Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘B’ : NEW DELHI
Before: SHRI R.K. PANDA & SHRI KULDIP SINGH
Date of Hearing : 09.07.2019 Date of Order : 11.07.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, DCIT (E), Circle 1 (1), New Delhi (hereinafter referred to as the ‘assessee’) by filing the present appeal sought to set aside the impugned order dated 02.06.2016 passed by the Commissioner of Income-tax (Appeals)-40, New Delhi qua the assessment year 2012-13 on the grounds inter alia that :-
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee against disallowance in respect of payment of Fundreamz amounting to Rs. 1,07,96,9591- by ignoring the fact that short-term loan/advance from FCRA Account is a violation of provision of FCRA Guidelines.
On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee against disallowance in respect of Consultancy Fee to IPE amounting to Rs.17,24,06,389/- by ignoring the fact that amount were received by the assessee as commercial fee in its accounts. If the amount was to be received as donation or grant, the same should have been received through Foreign Contribution Regulation Account after obtaining permission from the Ministry of Home Affairs, Government of India.
3. On the facts and in the circumstance of the case.ari~ in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee in allowing claim of benefits u/s 11 &12 of the I.T. Act by ignoring the fact that assessee itself has accepted that in respect of projects, as claimed charitable by assessee, these projects are not for undertaking any charitable activity but for providing ancillary professional services to the agencies / Government Departments in undertaking the charitable activities.” 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee, a trust registered under section 12A of the Income-tax Act, 1961 (for short ‘the Act’) and also accorded certificate u/s 80G(5)(vi) of the Act, was allowed exemption u/s 11 & 12 of the Act for AY 2009-10 onwards except AYs 2011-12 & 2012-13. AO noticed that the assessee trust has made payment of Rs.2,15,93,918/- to Fundreamz as fee for the reported services which was disallowed being unreasonable as per Object No.V(5) of the Memorandum of Association of the company and thereby disallowed 50% thereof i.e. Rs.1,07,96,959/- and made addition thereof to the total income of the assessee. AO also disallowed 20% of Rs.17,24,06,389/- paid by the assessee (CSSID) to Infrastructure Professionals Enterprises (IPE) Pvt. Ltd. which is 76% of the total expenditure on the ground that the assessee has become clandestine agent to transfer of foreign funds pertaining to private limited company i.e. IPE.
Assessee carried the matter by way of an appeal before the ld. CIT (A) who has deleted the additions by allowing the appeal.
Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
At the very outset, ld. AR for the assessee brought to the notice of the Bench that impugned order has been passed by the ld. CIT (A) by following earlier year’s order of AY 2011-12, which has been confirmed by the coordinate Bench of the Tribunal vide order dated 08.03.2019 passed in for AY 2011-12, thus the issue in controversy is covered. This fact has not been controverted by the ld. DR for the Revenue.
Coordinate Bench of the Tribunal vide order dated 08.03.2019 (supra) confirmed the order of ld. CIT (A) allowing the payment made to Fundreamz for rendering services to the assessee and allowed the payment to IPE for consultancy fee by returning following findings :-
“9. After considering the rival submissions, we are of the view that Departmental Appeal has no merit. The assessing officer in subsequent assessment years 2013- 2014 and 2014-2015 considered similar objects of assessee and after examining the details found that assessee is registered under section 12AA of the Income-Tax Act, 1961 and that objects of the assessee company are charitable, within the meaning of Section 2(15) of the Income Tax Act, 1961. The returned Nil income was thus accepted. It is well settled Law that though the principles of res judicata do not apply to the income tax proceedings, but, rule of consistency shall have to be applied by the Income Tax Authorities. We rely upon decision of the Hon’ble Supreme Court in the case of Radha Soami Satsang 193 ITR 321 (SC). Since, similar claim of assessee for exemption under section 11 of the I.T. Act have been accepted by the assessing officer on same facts in subsequent assessment years, therefore, there was no justification to take a contrary view in the present appeal. Further, the Ld. CIT(A) examined the entire issue in detail and have given a specific finding of fact in favour of the assessee that the assessee is engaged in the charitable activities and that the amount in question have been spent for charitable activities. Even if some amount have been received by assessee, that was received for charitable purposes only and no personal gain have been obtained by the assessee company. The finding of fact recorded by the Ld. CIT(A) have not been rebutted through any evidence on record. We, therefore, do not find any error in the order of the Ld. CIT(A) in allowing exemption under section 11 of the Income Tax Act, 1961. We confirm the Order of the Ld. CIT(A) and dismiss the appeal of the Department.”
Following the order passed by the coordinate Bench of the Tribunal in assessee’s own case for AY 2011-12 having identical facts, we are of the considered view that we find no illegality or perversity in the impugned order passed by the ld. CIT (A). Consequently, the appeal filed by the Revenue is dismissed. Order pronounced in open court on this 11th day of July, 2019.