ITO, Alwar v. M/S PUBLIC ROSE SHIKSHA SAMITI, Alwar

ITA 923/JPR/2011 | 2006-2007
Pronouncement Date: 28-11-2014 | Result: Dismissed

Appeal Details

RSA Number 92323114 RSA 2011
Assessee PAN AAATP5173D
Bench Jaipur
Appeal Number ITA 923/JPR/2011
Duration Of Justice 3 year(s) 25 day(s)
Appellant ITO, Alwar
Respondent M/S PUBLIC ROSE SHIKSHA SAMITI, Alwar
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-11-2014
Assessment Year 2006-2007
Appeal Filed On 02-11-2011
Judgment Text
IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI B. C. MEENA ACCOUNTANT MEMBER. ITA NOS. 497/JP/2011 & 109/JP/2012 (ASSESSMENT YEARS: 2003-04 & 2007-08) ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 ALWAR APPELLA NT VS. M/S PUBLIC ROSE SHIKSHA SAMITI TIJARA ROAD ALWAR RESPONDENT & ITA NOS. 921 922 & 923/JP/2011 (ASSESSMENT YEARS:2004-05 05-06 & 06-07) ASSISTANT COMMISSIONER OF INCOME TAX WARD-1(4) ALWAR APPELL ANT VS. M/S PUBLIC ROSE SHIKSHA SAMITI TIJARA ROAD ALWAR RESPONDENT PAN: AAATP5173D / BY REVENUE :SHRI RAJESH OJHA D.R. / BY ASSESSEE : SHRI P. C. PARWAL A.R. /DATE OF HEARING :26.11.2014 /DATE OF PRONOUNCEMENT : 28.11.2014 I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 2 ORDER PER SHAILENDRA KUMAR YADAV J.M: ALL FIVE APPEALS HAVE BEEN FILED BY THE REVENUE AGA INST THE RESPECTIVE ORDERS OF COMMISSIONER OF INCOME TAX (AP PEALS) ALWAR DATED 11.03.2011 FOR A.Y. 2003-04 18.11.201 1 FOR A.Y. 2007-08 AND CONSOLIDATED ORDER DATED 02.08.2011 FOR A.Y. 2004-05 05-06 & 06-07 SO THEY ARE BEING DISPOSED OF BY WAY OF COMMON ORDER FOR SAKE OF CONVENIENCE. 2. IN ITA NO. 497/JP/2011 FOR A.Y. 2003-04 REVENUE HAS FILED APPEAL ON THE FOLLOWING GROUND: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE OF EXEMPTION CLAIMED U/S. 10(23C)(IIIA D) OF RS.33 26 760/- MADE BY THE A.O. 2.1 IN ITA NO. 921/JP/2011 FOR A.Y. 2004-05 REVENU E HAS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE THE CLAIM OF EXEMPTION U/S. 10(23C)(IIIAD) OF THE IT ACT 1961. ON THIS ISSUE THE DEPARTMENT HAS FILED FURTHER APPEAL BEFORE HONBLE HIGH COURT. 2. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL A S ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.240000/- ON ACCOUNT OF RENT AT JAIPU R OFFICE AS MADE BY THE AO. 3. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 3 ADDITION OF RS.203360/- ON ACCOUNT OF CAR EXPENSES AS MADE BY THE AO. 4. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.277818/- ON ACCOUNT OF INTEREST MADE BY THE AO. 5. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.20090/- ON ACCOUNT OF DONATION AS MADE BY THE AO. 2.2 IN ITA NO. 922/JP/2011 FOR A.Y. 2005-06 REVENU E HAS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE THE CLAIM OF EXEMPTION U/S. 10(23C)(IIIAD) OF THE IT ACT 1961. ON THIS ISSUE THE DEPARTMENT HAS FILED FURTHER APPEAL BEFORE HONBLE HIGH COURT. 2. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL A S ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.265826/- ON ACCOUNT OF CAR EXPENSES AS MADE BY THE AO. 3. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.256358/- ON ACCOUNT OF INTEREST MADE BY THE AO. 2.3 IN ITA NO. 923/JP/2011 FOR A.Y. 2006-07 REVENU E HAS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE THE CLAIM OF EXEMPTION U/S. 10(23C)(IIIAD) OF THE IT ACT 1961. ON THIS ISSUE THE I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 4 DEPARTMENT HAS FILED FURTHER APPEAL BEFORE HONBLE HIGH COURT. 2. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL A S ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.104000/- ON ACCOUNT OF 1/3 RD OUT OF HOSTEL CUM RESIDENCE AS MADE BY THE AO. 3. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL A S ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.243000/- ON ACCOUNT OF RENT AND EXPENDITURE AT JAIPUR AS MADE BY THE AO. 4. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.102560/- ON ACCOUNT OF CAR EXPENSES WITH DEPRECIATION AS MADE BY THE AO. 5. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.214913/- ON ACCOUNT OF INTEREST MADE BY THE AO. 6. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.160000/- ON ACCOUNT OF PROFESSIONAL FRE PAYMENT TO SHRI M P JAIN RS. 1 LAC AND RS.60000/- TO SHRI SUDHANSH JAIPUR U/S 40(A)(IV) AS MADE BY THE AO. 2.4 IN ITA NO. 109/JP/2012 FOR A.Y. 2007-08 REVENU E HAS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN ALLOWING THE CLAIM OF EXEMPTION U/S. 10(23C)(IIIAD) OF THE I.T. ACT. 2. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL A S ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE U/S 40(A)(IN ACCORDANCE WITH) OF RS.9 60 000. 3. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL A S ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 5 DISALLOWANCE OF RS.1 20 000/- ON A/C OF RENT PAID T O DIRECTORS & FAMILY MEMBERS. 4. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE OF RS.2 40 000/- ON A/C OF SALARY PAID TO SH. R. K. SINGH SMT. SUNITA SINGH AND SH. RAKESH CHAUHAN. 5. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE OF RS.74 024/- ON A/C OF VEHICLE RUNNING (CAR EXPENSES) MAINTENANCE OF DEPRECIATION FOR PERSONAL USE. 3. FIRST WE TAKE ITA NO. 497/JP/2011 FOR A.Y. 2003- 04. 3.1 ASSESSEE IS A REGISTERED SOCIETY WITH REGISTRAR OF SOCIETIES ALWAR VIDE REGISTRATION NO. 6/ALWAR/88-89 DATED 26 .04.1988. 3.2 ASSESSING OFFICER IN ITS ORDER DATED 21.02.2006 STATED THAT ASSESSEE SOCIETY HAS VIOLATED THE CONDITION LAID DO WN BY SECTION 10(23C)(IIIAD) HENCE NOT ENTITLED TO CLAIM EXEMPTION U/S. 10(23C)(IIIAD). ASSESSING OFFICER STATED THAT FINANCIAL AID AND SUPPORT FOR A SUM OF RS.21 20 000/- WAS MADE WI THOUT INTEREST TO NIRWAN CHARITABLE TRUST. ASSESSEE DID NOT APPLY ITS INCOME DURING THE YEAR ON ITS OBJECTS AND CREDIT PA RT OF SUCH ACCUMULATED INCOME TO OTHER TRUST/INSTITUTIONS THE OBJECTS OF WHICH ARE NOT SIMILAR TO THE ASSESSEE SOCIETY. MOR EOVER THE ASSESSEE SOCIETY WAS ALSO UNABLE TO PROVE THE GENUI NENESS AND CORRECTNESS OF SUCH TRUST IN THE DIRECTION OF ITS A CTUAL INDULGENCE IN CHARITABLE ACTIVITIES. AS PER PROVIS ION B TO SECTION 10(23C) THE TRUST/INSTITUTIONS CLAIMING EXE MPTION U/S. 10(23C)(IIIAD) SHOULD NOT INVEST OR DEPOSIT ITS FUN DS FOR ANY I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 6 PERIOD DURING THE YEAR OTHERWISE THAN IN ANY ONE OR MORE FORMS OR MODE SPECIFIC IN SECTION 11(5). THEREFORE ASSESSEE SOCIETY HAS VIOLATED THE CONDITIONS LAID DOWN BY SE CTION 10(23C)(IIIAD) HENCE NOT ENTITLED TO CLAIM EXEMPTI ON U/S. 10(23C)(IIIAD). FURTHER AS PER SECTION 10(23C) IT I S MANDATORY THAT WHERE ASSESSEE PERFORMED ANY OTHER ACTIVITY WH ICH IS INCIDENTAL TO OTHER OBJECTS OF THE INSTITUTE THEN S EPARATE BOOKS OF ACCOUNTS ARE REQUIRED TO BE MAINTAINED BY IT IN RESPECT OF SUCH RECEIPTS. ASSESSEE SOCIETY IS PROVIDING OR IS RUNNING HOSTEL FOR THE STUDENTS AND ALSO PROVIDING BUS FACI LITY TO ITS STUDENTS WHICH CAN BE TERMED AS ACTIVITIES INCIDEN TAL TO THE OBJECTS OF THE SOCIETY. IT WAS FOUND BY ASSESSING OFFICER THAT ASSESSEE SOCIETY IS NOT MAINTAINING SEPARATE SET OF BOOKS OF ACCOUNTS FOR HOSTEL AND BUS FACILITIES INSTEAD IT HAS MERGED THE ACCOUNTS OF THE TWO ACTIVITIES. 3.3 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY WHEREIN VARIOUS CONTENTIONS WERE RAISED AS DETAILED IN PARA 4.2 OF ORDER OF CIT(A). HAVING CONSIDERED THE SAME CI T(A) GRANTED RELIEF TO THE ASSESSEE. SAME HAS BEEN OPPOSED ON B EHALF OF REVENUE. LD. DEPARTMENTAL REPRESENTATIVE WHO SUBMI TTED THAT CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWAN CE OF EXEMPTION CLAIMED U/S. 10(23C)(IIIAD) OF RS.33 26 7 60/- MADE BY ASSESSING OFFICER. ACCORDINGLY THE ORDER OF CI T(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. O N THE OTHER HAND LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE OR DER OF CIT(A). I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 7 3.4 AFTER GOING THROUGH RIVAL SUBMISSION AND MATERI AL ON RECORD WE FIND THAT IN RESPONSE TO WRITTEN SUBMISS ION BEFORE CIT(A) HE CALLED FOR REMAND REPORT AS SUBMITTED ON 14.02.2007. ACCORDING TO WHICH NIRWAN CHARITABLE TRUST HAS BEEN GRANTED REGISTRATION U/S. 12A OF ACT BY CONCER N COMMISSIONER OF INCOME TAX BIKANER VIDE HIS ORDER NO. 177 DATED 20.02.1999. BESIDES THIS PHOTO COPY OF LETT ER NO. 565 DATED 10.01.2007 WAS RECEIVED FROM INCOME TAX OFFIC ER WAR- 2 SRIGANGANAGAR ALONG WITH COPIES OF BALANCE SHEET OF NCT FOR A.Y. 2002-03 03-04 & 04-05 WHICH PROVES THE ACTIV ITIES OF NCT AND ITS EXISTENCE. CIT(A) ALSO CONSIDERED LIST OF STUDENTS SUBMITTED BY ASSESSEE WHEREIN IT WAS FOUND THAT ST UDENTS BELONG TO EVERY CASTE AND CREED AND TRUST WAS NOT C ONFINED TO ONE LINGUAL MINORITY ONLY. BY VIRTUE OF PROVISIONS OF SECTION 10(23C)(IIIAD) TOTAL INCOME OF SAMITI WAS EXEMPTED FROM TAX WHICH SAYS THAT ANY INCOME RECEIVED BY ANY PERSON O N BEHALF OF ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION S EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE OF PROFIT IF THE AGGREGATE ANNUAL RECEIPTS OF SUCH UNIVERSITY OR EDUCATIONAL INSTITUTIONS DO NOT EXCEED THE AMOUNT OF ANNUAL REC EIPTS AS MAY BE PRESCRIBED. THE CIT(A) FOUND THAT SAMITI IS SATISFYING ALL FOUR CONDITIONS I.E. ASSESSEE IS A EDUCATION IN STITUTION IT EXISTS SOLELY FOR EDUCATION PURPOSES IT DOES NOT E XIST FOR THE PURPOSE OF PROFIT AS THERE IS NO OTHER SOURCE OF IN COME FROM ANY OTHER ACTIVITY OTHER THAN EDUCATION AND ACTIVIT IES INCIDENTAL THERETO AND THE AGGREGATE RECEIPTS DOES NOT EXCEED THE I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 8 PRESCRIBED LIMIT (RS. ONE CRORE). ACCORDINGLY CIT (A) OBSERVED THAT ASSESSING OFFICER WAS NOT JUSTIFIED WHILE INVO KING THE PROVISION B TO SECTION 10(23C)(IIIAD). THE RELEVAN T PROVISO STATES THAT: PROVIDED ALSO THAT THE FUND OR TRUST OR INSTITUTIO NS (OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION S OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTIONS) REFERRED TO IN SUB- CLAUSE (IV) OR SUB-CLAUSE (V) (OR SUB-CLAUSE (VI) O R SUB- CLAUSE (VIA). HENCE THE PROVISION B TO SEC 10 (23C) IS NOT APPLICABLE TO CLAIM EXEMPTION UNDER SECTION 10(23C) (IIIAD). SIMILARLY ASSESSING OFFICER WAS NOT JUSTIFIED BY I NVOKING PROVISIONS OF MAINTAINING SEPARATE SET OF BOOKS OF ACCOUNTS FOR ACTIVITIES CONCERN WITH OBJECT OF SOCIETY ACTIVITI ES INCIDENTAL TO THE OBJECT OF THE SOCIETY ARE NOT APPLICABLE TO CLA IM EXEMPTION U/S. 10(23C)(IIIAD). IN THIS BACKGROUND CIT(A) WA S JUSTIFIED IN DELETING DISALLOWANCE OF EXEMPTION CLAIMED U/S. 10( 23C)(IIIAD) OF RS. 33 26 760/- MADE BY ASSESSING OFFICER. SAME IS UPHOLD. 4. AS A RESULT APPEAL OF REVENUE FOR A.Y. 2003-04 IS DISMISSED. 5. NOW WE TAKE ITA NOS. 921 TO 923/JP/2011 FOR A.Y. 2004- 05 05-06 & 06-07. 5.1 AS STATED ABOVE ASSESSEE IS REGISTERED SOCIETY WITH THE REGISTRAR OF SOCIETIES ALWAR VIDE REGISTRATION NO . 6/ALWAR/88- 89 DATED 26.04.1988 AND WAS CLAIMED TO BE EXISTING SOLELY FOR EDUCATION PURPOSE WITHOUT PROFIT MOTIVE AND ACCORDI NGLY THE I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 9 SOCIETY HAS CLAIMED EXEMPTION U/S. 10(23C)(IIIAD) O F ACT FOR ITS INCOME OF RS.6 28 831/- BEING NET SURPLUS OF INCOME S OVER EXPENDITURES DURING THE YEAR. ASSESSMENT OF SOCIET Y WAS MADE U/S. 143(3) OF ACT FOR EARLIER YEAR I.E. 2003-04 AN D CLAIM OF EXEMPTION U/S. 10(23C)(IIIAD) WAS DENIED BY ASSESSI NG OFFICER FOR DETAILED REASONS GIVEN IN ASSESSMENT ORDER FOR FOLLOWING REASONS: I. NON APPLICATION OF INCOME TOWARD THE OBJECT OF A SSESSEE. II. TRANSFER OF ITS INCOME TO OTHER TRUST NOT HAVIN G SIMILAR OBJECTS. III. INVESTING FUNDS OTHERWISE THAT THE MODES PROVI DED U/S 11(5) OF THE ACT. IV. NOT MAINTAINING SEPARATE SET OF ACCOUNT BOOKS F OR OTHER ACTIVITIES OF PROVIDING HOSTEL FACILITY AND BUS TRA NSPORTATION TO STUDENTS OF INSTITUTIONS RUN BY SOCIETY. ASSESSING OFFICER OBSERVED THAT FACTS AND CIRCUMSTA NCES OF THE ARE SAME IN CURRENT YEAR AS WELL. ACCORDINGLY ASSE SSEE WAS SPECIFICALLY ASKED AS TO WHY CLAIM OF EXEMPTION U/S . 10(23C)(IIIAD) MAY NOT BE DISALLOWED FOR THE SAME R EASONS AS WERE DISCUSSED IN IMMEDIATELY PRECEDING ASSESSMENT YEAR. APART FROM ABOVE ASSESSING OFFICER OBSERVED THAT E XCESSIVE AND UNREASONABLE PAYMENTS TO SHRI R K SINGH SECRET ARY SMT. SUNITA SINGH AND SHRI RAKESH CHAUHAN FOR THEIR RESI DENTIAL PREMISES CLAIMED TO HAVE BEEN TAKEN FOR FACILITY OF HOSTELS OF STUDENTS OF NURSING COLLEGE. THESE PERSONS HAVE BE EN PAID RS.2 40 000/- RS.1 20 000/- AND RS.1 20 000/- RESP ECTIVELY I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 10 FOR THIS PURPOSE. SIMILARLY RS.2 40 000/- AS ALSO BEEN PAID TO CHAIRMAN/PRESIDENT OF SAMITI FOR HIS RESIDENTIAL PR EMISES SITUATED AT JAIPUR WHICH HAS NO CONCERN OF ACTIVITI ES OF SAMITI CARRIED OUT WHOLLY AT ALWAR BUT IT WAS CLAIMED TO B E A BRANCH OFFICE OF THE SOCIETY. SAMITI WAS ALSO ALREADY HAV ING A PREMIUM VEHICLE OPEL ASTRA CAR IN EARLIER YEARS AND DURING THE YEAR UNDER CONSIDERATION ONE MORE PREMIUM VEHICLE I.E. T ATA SAFARI WAS PURCHASED. NO LOG BOOK AND ANY OTHER DETAILS A RE MAINTAINED FOR USE OF THESE VEHICLES. IN VIEW OF A BOVE FACTS AND CIRCUMSTANCES ASSESSING OFFICER DISENTITLED THE EX EMPTION U/S. 10(23C)(IIIAD) AND STATED THAT INCOME OF ASSES SEE SHOULD BE ASSESSED UNDER HEAD INCOME FROM BUSINESS & PROF ESSION AS ASSESSEE HAS CLAIMED DEPRECIATION ON FIXED ASSETS. CONSIDERING THE ACTIVITIES OF SAMITI AS ONE OF BUSINESS ASSESSI NG OFFICER DISALLOWED RS.2 40 000/- ON ACCOUNT OF RENT PAID FO R JAIPUR OFFICE TREATING AS UNREASONABLE AND EXCESSIVE. A S UM OF RS.2 03 360/- HAS BEEN DISALLOWED AGAINST CAR EXPEN SES AND INCLUSIVE OF DEPRECIATION PETROL EXPENSES DRIVER SALARY REPAIRS & MAINTENANCE ETC. ASSESSING OFFICER DISALLOWED IN TEREST OF RS.2 77 818/- INCURRED ON BANK OVER DRAFT LIMIT AS ASSESSEE HAS ADVANCED RS.44 20 000/- TO NCT. NO INTEREST HA S BEEN CHARGED FROM NCT ON OUTSTANDING BALANCE. ACCORDING LY INTEREST PAID ON OVER DRAFT LOAN AMOUNTING TO RS.2 77 818/- WAS DISALLOWED. SINCE OBJECT OF SOCIETY DOES NOT P ROVIDE FOR ANY SUCH TYPE OF DONATION AND ASSESSEE WAS HELD AS NOT A CHARITABLE INSTITUTION U/S. 12AA OF ACT DONATION O F I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 11 RS.20 090/- GIVEN TO SAINI COMMUNITY AT THE TIME OF GROUP MARRIAGE WAS NOT ALLOWABLE AND ACCORDINGLY SAME WAS DISALLOWED. FINALLY INCOME OF SAMITI HAS BEEN COM PUTED INCLUDED EXCESS OF INCOME OVER EXPENDITURE RS. 6 28 832/- AS TOTAL INCOME DECLARED AS PER RETURN AND VARIOUS DIS ALLOWANCE OF RS.7 41 268/- ASSESSED AT RS.13 70 100/-. 5.2 IN A.Y. 05-06 ASSESSING OFFICER VIDE ASSESSMEN T ORDER DATED 20.12.2007 HAS REPRODUCED ALMOST THE SAME GRO UNDS TAKEN IN EARLIER YEAR ASSESSMENT ORDER DATED 12.12. 2006 RELATING TO A.Y. 2004-05 FOR DISALLOWING CLAIM OF E XEMPTION U/S. 10(23C)(IIIAD) AND ALSO DISALLOWED CAR EXPENSES AND DEPRECIATION OF RS. 2 65 826/- AND INTEREST OF RS.2 56 358.25. FINALLY INCOME OF SAMITI HAS BEEN COMPUTED INCLUDIN G EXCESS OF INCOME OVER EXPENDITURE RS.23 65 833.26 AS TOTAL INCOME DECLARED AS PER RETURN AND VARIOUS DISALLOWANCE OF RS.5 22 184.25 ASSESSED AT RS.28 88 017.51. 5.3 IN A.Y. 06-07 ASSESSING OFFICER VIDE ASSESSMEN T ORDER DATED 29.12.2008 HAS REPRODUCED ALL THE SAME GROUND S AS TAKEN IN EARLIER YEARS ASSESSMENT ORDER DATED 12.12 .2006 RELATING TO A.Y. 2004-05 AND ASSESSMENT ORDER DATED 20.12.2007 RELATING TO A.Y. 2005-06 FOR DISALLOWING CLAIM OF EXEMPTION U/S. 10(23C)(IIIAD) AND ALSO MADE FOLLOWI NG DISALLOWANCES: I. DISALLOWANCE OF 1/3 RD OUT OF HOSTEL CUM RESIDENCE RS.1 04 000/- I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 12 II. DISALLOWANCE OF RENT AND EXPENSES FOR JAIPUR RS.2 43 000/- III. DISALLOWANCE OF CAR EXPENSES WITH DEPRECIATION RS.1 02 560/- IV. DISALLOWANCES OF INTEREST RS.2 14 913/- V. DISALLOWANCES OUT OF SALARY RS.6 31 550/- TREATI NG AS BOGUS AND NOT GENUINE. VI. DISALLWOANCE U/S. 40(A) RS.1 60 000/- ADVANCES MADE TO M. P. JHA RS.1 00 000/- AND RS.60 000/- TO SUDHANSH U AS NO TDS MADE ON THESE PAYMENTS. THUS INCOME OF SAMITI COMPUTED INCLUDING EXCESS IN COME OVER EXPENDITURE RS.42 01 589/- AS TOTAL INCOME DECLARED AS PER RETURN AND VARIOUS DISALLOWANCE OF RS. 14 56 023/- ASSESSED AT RS.56 57 612/-. 5.4 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY WHEREIN VARIOUS CONTENTIONS WERE RAISED. IN THIS R EGARD CIT(A) HAVING CONSIDERED THE SAME ALLOWED THE APPEAL OF A SSESSEE FOR ALL THESE THREE YEARS. SAME HAS BEEN OPPOSED BEFOR E US. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF ASSESSING OFFICER WHILE LD. AUTHORIZED REPRESENTATIVE SUPPORT ED THE ORDER OF CIT(A) ON THIS ISSUE. 5.5 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD WE FIND THAT ASSESSEE SAMITI FILED ITS RETU RN FOR THE RELEVANT ASSESSMENT YEARS UNDER CONSIDERATION AT NI L CLAIMING EXEMPTION U/S. 10(23C)(IIIAD) WHILE ASSESSING OFFI CER HAS MADE I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 13 ADDITIONS OF EXCESS OF INCOME OVER EXPENDITURE TREA TING THE SAME AS INCOME DECLARED AS PER RETURN WHICH WAS NO T FOUND JUSTIFIED BY CIT(A) AND COULD NOT BE ASSESSED AS IN COME FROM BUSINESS DISALLOWING THE CLAIM OF EXEMPTION U/S. 10 (23C)(IIIAD). ASSESSEE HAS CLAIMED SIMILAR EXPENSES DURING A.Y. 2 003-04 WHICH WERE NOT DISALLOWED BY ASSESSING OFFICER BUT IN A.Y. 2004-05 05-06 & 06-07 VARIOUS EXPENSES LIKE CAR EX PENSES INTEREST HOSTEL RENT SALARY DONATION ETC. HAVE B EEN DISALLOWED. ASSESSING OFFICER IN RESPECTIVE ASSESS MENT ORDERS IN CONSIDERATION HAS MENTIONED THAT FACTS AND CIRCU MSTANCES OF THE CASES UNDER CONSIDERATION ARE SAME AS OF EAR LIER YEAR. IN THIS BACKGROUND IT WAS NOT JUSTIFIED TO DISALLOW T HE EXPENSES IF NATURE OF ACTIVITY OF ASSESSEE HAS NOT CHANGED AND FACTS AND CIRCUMSTANCES ARE SAME. MOREOVER ORDER OF CIT(A) PERTAINING TO A.Y. 03-04 AND CLAIM OF EXEMPTION U/S. 10(23C)(I IIAD) HAS BEEN UPHELD BY US VIDE PARA 3 OF THIS ORDER INTER ALIA STATING THAT SAMITI IS SATISFYING THE ALL FOUR CONDITIONS O F SECTION 10(23C)(IIIAD) . AS STATED ABOVE ASSESSEE SAMITI IS IMPARTING EDUCATION AND EXIST SOLELY AND EXCLUSIVELY FOR EDUC ATION PURPOSES AND NOT FOR PURPOSE OF PROFIT AND NOT DOIN G ANY OTHER BUSINESS AS THERE IS NO OTHER SOURCE OF INCOME FROM ANY OTHER BUSINESS AND THE AGGREGATE RECEIPTS DOES NOT EXCEED THE PRESCRIBED LIMIT I.E. ONE CRORE. SO THE DISALLOWA NCE OF CLAIM OF EXEMPTION U/S. 10(23C)(IIIAD) IS NOT JUSTIFIED AS T HERE IS NO JUSTIFICATION TO ASSESS INCOME OF ASSESSEE AS BUSIN ESS INCOME AND TO DISALLOW THE EXPENDITURE TREATING THE ENTITY AS BUSINESS I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 14 ORGANIZATION. ASSESSEE SAMITI HAVE BEEN ALLOWED T O REGISTRATION U/S. 12A OF ACT WITH EFFECT FROM 1.4. 2000 BY ITAT VIDE ITS ORDER DATED 13.05.2011 INTER ALIA HELD THA T ASSESSEE SATISFIES LIST OF GENUINENESS OF ACTIVITIES OF INST ITUTION AS PER OBJECTS OF INSTITUTION. IN VIEW OF ABOVE CIT(A) J USTIFIED IN GRANTING RELIEF TO ASSESSEE IN ALL THESE 3 YEARS ON ALL ABOVE ISSUES AS CLAIMED U/S. 10(23C)(IIIAD) OF ACT. SAME ARE UPHELD. 6. AS A RESULT ITA NOS. 921 922 & 923/JP/2011 ARE DISMISSED. 7. NOW WE TAKE ITA NO. 109/JP/2012 FOR A.Y. 2007-08 . 7.1 ASSESSING OFFICER IN HIS ASSESSMENT ORDER HAS A RRIVED AT THE OBSERVATION FOR NOT ALLOWING EXEMPTION U/S. 10( 23C)(IIIAD) AND MAKING ADDITIONS/DISALLOWANCES OF EXPENDITURES IN HIS PARA 4.1. THUS ASSESSEE WAS DENIED EXEMPTION U/S. 10(23C)(IIIAD). 7.2 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY WHEREIN HAVING CONSIDERED THE WRITTEN SUBMISSIONS O F ASSESSEE CIT(A) DECIDED THE ISSUE IN FAVOUR OF ASS ESSEE. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE IN TER ALIA SUBMITTING THAT THE ORDER OF CIT(A) BE SET ASIDE AN D THAT OF ASSESSING OFFICER BE RESTORED ON THE ISSUE. ON OTH ER HAND LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CI T(A). I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 15 7.3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD WE FIND THAT ASSESSEE SAMITI FILED ITS RETU RN FOR THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION AT NIL CLAIMING EXEMPTION U/S. 10(23C)(IIIAD) WHILE ASSESSING OFFI CER HAS MADE ADDITIONS OF EXCESS OF INCOME OVER EXPENDITURE TREA TING THE SAME AS INCOME DECLARED AS PER RETURN WHICH WAS NO T JUSTIFIED OBSERVED BY CIT(A) AND FURTHER HELD THAT SAME COULD NOT BE ASSESSED AS TAXABLE INCOME DISALLOWING THE CLAIM OF EXEMPTION U/S. 10(23C)(IIIAD). ASSESSEE HAS CLAIMED SAME EXP ENSES DURING A.Y. 2003-04 WHICH WERE NOT DISALLOWED BY AS SESSING OFFICER BUT IN A.Y. 2004-05 05-06 & 06-07 VARIOUS EXPENSES LIKE CAR EXPENSES INTEREST HOSTEL RENT SALARY D ONATION ETC. HAVE BEEN DISALLOWED. ASSESSING OFFICER IN RESPECT IVE ASSESSMENT ORDERS IN CONSIDERATION HAS MENTIONED TH AT FACTS AND CIRCUMSTANCES OF THE CASES UNDER CONSIDERATION ARE SAME AS OF EARLIER YEAR. IN THIS BACKGROUND IT WAS NOT JUSTIFIED TO DISALLOW THE EXPENSES IF NATURE OF ACTIVITY OF ASSE SSEE HAS NOT CHANGED AND FACTS AND CIRCUMSTANCES ARE SAME. FURT HER APPEAL RELATING TO A.Y. 03-04 04-05 05-06 & 06-07 HAVE BEEN ALLOWED BY CIT(A) INTER ALIA CLAIM OF EXEMPTION U/S . 10(23C)(IIIAD) WAS ALLOWED AND IT WAS OBSERVED THAT SAMITI IS SATISFYING THE ALL FOUR CONDITIONS OF SECTION 10(23 C)(IIIAD) . WE HAVE ALREADY UPHELD THE ORDERS OF CIT(A) ALLOWING E XEMPTION U/S. 10(23C)(IIIAD) FOR A.Y. 03-04 TO 06-07 AS DIS CUSSED ABOVE. IN THIS BACKGROUND IT IS UNDISPUTED FACT THAT ASSE SSEE SAMITI IS IMPARTING EDUCATION AND EXIST SOLELY AND EXCLUSI VELY FOR I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 16 EDUCATION PURPOSES AND NOT FOR PURPOSE OF PROFIT AN D NOT DOING ANY OTHER BUSINESS AS THERE IS NO OTHER SOURCE OF I NCOME FROM ANY OTHER BUSINESS AND THE AGGREGATE RECEIPTS DOES NOT EXCEED THE PRESCRIBED LIMIT I.E. ONE CRORE. ACCORDINGLY THE DISALLOWANCE OF CLAIM OF EXEMPTION U/S. 10(23C)(III AD) WAS NOT JUSTIFIED AS THERE IS NO JUSTIFICATION TO ASSESS IN COME OF ASSESSEE AS BUSINESS INCOME AND TO DISALLOW THE EXP ENDITURE TREATING THE ENTITY AS BUSINESS ORGANIZATION. THE EXEMPTION U/S. 10(23C)(IIIAD) IS STATUTORILY ALLOWABLE TO ASS ESSEE IF ALL CONDITIONS ARE FULFILLED BY ASSESSEE AS DONE IN THI S CASE. 7.4 ASSESSEE HAS DEDUCTED TDS ON PAYMENTS OF RS.9 60 000/- MADE FOR SALARY RS.7 20 000/- AND HOS TEL RENT OF RS.2 40 000/- AND HAS DEPOSITED RS.36 720/- ON 08.0 2.2008 RS.40 800/- ON 08.02.2008 RS.31 710/- ON 17.03.200 8 COPIES OF TDS CHALLANS WAS KEPT ON RECORD. PROVISI ONS OF SECTION 40A(IA) ARE TO GOVERN PROFITS AND GAINS OF BUSINESS AND PROFESSION WHICH IS NOT APPLICABLE TO ASSESSEE AS S AMITI IS NOT DOING ANY BUSINESS OR PROFESSION AND THE INCOME OF SAMITI IS EXEMPTED U/S. 10(23C)(IIIAD). ADDITION MADE UNDER PROVISIONS OF SECTION 10(23C)(IIIAD) WAS NOT JUSTIFIED. SAME WAS RIGHTLY DELETED BY CIT(A). ASSESSING OFFICER WAS NOT JUSTIF IED IN REJECTING THE AUDIT REPORT FILED U/S.12A(B) IN FORM NO.10B AS ASSESSEE HAS BEEN ALLOWED TO GRANT REGISTRATION U/S . 12AA BY ITAT JAIPUR BENCH VIDE ORDER DATED 13.05.2011 WIT H EFFECT FROM 01.04.2000. IN VIEW OF ABOVE ORDER OF CIT(A) IS UPHELD. I.T.A. NOS. 497 & 921-23/JP/11 & 109/JP/12 A.Y. 03-04 04-05 05-06 06-07 &07-08 (ACIT VS. M/S PUBLIC ROSE SHIKSHA SAMITI) PAGE 17 8. AS A RESULT APPEAL FILED BY REVENUE FOR A.Y. 20 07-08 IS ALSO DISMISSED. 9. IN RESULT APPEALS FILED BY REVENUE FOR ALL YEAR S ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF NOVEMBER 2014. SD/- SD/- (B. C. MEENA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R TRUE COPY S.K.SINHA COPY FORWARDED TO: 1. THE APPELLANT- ACIT CIRCLE-1/ WARD-1(4) ALWAR . 2. THE RESPONDENT- M/S PUBLIC ROSE SHIKSHA SAMITI 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NOS. 497 & 921-23/JP/11 & 109/JP /12) BY ORDER A.R. JAIPUR.