DCIT, EXEMPTION CIRCLE, GHAZIABAD v. SATYAM EDUCATIONAL SOCIETY, ROORKEE

ITA 6140/DEL/2017 | 2014-2015
Pronouncement Date: 02-03-2021 | Result: Dismissed

Appeal Details

RSA Number 614020114 RSA 2017
Assessee PAN AESAS2656B
Bench Delhi
Appeal Number ITA 6140/DEL/2017
Duration Of Justice 3 year(s) 5 month(s) 2 day(s)
Appellant DCIT, EXEMPTION CIRCLE, GHAZIABAD
Respondent SATYAM EDUCATIONAL SOCIETY, ROORKEE
Appeal Type Income Tax Appeal
Pronouncement Date 02-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 02-03-2021
Assessment Year 2014-2015
Appeal Filed On 29-09-2017
Judgment Text
PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 6140/DEL/2017 (ASSESSMENT YEAR: 2014-15) DCIT EXEMPTION CIRCLE GHAZIABAD VS. SATYAM EDUCATIONAL SOCIETY SHIV COMPLEX 12 CIVIL LINES ROORKEE UTTARAKHAND PAN: AESAS2656B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI PRAKASH DUBEY SR. DR ASSESSEE BY: NONE DATE OF HEARING 02/03/2021 DATE OF PRONOUNCEMENT 02/03/2021 O R D E R PER PRASHANT MAHARISHI A. M. 1. THIS APPEAL IS FILED BY THE LD DCIT EXEMPTION CIRCLE GHAZIABAD [THE LD AO] AGAINST THE ORDER OF THE LD COMMISSIONER OF INCOME TAX (A) DEHRADUN [THE LD CIT (A)] DATED 26.07.207 FOR THE ASSESSMENT YEAR 2014-15 RAISING SOLITARY GROUND OF APPEAL THAT ADDITION DELETED BY THE LD CIT (A) ON ACCOUNT OF DEPRECIATION AND DONATION RECEIVED BY THE ASSESSEE ARE NOT PROPER. 2. THE BRIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE IS A SOCIETY REGISTERED WITH REGISTRAR OF SOCIETY UTTRAKHAND AS PER REGISTRATION CERTIFICATE DATED 11.01.1991 WHICH WAS SUBSEQUENTLY RENEWED UP TO 11.01.2016. IT REGISTERED U/S 12A OF THE INCOME TAX ACT 1961 VIDE REGISTRATION DATED 18.12.2019 AS THE SOCIETY IS ENGAGED IN RUNNING OF EDUCATIONAL INSTITUTION. THE ASSESSEE FILED ITS RETURN OF INCOME ON 23.03.2015 SHOWING NIL INCOME. THE LD AO PICKED UP THE RETURN FOR THE SCRUTINY. THE LD AO NOTED THAT DURING THE YEAR THE ASSESSEE HAS RECEIVED A DONATION OF RS. 43 80 000/- AS CORPUS DONATION. THE ASSESSEE SUBMITTED THE DETAILS PAGE | 2 THAT 303 PERSONS DONATED THE SUM AND DETAILS OF SUCH DONORS WERE SUBMITTED ON 26.12.2016. THE ASSESSEE WAS ASKED TO GET AT LEAST 50% OF THE DONATION CONFIRMED BY THE DONORS. THE ASSESSEE SUBMITTED CERTAIN CONFIRMATION BY VARIOUS DONORS TO THE LD AO DIRECTLY. ON PERUSAL OF THE THOSE CONFIRMATIONS THE LD AO NOTED THAT SOME OF THE DONATIONS RECEIVED IN CASH AND THE DONORS IN SOME OF THE CASES HAVE DONATED UP TO 25% TO 50% THEIR ANNUAL INCOME. SOME OF THE CONFIRMATIONS WERE ALSO RECEIVED FROM DIFFERENT ADDRESSED COMPARED TO ADDRESSES OF THE DONORS GIVEN BY THE ASSESSEE. THE LD AO LISTED OUT SUCH CASES AND HE HELD THAT SINCE THE CONFIRMATION OF THE DONORS WAS NOT PRESENTED PERSONALLY THEIR IDENTITY CANNOT BE CONFIRMED. ALL THE CONFIRMATIONS PRODUCED STATED THAT THEY ARE PREPARED IN SAME MANNER AND FURTHER THE DONATION MADE BY THE DONOR IS DISPROPORTIONATE TO THE INCOME SHOWN BY THE DONOR. THUS HE MADE ADDITION OF RS. 43 80 000/- AS UNEXPLAINED CASH CREDIT. 3. THE LD AO FURTHER NOTED THAT ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 1 13 44 087/- TOWARDS APPLICATION OF INCOME. ACCORDING TO THE LD AO SAME IS NOT ALLOWABLE IN VIEW OF THE FACT THAT CAPITAL EXPENDITURE ON ACQUISITION OF THE ASSET HAS ALREADY BEEN ALLOWED AS APPLICATION OF INCOME IN THE YEAR OF ACQUISITION OF FIXED ASSETS. THUS IT IS DOUBLE DEDUCTION OF SAME ITEM. CONSEQUENTLY ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS PASSED ON 26.12.2016 MAKING ABOVE ADDITIONS. 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT (A) DEHRADUN. HE PASSED AN ORDER ON 26.07.2017. ON ISSUE OF DISALLOWANCE OF DEPRECIATION HE NOTED THAT ORDER PASSED U/S 154 OF THE ACT THE ASSESSEE HIMSELF HAS INCLUDED THE DEPRECIATION AMOUNT AND THEREFORE THERE WAS A MISTAKE APPARENT FROM THE RECORD IN MAKING THE ADDITION AND THUS IT WAS RECTIFIED. THE LD CIT (A) THEREFORE ALLOWED THE CLAIM OF THE ASSESSEE. 5. ON THE ISSUE OF ADDITION OF CORRECT DONATION THE LD CIT(A) DEALT WITH THE WHOLE ISSUE VIDE PARA NO. 8 TO 10 OF HIS ORDER AS UNDER:- 8. THE ISSUE OF DONATION IS A SLIGHTLY COMPLEX MATTER AND IT APPEARS THAT THE AO WAS THOROUGHLY CONFUSED WHILE HANDLING THE SUBJECT BECAUSE SHE HAS MENTIONED THAT THE ASSESSEE RECEIVED DONATION OF RS. 43 80 000/- AS CORPUS DONATION AND AFTER EXAMINING AND RECORDING HER DOUBT WITH REGARD TO SOME OF THE DONORS HAS ADDED BACK THIS ENTIRE AMOUNT TO THE INCOME OF THE ASSESSEE. THE PAGE | 3 FACT OF THE MATTER IS THAT THE ASSESSEE RECEIVED A SUM OF RS. 49 74 000/- BY WAY OF CORPUS DONATION WHICH WAS TAKEN DIRECTLY TO ITS BALANCE SHEET AND IT ALSO RECEIVED A SUM OF RS. 43 80 000/- BY WAY OF REGULAR DONATION WHICH WAS REFLECTED IN ITS INCOME AND EXPENDITURE ACCOUNT. IT IS NOT CLEAR FROM THE ORDER OF THE AO AS TO WHETHER SHE HAS MADE THE ADDITION ON ACCOUNT OF CORPUS DONATION WHICH SHE WAS INVESTIGATING OR WHETHER SHE HAD MADE ADDITION ON ACCOUNT OF REGULAR DONATION ALREADY REFLECTED IN THE P & L A/C. HOWEVER SHE HAS ADDED THE SUM OF RS. 43 80 000/- WHICH IS A SUM ALREADY OFFERED AS INCOME BY THE ASSESSEE BY CREDITING THE SAME TO THE INCOME AND EXPENDITURE A/C. IT NATURALLY FOLLOWS THEREFORE THAT THAT PORTION OF DONATION WHICH HAVE ALREADY BEEN ACCOUNTED FOR AS INCOME IN THE INCOME & EXPENDITURE A/C CANNOT BE ADDED BACK TO INCOME AGAINST AS UNEXPLAINED CASH CREDIT. HENCE THE ADDITION OF RS. 43 80 000/- IN THIS REGARD CANNOT BE SUSTAINED. THE ONLY ISSUE THAT COULD BE LOOKED INTO WAS WHETHER THESE DONATIONS WERE ANONYMOUS DONATIONS WHICH COULD ATTRACT THE PROVISIONS OF SECTION 115BBC. IN ORDER TO VERIFY THE SAME THE AO WAS ASKED TO FORWARD THE ASSESSMENT RECORDS FOR EXAMINATION. HOWEVER DESPITE 03 LETTERS BEING WRITTEN TO THE AO INCLUDING A COPY MARKED TO THE RANGE HEAD THE ASSESSMENT RECORDS WERE NOT RECEIVED. THEREFORE THE ASSESSEE WAS ASKED TO FURNISH THE COPY OF ALL THE DOCUMENTS SUBMITTED BEFORE THE AO SO THAT IT COULD BE VERIFIED AS TO WHETHER THE DETAILS REGARDING THE IDENTITY ADDRESS ETC HAD BEEN FURNISHED TO THE AO OR NOT. A COPY OF THESE DOCUMENTS WERE SUBMITTED BEFORE THE UNDERSIGNED AND IT WAS FOUND THAT IN A LARGE MAJORITY OF CASES ADHAAR PAN CONFIRMATION LETTERS AND PASSBOOK WERE FURNISHED BEFORE THE AO. HOWEVER IN 11 CASES RELATING TO DONATION AMOUNTING RS. 5 40 000/- FROM THE MATERIALS FURNISHED BEFORE THE UNDERSIGNED IT WAS NOT CLEAR M/S SATYAM EDUCATIONAL SOCIETY A. Y 2014-15 A.NO10758 U/S-143 (3) AS TO WHETHER ANY DETAIL OF THIS NATURE HAD BEEN FURNISHED BEFORE THE AO. THE CASES IN WHICH THE DETAILS WERE NOT SUBMITTED BEFORE THE UNDERSIGNED WERE :- S.NO. NAME OF THE DONOR AMOUNT 1. ANKIT AHUJA 30 000/- 2. DEV KUMAR 30 000/- 3. MANOJ SHARMA 20 000/- 4. PRAMOD JOSHI 1 00 000/- 5. PRIYANKA GARG 20 000/- 6. PUSHPA GAUTAM 1 00 000/- 7. RAKESH KUMAR SINGH 50 000/- 8. S.C. TYAGI 1 00 000/- 9. S.K. TOMAR 30 000/- 10. SUDHA SHARMA 30 000/- 11. SHWETA AGARWAL 30 000/- TOTAL 5 40 000/- PAGE | 4 9. THE AO MAY VERIFY FROM THE ASSESSMENT RECORDS AS TO WHETHER THE ASSESSEE HAS SUBMITTED THE IDENTITY ADDRESS PROOF ETC BEFORE HIM IN RESPECT OF THESE AFOREMENTIONED CASES AND IF THE SAME HAVE NOT BEEN SUBMITTED THAN HE MAY TAKE APPROPRIATE ACTION U/S 115BBC. HOWEVER IF THE DETAILS HAVE BEEN FURNISHED THEN NO ADDITION IS NECESSARY. 10. FURTHERMORE SINCE THE AO HAD SPECIFICALLY MENTIONED THE ISSUE OF DONATION TO THE CORPUS THE ASSESSEE WAS ALSO ASKED TO SUBMIT THE DETAILS OF DONATION MADE TO THE CORPUS BY VARIOUS PERSONS AS SUBMITTED BEFORE THE AO. ON PERUSAL OF THE SAME IT WAS FOUND THAT IN A NUMBER OF CASES ONLY A CONFIRMATION LETTER HAS BEEN FILED BEFORE THE UNDERSIGNED. AS THE ASSESSMENT RECORDS WERE NOT FORWARDED BY THE AO IT WAS NOT POSSIBLE TO VERIFY WHETHER THE DETAILS REGARDING IDENTITY AND ADDRESS OF THE DONORS WITH REGARD TO SUCH CORPUS DONATIONS WERE FURNISHED BEFORE THE AO. THE HONBLE ITAT IN THE CASE OF MADHVI RAKSHA SANKALP NIRMAN NIKETAN VS. DDIT(EXEMPTION) ITA 2746/MUM/2014 VIDE ITS ORDER DATED 26.04.2017 HAS POINTED OUT THAT ONUS IS ON THE ASSESSEE TO PROVE THAT IT IS COVERED BY EXCEPTIONS TO CHARGEABILITY TO TAX AS IS PROVIDED BY PROVISION OF SECTION 115BBC OF THE ACT NAMELY THAT THE ASSESSEE MAINTAINED A RECORD OF THE IDENTITY INDICATING THE NAME AND ADDRESS OF THE PERSON MAKING SUCH CONTRIBUTION AND SUCH OTHER PARTICULARS AS PRESCRIBED. THE A8 MAY THEREFORE VERIFY FROM HIS RECORDS AS TO WHETHER THE ASSESSEE HAS FURNISHED EVIDENCE OF IDENTITY AND ADDRESS OF THE PERSONS MAKING THE DONATION IN COMPLIANCE TO REQUIREMENT OF SECTION 115BBC OF THE ACT AND IF THE SAME M/S SATYAM EDUCATIONAL SOCIETY A.Y 2014-15 A.NO10758 U/S-143 (3) HAVE NOT BEEN FURNISHED THEN BRING THE ANONYMOUS DONATIONS TO TAX IN ACCORDANCE WITH THE PROVISIONS OF SAID SECTION. IF THE DETAILS HAVE BEEN FURNISHED THEN NO ADDITION IS NECESSARY. THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED WITH THE AFORESAID DIRECTIONS. 6. THEREFORE THE LD AO IS AGGRIEVED WITH THE ORDER AND HAS PREFERRED THE APPEAL BEFORE US. 7. THE LD SR. DR RELIED UPON THE ORDER OF THE LD AO. 8. DESPITE NOTICE NONE APPEARED ON BEHALF OF THE ASSESSEE AND THEREFORE THE ISSUE IS DECIDED ON THE MERITS OF THE CASE. 9. WE HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE LD DR AND PERUSED THE ORDERS OF LOWER AUTHORITIES. ON THE ISSUE OF ALLOWABILITY OF DEPRECATION THE LD AO SHOULD NOT HAVE ANY GRIEVANCE AS THE SAME HAS BEEN RECTIFIED BY HIM AS PER ORDER U/S 154 OF THE ACT. THE ASSESSEE DID NOT CLAIM THE DEDUCTION OF THE DEPRECIATION ITSELF THEREFORE; THERE COULD NOT BE ANY PAGE | 5 OCCASION FOR DISALLOWANCE OF THE SAME. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) IN DELETING THE ADDITION OF DEPRECIATION AMOUNTING TO RS. 1 13 44 087/-. 10. ON THE SECOND ISSUE OF THE DONATION THE LD CIT(A) HAS SPECIFICALLY STATED THAT ONLY ISSUE THAT COULD BE LOOKED INTO WHETHER THESE DONATIONS IS ANONYMOUS DONATION WHICH COULD ATTRACT PROVISION OF SECTION 115BBC OF THE ACT OR NOT. THE LD CIT (A) ASKED FOR THE ASSESSMENT RECORD FROM THE LD AO BUT IT WERE NOT FURNISHED BY THE LD AO. ASSESSEE SUBMITTED THE COPIES OF THE DOCUMENTS SUBMITTED BEFORE THE LD AO WITH RESPECT TO THE DETAILS OF IDENTITY AND ADDRESS OF THE DONORS. THE LD CIT (A) NOTED THAT IN LARGE NUMBER OF CASES THE ASSESSEE SUBMITTED ADHAR PAN CONFIRMATION LETTERS AND PASSBOOK OF THE DONORS BEFORE THE LD AO. ONLY IN 11 CASES WHERE THE DONATION OF RS. 5 40 000/- IT WAS NOT CLEAR WHETHER THE ASSESSEE SUBMITTED THESE DETAILS OR NOT. IN PARA 9 OF THE ORDER THE LD CIT (A) DIRECTED THE LD AO TO VERIFY THE ASSESSMENT RECORDS WHETHER THE ASSESSEE SUBMITTED THE IDENTITY OF THE DONORS. IF THE PROOF OF IDENTITY IS FURNISHED THEN NO ADDITION IS REQUIRED. THUS WE DO NOT FIND ANY REASON THAT WHY LD AO IS AGGRIEVED. IT IS NOT THE CASE THAT ASSESSEE HAS NOT OFFERED THIS INCOME AS CORPUS DONATION U/S 11 (1) (D) OF THE ACT. THE LD DR ALSO COULD NOT SHOW US THAT NOW WHAT IS THE GRIEVANCE OF THE LD AO WHEN ASSESSEE HAS SHOWN IDENTITY OF THE DONOR BEFORE LD AO WHICH IS VERIFIED BY LD CIT (A) AND WHEN LD CIT (A) IS NOT SURE ABOUT THE PRROF OF IDENTITY OF CERTAIN DONORS SAME IS SENT BACK TO LD AO FOR PROPER VERIFICATION. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT (A). 11. THUS SOLITARY GROUND OF THE APPEAL OF THE LD AO IS DISMISSED. 12. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/03/2021. SD/- SD/- (SUDHANSHU SRIVASTAVA) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 02/03/2021 A K KEOT PAGE | 6 COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT NEW DELHI PAGE | 7 DATE OF DICTATION 2.03.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2.03.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 2.03.2021 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/ PS 2.03.2021 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 2.03.2021 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 2.03.2021 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2.03.2021 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2.03.2021 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER