M/s. Khalsa Montessori Senior Secondary School, New Delhi V. DCIT, Bulandshahr

ITA 6828/DEL/2014

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9763 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 17-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Section: 147; 148; 10; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.6828/DEL/2014 Assessment Year 2009-10 M/s. Khalsa Montessori Senior Secondary School, Near Exhibition Ground, Bulandshahar. vs. DCIT, Circle-Bulandshahar TAN/PAN: AAAAK2826P (Appellant) (Respondent) Appellant by: None Respondent by: Ms. Anupama Singla, Sr.DR Date of hearing: 30 05 2022 Date of pronouncement: 07 06 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed ap peal h as b een fil ed b y th e Assessee ag ain st th e o rd er o f th e C o mmiss io n er o f In co me T ax (Ap p eals), Me eru t (‘CIT(A)’ in sh o rt) d ated 3 1 .10 .2 0 14 arisin g fro m th e assess men t o rd er d ated 2 8 .0 3.2 0 1 3 p assed by th e Assess in g Officer (AO) u n d er Sectio n 1 43(3 ) r.w. Sectio n 14 7 o f th e In co me Tax Act, 1 9 61 (th e Act) co n cern in g AY 2 0 09 -10 . 2 . Brie fly sta ted , th e asse ssee is a s o ciety reg istered u n d er So ciet ies Reg i str atio n Ac t, 1 8 6 0 en g ag ed in i mp artin g o f ed u catio n act iv i ti e s. Th e so cie ty is reg ister ed u n der Sectio n 1 2A o f th e Ac t. Th e as sessee fil ed i ts re t u rn o f in co me d ec l arin g to ta l in co me o f Rs .3 2 ,6 3 ,4 1 9 /- an d claime d ex emp tio n u n d er Sect io n 11 an d 12 o f th e Act. Wh ile fra min g th e assessmen t, the Assessin g I.T.A. No.6828/Del/2014 2 Officer mad e certa in ad d itio n s an d d isal lo wan ces and assessed th e in co me a t Rs.8 6 ,7 3 ,1 7 0 /- and d en ied th e ex emp tio n th ereo n u n d er Sect io n s 1 1 an d 1 2 o f th e Act as also u n d er Sectio n 1 0 (23 C)(iii ad ) o f th e Act. Th e in co me so assessed was ch arg ed to tax on max i mu m marg in a l rate . 3 . Ag g riev ed , th e ass essee p re ferred ap p eal b e fo re th e CI T(A). Th e CIT(A) h as d e alt wi th g riev an ce o f th e ass essee as u n d er: 3 . D e c i si o n o n g ro u n d s o f a p p e a l No s . 1 &2 : T h e a p p e l l a n t i s a s o c i e t y r e g i s t e r e d u n d e r t h e S o ci e t i e s R e g i st r a t i o n A c t a n d i s a l s o re g i st e re d u / s 1 2 A o f t h e I T A c t 1 9 6 1 . F o r t h e a s s e s sm e n t y e a r 2 0 0 9 - 1 0 t h e a p p e l l a n t d i d no t f i l e i t s re t u rn u n d e r se c t i o n 1 3 9 (1 ) o f t h e I T A c t . S u b s e q u en t l y , n o t i c e u n d e r s e c t i o n 1 4 8 wa s i s su e d t o t h e a p p e l l a n t r e q u iri n g i t t o f i n d i t s re t u rn o f i n c o m e . F i n a l l y , t h e a p p e l l a n t f i l e d i t s r e t u r n o f i n c o m e o n 2 0 . 9 . 2 0 1 2 . I n t h e sa i d re t u rn , t h e a p p e l la n t h a d sh o wn a g r o ss t o t a l i n c o m e o f R s . 3 2 , 6 3 , 4 1 9 / - wh i c h w a s h o we v e r c l a i m e d a s e x e m p t u n d e r se c t i o n 1 0 a n d 1 2 A o f t h e I T A c t 1 96 1 . I n t h e g r o u n d s o f a p p e a l t h e a p p e l l a n t h a s n o t r a i s e d t h e i s su e o f e x e m p t i o n u n d e r s e c t i o n 1 0 , s o n o c o m m e n t s a r e b e i ng m a d e o n t h i s p o i n t a l t h o u g h t h e a s se s si n g o f f i c e r h a s c l e a rl y d e m o n s t r a t e d i n t h e a s se s s m e n t o r d e r t h a t t h e a p p e l l a n t i s n o t en t i t l e d f o r e x e m p t i o n u n d e r s e c t i o n 1 0 . 3 . 2 T h e A O i n h i s a ss e s sm e n t o rd e r h a d q u o t e d e x t ra c t s f r o m t h e a s s e ss m e n t o r d e r o f t h e i m m e d i a t e l y p re c e d i n g as s e s s m e nt y e a r , t h a t i s , a s s e s sm e n t y e a r 2 0 0 8 - 0 9 . I n t h e a s ses sm e n t y e a r 2 0 0 8 - 0 9 , t h e A O h a d d e m o n s t r a t e d t h a t t h e e x c e s s o f i n c o m e o v e r e x p e n d i t u re w a s m o re t h a n 1 5 % i n t h e c a s e o f t h e a pp e l l a n t a n d t h e r e f o r e i t w a s n o t e n t i t l e d f o r e x e m p t i o n u n d e r se c t i o n 1 1 o f t h e I T A c t 1 9 6 1 . S i n c e t h e f a c t s a n d c i r c u m s t a n c e s a r e s i m i l a r i n t h e I.T.A. No.6828/Del/2014 3 a s s e ss m e n t y e a r 2 0 0 9 - 1 0 a l so t h e A O c a m e t o a c o n c lu si o n t h a t t h e i n c o m e o f t h e a p p e l l a n t i s n o t e x e m p t u n d e r se c t i o n 1 1 o f t h e I T A c t 1 9 6 1 . 3 . 3 D u r i n g t h e c o u r se o f a p p e a l p ro c e e d i n g , t h e A R o f t h e a p p e l l a n t st a t e d i n h i s w ri t t e n su b m i s si o n f i r st l y t h a t m e r e l y b e c a u s e o f t h e f a c t t h a t t h e a p p e l l a n t h a d q u o t e d th e wr o n g se c t i o n t h a t i s se c t i o n 1 2 A i n st e a d o f s e c t i o n 1 1 t h e A O sh o u l d n o t h a v e d e n i e d t h e e x e m p t i o n t o t h e a p p e l l a n t a n d se c o n d l y t h a t A O sh o u l d n o t h a v e d e n i e d t h e e x e m p t i o n b y c o n s i d e ri n g t h e f ac t s o f p r e v i o u s a s s e ss m e n t y e a r s a s e a c h a s se s s m e n t y e a r s h o u l d b e i n d e p e n d e n t l y c o n s i d e r e d . 3 . 4 I h a v e g o n e t h r o u g h t h e a s s e s s m e n t o r d e r a s we ll a s t h e wr i t t en su b m i s s i o n o f t h e A R . F i r st o f a l l , i t i s o b v i o u s th a t t h e a p p e l l a n t h a d n o t f i l e d i t s r e t u r n o f i n c o m e o n o r b e f o re t h e d u e d a t e p r e sc ri b e d u n d e r s e c t i o n 1 3 9 (l ) a n d t h e re f o r e i n v ie w o f se c t i o n 1 3 9 (4 A ) t h e a p p e l l a n t w a s n o t e n t i t l e d f o r e x e m p t i on u / s 1 1 . S e c o n d l y , e v e n o n f a c t s i t i s o b v i o u s t h a t t h e su r pl u s o f i n c o m e o v e r e x p e n d i t u r e i n t h e c a s e o f t h e a p p e l l a n t i s m ore t h a n 1 5 % a n d t h e r e f o r e i t i s n o t e n t i t l e d f o r e x e m p t i o n u n d e r sec t i o n 1 1 o f t h e I T A c t 1 9 6 1 . O n t h e b a s i s o f a b o v e f a c t s, I a m o f a n op i n i o n t h a t t h e A O h a s ri g h t l y d e n i e d e x e m p t i o n u n d e r se c t i o n 1 1 t o t h e a p p e l l a n t . T h e g ro u n d o f a p p e a l No s . 1 &2 a re t h e re f o r e d i sm i s se d . 4 . D e c i d i n g d e c i si o n o n g ro u n d s o f a p p e a l N o . 3 : T h i s g ro u n d r e l a t e s t o a d d i t i o n o f R s. 2 4 , 6 1 , 9 9 6 / - o n t h e g r o u n d t h a t t h e a c c ru e d i n t e r e st o n f i x e d d e p o s i t r e c e i p t s w a s- n o t d e c l a r e d a s i n c o m e f ro m o t h e r s o u rc e s b y t h e a p p e l l a n t . T h e g i st o f su b m i s s i o n o f t h e A R o n t h i s p o i n t i s t h a t t h e a p p el l a n t i s m a i n t a i n i n g i t s b o o k s o f a c c o u n t s o n c a s h b a si s a n d t h e r e f o re t h e i n t e r e st i n c o m e wi l l b e t a k e n i n t o a c c o u n t - i n t h e ye a r i n w h i c h t h e I.T.A. No.6828/Del/2014 4 F D R s a re m a t u re d . I h a v e c o n s i d e re d t h e ri v a l su b m is si o n s a s a b o v e . E v e n i f t h e a p p e l l a n t i s m a i n t a i n i n g i t s b o ok s o f a c c o u n t o n c a sh b a s i s , a s p e r t h e n o r m s o f a c c o u n t i n g , i n t e re st i n c o m e h a s t o b e a c c o u n t e d f o r o n a c c ru a l b a si s a n d n o t o n r e c e i pt b a si s, a l t h o u g h t h e b u si n e s s i n c o m e m a y b e a c c o u n t e d f o r on c a sh o r re c e i p t b a s i s. I h a v e t h e r e f o re c o m e t o a c o n c l u s i on t h a t t h e a s s e ss i n g o f f i c e r h a s ri g h t l y a d d e d t h i s a m o u n t t o t h e t o t a l i n c o m e o f t h e a p p e l l a n t f o r t h e a s se s s m e n t y e a r 2 0 0 9 - 1 0 . 5 . D e c i s i o n o n g r o u n d s o f a p p e a l No . 4 : T h i s g ro u n d r e l a t e s t o d i sa l l o wi n g d e p re c i a t i o n o f R s . 1 8 , 7 9 , 0 1 3 / - o n f i x e d a s se t s . D u ri n g t h e c o u r s e o f a s s e ss m e n t p ro c e e d i n g s t h e A O a s k e d t h e a p p e l l a n t t h a t si n c e i t h a s c l a i m e d e xe m p t i o n i n re s p e c t o f a s s e t s i n e a r l i e r y e a r s t h e d e p r e c i a t i o n o n t h e sa m e sh o u l d b e d i s a l l o w e d . I n i t s re s p o n s e , t h e a p p e l l a nt h a d su b m i t t e d t h a t f i x e d a s s e t s h a s n e v e r b e e n c l a i m e d a g a i n st rev e n u e a n d t h e r e f o r e n o p a rt o f d e p r e c i a t i o n c a n b e d i s a l l o we d. D u r i n g t he c o u r s e o f a p p e a l p r o c e e d i n g s, t h e A R o f t h e a p p e l l an t h a d m o re o r l e s s re p e a t e d t h e sa m e a rg u m e n t s . 5 . 2 I h a v e c o n si d e r e d t h e r i v a l su b m i ss i o n s. I t s e em s t h a t t h e A O i s t a k i n g a c o n t ra d i c t o ry s t a n d o n t h i s p o i n t . Th e A O h a s d i sc u s s e d i n d e t a i l i n h i s a s se s s m e n t o rd e r t h a t i nc o m e o f t h e a p p e l l a n t i s n o t e x e m p t e i t h e r u n d e r t h e p r o v i si o n o f s e c t i o n 1 0 o r se c t i o n 1 1 . I n t h e c o n c l u d i n g l i n e o f t h e a s se s s m e nt o r d e r t h e A O h a s m e n t i o n e d t h a t h e i s a s se s si n g t h e i n c o m e o f t he a p p e l l a n t a s i n c o m e f ro m b u si n e s s u n d e r se c t i o n 2 8 o f t h e I T A c t 1 9 6 1 . I n t h i s si t u a t i o n i f a c c o rd i n g t o t h e A O t h e i n c o m e o f t h e a p p e l l a n t i s si m p l e b u si n e s s i n c o m e t h e n i t i s e n t i t l e d f o r d e p re c i a t i o n o n t h e f i x e d a s se t s o wn e d a n d u s e d b y i t f o r i t s b u si n e s s d u ri n g t h e c o n c e r n e d p re v i o u s y e a r . T h e a s se s si n g o f f i c e r h a s t o s s e d a si d e t h e a r g u m e n t s o f t h e A R b y s i m p l y w ri t i n g t h a t t h e e x p la n a t i o n i s n o t I.T.A. No.6828/Del/2014 5 sa t i sf a c t o ry a n d t h e a ss e s se e h a s f a i l e d t o f u rn i s h e v i d e n c e i n t h i s re g a r d . T h e A O h a d n o wh e r e m e n t i o n e d i n h i s o r d e r as t o wh a t e v i d e n c e wa s re q u i re d t o b e f u rn i s h e d b y t h e a p p e l la n t o n t h i s m a t t e r. T h e A O h a s n o t e st a b l i s h e d t h a t t h e c a p i t a l a s s e t s o n w h i c h d e p r e c i a t i o n h a s b e e n c l a i m e d h a v e n o t b e e n o w n e d an d u se d f o r t h e p u rp o se o f b u si n e s s b y t h e a p p e l l a n t i n t h e c o nc e rn e d p r e v i o u s y e a r . O n t h e b a si s o f a b o v e f a c t s I h a v e c o m e t o a c o n c l u s i o n t h a t t h e a p p e l l a n t i s e n t i t l e d t o d e p r e c i a t i o n i f i t s i nc o m e i s c o n si d e r e d t o b e a s s e s se d a s n o r m a l b u si n e s s i n c o m e . T h e g ro u nd s o f a p p e a l n u m b e r f o u r i s a c c o rd i n g l y a l l o w e d a n d a d d i t i o n o f R s. 1 8 , 7 9 , 0 1 3 / - i s d e l e t e d . 6 . G r o u n d s o f a p p e a l No . 5 : T h i s g ro u n d r e l a t e s t o t h e f a c t t h a t w h i l e c o m p u t i ng t a x o n t h e t o t a l i n c o m e o f t h e a p p e l l a n t t h e A O d i d n o t a l l o w t h e b e n e f i t of b a si c e x e m p t i o n . T h e A O i s d i re c t e d t o c o n si d e r t h e c l a i m o f t h e a p p e l l a n t a s p e r t h e r e l e v a n t p ro v i si o n o f l a w a n d a s p e r ra t e o f t a x a t i o n p re s c r i b e d f o r A s se s si n g O f f i c e r d u ri n g t he c o n c e r n e d A . Y . T h e g r o u n d o f a p p e a l n u m b e r f i v e i s c o n si d e r e d a l l o w e d f o r st a t i st i c a l p u rp o se s. ” 4 . Ag g riev ed b y th e den ial o f re li ef b y t h e CIT(A), th e assessee p referred ap p eal b efo re th e CIT(A). 5 . Wh en th e mat ter was cal led fo r h earin g , n o n e atten d ed o n b eh alf o f th e asse ssee. It is n o ticed fro m th e cas e reco rd s th at sev eral o p p o rtun it ies were g iv en to th e assessee in th e ma tt er with o u t an y av ail. Acco rd in g ly , th e ma tt er was p ro ceed ed ex -p arte in th e ab sen ce o f t h e assess ee. 6 . On p eru sal o f th e firs t ap p el la te o rd er, th e CIT(A) h as o b serv ed th at th e a ssessee h as n o t file d its retu rn o f in co me b efo re I.T.A. No.6828/Del/2014 6 th e d ate p rescrib e d un d er Sectio n 1 39 (1 ) an d th erefo re in v iew o f Sect io n 1 3 9(4 A), t h e effec t o f Sec tio n s 1 1 and 1 2 can no t b e g iv en in th e case o f As sessee h erein . It was fu rth er n o tice d th at th e su rp lu s o f in co me o v er exp en d itu re ex ceed s 1 5 %. In oth er wo rd s 8 5 % o f th e in co me d eriv ed fro m ch arit ab le ac tiv ity h as n o t b een all eg ed ly ap p lied fo r ch aritab le o b jects an d th u s th e assesse e is n o t en ti tled to rel ie f av a ilab le u n d er Sect io n s 1 1 an d 1 2 o f th e Act. 7 . In th e ab sen ce of an y reb u ttal o f su ch alleg at ion s, no in ter feren ce wi th th e fin d in g s o f th e CIT(A) is calle d fo r. Th e CIT(A) h as g iv en fin d in g s o n meri t s wh ich are sel f e x p lan ato ry an d in th e ab sen ce o f re lev an t fa cts to d islo d g e t he fac tu al fin d in g , we ar e n o t in c lin ed to in t erfere with su ch fin d in g s in ex- p a rte p ro ceed in g s. Co n seq u en tly , we d eclin e to in ter fer e with th e o rd er o f th e CIT(A). 8 . In th e resu lt, th e ap p eal o f th e as sessee is d ismiss e d ex- p a rte. Order pronounced in the open Court on 07/06/2022. Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /06/2022 Prabhat