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TMI Blog2021 (8) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... ome/ deduction of the expenses by the assessee incurred by the partner NGOs. 4. The order of Ld. CIT(A) be cancelled and the order of the A.O. be restored." 2. At the outset, Learned D. R., submitted that he relies on the order of the Assessing Officer where he has given elaborate findings and therefore, the relief allowed by learned CIT(A) be reversed and appeal of the Revenue be allowed. 3. Learned counsel for the assessee, on the other hand, submitted that it is an undisputed fact that the assessee is registered u/s 12A of the Act and during the year under consideration it has utilized the grants received by it by donating the same to other societies engaged in similar objects. It was submitted that the Assessing Officer has added back the surplus earned by assessee by disallowing the benefit u/s 11 of the Act and has also made an addition of the amounts which it had paid to other societies engaged in similar objects. Learned counsel for the assessee submitted that in the earlier year i.e. assessment year 2013-14, similar issues arose and learned CIT(A) in that year also allowed relief to the assessee and on an appeal filed by the Revenue against the order of learned CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therland). 2. Down stream research on seed system, awareness generation and seed multiplication, UP. (grant receive from IRRI Manila, Phillipnes) The AO held that the expenditure is not in accordance with the aims and objects of the trust and do not reflect any charity work having been done from the grant received and accordingly disallowed claim of exemption u/s 11 of the Act. During the course of appellate proceeding the appellant submitted as under:- BUSINESS DEVELOPMENT OF AGRI. PRODUCER COMPANIES The assessee society has in Annexure XXIII forming part of its Balance Sheet (erroneously referred to as note sheet of the Chartered Accountant by the learned Assessing Officer has given a detailed write up on the aforesaid programme as under: a) This two-year project, supported by 'ICCO & Kerk in Actie' (Now ICCO-COOPERATION, New Delhi), aims at strengthening the governance/ managerial and the business aspects of two primary producer companies (PPCs) of marginal and small farmers being promoted by CDS (one each in Eastern UP and Central Rajasthah). The total outlay of the project is Euro 47,136.00. Under the project, the two PPCs are being provided high quality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed storage and packaging of seed was done, suiting to the market demand. Awareness meetings for farmers was conducted, technological support was provided and the documentation was done for best practices in seed dissemination and business model promotion for the farmers. The appellan t further con tended that :- The assessee vide reply dated 29.11.2016 in response to show cause notice dated 04-11-2016 issued by the assessing officer made detailed submissions before the assessing officer on the particulars of activities conducted under the said programme and the way community was benefitted. In addition to the particulars of activities the assessee also produced photographs, report, and documents of the project. Relevant page of show cause dated 04- 11-2016 of assessing officer is attached at page 80 of paper boc,< and written submissions dated 29.11.2016 filed before the assessing officer is enclosed at pages 94, 152 to 155 of the paper book. The appellant filed copy of details regarding expenditure made on the projects submitted before the AO during the course of assessment proceedings. The appellant had also produced evidence regarding the activities of the appellant with res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grants from various reputed National and International Organization. It is strange that the AO was able to decide whether the activities of the appellant society are genuine or not on the basis of expenses made on mere two projects. The denial of benefit of exemption u/s 11 of the Act by the AO does not fulfill the requirement as envisaged under the Act. It is held that appellant is eligible for exemption u/s 11 and the addition of Rs. 83,78/034/- made by the Assessing Officer is hereby deleted. Ground of appeal No. 1.1 to 1.5 are allowed." 4.1 In the above findings learned CIT(A) has elaborately held as to how the assessee got funds through grant received from reputed national and international organizations and how the assessee had spent on the objects through other various organizations engaged in similar activities. We further find that in assessment year 2013-14, similar denial of exemption u/s 11 of the Act was made and the Tribunal vide order dated 16/11/2018 had confirmed the findings of learned CIT(A) by holding as under: 5. Vide ground No. 3 the Revenue is aggrieved with the action of learned CIT(A) by which he has deleted the addition of Rs. 62,40,012/- made by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r side. Keeping in view the facts and circumstances of the case, we confirm the view of learned CIT(A) and dismiss the ground No. 3 taken by the Revenue." 4.2 In view of the above facts and circumstances, ground No. 1 of the appeal filed by the Revenue is dismissed. 5. Now coming to ground No. 2 of the appeal, we find that learned CIT(A) has deleted the addition of Rs. 50,000/- by relying on earlier order of learned CIT(A) for assessment year 2013-14 in the case of the assessee itself by holding as under: "5.1 Ground of appeal No. 201 and 2.2 The Assessing Officer has held that salary paid to Shri S. K. Dwivedi (Secretary), Shri Amitabh Mishra (Treasurer) and Shri Probir Bose (Member) is excessive and disallowed Rs. 20,000/- and Rs. 20,000/- and Rs. 10,000/- out of their salaries u/s 13 of the Act. Total Disallowance made was Rs. 50,000/-. The AO was provided with detailed job1 descriptions of these three persons along with other details Vide submission dated 22.07.2016 along with details of remuneration paid to them in last 10 years. Identical issue regarding the addition made was raised in the appellant's own case for the A.Y. 2013-14. The issue was decided by my pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Shr S.K. Dwivedi, Shri Amitabh Mishra and Shri Probir Bose was provided. Shri Probir Bose is program Director for Migration projects supported by Jamshetji Tata Trust being implemented at Khalilabad and Lucknow. He is working with appellant since July 2001 and was coopted as Member on 28.01.2004. Shri Amitabh Mishra is Program Director for Goat based livelihood project in Bundelkhand, NRM project in Lalitpur, CBDRR project in Eastern UP and Agricultural Project in Hardoi. He is working with appellant since July 1996 and is member of Board since 26.02.2007. Shri S.K. Dwivedi is Executive Director and oversees the projects for revival of Agricultural based livelihoods in Eastern U.P. and North Bihar, IRRAS project and Jawaja project. He is responsible for strategic planning, implementation of projects and monitoring their outcomes. He also coordinates the Finance and Accounts functions. Salaries are fixed as per terms and conditions of service under specific scale (Category E-I) consisting of Basic Salary, DA (50% of basic), HRA, transport Allowance which is revised from time to time after performance appraisal. Either side may terminate the salary agreement by givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r noted that the "assessee could not explain their job and duties rendered to the assessee. The detailed terms and conditions of Mrs. Padmja Nair and Mr. J. L. Dwivedi were made available to the AO vide written submissions dated 18.11.2015. Mrs. Padmja Nair was paid for a specific task i.e. critical appraisal of "Community led total Sanitation" process carried out under the project Facilitating community led WASH and livelihood interventions in flood plains of Eastern UP in 20 villages of Rapti basin spread over district of Siddartha Magar, Sant Kabir Nagar, Maharaj Ganj and Gorakhpur, The important component was to promote sanitation in these villages. Total fees paid was Rs. 70,000/- subject to TDS and exclusive of service tax after submission of final report. Total payment made was Rs. 78,652/- inclusive of service tax (12%) and Education cess (3%). Dr. J.L Dwivedi was paid for specific task for "designing and implementation of Agriculture based livelihood strengthening programme within the project in appellant society as well as partners location in Eastern UP and Northern Khar". Total payment made was Rs. 17,500/-. It is pertinent to point out that Mrs. Padmja Nair and M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of income for charitable purpose and such donation cannot be treated as income of assessee trust in year of contribution either under unamended as amended section 12 of the Act. CBDT instruction No. 1132 dated 05.01.1978 stated that "The payment of sum by one charitable trust to another for utilization by donee trust towards its charitable objects is proper application of income for charitable purpose in hands of donor trust and donor trust will not loose exemption u/s 11 of the Act of the donations during the year of receipt itself. The decision of Hon'ble Gujrat High Court in case of Nirmala Baku Bhai Foundation (1997) 226 ITR 394 (Guj.) too is in favour of the appellant on this issue itself. The recent decisions in case of Delhi State Aids Control vs. ITO in ITAT No. 2906/Del/2010 and in case of Ram Ashram Trust, Nashik vs. Deptt of Income Tax in ITA No. 975/PN/2012 are also in the favour of appellant on this issue itself. In view of the above facts and judgments outlined above the disallowance of Rs. 62,40,6127- made by the AO is hereby deleted. The grounds of appeal No. 4 is allowed." 5.1 We find that learned CIT(A) while deciding the above ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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