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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI O.P. KANT
together and are being disposed of by this common order for the sake of convenience, by dealing with (AY 2011-12) and the decision thereof will apply mutatis mutandis to other appeal No. 2199/Del/2017 (AY 2012-12). However, the grounds of both the appeals are reproduced hereunder:-
The grounds raised in (AY 2011- 12) read as under:-
“1. Addition of Rs. 15,00,32,898/- on account of Non-refundable portion of Advance Fee of by the Assessing Officer and confirmation of the same by the CIT(A) is contrary to facts and law and therefore, the addition is liable to be deleted., 2. Addition of Rs. 15,00,32,898/- on account of Non-refundable portion of Advance Fee of by the Assessing Officer and confirmation of the same by the CIT(A) has resulted in double addition of Rs. 15,00,32,898/-, which has already been offered by the Appellant for taxation in the subsequent assessment year i.e. AY 2012-13 on account of recognition of the amount by the Appellant as income in that year and the department also has accepted it as income in assessment in AY 2012- 13.
The agreement of CIT(A) with the finding of her predecessor in her order that “the Principles of res-judicata are not applicable to Income Tax Proceedings and moreover, this issue is yet to attain its stage of finality in the judicial forum’ is contrary to facts and law as far as (a) that the Judicial Ruling of the Hon’ble Supreme Court in case of Radhasoami Satsag vs CIT 193 ITR 321 has not been considered, wherein it has been held that the department cannot take a u turn on a consistent policy followed by the assessee for number of years and accepted by the department in spite of the fact that the principle of Res Judicata is not applicable to income tax proceedings. Appellant has been following this consistent policy of offering the revenue for taxation, in the year in which services are rendered by him to the customers, since 1995. (b) That the following preceding judicial rulings, in the case of the appellant itself, have not been considered to judge the finality of the issue in the judicial forum (i) Orders of the Hon’ble ITAT in AY 2006-07, wherein the issue was dealt in detail and was decided in favor of the appellant, which was followed by the Hon’ble ITAT in AY 2007-08, 2008-09 and 2009-10. (ii) On an appeal filed by the department u/s. 260A for AY 2006-07, the Hon’ble Delhi High
Court did not admit the question of law on this issue (iii) The department did not file an appeal with the Hon’ble Supreme Court against the non admittance of the question of law on this issue by the High Court. 4. The appellant craves leave to add or amend any of the grounds of appeal
.”
3. The grounds raised in (AY 2012- 13) read as under:-
“1. Addition of Rs.12,81,05,587/- on account of Non-refundable portion of Advance Fee by the Assessing Officer and confirmation of the same by the CIT(A) is contrary to facts and law and therefore, the addition is liable to be deleted.
2. Addition of Rs.12,81,05,587/- on account of Non-refundable portion of Advance Fee by the Assessing Officer and confirmation of the same by the CIT(A) has resulted in double addition of Rs.12,81,05,587/-, since the amount has already been offered by the Appellant for taxation in the subsequent assessment year i.e. AY 2013-14 on account of recognition of the amount by the Appellant as income in that year and the department also has accepted it as income in assessment in AY 2013-14.
3. The agreement of CIT(A) with the finding of her predecessor in her order that “the Principles of res-judicata are not applicable to Income Tax Proceedings and moreover, this issue is yet to attain its stage of finality in the judicial forum.’ is contrary to facts and law as far as (a) that the Judicial Ruling of the Hon’ble Supreme Court in case of Radhasoami Satsag vs CIT 193 ITR 321 has not been considered, wherein it has been held that the department cannot take a u turn on a consistent policy followed by the assessee for number of years and accepted by the department in spite of the fact that the principle of Res Judicata is not applicable to income tax proceedings. Appellant has been following this consistent policy of offering the revenue for taxation, in the year in which services are rendered by him to the customers, since 1995. (b) That the following preceding judicial rulings, in the case of the appellant itself, have not been considered to judge the finality of the issue in the judicial forum in spite of the same being brought to knowledge of the CIT(A):- (i) Orders of the Hon’ble ITAT in AY 2006-07, wherein the issue was dealt in detail and was decided in favor of the appellant, which was followed by the Hon’ble ITAT in AY 2007-08, 2008-09 and 2009-10. (ii) On an appeal filed by the department u/s. 260A for AY 2006-07, the Hon’ble Delhi High Court did not admit the question of law on this issue (iii) The department did not file an appeal with the Hon’ble Supreme Court against the non admittance of the question of law on this issue by the High Court. 4. The appellant craves leave to add or amend any of the grounds of appeal
.”
4. The brief facts of the case are that the assessee filed its return of income on 30.9.2011 declaring income at Rs. 12,26,19,182/-. The return of the assessee was processed u/s. 143(1) of the Income Tax Act, 1961 (in short “Act”).
Subsequently, the case of the assessee was selected for scrutiny under manual selection. Furst notice u/s. 143(2) of the Act was issued on 20.9.2012 and further notices u/s. 142(1) of the Act alongwith detailed questionnaire were issued to the assessee. In response to the same, the AR of the assessee attended the proceedings from time to time and filed the details. Assessee is a company and engaged in the 6 business of imparting coaching (Test Preparation) to the students in respect of various entrance examination held in relations to Management, Engineering, and Fashion Designing etc. Necessary details which have been obtained during the course of assessment proceedings have been examined and assessment was completed at Rs. 30,57,28,890/- after disallowance of Rs. 15,00,32,898/- on account of Non- Refundable Portion of Advance fee disallowed and Rs. 3,30,76,812/- on account of Advertisement, publicity and sales promotion. Against the assessment order, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 31.7.2015 has partly allowed the appeal of the assessee by allowing the addition of Rs. 3,30,76,812/- on account of advertisement, publicity and sales promotion. Aggrieved with the impugned order dated 31.7.2015, assessee is in appeal before the Tribunal.
At the time of hearing, Ld. counsel for the assessee draw our attention towards the order passed by the Revenue Authority and stated that the issues in dispute is squarely covered in favour of the assessee by the ITAT, ‘B’ Bench, New Delhi decision dated 10.4.2015, a copy thereof is filed 7 before the Bench wherein the Tribunal vide its order dated 10.4.2015 passed in AY 2010-11 in assessee’s own case has dealt the similar and exact ground and decided the same in favour of the assessee. Hence, he requested to allow the grounds raised by the assessee by following the precedent in assessee’s own case, as aforesaid.
On the contrary, Ld. DR relied upon the orders of the authorities below.
We have heard both the parties and perused the records, especially the orders of the revenue authorities as well as ITAT, ‘B’ Bench, New Delhi decision dated 10.4.2015 passed in AY 2010-11 in assessee’s own case. We find that exactly this similar issue has already been dealt and adjudicated by the Tribunal in assessee’s own case, as aforesaid, wherein the Tribunal vide para no. 8 to 11 has held as under:-
“8. We have heard the rival submissions and perused the material available on record. On a consideration of the arguments advanced by the Id. CIT DR and the findings of the AO upheld by the Ld. CIT(A), it is seen that the issue has been 8 fully considered on similarity facts in 2006- 07 assessment year wherein the ITAT considering the same Revenue recognition policy of the assessee allowed the claim of the assessee. The said view on facts has consistently been followed by the ITAT in 2007-08; 2008-09; and 2009-10 assessment years wherein either assessee’s appeal has been allowed and where the CIT(A) allowed the relief following the view taken by the ITAT and the , department has come in appeal, the departmental appeal has been dismissed. It is also seen that the Revenue agitated the issue before the Hon’ble High Court u/ s 260A for 2006-07 assessment year wherein assailing the correctness of the order dated 27.12.2010 in & 4925/Del/2009 for 2005-06 & 2006-07 assessment years, the following questions of law canvassed as containing substantial legal issues for admission were raised by the Revenue:- I. "Whether the respondent was not liable to deduct the tax at source for the relevant year on account of the payment made by it to its franchisees u/s 194C of the Act, as held by the ITAT in the impugned order? II. Whether the assessing officer did not rightly reject the claim of the respondent making the addition of Rs. 1,24,07079/- to income of the respondent for the relevant year on account of non deduction of TDS in terms of section 40(a)(ia) of the Act ? III. Whether the ITAT has rightly deleted the addition of Rs.37,44,000/- made by the assessing officer on account of disallowance of bonus paid to its directors without payment of the dividend in terms of section 36(l)(ii) of the Act? IV. Whether the claim of the respondent for extra depreciation on commuters peripherals amounting to Rs. 1,65,115/- @ 60% V. Whether the ITAT rightly deleted the addition of Rs. 12,01,0000/- made by the assessing officer on the receipt of non refundable admission fee by the respondent from the students in the' relevant year?”
It is seen that the Hon’ble High Court vide its order dated 14.11.201 in ITA No.- 926/Del/2011 was pleased to admit only two of the following questions:-
(1) “whether the respondent had failed/neglected to deduct tax at sourced under section 194C and accordingly Section 40(A)(ia) of the Income Tax Act, 1061 is attracted? (2) Whether the Income Tax Appellate Tribunal is right in deleting addition of Rs.37,44,000/- made by the Assessing Officer on account of disallowance of bonus paid to the Directors in terms of Section 36(1 )(ii) of the Income Tax Act, 1961 ?”
In view of the aforesaid peculiar facts and circumstances of law, the issue can no longer be said to be res integra as far as the present forum is concerned. Accordingly in view of the factual position pleaded before the Bench as per the page No.-65 extracted in the earlier part of this order, we decide the issue in favour of the assessee subject to verification of the amounts set out in the said page which the AO shall verify. Accordingly in the light of the above, the appeal of the assessee is allowed.
In the result the appeal of the assessee is allowed for statistical purposes.”
7.1 After perusing the aforesaid finding of the Tribunal in assessee’s own case, we are of the considered view that the issues in dispute are squarely covered by the aforesaid finding of the Tribunal. Hence, respectfully following the precedent as aforesaid, the addition in dispute is deleted and appeal of the assessee is allowed in the aforesaid manner.
In the result, both the Appeals filed by the Assessee stands allowed in the aforesaid manner.