9911796707
TMI Blog2025 (5) TMI 1473X X X X Extracts X X X X X X X X Extracts X X X X ..... or AY 2018-19. ITA No.143/Del/2024 [Assessment Year : 2017-18] (Revenue's appeal) C.O.55/Del/2024 [Assessment Year :2017-18] (Assessee's Cross-Objection) 3. Briefly stated, the assessee is a society registered under Society Registration Act, 1860 and is also registered under s. 12A of the Act. The assessee society (trust/institution) as may be called, is also notified under s. 80G of the Act. As per the aims and objects stated in the Memorandum, the assessee society is formed with the object to establish educational institutions, schools, polytechnics, vocational, management training institutes and colleges etc. The assessee society is an umbrella entity for various educational institutions being run under the name of 'AMITY' with the setting up of schools way back in 1991, the society has set up university, schools, colleges across all fields like science, technology, medicines etc. These schools, colleges etc. are also affiliated to Central Board of Education with various universities and also its own university set up under the State Legislature. The assessee claims that the assessee is a society constituted for charitable purposes as defined under s. 2(15) of the Act. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome disallowance of arbitrary nature as stated by CIT(A). Whether for the same amount Ld.CIT(A) was correct in taking a view that since no disallowance was made in the original order dated 31.12.2019, the same could not be done in any fresh assessment or reassessment proceeding. 4. Whether for the amount of Rs. 5,31,06,000/- (Addition on account of payment made to concerns in which persons referred u/s. 13(3) are substantially interested.), the Ld.CIT(A) was justified in partly allowing the appeal of the assessee to the extent of confirmation of disallowance only to the amount of Rs. 1,51,84,400/-by treating 50% disallowance as excessive and allowing a disallowance of only 20% premised on the basis that specified persons have paid taxes at MMR. Whether for the amount 2,82,90,000/- which was paid to Stratega Finance Company Pvt. Ltd. by the assessee for AY 2017-18, the Ld.CIT(A) was justified in not treating the same as violation of section 13(1)(c) of IT Act i.e. payment made to specified person. 5. Whether for the amount of Rs. 358,25,00,000/- (Addition on account of violation of section 11(1)(a) r.w.s. 11(1)(c)) the Ld.CIT(A) was justified in deleting the above addition by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,51,84,400/- on account of payment made to entities in which specified persons are substantially interested treating the same as excessive and unreasonable under section 13(3) r.w.s 13(1)(c) r.w.s 13(2)(c) of the Act. (ii) That the above addition has been confirmed rejecting the submission and explanation given by the assessee to justify that the payments made by the assessee trust are neither excessive nor unreasonable and cannot be added invoking the provision of section 13(3) of the Act. (iii) That the above said addition has been confirmed arbitrarily by applying rate of 20% without there being any justification for the same. (iv) That the addition has been confirmed ignoring the detailed submission and explanation given by the assessee to justify that these payments have been made solely & exclusively for the activities of the assessee society & be allowed as application of income." 8. We now advert to respective issues arising in the present appeals here under. 9. Ground No.1 of the Revenue appeal is general in nature. 10. Ground No.2 concerns disallowance of 50% of salaries paid to specified persons under s. 13(3) of the Act. 10.1. In the course of assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments and did not resort to any disallowance. The CIT(A) further noted that the salary payments made to Shri Atul Chauhan & Shri Aseem Chauhan by Dubai Branch has already been disallowed for the purposes of claiming exemption under s. 11 of the Act. The AO thus cannot take a different view on the basis of same facts. The CIT(A) also noted that in the absence of any evidence as to fair market value of the service, the Revenue ought not to sit in the arm chair of the assessee and decide the payment structure of salary/reimbursement. The CIT(A) also took note of fact that salary received from the trust have been duly offered in their respective individual return and thus Revenue has not suffered any loss by so-called excessive payments. The CIT(A) thus adjudicated the issue of disallowance towards excessive payment of salary in favour of the assessee. 10.6. The process of reasoning adopted by the CIT(A) are reproduced as under:- Ground No. 5 "The facts are similar to ground no. 8 of AY 2018-19. For ready reference the finding for AY 2018-19 is reproduced below: "The following submissions of assessee are worth considering:- The assessee submitted that the above addition ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 143(3) of the Act (Refer Pg 3331-3353 of PB) Accordingly, at the very outset, it is reiterated that when the Hon'ble Delhi High Court had only allowed to grant a personal hearing and again pass the assessment order as per law, then having accepted the salary payments, ad-hoc disallowance of 50% on account of the same in the impugned assessment order involves the contempt of order of Court, and hence, the said disallowances are liable to be deleted. From the above one thing is clear that no disallowance was made in the original order however in the subsequent order on the basis of same facts addition/disallowance of Rs. 5,43,16,824/ has been made by the Ld. AO on account of 50% of the aggregate salary payments of Rs. 10,86,33,648/-. Two issues emerges (i) whether the AO can take a different view on the basis of same facts, (ii) whether adhoc disallowance is permissible. In my view the AO should not take a different view on the basis of same facts. Secondly when the facts i.e. qualification, experience, quantum of salary paid etc was different in case of each person than the AO should have benchmarked salary in each case to find out the reasonableness of salary paid. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefits of allowable deductions. No grounds are raised by the revenue relating to the deletion of the additions made by the CIT (Appeals) before the Tribunal, whereas reference was made to the provisions of section 13(1)(c) of the Act only to draw support for denying exemption under section 11 of the Act. The Tribunal has rightly rejected the plea of the revenue as bereft of merit. The alleged breach of section 13(1)(c) of the Act based on these factors is baseless, wholly untenable. Thus, we answer the substantial question of law No. 1 in favour of the assessee and against the revenue" Considering the facts (i) that no disallowance was made in the original order, (ii) that salary paid to Atul Chauhan and Aseem Chauhan by Dubai Branch has already been disallowed in computation of income, (iii) that the AO should not take a different view on the basis of same facts, (iv) that adhoc disallowance is normally not permissible u/s. 13(1)(c), (v) that specified persons has offered their salaries at maximum marginal rate to tax in their individual computation of income, (vi) That the assessee had made detailed submission to justify the salaries however the same were dealt i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee since more than 18 years and to more than 35 institutions operating under the assessee trust situated in different geographical locations across the country. A copy of return of income of the recipients, ledger account etc. were placed. The AO however concluded that the payment of INR 2,47,16,000/- made to M/s. Pooja Chauhan & Associates is highly excessive and nothing but diversion of funds of the assessee trust to enrich the persons specified under s. 13(3) and thereby attracting the provision of s. 13(1)(c) of the Act. 11.2. The CIT(A) in first appeal observed that firstly, profit of M/s. Pooja Chauhan & Associates has been duly offered to tax and entire tax position is neutral; secondly, the AO has not brought anything on record to substantiate the fair market value of services rendered by the firm. The payments works out in the vicinity of INR 50,000/- per month per institution and considering the scale of work and complexibility involved, the payments made cannot be regarded as disproportionate. The CIT(A) thus observed that the Revenue cannot sit in the arm chair of the assessee to decide the working pattern, payment structure etc. and hence in the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments, the assessee submitted before the CIT(A) as under:- * Cross Border Placement Pvt Ltd (Payment made Rs. 5,35,03,000/-) a. Company was established in 30.07.1996 The company has provided the placement services to the assessee trust which includes identifying the appropriate human resource, all necessary placement related support services, conduct of interviews and related support facilities. Further the company is extensively engaged in post qualification placement related services to students of the various universities of the assessee trust. It handles all placement cell related operations, coordinates with participating MNC's and domestic companies, manages the database of students and concludes the placement programs of the universities successfully. b. The amount has been paid for the services provided to the trust being maintenance of human resource records. coordination and finalization of fresh recruitments during the year under consideration. During the previous year under consideration, more than 245 companies had participated in the placement program organized by the university, Top recruiters consisted of SAP LABS MPRO MAHINDRA HCL TECHNOLOGIES HYUNDAI, et ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year a sum of Rs 2,44,19,000/-has been paid to the Company. A sum equivalent to 2% of the civil construction cost is paid to the company based on progress of the project each month due." 12.4. The assessee thus contended before the CIT(A) that these specified concerns were established and are operational for more than 20 years. These companies have also been subjected to scrutiny assessment in the past years and no additions have been made whatsoever. The assessee also contended that no disallowances have been made in the past towards such payments and doctrine of consistency required to be given due weight. The assessee also pointed out that amount paid to such specified concerns are within the applicable limits of remuneration as laid down in the Companies Act, 2013 alongwith requisites approvals wherever required. 12.5. The CIT(A) found the payments made to Stratega Finance Co. Pvt. Ltd. to be justified and thus reversed the estimated disallowance. However the CIT(A) confirmed disallowance ot the extent of 20% of payments made to other two concerns on estimated basis. 12.6. The CIT(A) has dealt with the issue as under:- Ground No. 7 "The assessee submitted that the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support facilities in relation to obtaining the term loan facility, working capital credit and other financial support facility to the assessee trust during the year under consideration. Following services had been provided by the company to the assessee society during the year (a) Seeking various approvals and sanctions from governmental regulatory bodies (b) Furnishing of financials and liasioning thereof with regulatory bodies in educational sector i.e. State UGC Authorities and Department of Education for schools. (c) Preparation of Budget for each institution (d) Preparation of project reports, projected data for submission with private and government authorities for issuance of funds and grants. The amount paid by the trust to the entity is towards financial and professional services for reconciliation & verification of accounts of various departments of Amity University Uttar Pradesh, Madhya Pradesh and others, towards management of insurance policies and tax matters during the year under consideration. The company is very old and apparently handling the affairs of assessee for a very long time. The payment to specified persons is also not significant. The AO is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objects of the assessee trust cannot be said to be excessive in any manner. The payments made are more than reasonable, having regard to the volume of work and nature of services. 13. The material facts that emerges are; (a) receipts from the assessee by these concerns have been duly offered to tax and therefore overall position is tax neutral; (b) the AO or the CIT(A) has brought nothing on record to substantiate fair market value of services rendered by these concerns while resorting to estimations. (c) the assessee has provided the particulars on nature of services provided by each concerns; (d) doctrine of principle of consistency needs to be given due weight; (e) the concerns are established for more than 20 years and are competent and accomplished to deliver services to such big institution; (f) the amounts paid to the Directors by the concerns are within permissible limits provided under the Companies Act, 2013; and (g) payments made to these concerns contribute only 15% of the total payments made by the society to these concerns. 14. In the light of these facts, there appears to be ample justification in the plea of the assessee. The CIT(A) has confirmed 20% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us centre(s) (Refer Pg 890 of PB) * Copy of NOC issued by the Ministry of External Affairs for setting up off campus in Dubai (Refer Pg 895 of PB)." 16.3. The AO however did find the explanation of the assessee to be satisfactory and made the entire addition of INR 358.28 crore being the difference between opening and closing balance of contribution under the head 'schools/society/HO' appearing in the 'Dubai Consolidated Balance Sheet'. 16.4. The CIT(A), in the first appeal, deleted the additions made by the AO applying the principle of consistency and having regard to the fact that no exemption has been claimed under s. 11 qua towards such remittance. The relevant paragraphs dealing with the issue is reproduced here under:- Ground No. 8 "The facts are similar to ground no.12 & 13 of AY 2018-19. For ready reference the finding for AY 2018-19 is reproduced below:- "It was submitted that the final addition of Rs. 139,99,56,313/- has been made by the Ld. AO on account of remittance made by the assessee society to RBEF Dubai during the year under consideration. The assessee submitted that during the course of original assessment proceedings, the foreign investments were dul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture Incurred towards the object of the Trust 9,58,53,27,523 Less: Depreciation 1,35,85,43,684 Less: Provision for Gratuity 7,35,55,727 Add: Gratuity Paid 1,53,36,710 Add: Gratuity Paid 1,53,36,710 Add: Capital Expenditure 3,89,14,32,055 12,06,99,96,877 Less: Expenditure incurred outside India has not been considered while 1,49,21,28,632 calculating application of income u/s. 11(1) 10,57,78,68,244 Net Surplus/(Deficit) 1,08,71,80,992 Less: 15% of Gross receipts extent to available surplus 1,08,71,80,992 Net Taxable Income NIL Tax Due NIL Less: Taxes Paid (TDS) 3,90,58,666 Refund Due 3,90,58,666 It is settled principle in law that while res-judicata does not, strictly speaking, apply to Income-tax proceedings, the Courte (Including the Hon'ble apex Court) have repeatedly emphasized that where the fundamental facts remained the same in different assessment years, it is not open for the Revenue to take one view in certain years and another view in other years. When on identical facts no addition was made in AY 2014-15 and 2015-16 then, it was not open for the AD to take one view in those years and another view in this year. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27. Defence Colony New Delhi Status: AOP (TRUST) Financial Year: 01.04.2016 10 31.03.2017 Assessment Year: 2017-2018 P. A. No.: AAATR7314Q Statement of Assessable Income Amount (Rs.) Amount (Rs.) Gross Receipt as par Income & Expenditure A/c 15,89,52,40,050 Less: Expenditure Incurred towards the object of the Trust 14,32,26,82,817 Less: Depreciation 2,07,12,08,789 Provision for Gratuity 12,62,10,122 Add: Gratuity Paid 2,21,64,793 Add: Capital Expenditure 9,67,84,61,632 22,02,58,90,331 Less: Expenditure incurred outside India has not been considered while 8,23,95,04,546 calculating application of income u/s. 11(1) 13,78,63,85,785 Net Surplus/(Deficit) 2,10,88,54,275 Less: 15% of Gross receipts extent to available surplus 2,10,88,54,275 Net Taxable Income NIL Tax Due NIL Less: Taxes Paid (TDS) 3,53,59,220 Refund Due 3,53,59,220 It shows that Gross Receipt as per Income & Expenditure A/c was Rs. 15,89,52,40,060/-and total expenditure including expenditure Incurred outside India was Rs. 14,32,26,82,617/-. As the Gross Receipt (as per Income & Expenditure A/c) of Rs. 15,89,52,40,060/-was more than total expenditure (Includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion w/s 11/12 arising out of a violation of section 13(1)(c) of the IT Act. 4. Whether the Ld.CIT(A) was justified in drawing the wrong inference that the AO in its order u/s. 154 dated 31.03.2023 had granted to the assessee the exemption w/s 11 except the amount covered u/s. 13(1)(c) of the IT Act. 5. Whether, for the amount of Rs. 225,87,87,142/- (Non grant of 15% benefit u/s. 11(1)(a) of the IT Act), the Ld.CIT(A) was justified in allowing the appeal of the assessee stating that since for AY 2017-18 exemption was allowed u/s. 11(1)(a) of the IT Act, therefore the same should be allowed for AY 2018-19 based on the principle of consistency, disregarding the fact that every assessment or reassessment is a fresh proceeding and principle of consistency does not summarily apply to an order/ addition which is based on substantiated facts and reasons. 6. Whether for the amount of Rs. 365,14,43,409/- (Addition on account of capital expenditure claimed in, ITR less depreciation), Ld. CIT(A) was justified in allowing the appeal of the assessee stating that since for AY 2017-18 exemption was allowed u/s. 11(1)(a) of the IT Act, therefore, the same should be allowed for AY 2018-19 bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soning and not some disallowance of arbitrary nature as stated by CIT(A). Whether for the same amount Ld.CIT(A) was correct in taking a view that since no disallowance was made in the original order dated 29.04.2021, the same could not be done in any fresh assessment or reassessment proceeding disregarding the fact that Hon'ble High Court of Delhi had given liberty to revenue to conduct its proceedings without any preconditions. 10. Whether for the amount of Rs. 139,99,56,313/- (Addition on account of violation of section 11(1)(a) r.w.s. 11(1)(c)) the Ld.CIT(A) was justified in deleting the above addition by taking a misplaced view that since no addition was made in AY 2013-14 & 2014-15 on above issue therefore, no addition could be made for this AY too based on the principle of consistency, disregarding the fact that every assessment or reassessment is a fresh proceeding and principle of consistency does not summarily apply to an order/ addition which is based on substantiated facts and reasons. Whether for the above amount, the Ld.CIT(A) was justified in taking a supporting view to his earlier stance, that since gross receipts as per I & E account was Rs. 1830,30,16,422 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntested the exemption granted to the assessee under s. 11(1) of the Act. It is being contended that AO has not allowed exemption and as such, the CIT(A) was not justified in drawing inference that the AO has granted exemption to the assessee under s. 11(1) of the Act. 21.1. In support of the order of the CIT(A), the Ld. Counsel pointed out that : "As regard to Ground No. 3, this issue of denial of exemption has been deliberated upon by the CIT(A) at CIT(A) order Page 98 to 103 of its order. On Page 98, the CIT(A) has deliberated upon ground no 2.4 and 6 raised originally in the appeal filed by the assessee against the assessment order where the total receipts were taxed. The CIT(A) has considered the rectification order passed under section 154 by the assessing officer. The CIT(A) has referred to para 5.7 at Page 1803 of PB and para 8 at Page 1805 of PB rectification order passed by the assessing officer where the assessing officer has categorically held that in case of Violation of section 13(1)(c), the exemption has to be denied only to the extent of the payment made to specified persons Accordingly, the contention of the Revenue in ground no. 3 that CIT(A) has not addressed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11 of the total income of the assessee. Further, in Para 10 of (PB Page 1805) the assessing officer has categorically stated that only income in respect of violation under section 13(1)(c)/13(1)(b) is to be taxed Maximum Margin Rate (MMR). Accordingly, it is submitted that CIT(A) has correctly drawn the inferences that assessing officer has granted exemption under section 11 except the amount covered under section 13(1)(c) which have been taxed by the AO at the maximum marginal rate. In view of the above fact, it is submitted that the contentions raised by revenue in Ground No.3 and Ground No.4 are incorrect and need to be dismissed." 21.2. As contended, the AO himself has held that exemption under s. 11 is to be restricted on that part of income which been applied for charitable purposes in accordance with law. The observations of the CIT(A) are sync with the position of law and does not call for any inference. 22. Ground Nos. 3 & 4 of the Revenue's appeal are dismissed. 23. As per Ground No.5, the Revenue has challenged the action of the CIT(A) in allowing the claim of the assessee in respect of amount retained to the extent of 15% of the total income to be applied for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout any approval u/s. 11(1)(c) from CBDT Rs. 44,74,00,000/- 7. Total income determined as per the above proposal Rs. 4,13,76,71,206/- Penalty u/s. 270A is also proposed to be initiated for under reporting of income of for A. Y.2017-18. Demand notice u/s. 156 and computation sheet is to be initiated accordingly". I have gone through the submission of assessee, order u/s. 154 and order for AY 2017-18. It is settled principle in law that while res judicata does not, strictly speaking, apply to income-tax proceedings, the Courts (including the Hon'ble apex Court) have repeatedly emphasized that where the fundamental facts remained the same in different assessment years, it is not open for the Revenue to take one view in certain years and another view in other years. (the principles of consistency). Therefore, considering the facts of case, the case law sited by assessee and accepted by AO in order u/s. 154 and following the principles of consistency, the AO is directed to allow exemption of 15% u/s. 11(1)(a) of the IT act. This ground of appeal is allowed." 23.3. The action of CIT(A) allowing exemption of 15% of gross income under s. 11(1)(a) of the Act is prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. Counsel supported the action of the CIT(A) and contended that exemption under s.11(1)(a) is available to the extent, it is applied for charitable purpose irrespective of the fact whether it is a revenue expenditure or a capital expenditure unlike other assessments not covered by s.11,12 etc. In the computation of income, the assessee itself has excluded the capital expenditure incurred and applied outside India. Therefore, the AO has committed mistake in making rectification on such count. The Ld. Counsel also pointed out that the computation of income in respect of a charitable trust registered under s. 12A of the Act has to be made in accordance with the provisions of s. 11(1)(a) of the Act. As per s.11(1)(a) of the Act, income applied for charitable purpose which may include capital expenditure is to be considered as exempt. The AO thus has committed mistake in the rectification order while making this additions (net of depreciation) for the reason that such expenditure is a capital expenditure. The CIT(A) has corrected the error by deleting the same. 24.4. For the purposes of computation of income in respect of charitable trust registered under s.12A, the capital expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Charges 11,15,33,908 Stratega Finance Co.Pvt.Ltd. Finance Related Services 3,02,59,500 Tegro India Pvt.Ltd. Project Advisory Services 4,47,92,240 Amity Education Services Pvt.Ltd. Professional & Consultancy Services 27,36,77,536 First Grade Force Pvt.Ltd. Security services 7,91,45,536 Amity University Press Printing of books/note books 98,49,363 Univo Edtech Pvt.Ltd. Skill Development services 12,42,40,489 Cyborg Cyber Forensics & Information Security Pvt.Ltd. Information security services 49,03,653 Amity Capital Venture Pvt.Ltd. Investment banking and venture capital services 19,90,000 Education services Organization Sale of books, stationary & housekeeping material 12,29,81,633 Amity Media LLC, Dubai Commission/marketing services 3,13,00,031 Amity Education Services LLC, Dubai Legal & Professional (management fees) 12,40,50,268 27.2. The AO made enquiries from assessee seeking details of nature of services rendered by the above referred concerns. For the reasons referred in Ground No.4 of the Revenue's appeal concerning AY 2017-18 (supra), the AO made addition of 40% of such payments made to specified concerns under s. 13(1)(c) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is having a large number of advocates and senior advocates on its panel that appear in various High Courts and Supreme Court. f. Therefore, the amount paid during the year under consideration is towards providing of above legal services in cases related to various institutions of the trust. Cross Border Placement Pvt Ltd (Payment made Rs. 6,55,15,228/-) a. Company was established in 30.07.1996. The company has provided the placement services to the assessee trust which includes identifying the appropriate human resource, all necessary placement related support services, conduct of interviews and related support facilities. Further the company is extensively engaged in post qualification placement related services to students of the various universities of the assessee trust. It handles all placement cell related operations, coordinates with participating MNC's and domestic companies, manages the database of students and concludes the placement programs of the universities successfully. b. The amount has been paid for the services provided to the trust being maintenance of human resource records, coordination and finalization of fresh recruitments during the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Furnishing of financials and liasioning thereof with regulatory bodies in educational sector i.e. State UGC Authorities and Department of Education for schools. - Preparation of Budget for each institution - Preparation of project reports, projected data for submission with private and government authorities for issuance of funds and grants. b) The amount paid by the trust to the entity is towards financial and professional services for reconciliation & verification of accounts of various departments of Amity University Uttar Pradesh, Madhya Pradesh and others towards management of insurance policies and tax matters during the year under consideration. Tegro India Pvt. Ltd.- Rs. 4,47,92,240/- a) It is submitted that the company was established way back in year 1979 on 24th of April. The trust had obtained from the Company supervision services of buildings and other infrastructure of the various institutions and campuses of the trust along with project advisory services towards setting up of its campuses during the year under consideration. b) Also, the company ensures the essential part of safety management i.e. preventive management of any mishappening by conducting re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly inappropriate to treat the payment made to the company unreasonable and in excess. Univo Edtech Pvt Ltd (Formerly know as "Amity Skills LLP")- Rs. 12,42,40,489/- (inclusive of service tax and GST) a. In this connection, it is submitted that the Amity University, Uttar Pradesh (an Institution of assessee society) had initiated and offered various courses or programs of study under categories like External, Blended and online programs which are duly approved by statutory regulatory body of the University. For the running, operation and management of these online and blended courses and programs, the Amity University had engaged "Univo Edtech LLP (formerly known as "Amity Skills LLP") as service provider in context of the aforesaid objective for the financial year 2017-2018 vide its agreement entered into dated 23.03.2017. b. The Univo Edtech LLP, is thoroughly engaged in providing service in the context of "Educational Programs" and facilitation of running such educational programs. The University had engaged the said concern more particularly for availing services in relation to admission of students to the University and for the facility and services of "help desk for stud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Service Tax and GST) The company is engaged in providing investment related consultancy and advisory services. The trust had availed the investment banking & venture capital services advisory services for financing structure during the year under consideration from the said entity. It is relevant to mention here that no payment has been made to any director or specified person from the above entity during the year. Hence the payments made to the Company are not violative of section 13 of the Act. Education Services Organization Rs. 12,29,81,633/- (inclusive of GST and Service tax) a. The organization specializes in procurement and distribution of Study Material for schools online. The books of different publishers are procured as per the Booklist of schools and Study Material Kits are prepared at our Stockpoints with additional stitching/binding. And completed Kits are provided in nice jute packing to the parents as per their requirements. Education Services Organization (ESO), which has end-to-end experience in fulfilling study material and uniform related requirements of schools, colleges and universities across the country. b. The trust has procured various services an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in marketing, advertising, web hosting and other cloud based solutions services. During the year, the assessee society has paid a sum of Rs. 3,13,00,031/- to the company towards the following services availed during the financial year 2017-18: - Annual Website Maintenance Services - Website Hosting Charges - - Website Design and Development Charges - - Marketing Expenses, which includes: 1. TV ad and retainer charges 2. Media Planning Service Charges 3. Marketing Design & Creative -Retainer ship Charges 4. Advertisement Charges -Audio and Visual Media with in Sony TV, TV Zee Cinema and Zee TV, CA TV Prime Broadcast, MTV, MTV Colors, NDTV 24x7, Star Plus TV, Radio Marketing Charges with station Suno 1024FM, 106.20 FM and 96.7 FM Spot Sponsorship Charges in various events with Big FM Radio and 96.7 HIT FM. Your Honors, the above said concerns established and are operational for more than 20 years. Further, they have also been subject to scrutiny assessments in the past years, and no addition has been made whatsoever qua any of the said payments. Thus, in view of the settled doctrine of 'principle of consistency', there being no change in the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abroad i.e. Dubai. 28.1. Identical additions were made in AY 2017-18 by the Revenue. The issue has been discussed in length in para 16 (supra) with reference to Ground No.5 of appeal in AY 2017-18. On appraisal of facts and law, the CIT(A) has granted relief in AY 2017-18, the reasons for which are enumerated in para 16 (supra). The CIT(A) has returned the identical findings for AY 2018-19 in question in view of the similarity of the factual matrix in both AYs. We see ample justification in the order of the CIT(A) in this regard. 28.2. The CIT(A) has dealt with the issue as under:- Ground no. 12 and 13:- "It was submitted that the final addition of Rs 139,99,66,313/- has been made by the Ld. AO on account of remittance made by the assessee society to RBEF Dubai during the year under consideration. The assessee submitted that during the course of original assessment proceedings, the foreign investments were duly admitted by the Ld. AO, and hence no disallowance was made on account of the same vide order assessment dated 29.04.2021 passed u/s. 143(3) of the Act (Refer Pg 3331- 3353 of PB). Accordingly, at the very outset, it is reiterated that when the Hon'ble Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess: Expenditure incurred outside India has not been considered while 1,49,21,28,632 calculating application of income u/s. 11(1) 10,57,78,68,244 Net Surplus/(Deficit) 1,08,71,80,992 Less: 15% of Gross receipts extent to available surplus 1,08,71,80,992 Net Taxable Income NIL Tax Due NIL Less: Taxes Paid (TDS) 3,90,58,666 Refund Due 3,90,58,666 It is settled principle in law that while res-judicata does not, strictly speaking, apply to income-tax proceedings, the Courts (including the Hon'ble apex Court) have repeatedly emphasized that where the fundamental facts remained the same in different assessment years, it is not open for the Revenue to take one view in certain years and another view in other years. When on identical facts no addition was made in AY 2014-15 and 2015-16 then, it was not open for the AO to take one view in those years and another view in this year. Therefore the addition deserves to be deleted on the principles of consistency itself. On merits The AO held that the money set aside in earlier year was used for these expenses and added the same u/s. 11(1)(a). For ready reference the computation of income for current year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15CA & 15CB alongwith justification of such remittances. The assessee submitted the details of foreign payments made during the year alongwith supporting documents such as copy of Form 15CA, 15CB & bank statement and explanation/justification with respect to their incurrence for promoting charitable purposes in India. However, the AO did not find the explanation satisfactory and disallowed such payments. The AO observed that the payments made to 'Herrick Feinstein LLP' and 'Jones Lang Americas, INC' related to acquisition of property in USA for use of educational purposes. However since the acquired Institutions are not part of the assessee trust and are located at outside India, the AO disallowed these payments. It was contended before the AO that the payments have been made to these entities towards due diligence and site assessment consulting for expansion of AMITY Group. Such payments are directly linked to aim and object of the Trust for educational objectives which include the establishment and expansion of educational institutions both in India and abroad. The AO however disallowed the payments. The AO also disallowed the payments made for advertisement charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Face book Ireland Ltd. were towards advertisement charges solely for the advertisement incurred for charitable purpose in India. It is pertinent to mention here that Amity has significant number of students from foreign territory as well which are enrolled with Amity India. Therefore, advertisement payments have been made as part of its expansion of educational activities through foreign students. Your Honors, it is undisputed that the foreign students had been enrolled with Amity India and not in any foreign country, and hence, the contention of the Ld. AO that advertisements given in foreign newspapers and foreign media to attract foreign students is not in line with the objects of the trust is without any shred of evidence. In-fact, the Ld. AO has himself deployed the phrase 'prima facie, which is self-sufficient to discern that the order has been passed in a dilemmatic state of mind, without appreciating the peculiar facts of the present case in the right perspective. It is seen that the Payments made to 'Herrick Feinstein LLP' and 'Jones Lang Americas, INC' are in connection with acquisition of a property in USA. When application of income outside India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable purpose in India. It is pertinent to mention here that Amity has significant number of students from foreign territory as well which are enrolled with Amity India. Therefore, advertisement payments have been made as part of its expansion of educational activities through foreign students. It is undisputed that the foreign students had been enrolled with Amity India and not in any foreign country, and hence, the contention of the Ld. AO that advertisements given in foreign newspapers and foreign media to attract foreign students is not in line with the objects of the trust is without any shred of evidence. In-fact, the Ld. AO has himself deployed the phrase 'prima facie', which is self-sufficient to discern that the order has been passed in a dilemmatic state of mind, without appreciating the peculiar facts of the present case in the right perspective. k. Thus, all the foreign remittances have been incurred for the sole objective of the trust i.e. education, promoting the educational activities and establishment of educational institutions. l. In this regard, reliance may be placed on the decision of Karnataka High Court in the case of CIT (Exemptions), Bangalore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under:- "11. We have considered the rival submissions. A perusal of the provisions of s. 11(1)(a) of the Act clearly shows that the words used are "Is applied to such purpose in India". The words are not "is applied in India". The fact that the legislature has put the words "to such purpose" between 'Is applied' and 'in India' shows that the application of income need not be in India, but the application should result and should be for the purpose of charitable and religious purpose in India." 29.4. It is the essential contention of the assessee that the provision of s.11(1)(a) of the Act clearly shows that words used are 'is applied to such purpose in India'. The words are not 'is applied in India'. 29.5. Having regard to the judgements quoted and also in view of the order of the AO giving appeal effect on the issue and relief granted by the CIT(A), we see no compelling reason to take a different view. 30. Ground No.11 of the Revenue's appeal is thus dismissed. 31. In the result, the appeal of the Revenue for AY 2018-19 is dismissed and Cross Objection filed by the assessee is allowed. 32. In the combined result, both the captioned appeals of the Revenue a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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