TMI Blog2022 (2) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... ions), Ahmedabad to the assessee under Section 10(23C)(vi) CIT(A) allowed the alternative claim of the assessee for exemption under Section 10(23C)(vi) by passing a well discussed and well reasoned order; the relevant portion of which is already extracted hereinabove. We, therefore, find no infirmity in the order of the learned CIT(A) allowing the alternative claim of the assessee for exemption under Section 10(23C)(vi) of the Act and even the learned DR has not raised any material contention to rebut or controvert this position. The impugned order of the learned CIT(A) on this issue is, therefore, upheld and the appeal of the Revenue is dismissed. Disallowance of expenses incurred by the assessee under the head Advertisement and Promotion Expenses and Travelling and Conveyance Expenses - HELD THAT:- Although the learned DR has contended that the expenditure in question was disallowed by the learned CIT(A) vide his impugned order after having found that the same was not incurred for the purpose of educational activity of the assessee, we find that no opportunity was specifically given to the assessee to establish its case on evidence as per clause (a) of third proviso to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donors and founders of the assessee-society. Date Description Amount 16.08.13 C/o Air Tickets booked from Delhi to New York to Delhi for Mr Vinay Rai against visit of Business purpose from 01.10.2013 to 09.10.2013 2,00,725/- 12.09.13 Amount of purchased 3000USD in cash and 10000 USD by Card @ ₹ 63.70/- each for Mr. Vinay Rai towards Foreign, visit against to attend MIT Conference meeting as per Bill No.3996 Dt. 12.09.2013 of Cox Kings Limited 8,28,736/- 24.10.13 C/o Purchased 5000 USD @ ₹ 62.50/- per Dollar purchased towards foreign travelling charges of Mr. Vinay Rai as per Bill No. 3202417 dt.04. 10.2013 of Cox Kings Limited 3,12,755/- 06.11.15 C/o Puchased 03 Nos. Apple iPhone for office use, snacks for staff meeting, hotel stay charges, travelling charges Taxi Hire charges for Mr. Vinay Rai as per Cr. Card statement dt 28. 10.2013 2,59, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Specs Being C/o JBL Sound System Digital/ still/photographer/ digital video etc hiring charges against Assocham Women's Achievers event at Mumbai 65,500/- 3. Rai University, BII/I, MCIE Mathura Road; New Delhi-44 Antraa (Dot) Com Being C/o 15 Nos. Momento of ₹ 1760/- + 12.50% Tax purchased for Assocham Ladies League event at Mumbai 38,068/- 4. Rai University, BII/ 1, MCIE Mathura Road, New Delhi-44 Antra (Dot) Com Being C/o 15 Nos. Momento of ₹ 1700/- + 12.50% Tax purchased for Assocham Ladies League event at Hyderabad 34,425/- 5, M/s Rai Foundation A-41, MCIE, Mathura Road, New Delhi-44 Antraa (Dot) Com Being /o 05 Nos. of Mementos purchased @ 1900 + 12.506s tax for distribution to Guests against convocation program held at Shangri La- Eros Hotel 10,688/- 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03 No. Handset, snacks, hotel stay charges, for Mr. Vinay Rai towards staff meeting foreign Travelling as per credit -card statement dt. 28.10.2013 enclosed. 4,32,551/- 14. Assocham Ms Babta Pandita, Shangri La s Hotel Being C/o. hotel charges snacks charges against convocatikon program as per bill No.208948 ₹ 208953 dt. 20.11.13 enclosed 2,48,039/- 15. Madam Richie Gupta Incahrge Gowns Rai Foundation PIONEERS Being amount of VVIP Gowns hiring charges towards convocation program as per bill no.5274 dt. 20.11.2013 enclosed. 7,675/- 16. Mr. Vinay (ND-172) Rai University The Oberoi, New Delhi Being snacks charges for meeting with staff members on dt. 09.12.2013 as per bill no. 10378415 dtd. 09.12.13 enclsoed 9,455/- 17. Babita Pandita, (Babita.Pandita@ raifoundation.org.) M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25. Ms. Nandita Das, Ms. Maria Dias, CHD Vihan dass AEBC Credit Card No. 3769-453730- 82009 Mumbai- Delhi-Mum bai on 05/03/2014 to 10/03/2014 film actress Guest for Women Award at Tukish Ambessy. 47,100/- 26. Gift giving to MIT Mr. Vinay Rai Gift given to MiT of $ 250 (Shri Vinay Rai happens to be an MIT Alumni) 27. Dr. A Sankara Ready Tour Bills Travelling from Ahmadabad to Mumbai for Special Award Function, 15,645/- 28. Rai University Dr. A. S. Reddy Tour Bills Meetup CM to all functions 11,764/- 29. Rai University Dr. A. S. Reddy Tour Bills . For Women Achievement Awards All at Hyderabad 12,092/- 30. Babita Pandita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 4,36,79,779/- on account of addition to fixed asset on the ground that the assessee could not furnish any documentary evidence to establish that the said assets acquired by utilizing the trust s fund were for the advancement of its objects. Accordingly, the total income of the assessee was determined by the Assessing Officer at ₹ 16,20,62,280/- in the assessment completed under Section 143(3) of the Act vide order dated 29.12.2016. 6. Against the order passed by the Assessing Officer under Section 143(3) of the Act, an appeal was preferred by the assessee before the learned CIT(A). During the course of appellate proceedings before the learned CIT(A), an alternative claim was made on behalf of the assessee for exemption under Section 10(23C)(vi) of the Act. In this regard, it was submitted on behalf of the assessee that, even though the assessment was finalized by the Assessing Officer disallowing its claim for exemption under Section 11 of the Act, an application for approval of exemption under Section 10(23C)(vi) for AY 2014-15 onwards had already been filed by the assessee on 21.11.2013. It was submitted that, although the said application was initially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in time before the Hon'ble ITAT after the Hon'ble CIT(Exemptions) has again rejected the approval even after directions by Hon'ble High Court of Gujarat for fresh consideration. The AO has, accordingly, finalized the assessment and concluded that the expenditure amounting to ₹ 16,06,935/- and ₹ 21,39,354/- in relation to traveling by Shri Vinay Rai and Ms. Harbin Arora respectively, was definitely not for the benefit of the Appellant University and such expenditure is in nature of their personal benefit, and therefore, provisions of section 13(1)(c)(ii) are applicable in the case of the Appellant. Therefore, as per assessment order, Appellant was not entitled to benefit of deductions u/s.11 and deductions claimed by the Appellant of ₹ 15,89,27,308/- for donations in nature of corpus and of ₹ 4,36,79,779/- for addition in assets, were disallowed by the AO. 7.1 I have also noted that in view of the approval u/s. 10(23C)(vi) granted by the CIT(Exemptions) for Asst. Year 2014-15, the Appellant has-a point saying that provisions of section 13(1)(c) was not applicable to its case. The Appellant has also, in its submission dated 08.10.2018, dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the approval is granted u/s 10(23C)(vi), it does not qualify for automatic exemptions u/s 11 and 12, Thus approval is granted subject to the conditions as discussions above. Moreover, the issue of 10(23C)(vi) was not the subject matter before the assessing officer during the assessment proceedings. Hence the AO had no occasion to examine the said issue. The AO in the assessment order observed facts regarding the disallowance of exemptions. The argument before the Ld. CIT(A) is that as the approval is now granted u/s 10(23C)(vi) , the exemptions may be given u/s 11 and 12. The appellant is of the opinion that even if assuming that provisions of section 13 are applicable, disallowance could not be made for total denial of exemption u/s. 11 and alternatively, disallowance should be restricted to the extent of questioned expenditure involved and relied on the ratio of following judgments for proposition: (i) CIT vs. Fr. Mullet's Charitable Institutions (SLP(C) No.22223 of 2014 filed by Dept. dismissed) [(2015) 371 ITR (St) 370) (SC)] (ii) CIT vs. Fr Mullers Charitable Institutions [(2014) 363 ITR 230 (Kar- HC) (iii)Director of Income tax vs. Working Wom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same if the facts and circumstances justify. It further held that if the first appellate authority failed to exercise his discretion judicially and arbitrarily refused to make inquiry in a case where the facts and circumstances so demand, his action would be open for correction by a higher authority. In other words, the message from the Bombay High Court is that if prima facie an information evidence is necessary to examine the claim of the assessee, the CIT(A) should consider the necessary evidence in exercise of power u/s. 250(4) even if the case of the assessee does not fall within the four corners of the circumstances enumerated in rule 46A(1). In such circumstances, and as per ratio laid down at 187 ITR 688 (SC) in the case of Jute Corporation of India Ltd., I am constrained to admit the contention raised u/s.10(23C)(vi) with the limitation that the adverse findings by the AO while making earlier the assessment has to be considered as per directions contained in the order of CIT(Exemptions) u/s. 10(23C)(vi). There is a clarion call from the highest echelon of the government to create an environment friendly to doing of business in this country. In the DO letter of Chairm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. Grounds taken by the Revenue 1. The ld. CIT (A) has erred in law and on facts in holding that assesses was eligible for claim of exemptions under section 10(23C)(vi) of the Income tax Act, though the same claim was not part of the original adjudication before the Assessing Officer. 2. On the facts and circumstances of the case, the ld. CIT(Appeals) ought to have upheld the order of the Assessing Officer in denying the claim of exemptions under section 11 of the Act. 3. On the facts and circumstances of the cases, the ld. CIT(Appeals) ought to have upheld findings of the Assessing Officer that assessee has violated the provisions of section 13(1)(c). 8. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that even though the assessment under Section 143(3) of the Act was completed by the Assessing Officer with reference to Sections 11 to 13 of the Act, disallowing the claim of the assessee for exemption under Section 10(23C)(vi) in violation of Section 13 of the Act, the application filed by the assessee for grant of approval under Section 10(23C)(vi) was pending at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered by the Assessing Officer from the angle of Section 13(1)(c) of the Act and as the same was allegedly found by him as incurred for the benefit of persons specified in Section 13(3) of the Act, the claim of the assessee for exemption under Section 11 of the Act was disallowed by him. The learned Counsel for the assessee has contended that since the assessment made by the Assessing Officer with reference to Section 11 r.w.s. 13 is found to be unsustainable and the income of the assessee is finally assessed with reference to Section 10(23C)(vi) of the Act, Section 13 is no more relevant and the learned CIT(A) was not justified in confirming the disallowance of expenditure which was made by the Assessing Officer with reference to Section 13 of the Act. She has contended that what is relevant for Section 10(23C)(vi) of the Act is that the income should be applied fully and exclusively by the assessee-trust to the objects for which it is established. She has contended that the assessee is in a position to support and substantiate its case on evidence and the matter may be restored to the file of the Assessing Officer for allowing the assessee an opportunity to do so. Although ..... X X X X Extracts X X X X X X X X Extracts X X X X
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