M/S. MA SHARDA EDUCATIONAL SOCIETY,GHAZIABAD vs. ADDL. CIT, GHAZIABAD

Learned counsel for the assessee further stated that in view of the aforesaid decision rendered by the various Benches of the ITAT on the issue in dispute which has been decided in favour of the assessee by holding that when registration under section 12A of the Act is granted in subsequent years, then exemption cannot be refused in earlier years merely for registration under section 12A of the Act in terms of amended section 12A of Income Tax Act. He also cited the case of Sree Sree Ramkrishna Sanity vs. DCIT (2015) 64 taxmann.com 33 (Kol).

On the issue of disallowances of Rs. 13,24,355/- being out of repair and maintenance, learned counsel for the assessee stated that the books of accounts of the assessee are audited and bill vouchers were produced by the assessee before the lower authorities which have been examined.

Learned counsel for the assessee further stated that assessee offered disallowances of Rs. 1,11,06,370/- out of building repair maintenance and Rs. 2,17,985/- out of other repair and maintenance considering the facts of the case i.e. when landlord has claimed repair allowance @ 30% subject to no imposition of penalty thus disallowance of Rs. 13,24,355/- has made. But the learned First Appellate Authority has also upheld this disallowances by ignoring the condition by the assessee regarding the wrong surrender because the expenses booked under the head building and repair and maintenance, but not repaired being monthly payments for services and maintenance. He stated that surrender is conditional but condition not followed by the AO but not only Rs. 9 Lacs addition made over and above, but further initiated penalty, hence the same does not bind assessee and even learned CIT(A) has sustained the addition monthly on merits and not solely on surrender. He stated that in view of the various decisions rendered by the ITAT which includes the case of ITO vs. Ram Prakash [2014] 52 taxmann.com 361 (Agra-Trib.), the issue is covered in favour of the assessee.

Learned DR strongly opposed the arguments advanced by the learned counsel for the assessee and relied upon by the order passed by the lower authorities.

I have heard both the parties, perused the orders passed by the Revenue authorities alongwith the paper books filed by the learned counsel for the assessee in which he has attached various documentary evidence supporting the claim of the assessee including various citations referred by him during the course of arguments. I am of the considered view that the issue of corpus donation of Rs. 9,02,500/- has already been decided in favour of the assessee by the ITAT Delhi Benches decision passed in the case of DIT vs. Vishwa Hindu Parishad [2017] 82 taxmann.com 135 (Delhi) / [2017] 248 taxman 290 (Delhi) / [2017] 394 ITR 411 (Delhi) / [2017] 297 CTR 148 (Delhi). The relevant paragraph 33 of the said order is reproduced as under:-

Keeping in view, the issues in dispute and the judgment of the ITAT Delhi Bench cited above and in view of the order of the Kolkata Benches of ITAT in the case of Sree Sree Ramkrishna Sanity vs. DCIT (2015) 64 taxmann.com 33 (Kol), I am of the view that addition of corpus donation has already been decided in favour of the assessee by the ITAT Delhi Bench (supra) by holding that even if there was a non compliance of section 12A(b) of the Act by the assessee then the corpus donation received by the assessee is not taxable in the hands of assessee.

As regards to the second issue of disallowance of Rs. 324355/- on account of repair and maintenance. After considering the arguments advanced by the learned counsel for the assessee and the learned DR alongwith the documentary evidences filed by the assessee in support of his contention, I am of the considered view that books of accounts of the assessee are audited and bill and vouchers in support of the expenses has been produced by the assessee and examined by the Assessing Officer.

In the result, the impugned order is set aside and the additions involved in the grounds of appeal are deleted by accepting the appeal filed by the assessee.

In the result, the appeal filed by the assessee is allowed.