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TMI Blog2018 (4) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... d donation as to its nature is not emanating from the records. The assessee has to bring on record sufficient evidences to prove that these receipts are capital donations and that the same is not chargeable to tax within the provisions of the 1961 Act. The assessee is not registered u/s 12A. The onus is on the assessee to prove its contentions. This matter is required to be set aside and restored to the file of learned CIT-A for re-determination of all the issues afresh on merits including additional grounds of appeal raised by the assessee before the tribunal. - Decided in favour of assessee for statistical purposes. - I.T.A. No.3029/Mum/2016 - - - Dated:- 19-4-2018 - SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri K. Shivram and Ms.Neelam C. Jadhav For Thje Revenue : Shri. V Justin ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee, being ITA No. 3029/Mum/2016 for assessment year 2005-06 is directed against the appellate order dated 17.03.2016 passed by learned Commissioner of Income-tax (Appeals)-1, Mumbai (hereinafter called the CIT(A) ) for assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that reopening is bad in law as the notice u/s.148 dt.27/03/2012 has been issued without obtaining prior approval / sanction / satisfaction as required u/s. 151 of the Income tax Act and without providing recorded reasons. Hence, the reopening is bad in law. 7. Without prejudice to the above, notice u/s. 148 dt.27/03/2012 was issued by the AO 15(1)(2) who had no jurisdiction over the assessee, hence the notice and assessment based on wrong jurisdiction and wrong assumption is bad in law and liable to be quashed. 8. Without prejudice to the above, donation of ₹ 79,73,282/- is a capital receipt not liable to the tax even though the assesse has wrongly shown in the tax computation. Therefore confirming the tax on the donation received as an income of the Assessee and disallowance of expenditure made by treating donation as income is not correct as per law. Hence the disallowance of expenditure confirm by the CIT(A) may be deleted. 9. The Appellant craves leave to add, amend, alter or delete any or all the above grounds of appeal. The assessee has raised additional grounds as above and prayed for admission of additional grounds of appeal . It is the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of expenditure account for the year ended 31.03.2005. The assessee could not produce books of accounts before the AO as the said book of accounts were already seized by Police Department for which necessary documentation was submitted by assessee before the AO to evidence that books of accounts are in the custody of police department. The assessee also submitted that the assessee had filed request letter to the Senior Inspector EOW Unit-3 with a request to supply photocopy of the books of accounts which as claimed by the assessee were not supplied to the assessee by the Police Department. The assessee also pointed out before the AO from the audit report dated 25.10.2005 that it maintained proper books of accounts and it is only due to the reasons as stated above the same could not be produced before the AO. The assessee submitted before the AO that it is not registered u/s. 12A and hence income is to be assessed as business income and parameters of allowability of business expenses as provided under the Income Tax Act, 1961 needs to be followed. The assessee submitted that it received donation of ₹ 79,73,282/-, income form physical fitness of ₹ 1,37,000/- and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Trust of ₹ 59,86,642/-cannot treated as expenses incurred for the purpose of business carried out by the assessee during the previous year relevant to assessment year under consideration, as such the same are disallowed in view of the provisions of IT Act 1961 referred to above. ii. In regard to expenses incurred for the purchase of physical fitness equipment of ₹ 5,45,000/-, it is stated that the same are expenses of capital in nature, as such capitalized and not allowed as revenue expenses iii. So far expenses incurred on renovation of Ambulance of ₹ 2,16,625/- is non- business expenses as such disallowed. In view of the facts discussed above, the following expenses only are deductable from the total income of ₹ 81,81,098/ - (Rs. 79,73,282/- donation + Physical fitness ₹ 137000/- and interest ₹ 7816/-) Administrative expenses ₹ 193393/- and (ii) Depreciation ₹ 405375/- Subject to the above remarks, the total income of the assessee trust is computed as under :- Amount in Rs . Total receipts as per Income Expenditure A/c for the year ended 31-03-2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he re-opening proceedings are based on wrong information. The Assessment Order passed U/s. 143(3)/147 is illegal and is liable to be cancelled. iii. The appellant without prejudice submitted that Assessing officer has failed to appreciate that the trust accounts were duly audited by the Chartered Accountant and were filed with the Charity Commission. He has not allowed the deduction of various expenses incurred by the appellant such as donation paid by the trust towards its objects simply on the ground that the trust was not registered U/s, 12A.From the above facts we request your honor to kindly direct the Assessing Officer to allow the various expenses claimed by the appellant towards the object of the trust. 7. The learned CIT-A considered the contentions of the assessee and rejected the same by holding as under:- 5.2. I have considered the facts and circumstances of the case, gone through the assessment order of the A.O and the submissions of the appellant and also discussed the case with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided here in under: i. The appellant has agitated reopening of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lieve but not the established fact of escapement of income. At this stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed the requisite belief. Whether the materials would conclusively prove the escapement is not concerned at that stage. This is so because the formation of the belief by the Assessing Officer is in the realm of subjective satisfaction. From the above judgement it may be inferred that the receipt of information by way of AIR was sufficient for the AO to form requisite belief that the income relating to donations has escaped assessment. Also in the case of Rohilkhand Educational Charitable Trust 42 Taxmann.co. 586, Hon'ble Allahabad High Court held that where assessee trust running hospital had not produced list of donors and expenditures claimed were reported by medical council to be bogus, initiation of proceedings u/s. 147 was justified. In the case under consideration also the information has been received from AIR. Further in the case of Rajat Export Import India Pvt. Ltd. Vs. ITO 252 CTR 307 Hon'ble Delhi High Court observed as under: At this stage, the Court is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of appellate proceedings. Accordingly, I have no reason to deviate from the findings given by the AO in his order. Grounds of appeal nos. 4 to 7 are, therefore, dismissed. 6. Ground No. 8 of appeal is vague, general and has not been availed. Therefore, same needs no separate adjudication and is accordingly disposed off. 8. Aggrieved by the appellate order dated 17-03-2016 passed by learned CIT(A) , the assessee has filed an appeal before the tribunal. The assessee raised additional grounds before the tribunal which are raised for the first time as the same were not raised before the authorities below. We have already admitted these additional grounds in the interest of justice keeping in view ratio of decision of Hon‟ble Supreme Court in the case of Jute Corporation of India v. CIT (supra) and decision of Hon‟ble Bombay High Court in the case of Ahmadabad Electricity Co. Ltd. v. CIT (supra), as these grounds have arisen in respect of subject matter of the tax proceedings . The assessee vide additional grounds is agitating that that notices u/s. 148 was issued by the AO without obtaining prior approval as is required u/s. 151 and without pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22/03/2013 Section and sub-section under which the assessment is made '- Assessed U/s 143(3) r w s 147 of the l.T.Act, 1961 ASSESSMENT ORDER This case has been received on transfer from I.T.O. 15(1)(2), Mumbai vide transfer memo received in this office dated 02.01.2013 for completing the assessment for the A.Y. 2005-06 u/s. 143(3) rws 147 of IT Act, 1961 recording the reasons as under:- Out of the list received i.e. list of non filers based on AIR Information, it is verified from the system that above mentioned assessee has not filed return of income for A.Y. 2005-06 even though there is taxable income. In this case the AIR information is as follows: Assessee has deposited cash of ₹ 10 lakhs or more in SB A/c i.e. ₹ 34,68,000/- Therefore I have reason to believe that the income to the extent of ₹ 34.68.000/- to chargeable to tax in A. Y. 2005-06, as escaped assessment and I propose to re-open the assessment by invoking the provisions of section 147 of the Income Tax Act, 1961, Hence , notice U/s 148 of I T Act, 1961 is being issued to the assessee ????? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed by the assessee from where the assessee got the information as to the non obtaining of the requisite prior permission u/s 151 by the AO from the relevant authority. The assessee is alleging that revenue has not obtained the necessary requisite permissions u/s 151 and onus is on the assessee to bring some evidence to justify its allegations . The assessee is also contemplating at this stage that its donations were capital receipt and hence could not be brought to tax. These contentions are raised for the first time before the tribunal. The details of the said donation as to its nature is not emanating from the records. The assessee has to bring on record sufficient evidences to prove that these receipts are capital donations and that the same is not chargeable to tax within the provisions of the 1961 Act. The assessee is not registered u/s 12A. The onus is on the assessee to prove its contentions. Additional grounds of appeal are raised before the tribunal for the first time which were not raised before the lower authorities but since these grounds goes to the root of the matter to decide the controversy between the rival parties, the same were admitted as they have arisen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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