9911796707
TMI Blog2024 (9) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... society as eligible for deduction under Section 10(23C)(vi) of the Act. In the light of the above, we deem it appropriate to remand back the matter to the file of Assessing Officer with a direction to re-examine the issue denovo after affording opportunity of hearing to the assessee. Needless to say that the assessee shall furnish all the details / evidence / documents to prove that the activities of the assessee are not in commercial in nature and are interlinked with the imparting of education. The assessee shall be at liberty to file documents, if any, as required for proving its case. - Shri Laliet Kumar, Hon ble Judicial Member And Shri G. Manjunatha, Hon ble Accountant Member For the Assessee : Shri S. Ramarao, Advocate. (appeared through virtual mode) For the Revenue : Smt. TH Vijaya Lakshmi, CIT-DR ORDER PER LALIET KUMAR, J.M. This appeal is filed by the assessee, feeling aggrieved by the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 31.10.2023 for the AY 2015-16. 2. The assessee has raised the following grounds : 1. That the order of the AO and the CIT (A) is bad in law and facts in the light of the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of Gratuity and EL encashment amounting to Rs. 5.58 lakh which is contrary to the law and available judicial precedence. 9. That the order of the AO and the CIT (A) is bad in law and facts in arbitrarily making addition of Rs. 24.49 crore towards depreciation which was not charged against income. 10. That the order of the CIT (A) is bad in law and facts in arbitrarily rejecting the condonation of delay petition in filing Form 35 for following reason; The appeal has been already decided on merit through a speaking order. (ii) The CIT (A) rejected the condonation of delay petition after 5 years at the time of disposal of appeal thus depriving the appellant of legal remedies against such order. (iii) The CIT (A) did not dispute the actual delay caused due to section 154 petition but rejected the condonation petition holding that the 154 petition was frivolous. 3. Facts of the case, in brief, are that assessee filed its return of income for the A.Y. 2015-16 on 28-09-2015, which was treated as defective. Subsequently, another return of income was filed by the assessee on 30.03.2017 admitting income at Nil- after claiming exemption u/s. 11. The assessee society was registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e apparently. There was no mistake apparent from records. 5.2. It is to be kept in mind that the appellant society offers the Chartered Financial Analyst Course/Programme, which is in the fields of financial analysis, management and control. Further, being an exempt entity, the appellant has to file IT returns every year after getting its accounts audited. Therefore, a significant knowledge of tax structure and practices is expected from the appellant society. Given this background, it can easily be concluded that there could not have been any bonafide belief of the appellant to infer that there was a rectifiable mistake apparent from the scrutiny order. A conjoint reading of para 4 4.1 of this order clearly manifests that rectification petition was frivolous and worthless. Thus, it appears that filing of rectification petition was simply to disguise or camouflage or artificially extend time barring date for filing of an appeal. This inference assumes stronger legitimacy from the fact that the rectification application itself was filed 10 days after the last date for filing of an appeal before the CIT(A). 5.3 Keeping all these in mind, the case does not appear to be fit for conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income at Nil. While doing so the assessing officer observed that on verification of the books of accounts and other details furnished by the AR of the assessee, it appears that the assessee has not violated the provisions of section 11 of the Income Tax Act. Copy of the order u/s. 143(3) rws 147 of the IT Act dated 28.12.2016 is submitted for kind perusal. Asst. year 2010-11: For the asst. year 2010-11 the appellant society filed its return of income on 04.10.2010 declaring total income at Nil after claiming exemption u/s. 11 of the IT Act. The case was taken up for scrutiny. The assessing officer completed the assessment vide their order u/s. 143(3) of the IT Act dated 19.03.2013 accepting the return of income. While computing the total income the assessing officer stated that on the basis of books of accounts and other details produced, the assessment is completed accepting the return of income. Copy of the order u/s. 143(3) of the IT Act dated 19.03.2013 is submitted for kind perusal. Assessment. year 2011-12: For the asst. year 2011-12 the appellant society filed its return of Income on 30.09.2011 declaring total income at Nil after claiming exemption u/s. 11 of the IT Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uting the total income the assessing officer stated that during the assessment proceedings, the assessee furnished information/ evidence on application of income towards the objectives of the assessee society. As per the Aims and objectives mentioned in MOA, the activities of the society are within the scope of the objectives for which the registration u/s. 12,4 was granted. Copy of the order u/s. 143(3) of the IT Act dated 29.12.2018 is submitted for kind perusal. 6.3. Despite noting the above submissions, the ld.CIT(A) has wrongly held as under : 9.2. In the present case, the AO had delved deep into the facts of the case to reach at a conclusion which was different from those decided in other years. Such a decision can never be brushed aside by siting the doctrine of res judicata. Accordingly, I am of the considered opinion that the AO was well within his jurisdiction while advocating a different view, based on the facts, regarding the claim of exemption. 6.4. It was contended by the ld.AR that this approach of the Revenue is contrary to the judgement of the hon ble Supreme Court in the case of Radhasoami Satsung, Saomi Bagh, Agra vs Commissioner of Income Tax reported in (1992) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught extension. The second proviso by sub-clause (ii) requires the Commissioner to make such enquiries to specify about the genuineness of the activities of the fund, trust or institution and compliance of such requirements of other laws in force by such fund, trust or institution. Upon considering the materials the Commissioner or the concerned authority can pass an appropriate order granting approval for a specific period of time, or reject the application. The second proviso importantly indicates that before granting approval to any fund, trust or institution, the Commissioner or the concerned authority may call for such documents including audited annual accounts or information from the fund, or trust or institution etc., as is deemed necessary for recording satisfaction about the genuineness of the activities. The judgment in American Hotel (supra) dealt extensively with the effect of the provisos to Section 10(23C). While doing so, the court made certain remarks with respect to the effect of these provisos characterizing a few of them as those dealing with the stage of considering applications for approval or registration and other as those dealing with application of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, the Commissioner or other authority may not on that basis alone reject the application. 76. The conclusions of this court are summarized as follows: a. It is held that the requirement of the charitable institution, society or trust etc., to 'solely' engage itself in education or educational activities, and not engage in any activity of profit, means that such institutions cannot have objects which are unrelated to education. In other words, all objects of the society, trust etc., must relate to imparting education or be in relation to educational activities. . e. The reasoning and conclusions in American Hotel (supra) and Queen's Education Society (supra) so far as they pertain to the interpretation of expression 'solely' are hereby disapproved. The judgments are accordingly overruled to that extent. 6.6. The ld.AR further submitted that the ratio laid down by the Hon'ble Supreme Court is available in paragraphs 62 and 63 of the judgment and that was required to apply by the ld.CIT(A) / Assessing Officer. However, both the lower authorities have failed to apply their mind and have wrongly given their findings on the basis of the judgements which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of New Noble Educational Society Vs. CCIT, the hon'ble Supreme Court held that if the surplus or profits are generated in the hands of the assessee applicant in imparting of education or related activities disproportionately, weight ought not to be given to surpluses or profits, provided they are incidental to the main activities of the assessee. Admittedly, the case of the assessee is that the assessee is having approval under section 10(23C) of the Act and for A.Ys. 2009-10 to 2013-14 and 2016-17. The assessment orders were passed by the Assessing Officer keeping the activities of the assessee society as eligible for deduction under Section 10(23C)(vi) of the Act. In the light of the above, we deem it appropriate to remand back the matter to the file of Assessing Officer with a direction to re-examine the issue denovo after affording opportunity of hearing to the assessee. Needless to say that the assessee shall furnish all the details / evidence / documents to prove that the activities of the assessee are not in commercial in nature and are interlinked with the imparting of education. The assessee shall be at liberty to file documents, if any, as required for proving its ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
