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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI
Before: SHRI H. S. SIDHU & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the Revenue against the order of the ld CIT (A)-1, Dehradun dated 18.10.2012 for the Assessment Year 2009-10. 2. The Revenue has raised the following grounds of appeal:- “1. The ld CIT(A) was not justified in allowing the exemption u/s 11 of the IT Act as forfeited by the AO for the instant year looking to the various deficiencies pointed out by the AO on the different level of Audit Report.
2. The ld CIT(A) was not justified in overlooking the facts that the assessee had misappropriated the funds granted by the government for specified purpose, which is purely in contravention of section 11 of IT Act, 1961.”
3. Facts of the case is that assessee is a society granted registration under societies registration act 1860 w.e.f. 17/02/2001 and also registered under section 12 AA of the act w.e.f. 12/07/2005. The assessee is carrying on the implementation activity of sarva Shiksha Abhiyan and integrated flagship programme for achievement of universal elementary education and its aim to provide useful and relevant education to all children in the age group of 6 to 14. The program was launched with the partnership with state government and local self-government’s. There assessee filed its return of income on 11.1. 2010 declaring nil income.
During the course of assessment proceedings, the Ld. assessing officer on examination of the manual of financial management and procurement and perusal of the books of accounts bills and vouchers produced raised certain enquiry on the activities of the assessee, referred to the perusal of the auditor’s report, wherein certain deficiencies were pointed out issued show cause notice that while the exemption granted to the trust under section 11 of the income tax act should not be withdrawn. The assessee replied to the notice on 29/12/2011 furnishing the compliance report from district and submitted that the assessee has complied with the audit queries. The Ld. assessing officer not satisfied with the explanation held that the assessee book the expenditure without actually carrying out activities holding that assessee has failed to apply its income for the charitable purposes. Ld. assessing officer withdrew the exemption granted to the assessee under section 11 of the income tax act and total income was assessed at Rs. 7 2180 4891/– vide assessment order dated 29/12/2011 under section 143 (3) of the income tax act, 1961.
Assessee aggrieved with the order of the Ld. assessing officer preferred an appeal before the Ld. CIT (A). The Ld. CIT (A) allowed the claim of the assessee. Therefore, revenue aggrieved with the order of the Ld. 1st appellate authority preferred appeal before us.
Ld. departmental representative vehemently supported the order of the Ld. assessing officer and submitted that in view of the audit report on the activities of the assessee The Ld. assessing officer has denied the exemption under section 11 of the act to the assessee. He further submitted that the Ld. CIT (A) has added in allowing the claim of the assessee.
Ld. authorized representative submitted before us paper book wherein the written submissions made before the Ld. CIT (A) and stated that the Ld. CIT appeal has allowed the claim of the assessee on the basis of the various compliance report submitted by the assessee to the auditors and the queries on which the Ld. assessing officer denied the exemption were satisfied and complied with. He therefore submitted that the order of the Ld. CIT (A) is in order.