Kandi Friends Educational Trust v. Cit-Ii, Chandigarh

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH I.T.A. No.191 of 2012 (O&M) Date of Decision:04.04.2013 Kandi Friends Educational Trust Vs. .....Appellant CIT-II, Chandigarh .....Respondent CORAM:HON'BLE MR. JUSTICE HEMANT GUPTAHON'BLE MS. JUSTICE RITU BAHRI Present:Mr. Brij Mohan Monga, Advocate for the appellant. HEMANT GUPTA, J.(Oral) The present appeal under Section 260-A of the Income Tax Act,1961 (for short, `the Act') is against the order dated 14.3.2012 in respect ofassessment year 2004-05. The assessee has claimed the followingsubstantial questions of law:- (i)Whether the ITAT is justified in not setting aside the order u/s263 of the Income Tax Act, 1961 dated 27-03-2009, passed by theCIT, which was based upon change of opinion and not based uponany cogent and tangible material? (ii)Whether the Tribunal is justified in confirming the order ofCIT, passed u/s 263 of the Act, without appreciating the detailedsubmissions of the appellant regarding application of income inaccordance with section 11 of the Income Tax Act, 1961?(iii)Whether the ITAT is justified in holding that the informationcollected by the Assessing Officer was not considered by him afterdue application of mind whereas the same had been duly examinedby the AO before framing the original assessment? The appellant is a Technical Educational Trust. The assessment proceedings in respect of assessee was finalised by the Assessing Officer on I.T.A. No.191 of 2012 (O&M) 26.12.2006 at nil income. The Assessing Officer found that the assessee hasincurred more than 85% of the expenditure during the year in question and,therefore, allowed the exemption under Section 11 and 12A of the Act.However, the Commissioner of Income Tax revised the said order inexercise of the provisions under Section 263 of the Act on 26.3.2009 aftergiving show cause notice. It was found that the families of the trustees havebeen paid interest whereas in terms of the deed of trust, the members of thetrust are not to be paid any benefit or profit from the trust. It was also foundthat the Assessing Officer has failed to examine the issue of deduction of taxat source while crediting interest to the family members of the trustees.Similarly, it was found that 50% of the development fund has been utilisedwhereas the balance was to be utilised after ten years. The Commissionerfound that there is no date of creation of development fund and the yearwise break up of opening balance is also not available. It was found thattowards development fund, each student was to contribute a sum of Rs.600/-per annum. It was found that such receipt is income of the trust and notexempted under Section 11 of the Act. Similarly, the discrepancies werefound on account of depreciation, repayment of term loan. Such order hasbeen affirmed in appeal by the Tribunal. Learned counsel for the appellant has argued that even if allsuch additions are made, still the tax effect is nil, therefore, it cannot be saidthat the order of Assessing Officer was prejudicial to the interest of revenue.Learned counsel for the appellant has referred to a Division Bench judgmentof Gujarat High Court in Commissioner of Income Tax v. Smt. Minalben S.Parikh, 215 ITR 81 in support of such argument. I.T.A. No.191 of 2012 (O&M) We have heard learned counsel for the appellant and find nomerit in the present appeal. The assessee has disputed the show causenotice justifying the return filed. It was never the stand of the assessee thateven if the said aspects are taken into consideration, still the income of theassessee would be nil. In the absence of any plea that the additions madewill not cause loss to the revenue, we find that the appellant cannot bepermitted to raise such questions in appeal without there being any factualbasis. In view thereof, we do not find that any substantial question oflaw arises for consideration in the present appeal. Dismissed. ( HEMANT GUPTA ) JUDGE April 04, 2013renu/Vimal I.T.A. No.191 of 2012 (O&M) We have heard learned counsel for the appellant and find nomerit in the present appeal. The assessee has disputed the show causenotice justifying the return filed. It was never the stand of the assessee thateven if the said aspects are taken into consideration, still the income of theassessee would be nil. In the absence of any plea that the additions madewill not cause loss to the revenue, we find that the appellant cannot bepermitted to raise such questions in appeal without there being any factualbasis. In view thereof, we do not find that any substantial question oflaw arises for consideration in the present appeal. Dismissed. ( HEMANT GUPTA ) JUDGE April 04, 2013renu/Vimal ( RITU BAHRI ) JUDGE