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TMI Blog2022 (2) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee and the entire material available on record, including the approval granted by the learned CIT(Exemptions), Ahmedabad to the assessee under Section 10(23C)(vi) CIT(A) allowed the alternative claim of the assessee for exemption under Section 10(23C)(vi) by passing a well discussed and well reasoned order; the relevant portion of which is already extracted hereinabove. We, therefore, find no infirmity in the order of the learned CIT(A) allowing the alternative claim of the assessee for exemption under Section 10(23C)(vi) of the Act and even the learned DR has not raised any material contention to rebut or controvert this position. The impugned order of the learned CIT(A) on this issue is, therefore, upheld and the appeal of the Revenue is dismissed. Disallowance of expenses incurred by the assessee under the head Advertisement and Promotion Expenses and Travelling and Conveyance Expenses - HELD THAT:- Although the learned DR has contended that the expenditure in question was disallowed by the learned CIT(A) vide his impugned order after having found that the same was not incurred for the purpose of educational activity of the assessee, we find that no opportunity wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and founders of the assessee-society. Date Description Amount 16.08.13 C/o Air Tickets booked from Delhi to New York to Delhi for Mr Vinay Rai against visit of Business purpose from 01.10.2013 to 09.10.2013 2,00,725/- 12.09.13 Amount of purchased 3000USD in cash and 10000 USD by Card @ ₹ 63.70/- each for Mr. Vinay Rai towards Foreign, visit against to attend MIT Conference meeting as per Bill No.3996 Dt. 12.09.2013 of Cox & Kings Limited 8,28,736/- 24.10.13 C/o Purchased 5000 USD @ ₹ 62.50/- per Dollar purchased towards foreign travelling charges of Mr. Vinay Rai as per Bill No. 3202417 dt.04. 10.2013 of Cox & Kings Limited 3,12,755/- 06.11.15 C/o Puchased 03 Nos. Apple iPhone for office use, snacks for staff meeting, hotel stay charges, travelling charges & Taxi Hire charges for Mr. Vinay Rai as per Cr. Card statement dt 28. 10.2013 2,59, 414/- 13.11.13 Amount of Air Tickets, Air tickets cancellation & Seat allocation charges of Mr. Vinay Rai, Dr. Harbeen Arora, Mr. Mounir Nartlho from Delhi-Ahmedabad- Delhi towards meeting with staff dt 28. 10.2013 cr. Card statement dt 03.11.2013 5,305/- Total 16,06,935/- 3. The Assessing Officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at Shangri La- Eros Hotel 10,688/- 6. ASSOCHAM Ms Babita Pandita, Rai University, Space City, B2/1, MCIE, Mathura Road, New Delhi 110044 Shangri La's Eros Hotel Being C/o Hotel Charges & Snacks charges against convocation program 2,48,039/- 7. Rai Foundation B-II/ 1, MCIE, Mathur Road, Near Badarpur Metro Station, New Delhi- 11 0044 Specs Being C/o LCD Data Projector, Laptop, Bose Sound System, Kramer Switcher, Digital Video camera A B Masking etc hiring charges against convocation program 30,700/- 8, Rai Foundation A-4, MCIE, Mathura Road, New Delhi-44. ANTRAA(DOT) Com Being C/o 06 nos. of momentos purchase @ 1700/- for distribution at assocham ladies league function at hotel Imperial as per bill no. 0084 dt. 19/07/13 attached. 11,475/- 9. Rai Foundation A-4, MCIE, Mathura Road, New Delhi-44. Chhaya Photo Centre Being amount of photography and video coverage for function at hotel imperial blue on dated 2 3rd July, 20 13 for assocham ladies league as per bill No. 1506 dated 23/07/2013 5,800/- 10. Assocham The Imperial New Dehli Being C/o. Hotel charges for booking of hotel for assocham ladies league function on dt.23/07/2013 as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Rai University ANTRAA DOT Com Being C/o. 18 nos. of momentos of ₹ 1700+ 12.50% Tax each purchased for Assocham functions at Hydrabad as per bill No. 0329 dt. 27/01/2014 enclosed. 34,425/- 23. Vinay Rai AEPC Card No. 3769- 161139-51001. Being amt of hotel stay charges for Ms. J. Panda & Mrs. Usha Aggrawal during visit of Hydrabad against Assocham function and snacks charge as per credit card statement dt 28/02/2014 95,074/- 24. Mr. Moninder Singh AEBC Credit Card No. 3769-453730- 82009 Delhi- Ahmedabad- Delhi on 14/02/2014 to 15/02/2014 guest for women award function 14,423/- 25. Ms. Nandita Das, Ms. Maria Dias, CHD Vihan dass AEBC Credit Card No. 3769-453730- 82009 Mumbai- Delhi-Mum bai on 05/03/2014 to 10/03/2014 film actress Guest for Women Award at Tukish Ambessy. 47,100/- 26. Gift giving to MIT Mr. Vinay Rai Gift given to MiT of $ 250 (Shri Vinay Rai happens to be an MIT Alumni) 27. Dr. A Sankara Ready Tour Bills Travelling from Ahmadabad to Mumbai for Special Award Function, 15,645/- 28. Rai University Dr. A. S. Reddy Tour Bills Meetup CM to all functions 11,764/- 29. Rai University Dr. A. S. Reddy Tour B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income of the assessee was determined by the Assessing Officer at ₹ 16,20,62,280/- in the assessment completed under Section 143(3) of the Act vide order dated 29.12.2016. 6. Against the order passed by the Assessing Officer under Section 143(3) of the Act, an appeal was preferred by the assessee before the learned CIT(A). During the course of appellate proceedings before the learned CIT(A), an alternative claim was made on behalf of the assessee for exemption under Section 10(23C)(vi) of the Act. In this regard, it was submitted on behalf of the assessee that, even though the assessment was finalized by the Assessing Officer disallowing its claim for exemption under Section 11 of the Act, an application for approval of exemption under Section 10(23C)(vi) for AY 2014-15 onwards had already been filed by the assessee on 21.11.2013. It was submitted that, although the said application was initially rejected by an order dated 20.10.2014, a direction was given by the Hon'ble Gujarat High Court by an order dated 27.07.2015 to consider the same afresh. It was submitted that, again by order dated 16.10.2015 passed as per the direction of the Hon'ble Gujarat High Court, approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to ₹ 16,06,935/- and ₹ 21,39,354/- in relation to traveling by Shri Vinay Rai and Ms. Harbin Arora respectively, was definitely not for the benefit of the Appellant University and such expenditure is in nature of their personal benefit, and therefore, provisions of section 13(1)(c)(ii) are applicable in the case of the Appellant. Therefore, as per assessment order, Appellant was not entitled to benefit of deductions u/s.11 and deductions claimed by the Appellant of ₹ 15,89,27,308/- for donations in nature of corpus and of ₹ 4,36,79,779/- for addition in assets, were disallowed by the AO. 7.1 I have also noted that in view of the approval u/s. 10(23C)(vi) granted by the CIT(Exemptions) for Asst. Year 2014-15, the Appellant has-a point saying that provisions of section 13(1)(c) was not applicable to its case. The Appellant has also, in its submission dated 08.10.2018, dealt the remand report by the AO that; "Further, the claim u/s.10(23C)(vi) was reportedly not made by the assessee in the original ROI filed so the claim made now, is not made under a valid return of income, and hence, the same cannot be entertained now." In this regard, the AO h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings. Hence the AO had no occasion to examine the said issue. The AO in the assessment order observed facts regarding the disallowance of exemptions. The argument before the Ld. CIT(A) is that as the approval is now granted u/s 10(23C)(vi) , the exemptions may be given u/s 11 and 12." The appellant is of the opinion that even if assuming that provisions of section 13 are applicable, disallowance could not be made for total denial of exemption u/s. 11 and alternatively, disallowance should be restricted to the extent of questioned expenditure involved and relied on the ratio of following judgments for proposition: (i) CIT vs. Fr. Mullet's Charitable Institutions (SLP(C) No.22223 of 2014 filed by Dept. dismissed) [(2015) 371 ITR (St) 370) (SC)] (ii) CIT vs. Fr Mullers Charitable Institutions [(2014) 363 ITR 230 (Kar- HC) (iii)Director of Income tax vs. Working Women's Forum [(2015) 63 taxmann.com 324 (SC)] (iv)CIT vs. Working Womens Forum [(2014) 365 ITR 353 (Mad-HC)] (v)CIT vs. Karnataka Industrial Area Development Board (SLP No.4568/2015, order dated 11.11.2016 by the Hon'ble Supreme Court) (vi) CIT vs. Karnataka Industrial Area Development Board (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the message from the Bombay High Court is that if prima facie an information evidence is necessary to examine the claim of the assessee, the CIT(A) should consider the necessary evidence in exercise of power u/s. 250(4) even if the case of the assessee does not fall within the four corners of the circumstances enumerated in rule 46A(1)." In such circumstances, and as per ratio laid down at 187 ITR 688 (SC) in the case of Jute Corporation of India Ltd., I am constrained to admit the contention raised u/s.10(23C)(vi) with the limitation that the adverse findings by the AO while making earlier the assessment has to be considered as per directions contained in the order of CIT(Exemptions) u/s. 10(23C)(vi). There is a clarion call from the highest echelon of the government to create an environment friendly to doing of business in this country. In the DO letter of Chairman No.FTS: 30311806/2016 dtd. 01.11.2016, the field formation has been directed "..,..... it is equally important to take steps to prevent avoidable dispute....". As a sequel to this it is strongly felt that it is onerous duty on the part of both revenue as well as taxpayers to reduce litigation so as to strengt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case, the ld. CIT(Appeals) ought to have upheld the order of the Assessing Officer in denying the claim of exemptions under section 11 of the Act. 3. On the facts and circumstances of the cases, the ld. CIT(Appeals) ought to have upheld findings of the Assessing Officer that assessee has violated the provisions of section 13(1)(c). 8. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that even though the assessment under Section 143(3) of the Act was completed by the Assessing Officer with reference to Sections 11 to 13 of the Act, disallowing the claim of the assessee for exemption under Section 10(23C)(vi) in violation of Section 13 of the Act, the application filed by the assessee for grant of approval under Section 10(23C)(vi) was pending at the relevant time inasmuch as the appeal filed by the assessee before the ITAT against the rejection of such approval by the CIT(A) vide order dated 16.10.2015 was pending and the same came to be disposed of by the ITAT only on 23.03.2018, i.e. after the passing of order by the Assessing Officer under Section 143(3) of the Act on 28.12.2016. As per the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment made by the Assessing Officer with reference to Section 11 r.w.s. 13 is found to be unsustainable and the income of the assessee is finally assessed with reference to Section 10(23C)(vi) of the Act, Section 13 is no more relevant and the learned CIT(A) was not justified in confirming the disallowance of expenditure which was made by the Assessing Officer with reference to Section 13 of the Act. She has contended that what is relevant for Section 10(23C)(vi) of the Act is that the income should be applied fully and exclusively by the assessee-trust to the objects for which it is established. She has contended that the assessee is in a position to support and substantiate its case on evidence and the matter may be restored to the file of the Assessing Officer for allowing the assessee an opportunity to do so. Although the learned DR has contended that the expenditure in question was disallowed by the learned CIT(A) vide his impugned order after having found that the same was not incurred for the purpose of educational activity of the assessee, we find that no opportunity was specifically given to the assessee to establish its case on evidence as per clause (a) of third p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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