ITO (E), Ghaziabad V. M/s Chaudhary Bishambhar Singh Education Society, Noida

ITA 718/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3381 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KR JIWANI
• Assessee Lawyers: AMIT GOEL; NIPPUN MITTAL CAS
• Keywords: Depreciation; Charitable institution; Earning of tax free income
• Section: 12AA; 32; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AND S MT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 718 /DEL./201 5 (ASSESSMENT YEAR : 20 10 - 11 ) ITO(E) WARD GHAZIABAD VS . CHAUDHARY BISHAMBHAR SINGH EDUCATION SOCIETY VILLAGE SARFABAD SECTOR 73 NOIDA PAN: AAAAC3871C APPELLANT) (RESPONDENT) A SSESSEE BY SH. AMIT GOEL & SH. NIPPUN MITTAL, CAS RE VENUE BY SH. VIJAY KR. JIWANI, SR.D.R. DATE OF HEARING 30 .07.2018 D ATE OF PRONOUNCEMENT 23.08.2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER T HE PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER DATED 28.11.2014 PASSED BY LD. COMMISSIONER OF INCOME - T AX (APPEALS) , NOIDA FOR A SSESSMENT Y EAR 20 10 - 11 ON THE FOLLOWI NG GROUNDS. ITA NO. 718 /DEL./201 5 2 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, IN DELETING ADDITION OF RS.98,10,000/ - ON ACCOUNT OF CORPUS DONATION AS THE ASSESSEE HAS CLAIMED EXEMPTION U/S 10(23C)(VI) IN ITS RETURN OF INCOME AND FAILED T O FILE COPY OF SUCH CERTIFICATES. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, IN DELETING ADDITION OF RS.16,92,423/ - ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION AS THE ASSETS HAS CREATED/ACQUIRED OUT OF EXEMPT INCOME SHALL HAVE NIL WDV. 3. THE ORDER OF LD.CIT(A) BE CANCELLED AND ORDER OF AO BE RESTORED. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : ASSESSEE IS A SOCIETY REGISTERED WITH THE R EGISTRAR OF S OCIETY, UTTAR PRADESH. ASSESS EE FILED ITS RETURN OF INCOME ON 12/1 0/10 DECLARING NIL INCOME. THE RETURN WAS PROCESSED UNDER SECTION 143 (1) OF THE INCOME TAX ACT, 1961 (THE ACT) AND WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO FILE CERTIFICATE REGARDING 10(23)(VI) OF THE ACT . ASSESSEE SUBMITTED THAT SOCIETY HAS APPLIED FOR REGISTRATION UNDER SECTION 12 AA WITH INCOME TAX DEPARTMENT BUT HAS NOT RECEIVED ANY COMMUNICATION IN RESPECT OF THE SAME. LD. AO ON PERUSAL OBSERVED THAT ASSESSEE SIMPLY FILED FORM 10 A FOR REGISTRATIO N UNDER SECTION 12 AA, AND IT WAS NOT REGISTERED UNDER SECTION 10 (23) (C ) OF THE ACT. LD. AO THUS COMPLETED ASSESSMENT UNDER SECTION 143 (3) OF THE ACT BY TREATING STATUS OF ASSESSEE AS AOP . LD.A.O. MADE ADDITION ON ACCOUNT OF CORPUS DONATION OF RS .98,10,000/ - AND ADDITION ON ACCOUNT OF DENIAL OF CLAIM OF DEPRECIATION AMOUNTING TO RS.16,92,423/ - . ITA NO. 718 /DEL./201 5 3 2.1. AGGRIEVED BY THE ADDITION MADE BY LD. AO ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A). 2.2. DURING THE APPELLATE PROCEEDINGS IT WAS SUBMITTED BY A SSESSEE THAT IT HAS BEEN GRANTED REGISTRATION UNDER SECTION 12 AA AS PER ORDER DATED 13.06.2014 PASSED BY THIS T RIBUNAL IN ASSESSEE S OWN CASE IN ITA NO. 236/ D EL/2014 . IT WAS SUBMITTED THAT A SSESSING O FFICER WHILE GIVING APPEAL EFFECT , GRANTED REGIS TRATION UNDER SECTION 12 AA TO THE SOCIETY. ASSESSEE ALSO FURNISHED COPY OF ORDER OF A SSESSING O FFICER BEFORE LD.CIT(A). LD.CIT (A) ACCORDINGLY GRANTED RELIEF TO THE ASSESSEE IN RESPECT OF THE DISALLOWANCES MADE BY LD. AO. 3 . AGGRIEVED BY THE ORDER OF LD .CIT (A), REVENUE IS IN APPEAL BEFORE US NOW. 4. LD. DR SUBMITTED THAT RECEIPTS OF SOCIETY IS ABOUT RS.1.34 CRORES, WHICH IS MORE THAN MONETARY LIMIT OF 1 CRORE PRESCRIBED UNDER SECTION 10 (23C) (IIIAD) OF THE ACT. IT WAS SUBMITTED THAT ASSESSEE RECEIVED LARGE AMOUNT OF DONATIONS FROM MANY PARTIES, FOR WHICH ASSESSEE FILED RECEIPTS. IT HAS BEEN SUBMITTED THAT THROUGH THESE RECEIPTS IDENTITY, ADDRESS OF DONORS HAS NOT BEEN ESTABLISHED AND THEREFORE LD. AO HAS CORRECTLY TREATED DONATIONS AS ANONYMOUS AND T AXED IT AT 30% AS PRESCRIBED UNDER SECTION 115BBC OF THE A CT. 4.1 . REGARDING DEPRECIATION CLAIMED BY ASSESSEE, LD.DR PLACING RELIANCE UPON DECISION OF HON BLE DELHI HIGH COURT IN CASE OF ITO VS CHARANJIV CHARITABLE TRUST REPORTED IN (2014) 43 TAXMANN.COM 300, SUBMITTED THAT SECTION 32 CANNOT BE MADE APPLICABLE IN CASE OF SOCIETY AND TRUST. ITA NO. 718 /DEL./201 5 4 5. ON THE CONTRARY LD.AR SUBMITTED THAT DISALLOWANCES OF CORPUS DONATIONS RECEIVED BY ASSESSEE HAVE BEEN DENIED TO ASSESSEE AT ASSESSMENT STAGE BECAUSE OF NON AVAILAB ILITY OF REGISTRATION UNDER SECTION 12AA OF THE ACT. 5.1 . LD.AR SUBMITTED REGARDING CLAIM OF DEPRECIATION THAT ASSETS WERE ACQUIRED , O N WHICH APPLICATION OF INCOME HAS ALSO BEEN CLAIMED . H E SUBMITTED THAT AMENDMENT TO SEC.11(6) WILL TAKE EFFECT F ROM 01/04/15 AND ACCORDINGLY WILL APPLY IN RELATION TO A SSESSMENT Y EAR 2015 - 16 ONW A RDS. 5.2. HE THUS SUPPORTED THE ORDER OF LD. CIT (A). 6. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. 7. GROU ND NO.1: IT IS OBSERVED THAT 12 AA R EGISTRATION C ERTIFICATE DATED 11/08/14 ISSUED BY REVENUE AUTHORITIES, IS VALID W.E.F. 01/04/07. IT IS OBSERVED THAT CERTIFICATE WILL BE APPLICABLE FOR THE PURPOSES OF A SSESSMENT Y EAR UNDER CONSIDERATION BEFORE US. IT IS ALSO OBSERVED THAT A SSESSING O FFICER TREATED CORPUS DONATION AS REVENUE RECEIPT IN THE HANDS OF ASSESSEE , DUE TO NON - AVAILABILITY OF 12AA C ERTIFICATE. LD.CIT(A) , CONSIDERING THESE FACTUAL CHANGES ALLOWED CLAIM OF ASSESSEE AND THEREFORE WE DO NOT FIND ANY INFIRMITY WITH THE SAME. 7.1. ACCORDINGLY GROUND NO. 1 OF REVENUE STANDS DISMISSED. 8. GROUND NO. 2 HAS BEEN RAISED IN RESPECT OF THE DEPRECIATION ALLOWED BY LD.CIT(A) TO THE TUNE OF RS.16,92,423/ - . AS HAS BEEN RIGHTLY OBSERVED BY LD. CIT (A) , AP PLICABILITY OF AMENDMENT TO SECTION 11 (6) OF THE A CT BY F INANCE A CT (NO. 2) A CT , 2014 WILL BE EFFECTIVE W.E.F. 01/04/15. AS , PRESENT ASSESSMENT YEAR IS 2010 - 11, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD. CIT (A) IN ITA NO. 718 /DEL./201 5 5 ALLOWING THE CLAIM OF DEPRECI ATION ON THE ASSETS WHICH HAS BEEN ACQUIRED FROM THE ACCUMULATED FUNDS OR INCOME SET APART FOR APPLICATION OF TRUST. 8.1. ACCORDINGLY THIS GROUND RAISED BY REVENUE STANDS DISMISSED. 9. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMISSED. ORDER PRONOU NCED IN THE O PEN C OURT ON 23.08.2018 . SD/ - SD/ - (R.K.PANDA) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD AUGUST , 2018. MANGA COPY OF THE ORDER FORWARDED TO: 1. AP PELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT, DELHI BENCHES, NEW DELHI ITA NO. 718 /DEL./201 5 6 S.NO. DETAILS DATE INITIALS DESIGNATION 1. DRAFT DICTATED ON 16.8.18 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR 16.8.18 SR. PS/PS 3. DRAFT PROP OSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6. KEPT FOR PRONOUNCEMENT 23.8.18 SR. PS/PS 7. ORDER UPLOADED ON 8. FILE SENT TO BENCH CLERK SR. PS /PS 9. DATE ON WHICH THE FILE GOES TO HEAD CLERK 10. DATE ON WHICH FILE GOES TO A.R. 11. DATE OF DISPATCH OF ORDER