Smt. Basanti Devi and Shri Chakhan Lal Garg Education Trust, New Delhi v. ITO (Exemptions),, New Delhi

CO 419/DEL/2010 | 2002-2003
Pronouncement Date: 19-01-2011 | Result: Dismissed

Appeal Details

RSA Number 41920123 RSA 2010
Bench Delhi
Appeal Number CO 419/DEL/2010
Duration Of Justice 20 day(s)
Appellant Smt. Basanti Devi and Shri Chakhan Lal Garg Education Trust, New Delhi
Respondent ITO (Exemptions),, New Delhi
Appeal Type Cross Objection
Pronouncement Date 19-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 19-01-2011
Assessment Year 2002-2003
Appeal Filed On 30-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.D. RANJAN ITA NO.5082 (DEL)2010 ASSESSMENT YEAR: 2002-03 INCOME TAX OFFICER(EXEMPTIONS) SMT. BASANTI DEVI & SHRI CHAKHAN TRUST WARD II AAYAKAR BHAWAN V. LAL GARG EDU CATION TRUST B-1/9 LAXMI NAGAR DELHI-110092. HAUZ KHAS NEW DELHI-110016. C.O. NO. 419(DEL)2010 (IN ITA NO. 5082(DEL)2010) ASSESSMENT YEAR: 2002-03 SMT. BASANTI DEVI & SHRI CHAKHAN INCOME TAX O FFICER(EXEMPTIONS) LAL GARG EDUCATION TRUST B-1/9 V TRUST WARD II AAYAKAR BHAWAN HAUZ KHAS NEW DELHI-110016. LAXMI NAGAR DELHI-1 10092. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI RAVI RAMACHANDRAN DR ASSESSEE BY: SHR I R.K. KAPOOR CA ORDER PER A.D.JAIN J.M . THIS IS DEPARTMENTS APPEAL AND THE ASSESSEES CROS S OBJECTIONS FOR ASSESSMENT YEAR 2002-03. THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS IN ITS APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT VOLUNTARY CONTRIBUTIO NS (WHETHER CORPUS DONATIONS OR GENERAL DONATIONS) RECEIVED BY A CHARI TABLE TRUST IS ITA 5082 & CO 419 2 INCOME AS DEFINED VIDE SECTION 2(24)(IIA) OF THE AC T AND CORPUS DONATIONS ARE EXEMPT FROM TAX U/S 11(1)(D) ONLY IF ASSESSEE IS REGISTERED U/S 12A/12AA OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LD. CIT(A) ERRONEOUSLY PLACED RELIANCE UPON APPELLATE DECISION IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 WHICH IN TURN IS NOW UNDER CHALLENGE IN THE HONBLE SUPREME COURT. FOR ASSTT. YEAR 2003-04 THE CIT(A) HAS ERRONEOUSLY HELD THAT RECEIPT OF MONEY B Y THE ASSESSEE IN THE STATUS OF AOP HAS TO BE SEEN UNDER NORMAL PROVI SIONS OF THE ACT. FURTHER FOR ASSTT.YEAR 2003-04 LD. CIT(A) FAILED TO APPRECIATE PROVISIONS OF SECTION 164 OF THE INCOME TAX ACT WHI LE ERRONEOUSLY HOLDING THAT PROVISIONS OF CHAPTER IV WOULD APPLY. 2. THE ASSESSEES CROSS OBJECTIONS ARE AS FOLLOWS: 1.0 THAT THE LEARNED ASSESSING OFFICER HAS GROSSL Y ERRED IN MAKING THE REASSESSMENT BY REOPENING THE SAME U/S 147/148 OF THE INCOME TAX ACT AND THE CIT(A) HAS ERRED IN LAW TO UPHOLD T HE SAME. 1.1 THAT THE CIT(APPEALS) OUGHT TO HAVE HELD THA T THE REOPENING OF THE SAME BASED ON ASSESSMENT OF THE SUBSEQUENT YEAR WAS BAD IN LAW AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSE E TO FURNISH FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETI ON OF THE ASSESSMENT. 2.0 THAT THE REASSESSMENT ORDER PASSED BY THE A O AND UPHELD BY THE CIT(A) IS BAD IN LAW. 3. AT THE OUTSET THE LEARNED COUNSEL SUBMITS THAT HE WISHES TO WITHDRAW THE CROSS OBJECTIONS. THE LEARNED DR WOULD HAVE N O OBJECTION. 4. ACCORDINGLY THE CROSS OBJECTIONS FILED BY THE A SSESSEE ARE DISMISSED AS WITHDRAWN. 5. APROPOS THE APPEAL FILED BY THE DEPARTMENT THE ASSESSEE TRUST RECEIVED A SUM OF ` 1 06 55 343/- AS INFRASTRUCTURE FUND. HOLDING TH AT THIS ITA 5082 & CO 419 3 AMOUNT WAS NOT ALLOWABLE AS A DEDUCTION U/S 11 OF T HE I.T. ACT THE AO BROUGHT IT TO TAX. 6. THE LEARNED CIT(A) BY VIRTUE OF THE IMPUGNED OR DER DELETED THE ADDITION FOLLOWING THE TRIBUNAL ORDER IN THE ASSES SEES OWN CASE FOR ASSESSMENT YEAR 2003-04 PASSED ON 30.1.2009 IN IT A NO. 3866(DEL)07. 7. AGGRIEVED BY THE SAID ACTION OF THE LEARNED CIT( A) THE DEPARTMENT IS IN APPEAL. 8. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THAT THE AFORESAID TRIBUNAL ORDER DATED 30.1.2009 IN THE ASSESSEES C ASE FOR ASSESSMENT YEAR 2003-04 HAS BEEN UPHELD BY THE HONBLE HIGH COURT VIDE ORDER DATED 23.9.2009 A COPY THEREOF HAS BEEN PLACED ON RECORD . 9. THE LEARNED DR HAS CONTENDED THAT THE LEARNED CI T(A) HAS ERRED IN DELETING THE ADDITION RIGHTLY MADE AND IN DOING SO HE HAS FAILED TO APPRECIATE THE FACT THAT VOLUNTARY CONTRIBUTIONS RE CEIVED BY THE CHARITABLE TRUST ARE INCOME U/S 2(24)(IIA) OF THE ACT AND CORP US DONATIONS ARE EXEMPT FROM TAX U/S 11(1)(D) OF THE ACT ONLY WHEN THE TRUS T IS REGISTERED UNDER SECTIONS 12A/12AA OF THE ACT; THAT THE TRIBUNAL DEC ISION(SUPRA) IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 IS NOW UNDER CHALLENGE BEFORE THE HONBLE SUPREME COURT; AND THAT THE LEAR NED CIT(A) HAS ERRED IN ITA 5082 & CO 419 4 HOLDING THAT THE RECEIPT OF MONEY BY THE ASSESSEE I N THE STATUS OF AOP HAS TO BE SEEN UNDER THE NORMAL PROVISIONS OF THE ACT. 10. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003- 04 VIDE ITS ORDER DATED 30.1.2009 (SUPRA) HELD TH AT THE AMOUNT RECEIVED BY THE ASSESSEE TRUST FROM ITS SETTLER TOWARDS INFR ASTRUCTURE FUND WAS NOT TAXABLE IN THE HANDS OF THE ASSESSEE DESPITE THE F ACT THAT THE ASSESSEE TRUST WAS NOT REGISTERED U/S 12A OF THE ACT IN THAT YEAR. 11. THE HONBLE DELHI HIGH COURT VIDE ITS ORDER DA TED 23.9.2009 IN ITA NO. 927/09 (SUPRA) HAVE DISMISSED THE DEPARTMENTS APPEAL AGAINST THE AFORESAID TRIBUNAL ORDER BY OBSERVING AS FOLLOWS:- THE RESPONDENT/ASSESSEE IS ADMITTEDLY A CHARITABLE ORGANIZATION WHICH IS A TRUST REGISTERED UNDER THE INDIAN TRUST ACT WHICH HAS ALSO BEEN GRANTED REGISTRATION UNDER THE INCOME TAX ACT W.E.F. 1.4.2003. THE ASSESSEE RECEIVED CERTAIN DONATIONS TOWARDS ITS CORPUS WHICH HAD BEEN DEPOSITED IN THE BANK AND THE MONEY WAS ADMITT EDLY SPENT FOR ACQUIRING LAND FOR CONSTRUCTION OF A COLLEGE. IN T HESE CIRCUMSTANCES WE ARE OF THE OPINION THAT THE CIT(A) AS WELL AS IT AT RIGHTLY CONCLUDED THAT THE DONATIONS RECEIVED TOWARDS CORPU S OF THE TRUST WOULD BE CAPITAL RECEIPT AND NOT REVENUE RECEIPT CH ARGEABLE TO TAX. NO QUESTION OF LAW ARISES. DISMISSED. 12. THE DEPARTMENT CONTENDS THAT THE AFORESAID HIGH COURT ORDER IS UNDER CHALLENGE BEFORE THE HONBLE SUPREME COURT BY WAY O F A SLP FILED BY THE DEPARTMENT. THIS HOWEVER IS NOT PREMISE ENOUGH TO ALLOW THE ITA 5082 & CO 419 5 DEPARTMENTS APPEAL PARTICULARLY WHEN THE HIGH COU RT ORDER HAS NOT BEEN SHOWN TO HAVE BEEN STAYED. 13. IN VIEW OF THE ABOVE RESPECTFULLY FOLLOWING TH E HIGH COURT DECISION(SUPRA) IN THE ASSESSEES OWN CASE FOR ASSE SSMENT YEAR 2003-04 THE GRIEVANCE OF THE DEPARTMENT IS REJECTED. 14. IN THE RESULT THE APPEAL FILED BY THE DEPARTME NT IS DISMISSED WHEREAS THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISM ISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON 19.1.2011. SD/- SD/- (K.D. RANJAN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19.1.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR