ACIT(E), CIRCLE- 1(1), NEW DELHI vs. J D TYTLER SCHOOL SOCIETY, NEW DELHI

Appellant by Sh. Vivek Vardhan, Sr. DR Respondent by Sh. Manish Kumar, Adv Date of Hearing 05.10.2021 Date of Pronouncement 11.10.2021 ORDER

PER SUCHITRA KAMBLE, JM

are as under: “1. On the facts and in circumstances of the case and in law, Ld CIT(A) has erred in ignoring that the assessee society has not taken the receipt on account of development fund in the Income and expenditure Account rather it was taken directly to balance sheet.

2. On the facts and in circumstances of the case and in law, Ld CIT(A) has erred in ignoring the fact that the assesses like any charitable or religious institutions are governed by almost the separate or independent provisions of section 11, 12, 12A, 12AA & 13 and these provisions are independent code in itself in chapter III of the Income Tax Act, 1961. The Income and Expenditure is computed on the basis of application of income for charitable or religious purposes and the deduction is allowed of the entire expenditure including the capital expenditure for purchase of capital assets u/s 11(1).

3. On the facts and in circumstances of the case and in law, Ld CIT(A) has erred in allowing the benefit of exemption u/s 11 & 12 of the Act ignoring the fact that the assessee society was involved in violating the rules/guidelines framed in the matter.

4. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing the appeal of the assessee ignoring the fact that in the case of charitable or religious institutions, the assessee is not eligible for any type of depreciation as the entire expenditure for the purchase of capital assets is allowed as a deduction and the same is treated as application of income u/s. 11(1) and claiming depreciation on the same capital assets is a double deduction and is not as per law as these capital assets are not used for the purpose of business of profession as provided u/s 32(1).

3. The assessee Society is running JD Tytler School since 1954 and is registered u/s 12A(a) of the Income Tax Act, 1961 vide order dated 28/1/1980. The Society has also been granted Certificate u/s 80G (5)(vi) of the Act up to period 31/3/2011. The School run under the Society is affiliated to CBSE and the main and exclusive object of the assessee society is to provide education. Till the scrutiny Assessment Year 2008-09, the benefit of Section 11 & 12 granted consistently to the assessee society for the same activity and the same objects. The return of income declaring income of Rs. NIL was filed on 27/9/2013. The Assessing Officer passed assessment order dated 10/3/2016 thereby making addition of Rs. 88,15,950/- towards development fund, Rs. 10,93,42,735/- as regards total receipts and thus assessed the income at Rs. 9,90,08,122/- less: (Expenditure allowed as per I & E account excluding depreciation).