×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
17-05-2019, Ashoka Education, Section 153C, 12A, 132, Tribunal Pune
This bunch of appeals filed by assessee are against consolidated order of CIT(A)-I, Nashik, dated 10.10.2014 relating to assessment years 2005-06 to 2010-11 against respective orders passed under section 143(3) r.w.s. 153C of the Income-tax Act, 1961 (in short ‘the Act’).
2. This bunch of appeals relating to same assessee on similar issues were heard together and are being disposed of by this consolidated order for the sake of convenience. In order to adjudicate the issues, we refer to the facts and grounds of appeal raised in ITA No.2161/PUN/2014, relating to assessment year 2005-06.
3. The assessee in ITA No.2161/PUN/2014, relating to assessment year 2005-06 has raised the following grounds of appeal:-
1. The learned CIT(A) erred in upholding the issue of Notice u/s 153C and the consequent assessment proceedings u/s 153C, challenged on various grounds, including for the ground relating to photocopy of gift deed found in search action with the donors that cannot be said to be belonging to appellant. Therefore, it is prayed to hold that the assessment proceedings initiated by issue of such Notice u/s 153C and the consequent assessment order passed u/s 153C were both bad in law.
2. The learned CIT(A) erred in disallowing various expenses @ adhoc 5%. It is prayed to cancel the disallowance.
4. The assessee has also raised additional grounds of appeal.
5. The assessee is aggrieved by exercise of jurisdiction by the Assessing Officer under section 153C of the Act, wherein vide ground of appeal No.1 the assessee has challenged notice issued under section 153C of the Act as not correct and hence, the consequent assessment order passed being bad in law. Vide ground of appeal No.2, the assessee has challenged disallowance of various expenses on adhoc basis @ 5%. The assessee has also raised additional grounds of appeal.
6. The learned Authorized Representative for the assessee at the outset pointed out that the issue which needs to be addressed as to when the proceedings can be initiated under section 153C of the Act. He further stated that during the course of search conducted on Ashoka group on 20.04.2010, copy of gift deed was found. As per the said gift deed, three Directors of Ashoka group gifted a piece of land to Ashoka Education Foundation i.e. assessee. The original of gift deed was with the trust and only copy of gift deed was seized document on which reliance was being placed to initiate proceedings under section 153C of the Act. The first point which was raised by him was that the said document was not incriminating document, since the registered gift deed was not found and the transaction was duly recorded in the books of account. He stressed that basically when no incriminating document was found, so no question of initiating proceedings under section 153C of the Act. Further, he also stated that no addition was made on this count. He then, referred to proceedings under section 153C of the Act and pointed out that when the said proceedings were being carried on, registration under section 12A of the Act granted to the assessee was cancelled by CIT(Exemption) because of pendency of 153C proceedings and on cancellation of 12A registration, the Assessing Officer disallowed entire expenditure and treated the entire receipts as income. However, the CIT(A) on the technical issue, stated that since the document was found, though not incriminating, but the proceedings were correctly initiated However, he holds the action of Assessing Officer was not correct and disallowed only 5% of expenses. The learned Authorized Representative for the assessee further referred to order of Tribunal ITA Nos.549 & 1294/PN/2009, order dated 31.12.2014, under which 12A recognition was restored back to the CIT.
7. The learned Authorized Representative for the assessee stressed that under earlier section 153C of the Act, expression was ‘belongs to’ but now w.e.f. 01.06.2015 expression is ‘pertains to’. He thus, stressed that mere copy of document cannot be said to belong to assessee, where it is not even stated to be incriminating. Our attention was drawn to financial statements of assessee trust, wherein the gifted land was recorded in assessee’s name. Since this transaction was already recorded and in the absence of any other document being found during the course of search, the learned Authorized Representative for the assessee stressed that there was no question of initiating proceedings under section 153C of the Act.