Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 266 - AT - Income TaxCharitable activity - grating exemption u/s 10(23C)(vi) - exemption u/s 11 - CCIT observed that, assessee cannot be said to be existed only for educational purposes and accordingly rejected the contention of the assessee for grating exemption u/s 10(23C)(vi) - Held that:- ITAT Delhi Bench in the case of Puranchand Dharmath Trust Vs. ITO, Wd-1, Gurgaon [2018 (5) TMI 630 - ITAT DELHI] held that where the assessee Trust advanced money as a loan to another Trust for which the assessee had not received any interest and the said sum was returned by the Trust, the amount advanced not being investment could not be held to be in violation of section 13(1)(d), 11(5) of the Act. Therefore, respectfully following the view taken by this Tribunal in the assessee’s own case, and as per our findings, we hold that there are no violations and the revenue did not make out any case to substantiate the violations in respect of 13(1)(c), 13(2)(a), 13(2)(g) and 13(2)(h) of the Act. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. The cars are used for the purpose of the assessee’s regular activity and the department did not place any material to establish that the cars were used for the personal benefit of directors/ authors/ promoters of the society. During the appeal hearing the revenue did not place any material to controvert the finding of the LD.CIT(A). Therefore we uphold the order of the ld.CIT(A) and dismiss the appeal of the revenue on this ground. Expenses related to the liquor and tobacco products and other entertainment expenses - Held that:- AO during the assessment proceedings observed that the assessee has incurred certain expenditure on cigarettes, in the name of Godavari Institute of Engineering which is run by the Society. Since the expenditure was not incurred for furtherance of the objects of the Society, the AO disallowed the said expenditure holding that it is gross violation of the objects of the Society. The Ld.CIT(A) examined the account of boarding and lodging and observed that a sum of ₹ 24,035/- relating to the expenses incurred for liquor and cigarettes was recovered and credited to the account. Ultimately, no expenditure was claimed relating to liquor and cigarettes etc. Therefore, allowed the appeal of the assessee and held that there are no violations for granting of exemption u/s 11 of the Act. During the appeal hearing, the revenue could not controvert the finding of the Ld. CIT(A) with tangible material. Therefore, we uphold the order of the CIT(A) and dismiss the appeal of the revenue on this ground. Reopening of assessment - Held that:- As per the proviso to section 147 of the Act, no notice u/s 148 could be issued unless, there is failure on the part of the assessee that income chargeable to tax had escaped assessment. In this case, the assessee filed the return of income claiming exemption u/s 10(23C) of the Act and there was no claim made by the assessee u/s 11. Only on cancellation of the approval granted u/s 10(23C) and on receipt of observations from the CCIT regarding violations and diversion of funds, it has come to the knowledge of the AO that the assessee has violated the provisions of section 13(1)(c), 13(2)(a), 13(2)(g) and 13(2)(h) of the Act thus there is no occasion to the AO to examine the violations u/s 13. The assessee did not furnish information with regard to it’s claim u/s 11, in the original assessment. In view of the findings of the CCIT with regard to the violations u/s 13(1)( c) and section 11(5) the AO reopened the assessment. There was no claim u/s 11 and no information was furnished with regard to satisfaction of the conditions for granting exemption of income under section 11 of the Act by the assessee. Thus there was a failure on the part of the assessee and the AO has rightly reopened the assessment u/s 148 of the Act.
|