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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Commissioner of Income Tax (exemptions) Delhi – Appellant
Versus
East Point Education Society – Respondent
ITA 248 of 2023 & CM Nos.22086-87 of 2023
Decided On : 02-05-2023
Income Tax - Assessment Year 2012-13 - Income Tax Act, 1961, Section 263 - Section 12A, Section 80(G)(5)(vi), Section 143(3) - The court considered whether the amount given as unsecured loans and later converted to contribution should have formed the basis for exercising revisional powers under Section 263 of the Income Tax Act. The court also discussed the previous Tribunal decisions allowing the appeal of the respondent/assessee on the issue of denial of exemption under Section 11 of the Act due to violation of provisions of Section 13(1)(c) read with Section 13(3) of the Act.
Fact of the Case:
The appeal concerns Assessment Year 2012-13 and is directed against the order passed by the Income Tax Appellate Tribunal. The central issue is whether the amount given as unsecured loans and later converted to contribution should have formed the basis for exercising revisional powers under Section 263 of the Income Tax Act. The respondent/assessee obtained registration under Section 12A and Section 80(G)(5)(vi) of the Act for AYs 2010-11 to 2012-13. The Assessing Officer accepted the return filed by the respondent/assessee, declaring its income as 'nil'. The CIT(E) issued a show cause notice, alleging that the assessment was done in a 'hurried and casual' manner without due application of mind.
Finding of the Court:
The Tribunal found that the Assessing Officer had considered the response of the respondent/assessee and then taken a view in the matter. It also noted that in previous AYs, the Tribunal had allowed the appeal of the respondent/assessee on the issue of denial of exemption under Section 11 of the Act due to violation of provisions of Section 13(1)(c) read with Section 13(3) of the Act. The court found no substantial question of law arising for consideration and closed the appeal.
Issues: The central issue is whether the amount given as unsecured loans and later converted to contribution should have formed the basis for exercising revisional powers under Section 263 of the Income Tax Act. The court also considered the previous Tribunal decisions allowing the appeal of the respondent/assessee on the issue of denial of exemption under Section 11 of the Act due to violation of provisions of Section 13(1)(c) read with Section 13(3) of the Act.
Ratio Decidendi: The court found that the Assessing Officer had considered the response of the respondent/assessee and then taken a view in the matter. It also noted that in previous AYs, the Tribunal had allowed the appeal of the respondent/assessee on the issue of denial of exemption under Section 11 of the Act due to violation of provisions of Section 13(1)(c) read with Section 13(3) of the Act.
Final Decision: The court found no substantial question of law arising for consideration and closed the appeal.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
1. This appeal concerns Assessment Year (AY) 2012-13.
2. The appeal is directed against the order dated 06.09.2019 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"].
2.1 The Tribunal via the impugned order has set aside the order passed by the Commissioner of Income Tax (Exemptions) [in short, "CIT(E)"] dated 20.03.2017 in exercise of its powers under Section 263 of the Income Tax Act, 1961 [in short, "Act"].
3. Briefly, the central issue in the case is: whether the amount, which, to begin with, was given by one of the trustees, i.e., Mr Mohinder Singh, in the form of unsecured loans, and which was later on converted to contribution, should have formed the basis for exercising revisional powers?
4. What is not in dispute is that the respondent/assessee obtained registration under Section 12A of the Act on 10.09.1985.
4.1 It is also not in dispute that the respondent/assessee obtained registration under Section 80(G)(5)(vi) of the Act, as far back as on 23.11.2009. These registrations were obtained for AYs 2010-11 to 2012 13.
5. In the period in issue, the respondent/assessee had filed its return of income on 27.09.2012, wherein it declared its income as "nil".
5.1 Along with the return, the respondent/assessee had also filed a report as required under Section 12A(b) in the prescribed form i.e., Form 10B.
5.2 This form was accompanied by a balance sheet, income and expenditure account and the relevant schedules.
6. It is after considering the material on record that the Assessing Officer (AO) framed an order dated 12.11.2014 under Section 143(3) of the Act. In sum, the AO accepted the return filed by the respondent/assessee, whereby it had declared its income as "nil".
7. As noted hereinabove, the CIT(E) exercised powers under Section 263 of the Act.
7.1 Concededly, a show cause notice dated 07.01.2005 was issued to the respondent/assessee by the CIT(E).
8. The burden of the CIT(E)'s order is that the AO had framed an assessment in "hurried and casual" manner without due application of mind and in disregard of the consistent stand of the revenue.
9. The Tribunal, having considered the issue at some length, recorded the following observations; which, being apposite, are extracted hereafter:
"9. We have considered the arguments made by both the sides and perused the material available on record. We find the Ld. CIT (E) assumed jurisdiction u/s 263 of the IT Act on the ground that the Assessing Officer framed the assessment in a hurried and casual manner without any application of mind and in utter disregard to the consistent stand of the Department. It is the submission of the ld. counsel for the assessee that the Assessing Officer, after due application of mind and on the basis of the reply of the assessee to the various issues raised by him, has passed the order. It is also the submission of the ld. counsel for the assessee that the Tribunal in assessee's own case for assessment year 2006-07 has allowed the exemption u/s 11 of the Act which was denied by the Assessing Officer and the CIT(A). Further, it is also the submission of the ld. counsel for the assessee that following the order of the Tribunal for assessment year 2006-07, the Tribunal in assessee's own case for assessment year 2007-08, 2009-10, 2010-11 and 2011-12, has allowed the appeal filed by the assessee on the issue of denial of exemption u/s 11 due to violation of the provisions of section 13(1)(c) read with section 13(3) of the IT Act. It is also the submission of the ld. Counsel for the assessee that when the Assessing Officer has taken a possible view, merely because the ld. CIT(E) does not agree with the view taken by the Assessing Officer, the same cannot be a ground for invoking the jurisdiction u/s 263.
10. We find merit in the above argument of the ld. counsel. A perusal of the order of the Tribunal for assessment year 2006-07, copy of which is plac
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