Dy. Commissioner of Income Tax (Exemption), Lucknow V. Mahila Samakhya Uttar Pradesh, Lucknow

ITA 886/LKW/2014

• Counselvise Citation: 88623714 RSA 2014
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-06-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 12-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K R RASTOGI
• Keywords: Charitable institution; Maximum Marginal Rate
• Section: 234B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.886/LKW/2014 ASSESSMENT YEAR:2011-12 DCIT (EXEMPTION) LUCKNOW V. MAHILA SAMAKHYA UTTAR PRADESH 4/13, VISHAL KHAND, GOMTI NAGAR LUCKNOW TAN/PAN:AABTM2147B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. K. R. RASTOGI, C.A. DATE OF HEARING: 18 06 2015 DATE OF PRONOUNCEMENT: 26 06 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY ISSUE THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE DEMAND OF RS.1,62,54,270/- RAISED BY THE ASSESSING OFFICER HAVING OBSERVED THAT THE ASSESSEE HAS NOT APPLIED MORE THAN 85% OF ITS INCOME FOR CHARITABLE PURPOSES. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED FROM THE RECEIPT & PAYMENT ACCOUNT ATTACHED TO THE RETURN OF INCOME THAT THE CURRENT YEAR RECEIPTS/GRANTS WAS UPTO RS.20,82,14,966/- AND UNUTILIZED FUND WAS OF RS.4,74,86,10/-, THEREFORE, SURPLUS IS MORE THAN 15% OF THE CURRENT YEARS GRANTS/RECEIPTS. ACCORDINGLY THE ASSESSEE WAS ASKED AS TO WHY SURPLUS IN EXCESS OF 15% OF THE CURRENT YEAR RECEIPTS MAY NOT BE TAXED AT MAXIMUM MARGINAL RATE AS NO FORM NO.10 HAS BEEN FILED ALONG WITH THE :- 2 -: RETURN OF INCOME WITHIN THE SPECIFIED TIME FOR FILING THE RETURN OF INCOME AS PER PROVISIONS OF SECTION 11(2) OF THE ACT READ WITH RULE 17 OF THE RULES. IN RESPONSE THERETO, IT WAS STATED THAT THE UNUTILIZED GOVERNMENT GRANTS MAY BE TREATED AS ADVANCES FOR NEXT YEAR AND THE SAME HAS BEEN ADJUSTED AGAINST THE SUBSEQUENT YEAR GRANT. THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE AND HAVING OBSERVED THAT THE SURPLUS IS MORE THAN 15% OF THE CURRENT YEAR RECEIPTS, THE ASSESSING OFFICER HAS RE-COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT RS.1,62,54,265/- AND DETERMINED THE TAX LIABILITY AT RS.69,18,510/- INCLUDING THE INTEREST CHARGED UNDER SECTION 234A AND 234B OF THE ACT. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT AS PER RECEIPTS & PAYMENT ACCOUNT AND INCOME & EXPENDITURE ACCOUNT, THE TOTAL EXPENDITURE INCURRED DURING THE YEAR WAS RS.19,85,00,608/- AND THE SAME WAS EXAMINED BY THE ASSESSING OFFICER, BUT WITHOUT ANY EVIDENCE ON RECORD, THE ASSESSING OFFICER ARBITRARILY STATED THE APPLICATION OF FUND AS RS.16,07,28,456/- AND COMPUTED THE TAXABLE INCOME AT RS.1,62,54,270/-. THE ASSESSING OFFICER HAS TAKEN THE RECEIPT & PAYMENT ACCOUNT FOR THE YEAR ENDING ON 31.3.2011 AS THE BASIS FOR COMPUTING THE GROSS RECEIPTS/GRANTS AT RS.20,82,14,966/- AND ALSO COMPUTED THE APPLICATION OF FUND AT RS16,07,28,456/- WHICH IS NOT CORRECT. THE LD. CIT(A) VERIFIED THE FACTS FROM THE DETAILS FURNISHED BY THE ASSESSEE AND BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE LD. CIT(A) WAS OF THE VIEW THAT PRESUMPTION OF THE ASSESSING OFFICER IN THIS REGARD IS NOT CORRECT AND DURING THE YEAR THE APPELLANT HAS RECEIVED GRANT AND OTHER INCOME TO THE EXTENT OF RS.20,82,14,966/- OUT OF WHICH AN AMOUNT OF RS.19,55,17,533/- HAS BEEN APPLIED FOR CHARITABLE PURPOSES WHICH IS MORE THAN 85% OF THE SAID GRANT AND INCOME DERIVED DURING THE YEAR. SINCE THERE IS NO SURPLUS OF MORE THAN 15%, THE ASSESSEE WAS NOT REQUIRED TO FILE FORM NO.10 AS PROVIDED UNDER SUB-SECTION (2) OF SECTION 11 OF THE ACT. :- 3 -: ACCORDINGLY THE ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE LD. CIT(A). 4. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND HAS PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE HAS FILED A COPY OF THE EXTRACT OF THE EXPENDITURES INCURRED DURING THE YEAR UNDER DIFFERENT GRANTS ALONG WITH RECEIPT & PAYMENT ACCOUNT FOR THE YEAR ENDING ON 31.3.2011 IN ORDER TO ESTABLISH THAT APPLICATION OF FUND WAS OF RS.19,55,17,533/-. IT WAS FURTHER CONTENDED THAT THE ASSESSING OFFICER HAS ADOPTED WRONG FIGURE WHILE MAKING THE ADDITION. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSING OFFICER HAS WRONGLY PICKED UP THE FIGURE OF RS.16,07,28,456/- AS APPLIED FOR CHARITABLE PURPOSES. THERE WAS NO DISPUTE WITH REGARD TO THE TOTAL RECEIPTS OF THE GRANT OF RS.20,82,14,966/-. THE DISPUTE WAS RAISED WITH REGARD TO THE AMOUNT OF APPLICATION OF FUND. ACCORDING TO THE ASSESSING OFFICER, IT WAS OF RS.16,07,28,456/- BUT ACCORDING TO THE ASSESSEE, WHICH IS SUPPORTED BY DOCUMENTARY EVIDENCE, IT WAS OF RS.19,55,17,533/- AND IF THE FIGURE STATED BY THE ASSESSEE IS TO BE ADOPTED, THE APPLICATION OF FUND WAS MORE THAN 85% AND NO DISALLOWANCE IS CALLED FOR. WE, THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND WE CONFIRM THE SAME. 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:26 TH JUNE, 2015 JJ:1706 :- 4 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR