ITO (Exemption)-II, Kolkata V. Shaw Education Foundation, Kolkata

ITA 716/KOL/2008

• Counselvise Citation: 71623514 RSA 2008
• Duration Of Justice: 7 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-08-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 02-05-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SITAL CHANDRA DAS
• Assessee Lawyers: A K TULSIYAN
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 143(3); 12A; 147; 11

Judgement Text

I.T.A. NOS. 716, 717 & 1611/KOL./2008 ASSESSMENT YEARS: 2000-2001, 2001-2002 & 2002-2003 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NOS. 716, 717 & 1611/KOL/ 2008 ASSESSMENT YEARS : 2000-2001, 2001-2002 & 2002-2003 INCOME TAX OFFICER (EXEMPTION)-II, KOLKATA,........ ...............,....APPELLANT 10B, MIDDLETON ROW, 5 TH FLOOR, KOLKATA-700 071 -VS.- SHAW EDUCATION FOUNDATION,......................... ...........................RESPONDENT 582, DIAMOND HARBOUR ROAD, KOLKATA-700 034 [PAN : AAETS 6148 M] APPEARANCES BY: SHRI SITAL CHANDRA DAS, JCIT , FOR THE DEPARTMENT SHRI A.K. TULSIYAN, A.R.., FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : NOVEMBER 16, 2015 DATE OF PRONOUNCING THE ORDER : NOVEMBER 20, 2015 O R D E R PER SHRI P.M. JAGTAP :- THESE THREE APPEALS FILED BY THE REVENUE ARE DIRECT ED AGAINST THREE SEPARATE ORDERS PASSED BY THE LD. COMMISSIONER OF I NCOME TAX (APPEALS)- XI, KOLKATA, DATED 06.12.2007, 18.02.2008 AND 06.06 .2008 FOR THE ASSESSMENT YEARS 2000-01, 2001-02 & 2002-03 RESPECT IVELY. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THE SA ME HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY A SINGLE CONS OLIDATED ORDER FOR THE SAKE OF CONVENIENCE. I.T.A. NOS. 716, 717 & 1611/KOL./2008 ASSESSMENT YEARS: 2000-2001, 2001-2002 & 2002-2003 PAGE 2 OF 6 2. THE ASSESSEE IN THE PRESENT CASE IS A TRUST, WHI CH IS DULY REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT, 1961. IT W AS ESTABLISHED ON 01.07.1993 AND SINCE INCEPTION, THE TRUST UNDERTOOK THE RESPONSIBILITY OF RUNNING A SCHOOL ALREADY IN EXISTENCE, NAMELY NATIO NAL GEMS SCHOOL. FOR ALL THE THREE YEARS UNDER CONSIDERATION, REGULAR RE TURNS OF INCOME WERE NOT FILED BY THE ASSESSEE. THE RETURN OF INCOME FOR A.Y. 2004-05, HOWEVER, WAS FILED BY THE ASSESSEE ON 30.03.2006 AND FROM TH E PERUSAL OF THE AUDITED ACCOUNTS FOR ALL THE THREE YEARS UNDER CONS IDERATION FILED ALONG WITH THE SAID RETURNS, THE ASSESSING OFFICER NOTICE D THAT THE RETURNS OF INCOME FOR THE SAID THREE YEARS WERE REQUIRED TO BE FILED BY THE ASSESSEE IN LAW. HE, THEREFORE, ISSUED NOTICES UNDER SECTION 148, IN RESPONSE TO WHICH THE RETURNS OF INCOME FOR THE YEARS UNDER CON SIDERATION WERE FILED BY THE ASSESSEE ON 13.04.2006. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THERE WERE CERTAIN PAYMENTS MADE BY THE ASSESSEE IN VIOLATION OF THE P ROVISIONS OF SECTION 13(2)(C) OF THE ACT. KEEPING IN VIEW THE SAID VIOLA TION, HE DENIED THE CLAIM OF THE ASSEESSEE FOR EXEMPTION UNDER SECTION 11 FOR ALL THE THREE YEARS UNDER CONSIDERATION AND ASSESSED THE INCOME E ARNED BY IT UNDER THE HEAD INCOME FROM OTHER SOURCES TREATING IT AS AN AOP. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FAIL ED TO PRODUCE EVIDENCE TO SUPPORT AND SUBSTANTIATE THE EXPENDITUR E CLAIMED UNDER THE HEADS EDUCATIONAL DEVELOPMENT PROGRAMME, SCHOOL EVENTS AND PROMOTIONAL & DEVELOPMENT EXPENDITURE INSPITE OF SUFFICIENT OPPORTUNITY AFFORDED BY THE ASSESSING OFFICER. THE EXPENDITURE CLAIMED BY THE ASSESSEE UNDER THE SAID HEADS, THEREFORE, WA S HELD TO BE NOT GENUINE BY THE ASSESSING OFFICER AND THE SAME WAS D ISALLOWED BY HIM. THE CLAIM OF THE ASSESSEE OF HAVING RECEIVED INFRA STRUCTURE CORPUS FUND WAS ALSO EXAMINED BY THE ASSESSING OFFICER AND ON S UCH EXAMINATION, HE FOUND THAT THE CONTRIBUTION TO THE SAID FUND WAS RE CEIVED BY THE ASSESSEE FROM THE STUDENTS OF NATIONAL GEMS SCHOOL. HE HELD THAT THIS CONTRIBUTION RECEIVED BY THE ASSESSEE FROM THE STUDENTS WAS NOT VOLUNTARY AND IN THE ABSENCE OF ANY DECLARATION FILED BY THE ASSESSEE FR OM THE CONCERNED STUDENTS, HE TREATED THE CORPUS FUND RECEIVED BY TH E ASSESSEE AS ITS I.T.A. NOS. 716, 717 & 1611/KOL./2008 ASSESSMENT YEARS: 2000-2001, 2001-2002 & 2002-2003 PAGE 3 OF 6 INCOME. THE CLAIM OF THE ASSESSEE OF HAVING SPENT S UBSTANTIAL AMOUNT FOR THE PURPOSE OF CONSTRUCTION OF BUILDING WAS ALSO NO T ACCEPTED BY THE ASSESSING OFFICER IN THE ABSENCE OF ANY EVIDENCE PR ODUCED BY THE ASSESSEE TO SUPPORT AND SUBSTANTIATE THE SAME. HE ALSO FOUND ON THE BASIS OF INQUIRY MADE BY HIM THAT THERE WAS ACTUALLY NO CONS TRUCTION OF BUILDING UNDERTAKEN BY THE ASSESSEE DURING THE YEARS UNDER C ONSIDERATION. ACCORDINGLY, THE CLAIM OF THE ASSESSEE OF HAVING SP ENT THE AMOUNT ON BUILDING CONSTRUCTION AS APPLICATION OF INCOME WAS ALSO DISALLOWED BY THE ASSESSING OFFICER. FINALLY THE ASSESSMENTS WERE COM PLETED BY THE ASSESSING OFFICER FOR ALL THE THREE YEARS UNDER CON SIDERATION VIDE ORDERS PASSED UNDER SECTION 143(3) READ WITH SECTION 147 D ETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.2,01,18,690/-, RS.1,27 ,76,690/- AND RS.1,43,08,540/- FOR ASSESSMENT YEARS 2000-01, 2001 -02 & 2002-03 RESPECTIVELY. 3. AGAINST THE ORDERS PASSED BY THE ASSESSING OFFIC ER UNDER SECTION 143(3) READ WITH SECTION 147 FOR ALL THE THREE YEAR S UNDER CONSIDERATION, THE APPEALS WERE PREFERRED BY THE ASSESSEE BEFORE T HE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. CIT(APPEALS), WRITTEN SUBMISSIONS WERE FILED BY THE ASSESSEE EXPL AINING ITS STAND ON EACH AND EVERY ISSUE RAISED BY THE ASSESSING OFFICE R IN THE ASSESSMENT ORDERS. VARIOUS DOCUMENTS WERE ALSO FILED BY THE AS SESSEE IN SUPPORT OF ITS SUBMISSIONS. THE SAID DOCUMENTS FILED BY THE AS SESSEE FOR THE FIRST TIME BEFORE HIM AS ADDITIONAL EVIDENCE WERE FORWARD ED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER ALONG WITH TH E WRITTEN SUBMISSIONS FILED BY THE ASSESSEE FOR HIS COMMENTS. IN THE REMA ND REPORT SUBMITTED TO THE LD. CIT(APPEALS), IT WAS STATED BY THE ASSESSIN G OFFICER THAT VARIOUS DETAILS AND DOCUMENTS FILED BY THE ASSESESE AT THE FAG END OF THE ASSESSMENT PROCEEDINGS COULD NOT BE VERIFIED BY HIM ON ACCOUNT OF INSUFFICIENCY OF TIME. THE ASSESSING OFFICER ALSO O BJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE FILED BY THE ASSESSEE FOR TH E FIRST TIME BEFORE THE LD. CIT(APPEALS) ON THE GROUND THAT THERE WAS NO RE ASON GIVEN BY THE ASSESSEE FOR ITS FAILURE TO FILE THE SAME BEFORE HI M DURING THE COURSE OF I.T.A. NOS. 716, 717 & 1611/KOL./2008 ASSESSMENT YEARS: 2000-2001, 2001-2002 & 2002-2003 PAGE 4 OF 6 ASSESSMENT PROCEEDINGS. ON MERIT, THE ASSESSING OFF ICER IN HIS REMAND REPORT MAINLY RELIED ON THE ASSESSMENT ORDERS WITHO UT MAKING ANY COMMENT ON THE WRITTEN SUBMISSIONS AND ADDITIONAL E VIDENCE FILED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS). AFTER TAKING NOTE OF ALL THESE FACTS AS WELL AS THE REMAND REPORT SUBMITTED BY THE ASSES SING OFFICER, THE LD. CIT(APPEALS) PROCEEDED TO EXAMINE THE ISSUES HIMSEL F ON MERIT IN THE LIGHT OF WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AS WELL AS ADDITIONAL EVIDENCE PRODUCED IN SUPPORT AND MAINLY RELYING ON THE DETAILS AND DOCUMENTS FILED BY THE ASSESSEE BEFORE HIM, HE DECI DED ALL THE ISSUES INVOLVED IN THE APPEALS OF THE ASSESSEE FOR ALL THE THREE YEARS UNDER CONSIDERATION IN FAVOUR OF THE ASSESESE THEREBY DEL ETING THE ADDITIONS MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORD ERS OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THESE APPEA LS BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AT THE OUTSE T, IT IS NOTED THAT THERE IS A DELAY OF TWELVE DAYS ON THE PART OF THE REVENU E IN FILING ITS APPEALS FOR A.Y. 2000-01, 2001-02. IN THIS REGARD, THE DEPA RTMENT HAS MOVED AN APPLICATION SEEKING CONDONATION OF THE SAID DELAY A ND KEEPING IN VIEW THE REASONS GIVEN IN THE SAID APPLICATION, WHICH ARE DU LY SUPPORTED BY AN AFFIDAVIT FILED BY THE CONCERNED AUTHORITY, WE ARE SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY ON THE PART OF THE REVENUE IN FILING THESE TWO APPEALS FOR A.Y. 2000-01 AND 2001-02. WE, THERE FORE, CONDONE THE SAID DELAY AND NOW PROCEED TO DISPOSE OF THE PRESEN T APPEALS FILED BY THE REVENUE ON MERIT AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND PERUSING THE RELEVANT MATERIAL ON RECORD. 5. AT THE TIME OF HEARING BEFORE US, LD. D.R. HAS R AISED A LIMITED CONTENTION THAT MOST OF THE DETAILS AND DOCUMENTS H AVING BEEN FILED BY THE ASSESSEE AT THE FAG END OF THE ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER DID NOT GET SUFFICIENT TIME TO VERIFY THE S AME. HE HAS CONTENDED THAT THIS ASPECT WAS SPECIFICALLY POINTED OUT BY TH E ASSESSING OFFICER IN I.T.A. NOS. 716, 717 & 1611/KOL./2008 ASSESSMENT YEARS: 2000-2001, 2001-2002 & 2002-2003 PAGE 5 OF 6 HIS REMAND REPORT SUBMITTED TO THE LD. CIT(APPEALS) AND OBJECTION WAS ALSO RAISED BY HIM TO THE ADMISSION OF ADDITIONAL E VIDENCE ON THE GROUND THAT NO REASON WAS GIVEN BY THE ASSESESE FOR ITS FA ILURE TO PRODUCE THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. H E SUBMITTED THAT KEEPING IN VIEW THIS OBJECTION RAISED BY HIM, THE A SSESSING OFFICER DID NOT VERIFY THE ADDITIONAL EVIDENCE FILED BY THE ASSESSE E AND MAINLY RELIED ON THE ASSESSMENT ORDERS PASSED BY HIM FOR ALL THE THR EE YEARS UNDER CONSIDERATION. HE HAS CONTENDED THAT THE ASSESSING OFFICER, THEREFORE, HAS NOT GOT ANY EFFECTIVE OPPORTUNITY TO EXAMINE THE AD DITIONAL EVIDENCE FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LD. C IT(APPEALS) AND THE RELIEF GIVEN BY THE LD. CIT(APPEALS) VIDE HIS IMPUG NED ORDERS TO THE ASSESSEE BY RELYING ON THE SAID ADDITIONAL EVIDENCE IS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. HE HAS CONTENDED THAT THE IMPUGNED ORDERS OF THE LD. CIT(APPEALS) ARE, THEREFORE, LIABLE TO BE S ET ASIDE AND THE MATTER SHOULD GO BACK TO THE ASSESSING OFFICER FOR GIVING HIM AN OPPORTUNITY TO VERIFY ALL THE DETAILS AND DOCUMENTS FILED BY THE A SSESSEE. ALTHOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS NOT RAISED ANY MATERIA L OBJECTION IN SENDING THE MATTER BACK TO THE ASSESSING OFFICER, HE HAS CO NTENDED THAT THE ASSESSING OFFICER SHOULD BE DIRECTED TO GIVE SUFFIC IENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND TO PASS A WELL REAS ONED AND WELL DISCUSSED ORDER ON ALL THE ISSUES INVOLVED IN THE C ASE OF THE ASSESSEE AFTER VERIFYING ALL THE DETAILS AND DOCUMENTS BROUGHT ON RECORD. 6. KEEPING IN VIEW THE SUBMISSIONS MADE BY THE LD. REPRESENTATIVES OF BOTH THE SIDES, WE CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE IMPUGNED ORDERS OF THE LD. CIT(APPEALS) FOR ALL THE THREE YEARS UNDER CONSIDERATION AND RESTORE THE MAT TER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING ALL THE ISSUES INVOL VED IN THE CASE OF ASSESSEE AFRESH ON MERIT AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY TO SUPPORT AND SUBSTANTIATE ITS CASE ON THE BASIS OF ALL THE DETAILS AND DOCUMENTS ALREADY BROUGHT ON RECORD. TH E ASSESSEE SHALL BE AT LIBERTY TO PRODUCE OTHER DOCUMENTARY EVIDENCE, I F ANY, IN SUPPORT OF ITS CASE ON THE ISSUES UNDER CONSIDERATION AND AFTER EX AMINING/ VERIFYING THE I.T.A. NOS. 716, 717 & 1611/KOL./2008 ASSESSMENT YEARS: 2000-2001, 2001-2002 & 2002-2003 PAGE 6 OF 6 SAME, THE ASSESSING OFFICER SHALL PASS A WELL DISCU SSED AND WELL REASONED ORDER. 7. IN THE RESULT, ALL THE THREE APPEALS OF THE REVE NUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 20, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 20 TH DAY OF NOVEMBER, 2015 COPIES TO : (1) INCOME TAX OFFICER (EXEMPTION)-II, KOLKATA, 10B, MIDDLETON ROW, 5 TH FLOOR, KOLKATA-700 071 (2) SHAW EDUCATION FOUNDATION, 582, DIAMOND HARBOUR ROAD, KOLKATA-700 034 (3) COMMISSIONER OF INCOME-TAX (APPEALS)- XI, KOL KATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.