M/S INDEPENDENT SCHOOL'S FEDERATION OF INDIA,GHAZIABAD vs. ADDL. CIT, GHAZIABAD

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ITA 5099/DEL/2015Status: DisposedITAT Delhi28 October 2015AY 2010-116 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, without commenting on the merits, directed the AO to re-examine the issues in dispute. This was based on the principle of consistency, noting that the AO had allowed similar relief in the assessee's own case for AY 2012-13.

What were the facts?

The assessee, an Independent School's Federation, appealed against the CIT(A)'s order for AY 2010-11. The grounds of appeal challenged the dismissal of its claim as a mutual concern, the classification of its activities under Section 2(15), and various disallowances including unspent contributions, legal expenses, and conveyance expenses.

What were the issues?

Whether the assessee society qualifies as a mutual concern and its activities fall within the ambit of Section 2(15) of the Income Tax Act. Also, the allowability of various expenses and the principle of consistency in assessment.

Which sections of the Income-tax Act were involved?

Section 2(15),Section 37(1),Section 143(3),Section 12A

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Before: SHRI H.S. SIDHU

Date of Hearing : 29-10--2015 Date of Order : 29-10-2015

O R D E R This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-Ghaziabad pertaining to assessment year 2010-11.

2.

The grounds of appeal read as under:-

“1. Because, learned commissioner of income tax (appeals) grossly erred in dismissing the claim of assessee that the society is mutual concern with independent identity of member schools with no business etc. by wrongly stating that there is no evidence in support of claim against the facts on the record.

2. Because, learned commissioner of income tax (appeals) further erred in holding the activities of assessee for safeguard interest of schools etc. is not falling within any of the clauses of s. 2(15) of the Act despite holding that Id. considered incorrect objects of assessee. Hence order is perverse.

3.

Because, Without prejudice to above and only as an alternative, learned commissioner of income tax (appeals) failed to consider the fact that regno u/s 12A is subsisting and with identical facts exemption is granted may be u/s 143(1) since inception, hence order is against the principle of consistency.

4. Because, Without prejudice to above and only as an alternative, on merits learned commissioner of income tax (appeals) erred in upholding taxing of ~ Rs. 2,35,377/- which was merely a unspent contribution of members and not of income nature.

5. Because, on merits learned commissioner of income tax (appeals) erred in upholding the disallowance of Rs. 2,84,000/-,being the legal expenses, while admittedly incurrence of expenses is not doubted, by wrongly holding that assessee failed to prove with evidence that such expenses are allowable u/s 37(1) of the Act.

6. Because, learned commissioner of income tax (appeals) erred is upholding the disallowance up to Rs. 50,0001 out of conveyance expenses merely with general expenses and without considering that the book of accounts are accepted.

'Therefore, it is prayed that finding of lower authorities that activity of assessee is business' being neither a 'mutual concern' nor covered u/s 2(15) of the Act may kindly be quashed and disallowance. and computation of taxable surplus of Rs. 5,69,377/- may kindly be held illegal and prayed to be quashed.”

3. The facts narrated by the revenue authorities are not disputed by both the parties, therefore, the same are not repeated here for the sake of convenience.

4.

Ld. Counsel for the Assessee has stated that the AO vide order dated 20.3.2015 passed u/s. 143(3) of the I.T. Act for the asstt. Year 2012-13 has allowed the similar relief involved in the present Appeal by completing the assessment in the case of the assessee. He requested to follow the rule of consistency, the AO may be directed to allow the relief in dispute to the assessee. He further stated that the issue raised by the assessee in the grounds of appeal may also be readjudicated by the AO by allowing the relief to the assessee. He has filed the Written Submission alongwith the Paper Book containing the pages 1-93, in which he has attached the Copy of B/s & income / exp. A/c with Annexures for AY 10-11; copy of Memorandum of Aims and Objective; Copy of Ledger a/c of Annual Subscription, Legal Fees and Conference fee; Copy of ledger a/c of legal exp.; copy of ledger a/c of vehicle exp.; copy of list of members; statement of comparative exp. and copy of latest assessment order. He has also filed the list of various following case laws supporting the case of the assessee:-

A. Principle of consistency shall be followed when facts remains unchanged.

(i) Radhsoami Satsang vs. CIT (1992) 193 321 (SC) 3

(ii) CIT vs. Neo Poly Pack (P) Ltd. (2000) 245 ITR 492 (Del). B. Receipts/Surplus of entities which are governed by principles of Mutuality is not income.

(i) CIT vs. Chlmsford Club vs. CIT (2000) 243 ITR 89 (SC) (ii) CIT vs. Cawnpore Club Ltd. (2004) 140 Taxman 378 (SC) (iii) CIT vs. Standing Conference of Public Enterprises (Scores) 186 Taxman 142 (Delhi) (in this Case SLP was dismissed by the Apex Court) (iv) DIT vs. All India Oriental Bank of Commerce Welfare Society 130 Taxman 142 (Delhi). (v) Circular No. 11/2008 dated 19.12.2008. C. Legal issue can be raised at any time. Power of CIT(A) are co-terminus with AO to conduct enquiry. i) NTPC Ltd. Vs. CIT 229 ITR 383 (SC) ii) Raj Rani Gulati (Smt.) vs. CIT (2002) 346 ITR 543 (All.) iii) Smt. Prabhavati S. Shah vs. CIT (1998) 231 ITR 1 (Bom) Finally, he requested that the issue in dispute may be set aside to the AO to decide the same, keeping in view of the decisions as well as Written Submission alongwith documentary evidence filed in the shape of Paper Book.

5.

Ld. DR opposed the request of the Ld. Counsel of the Assessee and relied upon the orders of the Authorities below.

6.

I have heard both the parties on the issue in dispute and perused the relevant records, especially the orders passed by the revenue authorities, Paper Book filed by the assessee’s counsel and the issue raised by the assessee in the grounds of appeal alongwith the assessment order dated 20.3.2015 for the asstt. Year 2012- 13 in assessee’s own case passed by the AO u/s. 143(3) of the I.T. Act, 1961 wherein the AO has accepted the exactly similar relief involved in the present Appeal. I am of the considered view that without commenting upon the merits of the case the issue in dispute requires to be thoroughly examined at the level of the AO with the directions to decide the issue in dispute afresh, under the law, after giving adequate opportunity of being heard to the assessee, especially after examining all the documentary evidences filed by the assessee in the shape of Paper Book, case laws and the issues raised by the assessee in the grounds of the present appeal. I hold and direct accordingly.

7.

In the result, the appeal filed by the assessee stands allowed for statistical purposes. Order pronounced in the Open Court on 29/10/2015.

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