TMI Blog2022 (12) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... sn't require any school vehicle for his personal usage and the said vehicle was not used by him rather the vehicle was used by the Principal and other staff members. CIT(E) has acknowledged the said explanation of the assessee where he held that there appears to be no evidence regarding any wrong use of the vehicle and the AO must remain cognizant that Shri. Rajinder Nath Chairman already has other vehicles in his personal name, and appears otherwise financially well-endowed and well settled. Therefore, on this account as well, the impugned order deserves to be set-aside. We are of the considered opinion that there is no justifiable basis to invoke the provisions of section 263 as the order passed by the AO cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue and the order so passed by the ld. CIT(E) is hereby set-aside and that of the AO is sustained. - Decided in favour of assessee. - ITA No. 376/Chd/2022 - - - Dated:- 6-12-2022 - SMT. DIVA SINGH, JM And SHRI. VIKRAM SINGH YADAV, AM Assessee by : Shri Sudhir Sehgal, Advocate Revenue by : Shri Sandip Dahiya, CIT, DR ORDER Per Vikram Singh Yadav , AM This is an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operly. 6. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 2. Briefly the facts of the case are that the assessee society, registered under section 12A(a) of the Act, had filed its return of income on 29/10/2017 declaring total income at NIL which was processed under section 143(1). Thereafter the matter was selected for scrutiny through CASS and notice under section 143(2) and 142(1) alongwith detailed questionnaire were issued to the assessee and thereafter, after going through the submissions made by the assessee, the returned income was accepted. The assessment records were subsequently examined by the Ld. CIT(E) and a show cause under section 263 of the Act was issued on 10/03/2022 and thereafter, after considering the submissions of the assessee but not finding the same acceptable, the assessment framed under section 143(3) was held to be erroneous in so far as prejudicial to the interest of the Revenue and the assessment order was set-aside with a direction to pass a fresh order in accordance with law taking into consideration the decision/observation made in the impugned order. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is blessed with two daughters who are happily married and settled in their own families and are living separately from the Chairman. The Chairman being advanced age in nature is having very little social and private life. He himself owns two vehicles in personal capacity and hence is not dependent on the school vehicle for personal use. We are enclosing herewith the copy of registration certificate of personal vehicles for your Honour's verification and records. 7. The school of the society is situated in village Sadhopur at the time of registration, the staff members of the vendor suggested that due to unnecessary formalities regarding registration of the vehicle in the name of the trust and to get the registration in the name of Sh. Rajinder Nath and on the insistence of our staff they also mentioned in invoice that Sh. Rajinder Nath is Chairman of the Chaman Vatika, Even in the registration certificate the name has been mentioned as Rajinder Chairman and not Rajinder Nath Individual. 8. There is no fact on record that car is being used for non-trust purposes or personal purposes. The ownership of the vehicle is with the school is with the trust and just because th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the car of Rs. 22,24,343/- during the F.Y. 2016-17; (ii) Whether the said car was actually used for the activities towards the fulfillment of the objects of the society. It is seen that the AO, during the course of assessment proceedings u/s. 143(3) of the Act, has completely focused on the first part and called for such documents/explanations as required to be produced to justify the first aspect i.e. the source(s) of income for the purchase. The AO had called for then Books of Accounts, Cash Book, ledger, invoice of car purchased, bank statement and vouchers based on which only the source(s) of income for the purchase of the car could be justified. The AO is seen to have not considered the second aspect of the case i.e. whether the car was actually used for the activities towards the fulfillment of the objects of the society. This aspect cannot be verified from any of the documents called for by the AO during the assessment proceedings. It is observed from the assessment records that neither the assessee trust has submitted the record of log book nor the AO has asked the assessee society to furnish the record of log book which should suggest that the vehicle has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dowed and well settled. Therefore, the; evidences to be employed in this matter of possible misuse must meet the standards/and tests of statutory adequacy and satisfactoriness. (iii) Besides, as the assessee has stated, the AO may determine whether the vehicle was employed in any matter to ferry/transport the principal, vice-principal and teachers and others related to the school amongst places, which would make the expense related/involved fully admissible as being incurred towards the charitable purposes/activities of the assessee. If the question is answered in the negative, the proportionate disallowance stated earlier can be considered. (iv) The objects of the trust continue to remain those of education and charitable purpose and cannot automatically be held to be violated simply on account of an ambiguity in the name on the registration document of the vehicle, an ambiguity which remains to be examined, and the hitherto unproved, even if imputed, misuse of the car. Therefore, any case for cancellation of registration granted u/s. 12AA of the Act or of assessing the overall surplus of income over expenditure of the assessee (as an AOP at whatever applicable rate) can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual ownership of a vehicle which has been purchased during the year and as per the ld. PCIT, where the ownership of the vehicle is reaffirmed to be that of the assessee society after re-verification, there doesn't appear to be any case to question the purchase of vehicle as being unrelated to or unused by the assessee society. The ld. CIT(E) has further held that on account of the fact that there being an ambiguity on the actual ownership of the car, the AO is not precluded to examine this aspect of wrong use of the vehicle towards non-charitable purpose though at this time, there appears to be no evidence available on record to show that there has been any wrong use of the vehicle. 6. In this regard, as per material available on record, we find that the invoice of Rs. 21,22,202/- issued by M/s. Globe Automobiles P Ltd. dated 28/03/2017 is in name of Mr. Rajender Nath Chairman, Chaman Vatika School, Village Sadhopur, District Ambala, the registration certificate under the Motor Vehicles Act is again in name of Mr. Rajender Nath Chairman, Chaman Vatika School, Village Sadhopur, District Ambala, the assessee's society funds have been utilized for purchase of the said v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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