INSTITUTE OF TECHNICAL TRAINING,SUNDARGARH vs. CIT(EXEMPTION), HYDERABAD

At the outset, we found that the appeal of the assessee is barred by 206 days. In this regard, the assessee has filed an application for condonation of delay along with affidavit stating sufficient reasons for condoning the delay, to which ld. CIT-DR did not object. Considering the application of the assessee and looking to the facts of the case, we condone the delay of 206 days in filing the present appeal and appeal is admitted for hearing.

None represented on behalf of the assessee, however, an adjournment letter has been filed requesting to adjourn the appeal on medical ground. This appeal has been filed in December, 2021 and the appeal has been posted for hearing on three earlier occasions. This is 4th time the appeal has been posted for hearing. As the adjournment application is not found to be substantiated, therefore, the adjournment application is rejected and the appeal is being disposed off.

It was submitted by the ld. CIT-DR that the assessee has paid salaries to its trustees, who are also governing body members. It was the submission that the ld. CIT(E) has invoked his powers under revision for the purpose of directing the AO to examine the quantification of the salaries paid to the trustees and as to whether the same was hit by the provisions of Section 13(1)(c) of the Act. It was the submission that as the salaries have been paid to the trustees, the same is liable to be examined by the AO and the same having not been properly done; therefore, the order u/s.263 of the Act is liable to be upheld.

We have considered the submissions of the ld. CIT-DR. It is noticed that the assessee has filed paper book containing the reply to the show cause notice issued u/s.263 of the Act. It is also noticed that the assessment order passed u/s.143(3) of the Act is also available on the records. A perusal of the order passed u/s.263 of the Act shows that the ld. CIT(E), Hyderabad has proposed to treat the assessment order passed u/s.143(3) of the Act on 25.07.2017 as erroneous and prejudicial to the interest of revenue, insofar as the salaries paid to the Secretary, President and members of the trust, having not been examined by the AO. A perusal of the ld. CIT(E) shows that the words he has used are Rs.55,42,431/-.” A perusal of the assessment order passed u/s.143(3) of the Act shows that the AO has called for the payments made to the governing body members, he has examined the same. The details were produced alongwith qualifications of the members of the governing body, nature of the job they are doing, details of salaries and a comparison of the salaries of other institutions along with copy of the pay structure of Polytechnic College issued by the AICTE, New Delhi, have also been examined by the AO and he has mentioned this in his assessment order. After examining this, the AO has not made any addition. A perusal of the reply filed to the show cause notice issued u/s.263 of the Act, as filed with the paper book, also shows that the Principal has been paid salary of Rs.6,09,821/- as against the approved scale of pay by AICTE of minimum of Rs.6,73,200/- and the prevailing market rate minimum of Rs.9 lakhs. Similarly, in respect of others also the comparison along with the pay-scale approved by the AICTE has been placed before the ld. CIT(E) in the course of the reply to show cause notice. This fact has not been considered by the ld.CIT(E) and nothing has been brought out to show that these facts as placed by the assessee is wrong. This being so, as the issue has already been considered by the AO in detail for the assessment order and the same has also been referred to in the assessment order, as also on the ground that the salary paid are much lower than the market rate and lower than the approved rate by the AICTE, we are of the view that the revision as proposed by the