9911796707
TMI Blog2020 (7) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity to the Assessing Officer for examining the same, in violation of Rule 46A of the I.T. Rues. iv The ld. CIT(A) erred in deleting the addition of Rs. 3,63,96,696/- when the assessee did not produce any evidence in respect of the building expenditure, before the Assessing Officer during the course of assessment proceedings. v The order of the CIT(A) is perverse as the CIT(A) has mentioned that the assessee has spent 85% of the gross receipts (i.e. Rs. 14,82,12,178/-) for charitable purpose, whereas no evidence was filed before the Assessing Officer to establish that it was spent for charitable purpose. - vi Any other ground that may be taken up at the time of hearing before the Hon'ble ITAT - Total tax effect 3,63,96,696/- 3. Facts of the case in brief are that assessee is a charitable trust registered u/sec. 12A of the Act, the objects and activities undertaken by the assessee are as under:- 7.1 Sponsorship - Education of poor and needy children: In 2014 the Trust sponsored the education and care of 3,952 children. (In School: 2,624- In Colleges: 837 -Technical & Professional: 270 - Nursing & Pharmacy: 96 - Masters, Engineering & Medicine: 121 - Studying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e campus has Mango trees and 8 acres of vegetable cultivation. Today 266 children (196 boys and 70 girls) live on the campus. Of these 60 children are HIV+ (Boys: 36 and Girls: 24). Butterfly Hill has a staff of 68 (On campus: 30 and Off campus: 38). 7.6 Butterfly Hill School: The school caters mainly to the children on campus but a few children from the surrounding villages also attend the school. There are 329 children (Boys: 221 and Girls: 108) in the school with a staff of 25 (Men: 11 and Women: 14) 7.7 Night Shelter: The Night Shelter for boys is run in a school building of the Vijayawada Municipal Corporation near the Benz Circle area. This provides a rof over their heads for boys who are on the streets. n opportunity for boys who have, for the welfare of the street children in Benz Circle area. Dinner and breakfast are provided. The children are counseled and repatriated of possible. 7.8 Observation Home (Home for Juvenile Delinquents), Vijayawada: On the request of the Superintendent we are offering our service at the Government Observation Home for Boys. Our work at the Home is to ensure that the boys are treated in a humane way. Our Trust provides on a regular ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o self-contained Dental clinics. 7.11 Technical and Professional Training Programme: Several of our boys and girls are sent for technical training to NTTF, Gannavaram, Boys Town, Hyderabad, Don Bosco Technical School, Guntur, St. Joseph's ITI, Gunadala, Asha Nilayam, Gollapudi, Kolping centre, Guntur and Apple Computers, Vijayawada. Several are also sent for Hair Cutting and Beautician courses and for Hotel Management. On our Daddy's Home campus we also have training for older boys and girls in Tailoring, Embroidery, Book Binding, Bag making and Footwear making. Several are also trained in Electrical work, Plumbing, Air Conditioning and Building Painting. 7.12 Slum Schools: We are working in 7 slum areas in Vijayawada: 1. Brahmarambhatiuram 2. Kandrika/ Rajiv Nagar 3. New Rajarajeswaripeta 4. Alankar Centre/Sambamurty Road 6. Autonagar 7. Vambey Colony 8. Bhaskaraopeta In the slums our activity is focussed on the children. Since many of the street children come from the slums our activity here is a preventive measure. In each of these slums we have started a Literacy Centre. At New Raja rajeswari peta we also run a regular Elementary and High school ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. Ground Nos. 1 & 6 are general in nature, no adjudication is required, therefore, same are dismissed. 7. Ground Nos. 2 & 3 raised by the department on the ground that ld. CIT(A) deleted the addition without giving opportunity to the Assessing Officer which is amounting to violation of rule 46A of the I.T. Rules. In the assessment order, the Assessing Officer has noted that the assessee has debited expenses on account of construction to the tune of Rs. 3,63,96,696/- during the year. During the course of hearing, on 28/03/2016 only partial bills were furnished. The assessee not filed other details such as where such activity has happened, what is the activity undertaken and whether Government permission were obtained are not were not furnished. He further observed that the assessee furnished the photographs and submitted that the construction activity carried by the assessee pertains to existing structure, however no details were given by the assessee. Therefore, the Assessing Officer adjourned the case to 30/03/2016 and asked the assessee to furnish further details. The assessee could not furnish any further details, therefore the Assessing Officer considered the report of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport (who is not competent to estimate the cost of construction) disallowed the expenditure incurred by the assessee is highly improper and unjustified. This is continues activity carried by the assessee by utilizing the funds received from various people. The objects of the assessee are very clear that the assessee is running various homes for different purposes to run such huge activity various buildings are required, therefore the assessee continuously carrying the construction activity according to the objects of the society, therefore the Assessing Officer without examining the issue and without considering the details filed, simply disallowed the entire expenditure incurred by the assessee is not correct. Further, the assessee started the construction activity in earlier years i.e. A.Ys. 2010-11, 2011-12, 2012-13 & 2014-15 all the years the Assessing Officer has allowed the expenditure incurred by the assessee. The only year under consideration, the Assessing Officer without giving proper opportunity has disallowed the expenditure incurred by the assessee is not correct. Therefore, the ld. CIT(A) after examining each and every detail directed the Assessing Officer to delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income for the year under consideration. As per section (11)(1)(a), the income accumulated by the assessee is less than 15%, therefore the entire income of the assessee is exempt u/sec. 11(1) of the Act. We have examined the entire facts and circumstances of the case and find that assessee is running the trust in accordance with the objects. The activities carried by the assessee in running the trust are charitable in nature, the expenditure incurred by the assessee is also a genuine expenditure. The ld. CIT(A) after examining the details in respect of expenditure incurred by the assessee gave a finding that the assessee has applied his income more than 85%, therefore as per section 11(1), the entire income of the assessee is exempt. We find no reason to interfere with the order passed by the ld. CIT(A). Thus, this ground of appeal raised by the department is dismissed. 11. So far as cross objection filed by the assessee is concerned, it is only supportive to the order of the ld.CIT(A). As no grievance against the order of the ld. CIT(A), this cross objection filed by the assessee has become infructuous and is dismissed accordingly. 12. In the result, appeal filed by the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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