TaxTMI 
TaxTMI 
2016 (4) TMI 76
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....d assessment order passed on dated 31.12.2012, was without making proper enquiries. Such finding and the assumption of jurisdiction, both are contrary to the provisions of law and facts on record. Hence, the proceedings initiated u/s 263 of the Act and the impugned order dated 18.03.2015 kindly be quashed. 4. The CIT (Exemption), Jaipur erred in law as well as on the fact of the case in denying the claim made u/s 10(23C)(iiiad) of the Act on the plea that the aggregate annual receipts of the Appellant Samiti exceeded Rs. 1 Crore which is an incorrect finding of fact and legally unsustainable and thus, thereby declining the benefit of the exemption to the Appellant Samiti to which it is otherwise entitled to. In view of such an interpretation which contrary to the provisions of law and also based on incorrect facts, the impugned order kindly be quashed and Appellant Samiti be held entitled to the exemption u/s 10(23C)(iiiad) of the Act, as claimed. 5. The CIT (Exemption), Jaipur erred in law as well as on the fact of the case in denying the benefit of Sec. 11 & 12 of the Act pursuant to the registration granted on dated 23.08.2011 u/s 12A of the Act, in the year un....
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....s 10(23C)(iiiad) of the Act. Accordingly, the assessee had been wrongly allowed exemption U/s 11 as well as U/s 10(23C)(iiiad) of the Act. Further the assessee had claimed depreciation of Rs. 7,62,298/-. This claim of depreciation is not allowable as the capital expenditure incurred has already been allowed in the year of purchase of the assets as application. According to him, the depreciation allowed on the same asset is double deduction on the same asset. He further relied on the decision of Hon'ble Supreme Court in the case of Escorts Limited Vs. Union of India 199 ITR 43 (SC), Lissie Medical Institutions Vs. CIT 348 ITR 43 and Charanjiv Charitable Trust 267 CTR 305 (Delhi). After observing as above the ld CIT(Exemption) gave show cause notice U/s 263 of the Act to the assessee Samiti, which is reproduced as under:- 1. The assessee samiti moved an application in form No.10A dated 04-02-2011 for registration under section 12A. The registration was granted vide order dated 23-08-2011. It may be noted that the proviso to section 12A(2) of the Act inserted by Finance (No.2) Act, 2014 w.e.f. 01.10.2014 provides that where registration has been granted to the trust or in....
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....holarship amount is not the income of the society but only an obligation given by the Government for disbursing it to the students. This issue has been examined by the AO also in course of assessment proceedings. It may be clarified that at present such scholarship is given by the Government directly to the students and not routed through the society. In any case since it is not the income of the society, the AO has rightly allowed exemption to the assessee u/s 10(23C)(iiiad) as income of the assessee is less than Rs. 1 crore. 3. The assessee society has claimed depreciation of Rs. 7,62,298/- during the relevant year. The society has not claimed any capital expenditures as application of income in as much as in all earlier years society has claimed exemption u/s 10(23C)(iiiad). Therefore, the depreciation is allowable to the assessee. Otherwise also, even in a case where income is computed u/s 11, both the depreciation and application is allowable in respect of the capital expenditure as held in the following cases: CIT Vs. Devi Sakuntala Tharal Charitable Foundation (2013) 358 ITR 452 (MP)(HC) DIT Vs. Vishwa Jagriti Mission (2012) 73 DTR 195 (Del.)(HC) ....
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.... that order of the Assessing Officer is erroneous and prejudice to the interest of revenue on the issue of scholarship receipt not shown in the receipt and payment account as well as claim of depreciation. 3. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that U/s 263 of the Act, the twin conditions are to be specified by the ld CIT(Exemption) i.e. order of the Assessing Officer is erroneous and prejudicial to the interest of revenue. The provision cannot be invoked to correct each and every type of mistakes or error committed by the Assessing Officer, it is only when an order is erroneous as also prejudicial to the revenue's interest, that the provision will be attracted. Every loss of revenue as a consequence of the order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue, if the Assessing Officer has adopted one of the two or more courses permissible in law and it has resulted in loss of revenue, or where two views are possible and Assessing Officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order and prejudicial to the interest of the revenue. For which he ....
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....argued that as per Section 44AB such receipts are not considered for audit purpose. He further argued that the assessee Samiti rightly claimed depreciation on assets. This issue also covered by the Hon'ble Jaipur ITAT in the case of ITO Vs. Krishi Upaj Mandi Samiti (2012) 53 SOT 500 (Jp), CIT v/s Institute of Banking Personnel Selection (2003) 185 CTR (Bom) 492, CIT v/s Market Committee, Pipli (2011) 238 CTR (P&H) 103, CIT v/s Tiny Tots Education Society (2011) 330 ITR 21 (P&H), DIT (Exemption) v/s Framjee Cawasjee Institute (1993) 109 CTR (Bom) 463, CIT v/s Raipur Pallottine Society(1989) 80 CTR (MP) 127, CIT v/s Society of the Sisters of St. Anne (1984) 39 CTR (KAR) 9, and CIT v/s Institute of Banking (2003) 264 ITR 110 (Bom). The case laws cited by the ld CIT(Exemption) is distinguishable and argued that the assessee samiti never claimed any capital expenditure as an application of income in the earlier year. The ld CIT (Exemption) rightly allowed the depreciation in past and in the year under consideration. The case laws relied upon by the ld CIT(Exemption) of Hon'ble Supreme Court was to decide the application of fund of the charitable object. The ld Assessing Officer also....
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....ment has been completed by the Assessing Officer on 31/12/2012. The ld Assessing Officer issued detailed questionnaire on 17/10/2012, the assessee furnished requisite details/information/books of account etc. before him. The ld Assessing Officer held that the registration w.e.f. 23/08/2011 U/s 12AA have been granted by the ld CIT, Alwar. The society was working as per its byelaws and carried out charitable activity. All the income of the society was applied for fulfillment of the object of the society. The educational institutions are existing solely for educational purposes and not for the purpose of profit. The aggregate annual receipts of the society during the year under consideration was Rs. 93,70,725/-, which is below Rs. 1 crore. All the annual receipts of the samiti is exempted U/s 10(23C)(iiiad) of the Act. The ld Assessing Officer accepted the assessee's returned income by order dated 31/12/2012. The ld Assessing Officer issued query letter on 17/10/2012 on both the issues in item No. 3,4 and 8, which was replied by the assessee vide letter dated 19/11/2012 at item No. 3 and 8. Thus, the Assessing Officer made detailed enquiry on both the issues and no adverse inference h....