TaxTMI 
TaxTMI 
2022 (2) TMI 1143
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....he Act" in short). The return of income for the year under consideration was filed by the assessee on 29.09.2014 declaring negative income at Rs. (-) 4,05,44,803/-, after claiming exemption of Rs. 15,89,27,308/- under Section 11 of the Act. In the Income and Expenditure Account filed along with the said return, expenditure of Rs. 1,17,17,734/- and Rs. 1,23,72,023/- was debited by the assessee on account of "Advertisement and Promotion Expenses" and "Travelling and Conveyance Expenses" respectively. During the course of assessment proceedings, the assessee was required by the Assessing Officer to furnish complete details of these expenses; and, from the perusal of the details so furnished by the assessee, the Assessing Officer noted that the following expenses were incurred on the foreign travel by Shri Vinay Rai, one of the principal donors and founders of the assessee-society. Date Description Amount 16.08.13 C/o Air Tickets booked from Delhi to New York to Delhi for Mr Vinay Rai against visit of Business purpose from 01.10.2013 to 09.10.2013 2,00,725/- 12.09.13 Amount of purchased 3000USD in cash and 10000 USD by Card @ Rs. 63.70/- each for Mr. Vinay Rai t....
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....ers' Awards event scheduled on 02/01/2014. 4,65,100/- 2. Rai Foundation B-II/I, MCIE Mathura Road, Near Badarpur Metro Station, New Delhi- 110044 Specs Being C/o JBL Sound System Digital/ still/photographer/ digital video etc hiring charges against Assocham Women's Achievers event at Mumbai 65,500/- 3. Rai University, BII/I, MCIE Mathura Road; New Delhi-44 Antraa (Dot) Com Being C/o 15 Nos. Momento of Rs. 1760/- + 12.50% Tax purchased for Assocham Ladies League event at Mumbai 38,068/- 4. Rai University, BII/ 1, MCIE Mathura Road, New Delhi-44 Antra (Dot) Com Being C/o 15 Nos. Momento of Rs. 1700/- + 12.50% Tax purchased for Assocham Ladies League event at Hyderabad 34,425/- 5, M/s Rai Foundation A-41, MCIE, Mathura Road, New Delhi-44 Antraa (Dot) Com Being /o 05 Nos. of Mementos purchased @ 1900 + 12.506s tax for distribution to Guests against convocation program held at Shangri La- Eros Hotel 10,688/- 6. ASSOCHAM Ms Babita Pandita, Rai University, Space City, B2/1, MCIE, Mathura Road, New Delhi 110044 Shangri La's Eros Hotel Being C/o Hotel Charges & Snacks charges against convocation program 2,....
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....d by babita Pandita towards assocham ladies league Mumbai women at the decade achievers award event as per detailed enclosed. 18,288/- 18. Babita Pandita, Rai University Hotel Sharanam Stay in hotel Sharanam two person dated 31/02/2013 to 04/01/2014 purpose of assocham ladies league Mumbai event (Ms. Babita & Ms. Riche) 2,136/- 19. Rai University Lincia Jewel Rasario. Mahila Vikas Mandal Event- Assocham ladies league women of the decade achiever award ( bill for month of January/02/20H) 11,000/- 20. Rai University ANTRAA DOT Corn Being C/o, 15 Nos. Memento of Rs. 1700/- + 12.50% tax 2 Nos. Momento of Rs. 1500 + 12.50% Tax purchased for Assocham ladies league event of Mumbai as per bill no.0305 & 0307. Respectively dt 1 and 6th jan, 2014. 32,063/- 21. Mr. Vinay Rai AEPC Card No. 3769- 161 139-51001. Being Hotel Stay charges for Mr. Vinay Rai & Dr. Arora & other snacks charges for meeting as per credit card statement dt. 28/01/2014 attached. 49,014/- 22. Rai University ANTRAA DOT Com Being C/o. 18 nos. of momentos of Rs. 1700+ 12.50% Tax each purchased for Assocham functions at Hydrabad as per bill No. 0329 dt....
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.... Padhao policy was not found acceptable by the Assessing Officer as the said policy, according to him, was not even in existence in the F.Y. 2013-14. The case of the assessee that less privileged girl students were awarded scholarships during this programme was also found not supported by any evidence by the Assessing Officer. He accordingly arrived at a conclusion that the assessee had incurred huge expenditure under the head "Advertisement and Promotion" and "Travelling and Conveyance" for the benefit of specified persons under Section 13(3) of the Act in violation of provisions of Section 13(1)(c) of the Act and consequently the benefit of Sections 11 and 12 of the Act was not available to the assessee-trust. He accordingly denied the claim of the assessee for exemption of Rs. 15,89,27,308/- under Section 11 of the Act and also made a further addition of Rs. 4,36,79,779/- on account of "addition to fixed asset" on the ground that the assessee could not furnish any documentary evidence to establish that the said assets acquired by utilizing the trust's fund were for the advancement of its objects. Accordingly, the total income of the assessee was determined by the Assessing Offic....
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....ade by the assessee. Accordingly, remand report was submitted by the Assessing Officer to the learned CIT(A); and, when the same was confronted by the learned CIT(A) to the assessee, the latter submitted its rejoinder thereon. After taking into consideration the submissions of the assessee, the remand report submitted by the Assessing Officer as well as the case-laws relied upon on by the assessee in support and the relevant record available before him, the learned CIT(A) rendered his decision vide paragraph No.7 (including paras 7.1 to 7.3) which read as under:- 7. DECISION : I have carefully considered the assessment order and submission of appellant. Assessment has been finalized by AO under the provisions of sections 11 to 13, even though AO was fully aware that approval u/s.10(23C)(vi) for Asst. Year 2014-15 was pending at that point in time before the Hon'ble ITAT after the Hon'ble CIT(Exemptions) has again rejected the approval even after directions by Hon'ble High Court of Gujarat for fresh consideration. The AO has, accordingly, finalized the assessment and concluded that the expenditure amounting to Rs. 16,06,935/- and Rs. 21,39,354/- in relation to t....
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....the activities of the trust are genuine and are in accordance with its objectives as well as in conformity with the conditions subject to which it is approved, (b) this approval is applicable to income of the educational trust/institution run by it and shall not have any application to income from non-educational activity, (c) the trust shall apply its income or accumulate its income for application wholly and exclusively for the objects for which it is established and application of its income must be in accordance with third proviso to Sec 10(23C) of the Act and (d) the approval granted shall be subject to the provision of Proviso to Sec 143(3) and shall not be construed as a fetter on the powers of the Assessing Officer to examine the various issues of the case in any proceedings before the assessing officer. Thus even though the approval is granted u/s 10(23C)(vi), it does not qualify for automatic exemptions u/s 11 and 12, Thus approval is granted subject to the conditions as discussions above. Moreover, the issue of 10(23C)(vi) was not the subject matter before the assessing officer during the assessment proceedings. Hence the AO had no occasion to examine the said i....
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....'ble Supreme Court as well as the High Courts relied upon by the Appellant. The issue is being looked into. Hon'ble Karnataka High Court in the case of Shankar Khandsari Sugar Mills Vs. CIT 193 ITR 669 (Kar.) has observed that "In the absence of any prejudice to the revenue, and the basis of the lax under the Act being to levy tax, as far as possible, on the real income, the approach should be liberal in applying the procedural provisions of the Act. An appeal is but a continuation of the original proceeding and what the Income-tax Officer could have done, the appellate authority also could do." Hon'ble Bombay High Court in the case of Smt. Prabhavati S, Shah 231 ITR 1, (Bom.) has observed that "CIT(A) is empowered u/s.250(4) to make such further inquiry as he thinks fit and such power being quasi judicial power, it was incumbent on him to exercise the same if the facts and circumstances justify. It further held that if the first appellate authority failed to exercise his discretion judicially and arbitrarily refused to make inquiry in a case where the facts and circumstances so demand, his action would be open for correction by a higher authority. In other words, the m....
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....-, being the expenditure incurred by the assessee under the head "Advertisement and Promotion Expenses" and "Travelling and Conveyance Expenses", which according to the learned CIT(A) was not allowable being not incurred for the purpose of educational activity of the assessee. Aggrieved by the order of the learned CIT(A), the Revenue and assessee - both are in appeal before the Tribunal on the following grounds:- Ground taken by the assessee The Learned Commissioner of Income Tax (Appeals)-4, Ahmedabad has erred in law and on facts of the case in confirming the disallowance of Rs. 37,46,289/- (Rs. 16,06,935+Rs. 21,39,354) as expenditure not for the purpose of educational activity of the appellant though the appellant was entitled to deduction of the same under the provisions of Section 10(23C)(vi) of the I.T. Act, 1961. Grounds taken by the Revenue 1. The ld. CIT (A) has erred in law and on facts in holding that assesses was eligible for claim of exemptions under section 10(23C)(vi) of the Income tax Act, though the same claim was not part of the original adjudication before the Assessing Officer. 2. On the facts and circumstances of the....
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....reasoned order; the relevant portion of which is already extracted hereinabove. We, therefore, find no infirmity in the order of the learned CIT(A) allowing the alternative claim of the assessee for exemption under Section 10(23C)(vi) of the Act and even the learned DR has not raised any material contention to rebut or controvert this position. The impugned order of the learned CIT(A) on this issue is, therefore, upheld and the appeal of the Revenue is dismissed. 9. In the assessee's appeal, the solitary issue involved relates to the disallowance of Rs. 37,46,289/- as confirmed by the learned CIT(A) out of expenses incurred by the assessee under the head "Advertisement and Promotion Expenses" and "Travelling and Conveyance Expenses". In this regard, the learned Counsel for the assessee has submitted that this expenditure was considered by the Assessing Officer from the angle of Section 13(1)(c) of the Act and as the same was allegedly found by him as incurred for the benefit of persons specified in Section 13(3) of the Act, the claim of the assessee for exemption under Section 11 of the Act was disallowed by him. The learned Counsel for the assessee has contended that since the ....