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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
ITA No.9844/Del/2019 Assessment Year: 2016-17 Noble Welfare and Vs. ITO, Ward-2(4), Charitable Trust, New Delhi. GL-11, Jail Road, Hari Nagar, Delhi-1100 58 PAN :AAATN9901F (Appellant) (Respondent)
Appellant by None Respondent by Shri Om Parkash, Sr. DR
Date of hearing 30.08.2022 Date of pronouncement 25.11.2022
ORDER This is an appeal by the assessee against order dated 31.10.2019
of learned Commissioner of Income-Tax (Appeals)-40, Delhi for the
assessment year 2016-17.
When the appeal was called for hearing, none appeared on
behalf of the assessee to represent the case. Even, there is no
application by the assessee seeking adjournment.
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Perusal of record reveals, though, multiple opportunities were
given to the assessee earlier, however, on none of the occasions, the
assessee did appear. It is further evident, notice of hearing repeatedly
issued to the assessee have returned back unserved with the postal
remarks ‘left’, though, notices were issued in the address provided in
the appeal memo. These facts reveal complete lack of interest of
assessee in pursuing the present appeal. Since sufficient opportunities
have been given to assessee, which he has failed to avail, I proceed to
dispose of the appeal ex parte qua the assessee after hearing the
learned Departmental Representative.
The effective grounds raised by the assessee are as under:
That on the facts and circumstances of the case and provisions of the law, the learned Commissioner of Income-Tax (Appeals) was not justified in sustaining the action of the Assessing Officer in computing the surplus of Rs.29,89,816 is against deficit of Rs.2,90,82,520/-. It is prayed that the addition being unwarranted be deleted.
That on the facts and circumstances of the case and provisions of the law, the learned Commissioner of Income-Tax (Appeals) was not justified in sustaining the action of the Assessing Officer in denying the exemption u/s 11 and 12 for alleged violation of section 13(1)(c) and 13(1)(d) of the Income-Tax Act and taxing the income of Trust as AOP for giving Rs.10,00,000 to M/s. Yuvraj Agro Foods Private Limited. Assessee has not made any
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violation of Section 13(1)(c) and section 13(1)(d) of the Income-Tax Act. It is prayed that the additions being unwarranted be deleted.
That on the facts and circumstances of the case and provisions of the law, the learned Commissioner of Income-Tax (Appeals) was not justified in sustaining the action of the Assessing Officer denying the exemption u/s 11 and 12 for alleged violation of section 13(1)(c) and 13(1)(d) of the Income-Tax Act and taxing the income of Trust as AOP for giving Rs.99,97,000 against a liability of Rs.40,56,580. It is prayed that denying u/s.11 and 12 and making the addition being unwarranted be deleted.
That on the facts and circumstances of the case and provisions of the law, the learned Commissioner of Income-Tax (Appeals) was not justified in sustaining the action of the Assessing Officer denying the exemption u/s 11 and 12 for alleged violation of section 13(1)(c) and 13(1)(d) of the Income-Tax Act and taxing the income of Trust as AOP for giving Rs.4,132/- as insurance of one of the property of Mr. Amit Saxena which was mortgaged by Trust for taking loan for extension of college campus. It is prayed that denying exemption u/s.11 and 12 and making the additions being unwarranted be deleted.
Briefly the facts are assessee is a charitable trust registered under
Section 12A of the Income-Tax Act, 1961. For the assessment year
under dispute, the assessee filed its return of income on 17.10.2016
declaring nil income after claiming exemption under Section 11 of the
Income-Tax Act, 1961. In course of assessment proceeding, the
Assessing Officer noticed that the assessee is running an Engineering
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College and a Law College in Haryana. From the details furnished, he
found that the assessee had given an advance of Rs.10,00,000 to M/s.
Yuvraj Agro Foods Pvt. Ltd. who is a specified person in terms of sec.
13(1)(c) and 13(1)(d) of the Act. He further found that substantial
payments were made to M/s. Neeraj Agro Foods, wherein, one of the
trustee is a partner. Being of the view that the advances to the
concerned parties are in violation of sec. 13(1)(c) and 13(1)(d) of the
Act, the Assessing Officer held that the assessee has to be assessed in
the status of AOP without allowing the benefit of exemption under
Sections 11 & 12 of the Act. Further, Assessing Officer held that the
depreciation claimed on capital expenditure cannot be allowed as the
cost of such assets has already been claimed as application of income.
Proceeding further, the Assessing Officer held that the interest
expenditure claimed by the assessee is not allowable as the assessee
lost its charitable status due to violation of sec. 13(1)(c) and 13(1)(d)
of the Act. Accordingly, he disallowed 50% of the interest
expenditure. Against the assessment order so passed, assessee
preferred an appeal before learned Commissioner (Appeals).
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However, finding no merit in the appeal of the assessee, learned
Commissioner (Appeals) dismissed the appeal.
I have considered the submissions of learned Departmental
Representative and perused the material on record.
It is evident, assessee’s claim of exemption under Section 11 of
the Act as a charitable trust was denied by the Assessing Officer on
the ground that the assessee had advanced money to specified persons
in violation of sec. 13(1)(c) and 13(1)(d) of the Act. In this regard, the
Assessing Officer has specifically alleged that the entities to whom
the assessee had advanced money are closely related to the assessee
trust since the trustees, one way or the other, are involved with such
entities. The material on record reveals that the assessee has failed to
rebut the aforesaid factual finding of the departmental authorities by
bringing on record any concussive evidence. The factual position
remained unaltered before me as well, since, the assessee has failed to
appear and lead evidence to rebut the finding of the departmental
authorities.
In view of the aforesaid, I do not find any reason to interfere
with the decision of learned Commissioner (Appeals).
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In the result, the appeal is dismissed. Order pronounced in the open court on 25th November, 2022. Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 25th November, 2022. Mohan Lal