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TMI Blog2013 (8) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ. For the Appellant : Shri Waseem Arshad, Sr. DR. For the Respondent : Shri P K Sehgal, Adv. ORDER:- Per: A L Gehlot: This is an appeal filed by the Revenue against the order dated 23.02.2011 passed by the ld. CIT(A), Ghaziabad for the Assessment Year 2002-03. 2. The Revenue has raised the following grounds of appeal:- "1. The Ld. CIT(A) s order is perverse as his presumption that deceased Mohd. Anwar Saeed has accepted the order. 2. The ld. CIT(A) has erred in law and on facts in deleting the total addition of Rs.34,71,646/- stating that income of the assessee is liable to be computed in accordance with section 11 to 13, ignoring the fact that Mohd. Saeed, Registrar of the society got benefited by the trust and comes under the ambit of section 13(3)(cc) and thereby assessee is not entitled for exemption under the section 11 of the IT Act. 3. The Ld CIT(A) has erred in law and on facts in ignoring the application and implication of section 13 of the IT Act. 4. The Ld. CIT(A) has erred in law and on facts in deleting the total addition of Rs.34,71,646/- merely on the basis that the assessment of the assessee was made on protective basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.2008 present Shri Abdul Majid accounts officer of Jamia Urdu, filed request application case adjourned to 07.10.2008. On 07.10.2008 nobody attended nor the assessee filed any reply. On 13.10.2008 a request application received by FAX. Issue notice u/s 142(1) dated 13.10.2008 for fixed the date on 23.10.2008. On 23.10.2008 again request application received by FAX. On 06.11.2008 issue notice u/s 142(1) given final opportunity for fixed the date 17.11.2008. On 17.11.2008 nobody attended nor the assessee filed any reply. On 18.11.2008 a letter date 17.10.2008 received along with ITAT order. Again notice u/s 142(1) dated 25.11.2008 issued for fixed the date on 04.12.2008. On 04.12.2008 nobody attended nor the assessee filed any reply. In the face of repeated non compliance I have no option but to pass the assessment order exparte u/s 144 of the IT Act, 1961. As discussed above, since the assessment order in case of Shri Anwar Saeed for A.Y. 2002-03 has not become final and there is not question of double taxation of income in the hands of the assessee. Therefore I have no substantial ground to deviate from the finding given by my predecessor in his order dated 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter). This is second round of litigation. In the first round, the CIT(A), Ghaziabad passed an order on 31.05.2005 allowing appeal of the assessee in part. The said order of the CIT(A) was challenged before the I.T.A.T., Agra Bench. The Agra Bench vide its order dated 6th September, 2007 in ITA Nos. 371, 372, 373 374/Agr/2005 sent back the matter to the file of the CIT(A). In compliance to the direction of I.T.A.T., the CIT(A) after considering the assessee s submission, decided the appeal in favour of the assessee. The CIT(A) noted that the assessee was also granted registration under section 12A of the Act w.e.f. 01.04.2004. The issue before the CIT(A) were of four folds which reads as under :- (Page no.20) i) One is whether the appellant is entitled for exemption under section 10(22) of the I.T. Act, 1961. ii) The other one is find the effect and fate of addition made in the hand on protective basis and made on substantive basis in the hand of Shri S. Anwar Saeed. iii) Remaining question is with regard to two other additions i.e. capital expenditure debited to income expenditure account and disallowance made by resorting to section 40A(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act ! The case laws of St. Michael Edu Foundation 43 ITD 656 (ITAT Delhi) and of M.D. Memorial Charity Educational Society 74 TTJ 595 (ITAT Delhi) are also applicable on this issue. Also the Act, did not provide any condition or filing of return and audit of accounts to avail exemption under section 10(22) of the Act , and thus, the conclusion is inevitable that the appellant is educational institution and existing solely for the purpose of education. 7.5 Here, the other question arises whether it was existing not for the purpose of profit. In this read, treading the assessment order would reveal that the only objection of the Assessing Officer, based on survey conducted on 21.11.2002, special audit and the statement of one Abdul Majid, Accounts Officer is that Shri S. Anwar Saeed, the then Registrar of the institute was running the institute for personal profits and he had used the institution for his personal gains. The AO has while allowed the Salary paid to Shri S. Anwar Saeed, but has disallowed the expenditure of such personal advantage gained by him from the hands of the appellant and that too on protective basis to be taxed in the hands of Shri S. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the issue in the case of DIT(E) vs. Raunaq Foundation 294 ITR 76. The CIT(A) has also held that when the disallowance was made in the case of assessee on protective basis and the same were added in the hands of Shri S. Anwar Saeed on substantive basis, the disallowance made on protective basis cannot be sustained. Similar finding was given by the CIT(A) in respect of disallowance under section 40A(3) observing that when assessee is eligible for exemption under section 10(22) of the Act, the disallowance under section 40A(3) becomes academic. 7. We have heard the ld. Representatives of the parties and records perused. The ld. Departmental Reprehensive did not dispute regarding the facts of the case. The admitted facts of the case are that the assessee is an Educational Institute and its income are exempt under section 10(22) of the Act. We noticed that the CIT(A) has rightly allowed the assessee s claim after a detailed discussion that the assessee is an Educational Institution existing solely for the that purpose and not for the purpose of profit and thus fulfilled the conditions of section 10(22) of the Act. The CIT(A) has rightly deleted the addition which was made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of that, order of CIT(A) is confirmed. The order of CIT(A) is also sustainable on the fact that the A.O. relied original order of his predecessor which has already been set aside by the I.T.A.T. in first round of litigation. 7. The other grounds raised are general in nature require no finding. 8. Before parting from the matter, it is relevant to mention that the A.O. while deciding the matter afresh on the direction of the I.T.A.T., has made some comments/observations. At the cost of repetition, the relevant observation/ comment of the A.O. is reproduced as below:- "In these circumstances, I am of the opinion that the Hon ble ITAT has granted the relief to assessee only on the basis of assertion of Ld. AR which was not quite correct." 9. Such observations/comments are against judicial discipline. Here we would like to mention that the principles of judicial discipline require that the orders of higher appellate authorities should be followed by the subordinate authorities otherwise; entire judicial system would lead to chaos. In this regard, we would like to refer the following observations of Hon ble Delhi High Court in the case of Nokia Corporation vs. Director o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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