URMILA DEVI CHARITABLE SOCIETY, GHAZIABAD V. ITO, EXEMPTION WARD, GHAZIABAD

ITA 7016/DEL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0056 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHAKANT SAHU
• Keywords: Cancellation of registration; Set aside
• Section: 12AA; 143(1); 147; 148; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY NEW DLEHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA.NO7016/DEL/2018 ASSESSMENT YEAR: 2011-12 URMILA DEVI CHARITABLE SOCIETY, VS. INCOME-TAX OFF ICER R 9/242, RAJ NAGAR, EXEMPTION WARD, GHAZIABAD. GHAZIABAD PAN ACDPS 8082R (APPLICANT) (RESPONDENT) APPELLANT BY: SHRI ROHIT TIWARI, ADVOCATE RESPONDENT BY: SH.SUBHA KANT SAHU, SR. DR DATE OF HEARING: 06/12/2019 DATE OF ORDER : 31/12/2019 ORDER PER K. NARASIMHA CHARY, J.M. CHALLENGING THE ORDER DATED 31/8/2018 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS),GAZIABAD (LD. CIT(A)) FOR ASSESSMENT YEAR 2011-12, M/S URMILA DEVI CHARITABLE SOCIETY (THE ASSESSEE) FILED THIS APPEAL. 2. BRIEF FACTS OF THE CASE AS COULD BE CULLED OUT F ROM RECORD AND THE ARGUMENTS ARE THAT THE ASSESSEE IS A CHARITABLE TRU ST. REGISTRATION OF THE TRUST WAS GRANTED UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (FOR 2 SHORT THE ACT) BY ORDER DATED 08.10.2010 BY THE C OMMISSIONER OF INCOME TAX, GAZIABAD. SUBSEQUENTLY THE SAID REGISTR ATION WAS CANCELLED W.E.F. 1/4/2010 VIDE ORDER NO. F-NO CIT (EXEMPTIONS )/LKO/12 AA/2015- 16/769 DATED 22/4/2016. IN VIEW OF THIS CANCELLATIO N OF THE REGISTRATION UNDER SECTION 12AA OF THE ACT, LEARNED ASSESSING OF FICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 28/3/2017. ASSESSEE PLEADED BEFORE THE ASSESSING OFFICER THAT THE CANCELLATION OF REGISTRA TION UNDER SECTION 12AA OF THE ACT WAS CHALLENGED BEFORE THE TRIBUNAL AND T HE SAID APPEAL WAS PENDING. ASSESSEE FURTHER CONTENDED THAT THE CORPUS DONATION WAS RECEIVED FROM THE GENUINE PARTIES AND ANY DEVELOPME NT AFTER A GAP OF SEVERAL YEARS CANNOT BE A BASIS TO REFUSE THE EXEMP TION AND TO BRING THE DONATIONS TO TAX AS INCOME OF THE SOCIETY AND FURTH ER SUBMITTED THAT THE CORPUS DONATION TO THE TUNE OF RS. 2,19,06,000/-WAS UTILISED IN A FIXED ASSET. LEARNED ASSESSING OFFICER, HOWEVER, DID NOT AGREE WITH THE ASSESSEE AND BECAUSE THE REGISTRATION UNDER SECTION 12AA OF THE ACT WAS CANCELLED, THE CLAIM OF THE ASSESSEE IN RESPECT OF APPLICATION IN FIXED ASSETS WAS NOT ALLOWABLE. LEARNED ASSESSING OFFICER HELD THAT IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF UP FOREST CORPORATION VS. DCIT IN CIVIL APPEAL NO. 9433 OF 20 03 AND BATCH OF CASES DECIDED ON 27/11/2007, REGISTRATION UNDER SECTION 1 2A IS A CONDITION PRECEDENT TO AVAIL THE BENEFIT UNDER SECTION 11 AND 12 OF THE ACT AND SINCE SUCH A REGISTRATION WAS CANCELLED, SURPLUS AS PER THE INCOME AND EXPENDITURE ACCOUNT IS TAXABLE INCOME OF THE ASSESS EE. HE, THEREFORE, CONCLUDED THE ASSESSMENT UNDER SECTION 143(3)/147 O F THE ACT OF THE ACT BY ORDER DATED 1/12/2017 BY ADDING THE ENTIRE DONAT IONS RECEIVED DURING THE FINANCIAL YEAR 2010-11 TO THE TUNE OF RS. 2,20, 16,720/-. 3 3. AGGRIEVED BY SUCH AN ADDITION, ASSESSEE PREFERRE D AN APPEAL BEFORE LD. CIT(A) AND TOOK ALL THE PLEAS THAT WERE TAKEN BEFORE THE LEARNED ASSESSING OFFICER. LD. CIT(A) HOWEVER, DISM ISSED THE APPEAL ON THE GROUND THAT AS ON SUCH DATE THE TRUST WAS NOT R EGISTERED IN SECTION 12AA OF THE ACT AND, THEREFORE, THE ASSESSEE CANNOT BE GIVEN THE BENEFIT OF PROVISIONS UNDER SECTION 11(1)(D) OF THE ACT. 4. IT IS THE SUBMISSION OF THE LD. AR THAT THE CANC ELLATION OF REGISTRATION WAS CHALLENGED BEFORE THE TRIBUNAL AND A COORDINATE BENCH OF THIS TRIBUNAL QUASHED THE ORDER OF CANCELLATION PASSED ON 22/4/2016 UNDER SECTION 12AA (3) OF THE ACT CANCELLING THE RE GISTRATION W.E.F. 1/4/2010. HE PRODUCED THE COPY OF ORDER DATED 13/6/ 2019 IN ITA NO. 4136 /DEL/ 2017 IN SUPPORT OF SUCH SUBMISSION. HE F URTHER SUBMITTED THAT SUCH A DECISION OF THE COORDINATE BENCH WAS FOLLOWE D IN ITA NUMBER 6909/DEL/ 2018 IN ASSESSEES OWN CASE FOR THE ASSES SMENT YEAR 2015-16 BY ORDER DATED 10/7/2019. 5. LD. DR PLACED RELIANCE ON THE ORDERS OF THE AUTH ORITIES BELOW AND SUBMITTED THAT THE AUTHORITIES BELOW ARE JUSTIFIED IN CONCLUDING THAT BASING ON THE DOCUMENTARY EVIDENCES SUCH AS STATEME NT OF DONORS, BANKING CHANNEL AND FIR REPORT ETC SUGGESTING THAT THE DONORS WERE BOGUS, THE REGISTRATION WAS CANCELLED AND THE SAID MATERIAL WAS CONFRONTED TO THE ASSESSEE DURING THE PROCEEDINGS U NDER SECTION 147 OF THE ACT. HE, THEREFORE, SUBMITS THAT THERE ARE NO G ROUNDS TO INTERFERE WITH THE IMPUGNED ORDER. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. FOR THE ASSESSMENT YEAR 2011-1 2 THE ASSESSEE HAS 4 FILED THE RETURN OF INCOME ON 30/9/2011 SHOWING NIL INCOME. SUCH A RETURN OF INCOME OF THE ASSESSEE WAS PROCESSED UNDE R SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE REGISTRATION GRANTED TO THE ASSESSEE BY ORDER DATED 8/10/2010 UNDER SECTION 12AA OF THE ACT WAS C ANCELLED BY THE COMMISSIONER OF INCOME TAX (EXEMPTION) LUCKNOW UNDE R SECTION 12AA (3) OF THE ACT BY ORDER DATED 22/4/2016 W.E.F. 1/4/ 2010. IN VIEW OF THIS CANCELLATION OF REGISTRATION UNDER SECTION 12AA OF THE ACT, LEARNED ASSESSING OFFICER PROPOSED TO REOPEN THE ASSESSMENT BY ISSUANCE OF NOTICE DATED 28/3/2017 UNDER SECTION 148 OF THE ACT . LEARNED ASSESSING OFFICER NOTED THAT DURING THE YEAR THE ASSESSEE HAS RECEIVED DONATION FROM HARBICURE HEALTHCARE BIO HERBAL RESEARCH FOUND ATION TO THE TUNE OF RS. 85 LACS, FROM SOCIETY FOR WELFARE OF HANDICAPPE D PERSONS TO THE TUNE OF RS. 15 LACS., AND IN VIEW OF THE INFORMATION REC EIVED FROM THE COMMISSIONER OF INCOME TAX (EXEMPTION), AND ALSO IN VIEW OF THE CANCELLATION OF REGISTRATION HELD THAT THE ENTIRE D ONATION OF RS.2,19,06,000/-WHICH INCLUDES THE DONATION OF RUPE ES ONE CRORE BEING BOGUS DONATION IN LIEU OF CASH (RS. 15 LAKHS FROM M /S SOCIETY FOR WELFARE OF THE HANDICAPPED PERSON PLUS RS. 85 LACS FROM M/S HEBICURE HEALTHCARE BIO HERBAL RESEARCH FOUNDATION) WAS TAXA BLE INCOME OF THE ASSESSEE AND ADDED THE ENTIRE AMOUNT TO THE INCOME OF THE ASSESSEE. 7. ON A READING OF THE ORDER DATED 13/6/2019 IN ITA NO. 4136 /DEL/ 2017 FOR ASSESSMENT YEAR 2011-12, WE FIND THAT THE ORDER OF CANCELLATION OF REGISTRATION UNDER SECTION 12AA OF THE ACT WAS S ET ASIDE BY A COORDINATE BENCH OF THIS TRIBUNAL AND THE REGISTRAT ION UNDER SECTION 12AA OF THE ACT WAS GRANTED. LD. DR SUBMITTED THAT IN VI EW OF THIS DEVELOPMENT, THE MATTER MAY BE REMANDED TO THE FILE OF THE LEARNED 5 ASSESSING OFFICER TO TAKE A VIEW AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE. LD. AR REPORTS NO OBJECTION FOR REMANDING THE MATTER TO THE FILE OF THE LEARNED ASSESSING OFFICER. CONSIDERING THE S UBMISSIONS, WE SET ASIDE THE IMPUGNED ORDER AND REMAND THE MATTER TO T HE FILE OF THE LEARNED ASSESSING OFFICER TO TAKE INTO CONSIDERATIO N THE OBSERVATIONS MADE BY THE COORDINATE BENCH OF THIS TRIBUNAL IN IT A NO. 4136 /DEL/ 2017 BY ORDER DATED 13/6/2019 AND DECIDE THE ISSUE AFRES H. 8. APPEAL OF THE ASSESSEE IS, ACCORDINGLY, ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN OPEN COURT ON THIS THE 31 ST DECEMBER, 2019. SD/- SD/- (G.S. PANNU) (K. NARASIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBER DATED: 31/12/2019 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI