M/s All India J.D. Educational Society, New Delhi v. DDIT (E), New Delhi

ITA 4009/DEL/2011 | 2008-2009
Pronouncement Date: 18-11-2011 | Result: Allowed

Appeal Details

RSA Number 400920114 RSA 2011
Assessee PAN AABTA2085C
Bench Delhi
Appeal Number ITA 4009/DEL/2011
Duration Of Justice 2 month(s) 13 day(s)
Appellant M/s All India J.D. Educational Society, New Delhi
Respondent DDIT (E), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 18-11-2011
Assessment Year 2008-2009
Appeal Filed On 05-09-2011
Judgment Text
ITA NOS. 4008 & 4009/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 4008 & 4009/DEL/2011 A.YRS. : 2005-06 & 2008-09 M/S ALL INDIA J.D. EDUCATIONAL SOCIETY C/O M/S JAIN RAJ ASSOCIATES 208 HANS BHAVAN 1 BSZ MARG NEW DELHI 110 002 (PAN : AABTA2085C) VS. DEPUTY DIRECTOR OF INCOME TAX - E INV. CIR-I NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. P.K. JAIN CA DEPARTMENT BY : SH. ROHIT GARG SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DAT ED 14.7.2011 PERTAINING TO ASSESSMENT YEARS 2005-06 & 2008-09. SINCE COMMON ISSUES HAVE BEEN RAISED IN BOTH THE APPEALS AND THE APPEALS WERE HEARD TOGETHER THESE ARE BEING DISPOSED BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE COMMON GROUNDS RAISED IN BOTH THE APPEALS REA D AS UNDER:- (I) THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN LAW AND ON FACTS BY UPHOLDING THE ORDERS OF THE DEPUTY ITA NOS. 4008 & 4009/DEL/2011 2 DIRECTOR OF INCOME TAX-E INV. CIR-I NEW DELHI PASSE D U/S 147/143(3) RESULTING IN HUGE DEMAND. (II) THE ORDER OF DDIT-E U/S 147/143(3) DEPENDING U PON THE CANCELLATION OF REGISTRATION U/S 12AA BECOMES NULL AND VOID IN VIEW OF THE ORDERS OF THE HONBLE BENCH A ITAT NEW DELHI SETTING ASIDE THE ORDERS OF THE CANCELLATION O F REGISTRATION U/S 12AA. THE DDIT(E) HAS TREATED THE ENTIRE CORPUS DONATIONS RECEIVED DURING THE YEAR AS INCOME U/S 2(24) ON THE BASIS OF WITHDRAWAL OF REGISTRATION U/ S 11 AND 12 AS PER THE ORDER OF DIT(E) WHICH IS ITSELF BASED ON WRONG INTERPRETATION OF FINDINGS. (III) THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE ORDER BY NOT ALL OWING THE DEPRECIATION CLAIM WHICH IS CONTRARY TO THE FACTS AND LAW. (IV) THAT THE APPELLANT CRAVES THE LEAVE TO ADD MOD IFY AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AN ALL THE ABOVE GROUNDS ARE WITHOUT PREJUD ICE TO EACH OTHER. 3. IN THIS CASE ASSESSING OFFICER NOTED THAT THE ASSESSEE SOCIETY WAS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT 1860 SINCE 14.08.2002. THE ASSESSEE WAS REGISTERED 12A(A) W.E.F. 1.4.2003. THE ASSESSEE WAS ALSO APPROVED U/S 80-G5(VI) FOR T HE PERIOD 1.4.2007 TO 31.3.2010. THE ASSESSEE CLAIMED TO BE RUNNING A N AYURVEDIC MEDICAL COLLEGE AND HOSPITAL AT ALIGARH. THE AS SESSEE HAD FILED AN APPLICATION U/S 10(23C)(VI) ON 5.11.2007 BEFORE THE DGIT(E) FOR NOTIFICATION FOR ASSESSMENT YEAR 2008-09 TO 2010-11. THIS APPLICATION ITA NOS. 4008 & 4009/DEL/2011 3 OF THE ASSESSEE WAS REJECTED BY THE DGIT(E) VIDE HIS ORDER DATED 28.11.2008. WHILE REJECTING THE APPLICATION THE DIT(E) HELD THAT THE ASSESSEE HAD BEEN MAKING FALSE CLAIM OF EXPENSES INC LUDING SALARY PAYMENTS TO EMPLOYEES WHO WERE NOT WORKING WITH THE A SSESSEE AND HAD LEFT THEIR SERVICES. THE DGIT(E) ALSO HELD THA T THE ASSESSEE HAD FAILED TO RECONCILE THE DETAILS OF CONTRIBUTION TO CORPUS RECEIVED DURING F.Y. 2003-04. 3.1 ASSESSING OFFICER FURTHER NOTED THAT AS THE RE GISTRATION U/S 12A(A) HAS SINCE BEEN WITHDRAWN BY THE DIT(E) FOR THE PERIO D FROM 1.4.2004 ONWARDS INCLUDING THE PERIOD UNDER CONSIDERATION THE ASSESSEE WAS NOT ENTITLED TO THE BENEFIT OF SECTIONS 11 AND 12 OF THE INCOME TAX ACT 1961. THE ASSESSING OFFICER ACCORDINGLY MADE THE ADDITION OF CORPUS DONATION AND DISALLOWED THE CLAIM OF DEPRECIATION. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFF ICER. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 1647/DEL/2009 VIDE ORDER DATED 17.6.2011 HAS SET AS IDE THE ORDER OF THE DIT(E) REGARDING CANCELLATION OF REGISTRATION U/ S 12AA. HENCE HE PLEADED THAT THIS MATTER SHOULD ALSO BE REMITTED TO T HE FILES OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. ITA NOS. 4008 & 4009/DEL/2011 4 6.1 LD. DEPARTMENTAL REPRESENTATIVE DID NOT HAVE AN Y OBJECTION TO THIS PROPOSITION. 6.2 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. W E FIND THAT THE TRIBUNAL IN THE AFORESAID ORDER DATED 17.6.2011 HAS HELD AS UNDER:- WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. FROM THE FACTS STATED ABOVE IT IS CLEAR THAT THE ASSESSEE HAD NOT FILED DESIRED INFOR MATION BEFORE THE LD. DIT(E). THE ASSESSEE MADE A REQUEST FOR KEEPING THE PROCEEDINGS IN ABEYANCE TILL THE WRIT P ETITION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. DGIT(E) WAS DECIDED OR THE APPEAL AGAINST THE ASSESSMENT O RDER FOR A.Y. 2006-07 WAS DECIDED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). DURING THE COURSE OF HEARING THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE MADE STA TEMENT AT BAR THAT THE WRIT PETITION FILED BY THE ASSESSEE HAS BEEN DISMISSED. IT IS ALSO A FACT THAT THE DIT(E) HAS R ELIED HEAVILY ON THE OTHER OF THE LD. DGIT(E) AND FINDINGS IN THE ASSESSMENT ORDER. THE ASSESSEE HAD NOT SUBMITTED AN Y REPLY TO THE SHOW CAUSE NOTICES ISSUED. FROM THE FACTS STATED ABOVE IT IS NOT A CASE WHERE IT CAN BE SAID THAT ADEQUATE OPPORTUNITY WAS NOT PROVIDED TO THE ASSESS EE. AT ITA NOS. 4008 & 4009/DEL/2011 5 THE SAME TIME THE ORDER PASSED BY THE DIT(E) IS BASE D ON THE DECISION OF THE DGIT(E) AND ASSESSING OFFICER. HONBLE DELHI HIGH COURT HAS DISMISSED (237 CTR 9) THE WRIT PETITION ON THE GROUND THAT THE ASSESSEE WAS GIVEN OPPORTUNI TY BY DGIT(E) OF BEING HEARD AND HENCE THERE WAS NO CONTRAVENTION OF FUNDAMENTAL RIGHTS OR VIOLATION O F PRINCIPLE OF NATURAL JUSTICE. HOWEVER CANCELLATION OF REGI STRATION UNDER SECTION 12A OF THE ACT IN THE ABSENCE OF ANY REPLY TO THE SHOW CAUSE NOTICES ISSUED IN OUR CONSIDERED OPI NION WILL BE TOO HARSH AND DOES NOT COMMENSURATE PENALTY SUF FERED BY ASSESSEE BY WAY OF WITHDRAWAL OF REGISTRATION U/ S 12A AS COMPARED TO THE NON-COMPLIANCE OF NOTICES MADE BY THE ASSESSEE. WE THEREFORE FEEL IT PROPER TO SET AS IDE THE MATTER TO THE FILE OF THE LD. DIT(E) WITH THE DIRECTI ONS TO PROVIDE ANOTHER OPPORTUNITY OF BEING HEARD TO THE A SSESSEE TO PRESENT ITS CASE. THE ASSESSEE IS DIRECTED T O PRODUCE BOOKS OF ACCOUNTS AND ANY OTHER MATERIAL NECESSARY TO PROVE ITS CASE THAT THE ACTIVITIES OF ASSESSEE EXIS T FOR CHARITABLE PURPOSES. SINCE WE ARE SETTING ASIDE THE MATTER TO BE DECIDED AFRESH THE GROUND RAISED BY T HE ASSESSEE THAT THE LD. DIT(E) CANNOT WITHDRAW EXEMPTIO N ITA NOS. 4008 & 4009/DEL/2011 6 WITH RETROSPECTIVE EFFECT IS NOT BEING DECIDED. THE ASSESSEE CAN TAKE THIS PLEA BEFORE THE LD. DIT(E) WH O WILL DECIDE THIS ISSUE ALSO AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 6.3 IN LIGHT OF THE ABOVE DECISION AND SUBMISSIONS O F THE ASSESSEE IN OUR CONSIDERED OPINION THE MATTER NEEDS TO BE REMIT TED TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH . ACCORDINGLY WE REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICE R. 7. IN THE RESULT BOTH THE APPEALS FILED BY THE ASS ESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/11/2011. SD/- SD/- [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 18/11/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES