SARWAJANIK VACHANALAYA, BHANDARA(MH) V. ITO, WARD-2, BHANDARA(MH)

ITA 89/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93302 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2002-2003
• Appeal Filed On: 11-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: V V SARANJAME
• Section: 147; 11; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER ITA NO. 89 / NAG ./ 2013 ( ASSESSMENT YEAR : 20 0 2 - 03 ) SARWAJANIK VACHANALAYA GANDHI CHOWK BHANDARA 441 904 APPELLANT V/S INCOME TAX OFFICER WARD - 2, NH - 6, BHANDARA .... RESPONDENT PERMANENT ACCOUNT NUMBER A ACAS2027G ITA NO. 90 / NAG ./ 2013 ( ASSESSMENT YEAR : 20 03 - 04 ) SARWAJANIK VACHANALAYA GANDHI CHOWK BHANDARA 441 904 APPELLANT V/S INCOME TAX OFFICER WARD - 2, NH - 6, BHANDARA .... RESPONDENT PERMANENT ACCOUNT NUMBER AACAS2027G ASSESSEE BY : SHRI V.V. SARANJAME REVENUE BY : SHRI NARENDRA KANE / DATE OF HEARING 3 1.0 3 .2015 / DATE OF ORDER 09.04.2015 SARWAJANIK VACHANALAYA 2 O R D E R PER MUKUL K. SHRAWAT , J .M. BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE PERTAINING TO THE ASSESSMENT YEARS 2002 - 03 AND 2003 - 04, AGAINST THE LEVY OF PENALTY UNDER SECTION 271(1)(C), RESPECTIVELY OF ` 1 2,492 AND ` 32,873. 2. F ACTS IN BRIEF, AS EMERGED FROM THE CORRESPONDING PENALTY ORDERS AND ASSESSMENT ORDER WERE THAT, THE ASSESSEE IS AOP (TRUST) RUNNING A LIBRARY. THE IMPUGNED ASSESSMENTS WERE MADE UNDER SECTION 143(3) R/W SECTION 147 OF THE ACT. THE OBS ERVATION OF THE ASSESSING OFFICER WAS THAT THE ASSESSEE HAD DEDUCTED GRANT IN AID FROM THE GROSS INCOME. THE OBJECTION OF THE ASSESSING OFFICER WAS THAT THE ASSESSEE WAS REQUIRED UNDER THE STATUTE TO SPEND 75% OF THE INCOME ON THE OBJECTS OF THE TRUST. A CCORDING TO THE ASSESSING OFFICER, THE ASSESSEE HAD NOT SPENT THE 75% AMOUNT, HENCE, THE EXEMPTION UNDER SECTION 11 WAS CURTAILED. THE ASSESSING OFFICER HAD ALLOWED DEDUCTION UNDER SECTION 11, TO THE EXTENT WHICH, ACCORDING TO HIM, WAS THE EXPENDITURE INCU RRED TOWARDS THE OBJECTS OF THE TRUST. HOWEVER, THE BALANCE AMOUNT WAS TAXED RESPECTIVELY OF ` 1,16,238 (FOR THE ASSESSMENT YEAR 2002 - 03) AND ` 1,91,027 (FOR THE ASSESSMENT YEAR 2003 - 04). WHILE LEVYING THE PENALTY UNDER SECTION 271(1)(C), THE OBSERVATION O F THE SARWAJANIK VACHANALAYA 3 ASSESSING OFFICER WAS THAT THE FIRST APPELLATE AUTHORITY HAD CONFIRMED THE SAID ADDITION . IT WAS FURTHER NOTICED BY THE ASSESSING OFFICER THAT THERE WAS A PROCEDURAL NON - COMPLIANCE ON THE PART OF THE ASSESSEE, THEREFORE, THE ASSESSEE HAD FURNISHED IN ACCURATE PARTICULARS OF INCOME. RESULTANTLY, THE IMPUGNED PENALTIES FOR RESPECTIVE ASSESSMENT YEARS WERE IMPOSED. 3. ON THIS SHORT ISSUE, I HAVE HEARD BOTH THE SIDES. FROM THE SIDE OF THE APPELLANT, THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI V.V. SARANJAME, AND FROM THE SIDE OF THE REVENUE, THE LEARNED DEPARTMENTAL REPRESENTATIVE, SHRI NARENDRA KANE, APPEARED. UNDISPUTED FACTUAL POSITION IS THAT THE ASSESSEE IS A TRUST RUNNING A PUBLIC LIBRARY. THE ASSESSEE HAD SPENT AN ADEQUATE AMOUNT TOWARDS THE OBJECT OF T HE TRUST. HOWEVER, THERE WAS A LEGAL CONFUSION THAT THE GRANT IN AID WAS NOTHING BUT VOLUNTARY CONTRIBUTION. DUE TO THIS LEGAL UNCERTAINTY, THE ASSESSEE HAD SPENT THE AMOUNT AVAILABLE TOWARDS THE OBJECT OF THE TRUST, HOWEVER, AS PER THE CALCULATION OF TH E ASSESSING OFFICER, THE ENTIRE AMOUNT WAS NOT UTILIZED FOR THE PURPOSE OF THE TRUST. ALTHOUGH, THE IMPUGNED ADDITION WAS CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS) BUT THE FACT REMAINS THAT THERE WAS NO DISCREPANCY POINTED OUT BY THE ASSESSING OFFICE R IN THE BOOKS OF ACCOUNT FILED BY THE ASSESSEE. I AM OF THE VIEW THAT IN A SITUATION WHEN THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER AND SARWAJANIK VACHANALAYA 4 THE ASSESSEE HAD FURNISHED A REASONABLE EXPLANATION WHICH WAS NOT CONTRADICTED BY THE REVENUE DEP ARTMENT, EXCEPT RAISING A LEGAL ISSUE, IT IS UNJUSTIFIED ON THE PART OF THE REVENUE DEPARTMENT TO LEVY PENALTY FOR CONCEALMENT OF INCOME. RATHER, ACCORDING TO ME, WHEN ALL THE INFORMATION WERE VERY MUCH AVAILABLE BEFORE THE ASSESSING OFFICER, THEN THERE WA S NO JUSTIFIED REASON TO IMPOSE THE CONCEALMENT PENALTY AND THE SAME IS HEREBY DELETED. THE GROUND RAISED BY THE ASSESSEE FOR BOTH THE YEARS ARE ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL S FOR BOTH THE YEARS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 9 TH APRIL 2015. SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER NAGPUR , DATED : 9 TH APRIL 2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, NAGPUR CITY CONCERNED ; (5) THE DR, ITAT, NAGPUR ; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A SS ISTANT REGISTRAR ITAT, NAGPUR