AND HAS SIMPL Y FOLLOWED THE AOS CONCLUSION AND DISMISSED THE ASSESSEES APPEAL. ALT HOUGH, THE LD. SR. DR HAS SUPPORTED THE ORDER OF THE LD. CIT (A), HE RAIS ED NO SERIOUS OBJECTION IF THE APPEAL WAS RESTORED TO THE FILE OF THE FIRST APPELLATE AUTHORITY. THEREFORE, IN THE INTEREST OF JUSTICE WE DEEM IT FIT TO RESTORE THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE TO THE FILE OF LD. CIT (A) FOR FRESH ADJUDICATION AFTER PROVIDING PROPER OPPORTUNIT Y TO THE ASSESSEE AND WITHOUT BEING PREJUDICE WITH THE EARLIER IMPUGNED O RDER. THE ASSESSEE SHALL BE AT LIBERTY TO FILE WHATEVER DOCUMENTS IT D EEMS NECESSARY IN THIS REGARD AND IT WILL BE IN THE FITNESS OF THINGS THAT THE LD. CIT (A) OBTAINS A REMAND REPORT FROM THE AO BEFORE PASSING THE FINAL ORDER. 7. IN THE FINAL RESULT APPEAL OF THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.11.2017 . SD/- SD/- (R.K.PANDA) (SUDH ANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER ITA NO. 6827//DEL/2015 KAMAL SHIKSH SANSTAN VS. ACIT 6 DATED: 20.11.2017 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI