Shiv Educational Society, Panipat v. DCIT, Panipat

ITA 371/DEL/2017 | 2011-2012
Pronouncement Date: 28-02-2020 | Result: Allowed

Appeal Details

RSA Number 37120114 RSA 2017
Assessee PAN AAGTS4906F
Bench Delhi
Appeal Number ITA 371/DEL/2017
Duration Of Justice 3 year(s) 1 month(s) 5 day(s)
Appellant Shiv Educational Society, Panipat
Respondent DCIT, Panipat
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2020
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 28-02-2020
Last Hearing Date 12-02-2020
First Hearing Date 12-02-2020
Assessment Year 2011-2012
Appeal Filed On 23-01-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI AMIT SHUKLA JUDICIAL MEMBER AND SHRI O.P. KANT ACCOUNTANT MEMBER ITA NO.371/DEL./2017 ASSESSMENT YEAR: 2011-12 M/S. SHIV EDUCATIONAL SOCIETY V & P.O. DEHRA SAMALKHA PANIPAT VS. DCIT PANIPAT CIRCLE PANIPAT PAN :AAGTS4906F (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 18/11/2016 PASSED BY THE LEARNED CIT(APPEALS) KARN AL [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2011-12 RAISI NG FOLLOWING GROUNDS: 1. THAT THE APPELLANT IS AN EDUCATIONAL CHARITABLE SOCIETY WHICH ACTIVITIES ARE CONDUCTED AS PER MUTUAL ARRANGEMENTS OF THE MEMBERS. THE A.O. HAS MERELY ASSUMED & ON SURMISES REJECTED THE EXEMPTION U/S 11 OF THE ACT 1961 WHICH IS WRONG . 2. THAT THE APPELLANT SOCIETY IS LIABLE TO EXEMPTI ONS U/S 11 READ WITH SECTION 10(23C)(III)(AD) OF THE ACT BEING AN E DUCATIONAL INSTITUTIONS AND WHOLE OF THE SURPLUS IS NOT LIABLE TO TAX. APPELLANT BY SHRI K.C. ANEJA ITP RESPONDENT BY SHRI PARIKSHIT SINGH SR. DR DATE OF HEARING 12.02.2020 DATE OF PRONOUNCEMENT 28.02.2020 2 ITA NO. 371/DEL/2017 3. THAT ONLY THAT PART OF THE SURPLUS LIABLE TO TA X WHICH ALLEGED VIOLATED THE PROVISIONS AND WHOLE OF THE SURPLUS RS . 679116 IS NOT LIABLE TO BE CHARGED. 4. THAT NEITHER THE APPELLANT SOCIETY NOR ANY OF I TS MEMBERS ARE DOING ANY BUSINESS OR HAVING ANY PERSONAL BENEFITS. THE A.O. ARBITRARILY & WITHOUT ANY SUBSTANTIAL MATERIAL REJE CTED THE CLAIM U/S 11 OF THE IT ACT AND WRONGLY TREATED RS. 679116 /- AS BUSINESS INCOME. 5. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE INTEREST AT 12% AS INTEREST U/S 36(1 )(III) AMOUNTING TO RS. 16 4562/- FOR THE ALLEGED ADVANCES MADE TO THE MEMBERS HAVE WRONGLY & ARBITRARILY BEEN ADDED. 6. THAT INTEREST PAID AS PER INCOME & EXPENDITURE ACCOUNT ARE TO THE TIME OF RS. 124064/-AND A.O. HAS WRONGLY WORKED OUT THE DISALLOWANCES. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE HAS CLAIMED TO BE A CHARITABLE ORGANIZATION AND FILED R ETURN OF INCOME ON 29/09/2011 DECLARING TAXABLE INCOME AT NIL. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER S ECTION 143(2) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) WA S ISSUED AND COMPLIED WITH. THE ASSESSING OFFICER DURING THE SCR UTINY ASSESSMENT OBSERVED THAT SOCIETY HAS MADE INTEREST- FREE ADVANCES TO ITS MEMBERS IN VIOLATION OF THE PROVISI ONS OF SECTION 13(3) R.W.S. 13(1)(C) OF THE ACT AND ACCORDINGLY H E REJECTED THE EXEMPTION OF 6 79 116/- UNDER SECTION 11 TO 13 OF THE ACT AND ASSESSED INCOME OF THE ASSESSEE IN THE STATUS OF AS SOCIATION OF PERSON (AOP). THE ASSESSING OFFICER ALSO MADE ADDIT ION FOR DISALLOWANCE OF THE INTEREST OF 1 64 562/- AND DEPRECIATION OF 2 24 196/-. IN FURTHER APPEAL THE LD. CIT(A) UPHEL D THE REJECTION OF EXEMPTION OF 6 79 116/- BUT ALLOWED THE DISALLOWANCE OF THE INTEREST PARTLY. 3 ITA NO. 371/DEL/2017 3. BEFORE US THE LEARNED COUNSEL OF THE ASSESSEE SUB MITTED THAT THE REGISTRATION UNDER SECTION 12A OF THE ACT WAS REJECTED BY THE LEARNED CIT HOWEVER ON FURTHER APPEAL BY THE ASSESSEE THE MATTER HAS BEEN RESTORED BACK TO THE LD. CIT WITH THE DIRECTION TO RECONSIDER THE ASSESSEES APPLICATION AND PASS T HE APPROPRIATE ORDER WHICH IS STILL PENDING. 4. THE LEARNED DR ACCORDINGLY SUBMITTED THAT ISSUE IN DISPUTE MAY BE DECIDED ONCE THE REGISTRATION IS GRANTED TO THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE RELEVA NT FINDING OF THE TRIBUNAL IN ITA NO. 4605/DEL/2014 RESTORING THE MATTER OF REGISTRATION UNDER SECTION 12A OF THE ACT TO THE CI T IS REPRODUCED AS UNDER: 4. HAVING HEARD THE LD. COUNSEL AS WELL AS THE LD. CIT DR ON THE ISSUE WE NOTE THAT MODERN COLLEGE OF EDUCATION IS PART OF THE ASSESSEE SOCIETY AND THE SOCIETY RUNS THIS COLLEGE. THIS FACT IS DULY MENTIONED IN THE ASSESSMENT ORDER FOR ASSESSMENT YE AR 2013-14. THEREFORE IT CANNOT BE SAID THAT THE SOCIETY HAS T RANSFERRED ITS ASSET TO SOME OTHER ENTITY WITHOUT CONSIDERATION. IT IS A LSO SEEN THAT THE ASSESSEE SOCIETY HAS ADVANCED LESS THAN 5% OF ITS G ROSS RECEIPTS TO ITS MEMBERS AND THE SAME IS EVIDENT FROM THE CHART FILED BEFORE US AND AVAILABLE ON PAPER BOOK PAGE 5 WHEREIN THE GROS S RECEIPTS FOR ASSESSMENT YEARS 2011-12 2012-13 AND 2013-14 ARE I NDICATED. THUS THE PROVISIONS OF SECTION 13 OF THE ACT DO NO T STAND VIOLATED. WE ALSO NOTE THAT THE LD. CIT HAS REFUSED REGISTRAT ION ON THE GROUND THAT THE GENUINENESS OF THE ACTIVITIES WOULD NOT BE SATISFACTORILY PROVED BY THE ASSESSEE. WE HAVE PERUSED THE MEMORAN DUM OF OBJECTIVES OF THE ASSESSEE SOCIETY AND NOTE THAT T HE LD. CIT HAS NOT GIVEN ANY SPECIFIC FINDING REGARDING THE NON-GENUIN ENESS ACTIVITIES OF THE TRUST VIS--VIS THE OBJECTIVES AS MENTIONED IN THE MEMORANDUM OF ASSOCIATION BUT HAS RATHER RELIED ON THE REPORT OF THE ASSESSING OFFICER IN THIS REGARD. ON THE FACTS OF THE CASE AND AFTER DULY CONSIDERING THE AVERMENTS OF BOTH THE PA RTIES IT IS OUR CONSIDERED OPINION THAT THE MATTER SHOULD BE REEXAM INED BY THE LD. CIT. ACCORDINGLY WE RESTORE THE ISSUE TO THE OFFIC E OF THE LD. CIT WITH THE DIRECTION TO RECONSIDER THE ASSESSEES APP LICATION KEEPING IN MIND OUR OBSERVATIONS IN THE PRECEDING PARAGRAPH S AND PASS 4 ITA NO. 371/DEL/2017 APPROPRIATE ORDER AS PER LAW AFTER GIVING DUE OPPOR TUNITY TO THE ASSESSEE. 6. WE FIND THAT THE REGISTRATION APPLICATION OF THE AS SESSEE IS STILL PENDING BEFORE THE LEARNED CIT AND THE FATE O F THE EXEMPTION UNDER SECTION 11 TO 13 OF THE ACT IS DEPENDENT ON T HE GRANTING OF REGISTRATION BY THE LEARNED CIT UNDER SECTION 12A O F THE ACT. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE SET A SIDE THE ORDER OF LEARNED CIT(A) AND RESTORE THIS APPEAL TO THE LD . CIT(A) WITH THE DIRECTION TO THE DECIDE THE ISSUE IN DISPUTE AFRESH AFTER PASSING OF THE ORDER BY THE LEARNED CIT PURSUANT TO THE ORDER OF THE TRIBUNAL (SUPRA). IT IS NEEDLESS TO MENTION THAT THE ASSESSE E SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY 2020. SD/- SD/- ( AMIT SHUKLA ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH FEBRUARY 2020. RK/- (D.T.D.S.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR ITAT NEW DELHI