TMI Blog2013 (6) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, in respect of ONGC the funds were provided for setting up of math’s lab and TDS was deducted by the donor as a matter of abundant caution, which cannot be held against assessee so as to hold as subcontractor. As regards other receipts from Mrs. Ramneeka Lobo which represented expenses in order to meet its expenses towards electricity, water, housekeeping, security etc. for the dance classes & receipts from Tata Consultancy Services Ltd. represented maintenance charges for conducting computer classes for students for which the appellant was charging above mentioned maintenance cost assessee has demonstrated that there was no infirmity therein. Merely because the assessment order is short cannot led to an assumption that proper inquiries were not carried out. Thus order passed by DIT(E) u/s 263 quashed. In favour of assessee. - ITA No. 2308/Del/2012 - - - Dated:- 17-5-2013 - Shri R. P. Tolani And Shri T. S. Kapoor,JJ. For the Appellant : Sh. O. P. Sapra Adv. Sh. Sanjeev Sapra FCA For the Respondent : Srhri A. K. Mishra CIT(DR) ORDER Per R. P. Tolani, J. M:- This is assessee s appeal against the order dated 30-3-2012 passed by the Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d without making proper enquiries and therefore he set aside the assessment order with the directions to the AO to examine the issues and pass a fresh assessment in accordance with law. 2.1. In view of the above, assessment in question was set aside u/s 263 and a fresh assessment was ordered. Aggrieved, assessee is in appeal before us. 3. Ld. Counsel for the assessee made following submissions: (i) Provisions of section 263 have no application to the facts of this case because the Ld. AO while passing the assessment order dated 04/09/2009 had duly applied his mind after examining the account books alongwith bills/vouchers regarding expenditure incurred and amounts received under different heads as was specifically pointed out to the Ld. DIT(E) in appellant's reply dated 21/03/2012 to notice u/s 263. (ii) As regards TDS claimed by the Appellant on the alleged contractual payments made by various parties also, the AO had applied his mind. Details of the same were also filed before the Ld. DIT(E). (iii) As regards contribution made by ONGC, the Appellant had filed letter dated 08/05/2006 received from ONGC in response to Appellant's letter dated 27/02/2006 from which it is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be wholly or substantially financed by the Govt. Vide letter dated 26/03/2012 it was highlighted before the Ld. DIT (E) that as per the consolidated balance sheet of the assessee society, total asset side as on 31/03/2007 was Rs.26,08,24,028/- of which the source was substantially the funds received from Govt. Depts. aggregating at Rs.21,08,00,000/- as per the list filed before DIT(E). (ix) The Ld. DIT(E) in the impugned order at page 6 has himself held as under: 'Therefore even if exemption u/s 11 is denied, the claim of exemption u/s 10(23C)(iii)(ab) will lie". (x) Even if exemption granted u/s 11 (1 )(a) of RS.1 ,58,97,413/- was not allowed to the assessee (though not admitted), then too, the result was net loss as the AO had computed the net loss Rs.5,27,39,780/-. Therefore, the assessment order was neither erroneous nor prejudicial to the interest of revenue particularly when the AO has specifically mentioned in the assessment order that such loss/deficit was not to be allowed to be set off against the income of the subsequent years. In Supreme Court judgment in the case of Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 it was clearly held that the CIT has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance of violation of terms and conditions pointed out by the Directorate of Education and/or the Urban Ministry on the information of de-recognition of the school by the Directorate of Education. The tax authorities can take notice. The gravity of the consequences of holding a certain school as de-recognized is not to be trifled with or taken lightly and it is a powerful tool in the hands of the Directorate of Education and if it is taken away, serious consequences are visited on the school which is not a fact in the present case. 6.4. Before parting it is necessary to address the judgment of the coordinate Bench sitting at Chennai in the case of M/s Rajah Sir Sannamalai Chettiar Foundation vs. DIT(E) (supra) wherein the facts were entirely distinguishable. In the facts of the said case there was an admission on the part of the assessee school that they were in the business of running the school of commercial lines. A perusal of the order dated 20th June 2011, copy of which has been filed before the Bench shows that in fact the assessee school in clarification as per para 8 of the impugned order clarified that no free education was being impart ed by the assessee school to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f revenue. The assessee has demonstrated that there is no discrepancy in the contract receipts as alleged at pages 3 4 of the order passed u/s 263 of the Act. There is no issue about section 10(23C)(iiiab) because what has been applied are provisions of sec. 11 12. Therefore, non-consideration of sec. 10(23C)(iiiab) makes no difference as it is not applied by the assessing officer and assessee has no issue on that. There is no provision of hurried assessment in the income-tax provision inasmuch as assessment can be framed even by one appearance also and there is no legal bar in the Act. Thus, the observation of ld. DIT(E) in this behalf are not tenable and has no legal basis. Therefore, the entire exercise of sec. 263 is without any justification and the order deserves to be quashed. 4. Ld. DR, on the other hand, contends that: DIT(E) has distinctly pointed out that the issues about contract receipts and applicability of Sec. 10(23C)(iiiab)has not been examined. The assessing officer as statutory authority has certain duties to perform in respect of inquiry of the various receipts of the assessee which has not been undertaken by the assessing officer. In case relevant inquiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before assessing officer. The same was demonstrated before DIT(E) also from the record. Merely because the donors have deducted some TDS will not convert the real nature of the receipt i.e. being donation, grant or advertisement into one of being sobcontractor. Under these circumstances, on this point also we see no error in the order of assessing officer and no justification for DIT(A) assuming jurisdiction u/s 263. 5.2. Similarly, in respect of ONGC the funds were provided for setting up of math s lab and TDS was deducted by the donor as a matter of abundant caution, which cannot be held against assessee so as to hold as subcontractor. So also the cases as mentioned in paras 3 4 of DIT(E) s order in respect of receipt from Mrs. Ramneeka Lobo and Tata Consultancy, assessee has demonstrated that there was no infirmity therein. Merely because the assessment order is short cannot led to an assumption that proper inquiries were not carried out. Under these circumstances and reliance on several case laws pleaded by the assessee we hold that order of assessing officer can neither be termed as erroneous nor prejudicial to the interests of revenue. Accordingly, order passed by ld. D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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