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Income Tax Appellate Tribunal, ALLAHABAD’ SMC’ BENCH, ALLAHABAD
A.Y. 2013-14 Hindi Sahitya Sammelan, vs. Income Tax Officer, 12, Sammelan Marg, Allahabad- (Exemption), Allahabad 211003 PAN:AAATH6056L (Appellant) (Respondent) Assessee by: Sh. Praveen Godbole, C.A. Revenue by: Sh. A.K. Singh, Sr. DR Date of hearing: 22.10.2024 Date of pronouncement: 27.12.2024 O R D E R PER NIKHIL CHOUDHARY, A.M.: This appeal is against the order of the ld. CIT(A), NFAC dated 22.02.2023 passed under section 250 of the Income Tax Act, 1961 against the orders of the ITO(Exemption)dated 28.03.2016. The grounds of appeal preferred are as under:-
1. That in any view of the matter assessment order passed u/s 143(3) of the Act dated 28.03.2016 is bad both on the facts and in law as the income of the society is exempt from tax which will appear from the assessment record but the A.O. ignored the past record.
2. That in any view of the matter CIT(A) is highly unjustified in passing ex-parte order without giving proper opportunity to the appellant and more so CIT(A) has ignored the past record of the appellant's Society, hence, his entire action is liable to be declared illegal as well as bad in law.
3. That in any view of the matter the income of the society is exempt from income tax from the date of its inception but the claim of exemption was not properly considered by the two lower authorities, hence, their orders are bad in law as well as illegal.
That in any view of the matter the income of the society is exempted from tax being educational society as declared by CIT (Exemption), Lucknow, in earlier years, hence, the income determined at Rs.19,31,763/ is highly unjustified and incorrect and the claim of exemption is liable to be accepted following the principal of consistency and also in view of the fact that all the necessary documents such as Form 10 etc. were filed properly and within the time.
That in any view of the matter finding and observation of two lower authorities in their order about determining of income as well there action in passing ex-parte decision are not correct.
That in any view of the matter penal interest charged u/s 234B & 234C of the Act is highly unjustified and incorrect in the facts and circumstances of the case. 7. That in any view of the matter the appellant reserves his right to take any fresh ground(s) of appeal before hearing of the appeal. 8. That the order appealed against is contrary to facts, law and principles of natural justice.”
It was observed that the appeal is late by about 17 months. A condonation petition and an affidavit has been filed by the Pradhanmantri of the appellant society, stating that he was informed by Shri. Ram Gopal Yadav, computer operator of the society who was recruited in place of the earlier computer operator Shri. Dilip Gupta, who left a job all of sudden, that an appellate order dated 22.02.2023 had been found in a bunch of misc. papers lying in the almirah, which was under the control of the previous computer operator. Upon receiving this information, the Pradhanmantri immediately contacted the ld. Counsel of the society and requested him to prepare a second appeal for being filed before the Hon’ble Bench and the appeal was filed without further delay. It was prayed that the matter could not be attended due to the mistake of previous computer operator and the delay was purely unintentional. Accordingly, it was requested that the delay may kindly be condoned. After considering the circumstances of the delay, in order that the substantive justice should not be affected on this account, we admit the appeal for consideration by condoning the delay. 2
The facts of the case are that the ld. AO observed that, from the gross receipts during the year of Rs.4,12,26,286/-, the assessee had only spent Rs.3,30,91,277/- on Revenue expenditure and Rs.19,303/- on fixed assets and accumulated Rs.19,31,763/- for specified purposes under section 11(2) of the Income Tax Act, 1961. However, the ld. AO observed that the assessee had not filled form 10 for accumulation of income and therefore, he asked the assessee to show cause as to why the amount accumulated should not be added to the income of the assessee. He further asked the assessee to explain, whether the amount that had been accumulated had been invested as per section 11(5) of the Income Tax Act, 1961. In response, the assessee submitted that the form 10 had been filed on time, but the treasure / accountant who used to handle the matter had retired in the year 2015 and therefore, documents kept by him were not presently traceable. The ld. AO, however, did not accept the plea of the assessee because the assessee had not submitted any proof regarding the submission of form 10 to the Department, or any proof about the investment of accumulated money in the modes as specified under section 11(5) of the Act. He observed that the perusal of the bank account showed, that the balance as on 31.03.2013 was less than the balance as on 1.04.2012, from which he concluded that the amount had not been invested in the specified mode. Accordingly, he added back a sum of Rs.19,31,763/- to the income of the assessee.
4. Aggrieved with the said addition, the assessee went in appeal to the ld. CIT(A). The ld. CIT(A) records the fact that he issued four notices to the assessee for compliance, but the assessee did not made compliance to any of these notices. Therefore, quoting from a number of case laws, he dismissed the appeal of the assessee.
5. The assessee is aggrieved with this summary dismissal of its appeal and has come before us in appeal. Shri. Praveen Godbole, C.A. (hereinafter referred to as the ‘ld. AR’) appeared on behalf of the assessee and submitted that the assessee was a registered society that was engaged in imparting education through various modes. It was submitted that vide his orders dated 30.05.2024, the ld. CIT(Exemption), Lucknow had granted exemption to the assessee under section 10(23C)(VI) of the Act and held that the provisions of section 11 and 12 would apply in the case of the assessee from the assessment year 2000-01. It was prayed that the revision matter was pending before the ITO (Exemption), in the light of the 10(23C)(VI) order and therefore, it was prayed that the matter may kindly be restored back to the file of the ITO (Exemption) to reconsider the entire issue in the light of the exemption granted by the ld. CIT(A), Lucknow.
6. On the other hand, Shri. A.K. Singh, ld. Sr. DR (hereinafter referred to as the ‘ld. Sr. DR’) pointed out that the issue in assessment was not whether a society was eligible under section 10(23C)(VI), but rather whether it had fulfilled its commitment in Form No. 10, regarding the accumulation and utilization of income. Accordingly, it was prayed that as the assessee had not furnished any evidence with regard to the same, the addition was deserving of being sustained in his hands.
We have duly considered the facts and circumstances of the case. We observed that the matter in the present matter does not involve the status of the society viz viz section 10(23C)(VI), but rather whether the assessee had filed its Form No. 10 and whether it has accumulated its income and utilized it in the matter prescribed under the act. The assessee is not able to produce that Form No.10 before the authorities, on account of the fact that the erstwhile accountant who used to handle such matters has since retired and the documents kept by him, are not traceable. Be that as it may, we observed that the fact of adherence to the provisions of law can be ascertained by the ld. AO, by examining the mode of investment of the accumulated surplus and its subsequent utilization by the assessee. Accordingly, we