Commissioner Of Income Tax,Central-1, Kolkata v. Narula Education Trust

ITAT/119/2015 IA No.GA/1/2015 (Old No.GA/2696/2015) IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE COMMISSIONER OF INCOME TAX,CENTRAL-1, KOLKATA -Versus- NARULA EDUCATION TRUST Appearance:Mr. Smarajit Roychowdhury, Adv....for the appellant.Mr. J. P. Khaitan, Sr. Adv.Mr. Siddharth Das, Adv.Ms. Swapna Das, Adv....for the respondent. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 22[nd] August, 2022. The Court : This appeal filed by the revenue under Section260A of the Income Tax Act, 1961 (the ‘Act’ for brevity) isdirected against the order dated 29[th] January, 2015 passed by theIncome Tax Appellate Tribunal, “A” Bench, Kolkata (the Tribunal)in ITA No.151/Kol/2012 for the assessment year 2008-09.260A of the Income Tax Act, 1961 (the ‘Act’ for brevity) isdirected against the order dated 29[th] January, 2015 passed by theIncome Tax Appellate Tribunal, “A” Bench, Kolkata (the Tribunal)in ITA No.151/Kol/2012 for the assessment year 2008-09. The revenue has suggested the following substantial questions of law: “ i)Whether the Learned Tribunal erred in law in notremanding the matter to the Assessing Officer toascertain whether the assessee had received anycapitation fees in the garb of donation in the relevantassessment year and thereafter directing the AssessingOfficer to carry out de-nevo assessment based on suchfindings?remanding the matter to the Assessing Officer toascertain whether the assessee had received anycapitation fees in the garb of donation in the relevantassessment year and thereafter directing the AssessingOfficer to carry out de-nevo assessment based on suchfindings?ii)Whether the Learned Tribunal in the facts andcircumstances of this case erred in law in not callingfor the records of the relevant assessment year toascertain the nature of receipts of the Assessee andaccordingly failed to act as the last act finding bodyunder the statute”circumstances of this case erred in law in not callingfor the records of the relevant assessment year toascertain the nature of receipts of the Assessee andaccordingly failed to act as the last act finding bodyunder the statute” We have heard Mr. Smarajit Roychowdhury, learned standingcounsel for the appellant/revenue and Mr. J. P. Khaitan, learnedsenior advocate assisted by Ms. Swapna Das and Mr. Siddharth Das,learned advocates for the respondent/assessee. The short issue which falls for consideration is whether theorder passed by the tribunal setting aside the order passed by theCommissioner of Income Tax (Appeals) was just and proper in thefacts and circumstances of the case. The assessee is a trust whichwas granted registration under Section 12AA of the Act on 5[th]December, 2000. This registration was cancelled by invoking theprovisions under Section 12AA(3) of the Act from the assessmentyear 2004-05. The said order was put to challenge and the order ofcancellation was set aside and the same stood confirmed upto thisCourt. Thus, the tribunal took note of the said development and The short issue which falls for consideration is whether theorder passed by the tribunal setting aside the order passed by theCommissioner of Income Tax (Appeals) was just and proper in thefacts and circumstances of the case. The assessee is a trust whichwas granted registration under Section 12AA of the Act on 5[th]December, 2000. This registration was cancelled by invoking theprovisions under Section 12AA(3) of the Act from the assessmentyear 2004-05. The said order was put to challenge and the order ofcancellation was set aside and the same stood confirmed upto thisCourt. Thus, the tribunal took note of the said development and also noted that the CIT(A) denied exemption under Section 11 ofthe Act on the sole ground that the registration granted to therespondent/assessee had been cancelled but the same having beenrestored, the tribunal held that there is no reason for denyingexemption. The revenue by way of a supplementary affidavit nowseeks to condone that the assessment should be permitted to be re-done de novo by the assessing officer on the ground that at thefirst instance the denial of exemption was solely on the groundthat the registration granted to the assessee was cancelled. Thequestion would be as to whether the same is permissible. TheCIT(A) on an assumption that the respondent/assessee had receivedcapitation fee under the garb of receiving donation from and onbehalf of students for giving admission came to the conclusionthat the activities of the trust are not in accordance with thedeed of trust and the provisions of the Income Tax Act and itsactivities are not genuine and not being carried on in accordancewith the objects of the trust and, accordingly, the registrationwas cancelled. This order was put to challenge before the tribunalin ITA No.1478/Kol/2010 which was allowed by the tribunal by orderdated 24[th] February, 2012. Against such order, the revenuepreferred appeal before this Court in ITAT No.141/2012 which wasdismissed by judgment dated 8[th] July, 2012. Further, it is seenthat the department had denied exemption to the assessee for theassessment years 2004-05, 2006-07 and 2007-08 solely on the ground that the registration granted to them under Section 12A wascancelled. Subsequently, in view of the restoration of theregistration, by order dated 30[th] April, 2012 the tribunal quashedthe assessment order for the aforementioned three years. Therevenue preferred appeal before this Court in ITAT/53/2013 and thesaid appeal was dismissed as not pressed by order dated 8[th] May,2013. Similarly, for the assessment years 2009-10 and 2010-11,exemption udner Section 11 was denied for the sole reason that theregistration granted under Section 12A of the ACt was cancelled.Against such assessment order, the assessee preferred appealbefore the CIT(A) who directed the assessing officer to grantexemption under Section 11A of the Act. The revenue preferredappeal before this Court for the assessment year 2010-11 inITAT/335/2017 which was also dismissed by order dated 6[th] July,2018. In the light of the above, the plea raised by the revenuethat the assessment should be directed to be re-done de novo isimpermissible. Furthermore, it was never the case of thedepartment that the denial of exemption was on the ground thatcapitation fee was received by the assessee. In fact, in theappeal the filed before the CIT(A), Central – 3, Kolkata theassessee had raised a specific plea that there is nothing onrecord that there was any capitation fee received by the assesseefor running its activity as an educational institution. Furthermore, we also note that the assessment was under Section143(3) of the Act and before completing the assessment and passingthe order dated 22[nd] December, 2010, the assessing officer issuednotices under Sections 143(2) and 143(1) of the Act and after dueenquiry, the assessment was completed. There is absolutely nowhisper in the said order that the respondent/assessee hadreceived capitation fee. Furthermore, we also note that the assessment was under Section143(3) of the Act and before completing the assessment and passingthe order dated 22[nd] December, 2010, the assessing officer issuednotices under Sections 143(2) and 143(1) of the Act and after dueenquiry, the assessment was completed. There is absolutely nowhisper in the said order that the respondent/assessee hadreceived capitation fee. Thus, for the above reasons, we are of the view that the plearaised by the revenue that the assessing officer should bepermitted to re-do the assessment for de novo consideration isimpermissible. For the above reasons, the appeal (ITAT/119/2015)is dismissed and the substantial questions of law are answeredagainst the revenue.Consequently, the connected application for stay (IANo.GA/1/2015) also stands dismissed. (HIRANMAY BHATTACHARYYA, J.) S.Das/As.