JCIT (OSD) (E) v. Population Services International

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The Tax Publishers2024 TaxPub(DT) 806 (Del-Trib) IN THE ITAT DELHI N.K. BILLAIYA, A.M. & ASTHA CHANDRA, J.M. JCIT (OSD) (E) v. Population Services International ITA No. 1805/Del/2023 12 February, 2024 Assessee by: Ajay Vohra, Sr. Advocate, Arpit Goyal, Advocate Department by: P.N.Barnwal, CIT-DR ORDER *Astha Chandra, J.M.* The appeal filed by the Revenue is directed against the order dated 14-3-2023 of the Learned Commissioner (Appeals) NFAC, Delhi (CIT(A)) pertaining to the Assessment Year (AY) 2016-17. 2. The Revenue has raised the following grounds: 1. That on the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) is erred in allowing appeal of the assessee by ignoring that it is not carrying charitable activities as envisaged in Section 2(15) read with section 10(23C) of the IT Act, 1961. 2. That on the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) is erred in allowing appeal of the assessee by ignoring finding of special auditor that the activities of the assessee is neither genuine nor incidental to the attainment of aims and objectives. 3. That on the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) is erred in allowing appeal of the assessee by merely relying on order of the Hon'ble ITAT without appreciating the facts of the case and findings of the Assessing Officer. 4. That on the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) is erred in allowing appeal of the assessee by merely relying on order of the Hon'ble ITAT, whereas the same has not been accepted by the revenue and further appeal is being filed before the Hon'ble High Court. 5. The Appellant craves leave to add, alter, amend, append or delete any of above grounds. 3. Briefly stated, the assessee trust e-filed its return for Assessment Year 2016-17 on 11-10-2016 declaring Nil income. The return was processed under section 143(1)(a) of the Income Tax Act, 1961 ( the Act ) on 26-11-2016. The case was selected for scrutiny. During the course of assessment proceedings the Learned Assessing Officer (AO) noticed difference in the donation as per FCRA returns and those shown in Income and Expenditure Account. The Learned Assessing Officer submitted proposal dated 12-12-2018 for Special Audit. Proposal for withdrawal of approval granted under section 10(23C)(iv) of the Act was also forwarded to Commissioner (Exemption), Delhi (CIT(E)) who issued show cause notice to the assessee. It is stated that the assessee could not give any proper explanation and failed to counter the findings of the Special Audit Team that the assessee is operating as a commercial pharmaceutical company by making its own products and maximising its projects. The activities of the assessee were not charitable and purely commercial in nature. The Learned Commissioner (Exemption), Delhi withdrew the approval under section 10(23C)(iv) granted to the assessee. Consequently, the Learned Assessing Officer rejected the assessees claim of exemption and held its income to be taxable as AOP. Accordingly, he completed the assessment on income of Rs. 1,84,49,07,500 under section 143(3) read with section 144B of the Act on 13-5-2021. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 806 (Del-Trib)

IN THE ITAT DELHI

N.K. BILLAIYA, A.M. & ASTHA CHANDRA, J.M.

JCIT (OSD) (E) v. Population Services International

ITA No. 1805/Del/2023

12 February, 2024

Assessee by: Ajay Vohra, Sr. Advocate, Arpit Goyal, Advocate

Department by: P.N.Barnwal, CIT-DR

ORDER

Astha Chandra, J.M.

The appeal filed by the Revenue is directed against the order dated 14-3-2023 of the Learned Commissioner (Appeals) NFAC, Delhi (CIT(A)) pertaining to the Assessment Year (AY) 2016-17.

2. The Revenue has raised the following grounds:

1. That on the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) is erred in allowing appeal of the assessee by ignoring that it is not carrying charitable activities as envisaged in Section 2(15) read with section 10(23C) of the IT Act, 1961.

2. That on the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) is erred in allowing appeal of the assessee by ignoring finding of special auditor that the activities of the assessee is neither genuine nor incidental to the attainment of aims and objectives.

3. That on the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) is erred in allowing appeal of the assessee by merely relying on order of the Hon'ble ITAT without appreciating the facts of the case and findings of the Assessing Officer.

4. That on the facts and circumstances of the case and in law, the Learned Commissioner (Appeals) is erred in allowing appeal of the assessee by merely relying on order of the Hon'ble ITAT, whereas the same has not been accepted by the revenue and further appeal is being filed before the Hon'ble High Court.

5. The Appellant craves leave to add, alter, amend, append or delete any of above grounds.

3. Briefly stated, the assessee trust e-filed its return for Assessment Year 2016-17 on 11-10-2016 declaring Nil income. The return was processed under section 143(1)(a) of the Income Tax Act, 1961 ( the Act ) on 26-11-2016. The case was selected for scrutiny. During the course of assessment proceedings the Learned Assessing Officer (AO) noticed difference in the donation as per FCRA returns and those shown in Income and Expenditure Account. The Learned Assessing Officer submitted proposal dated 12-12-2018 for Special Audit. Proposal for withdrawal of approval granted under section 10(23C)(iv) of the Act was also forwarded to Commissioner (Exemption), Delhi (CIT(E)) who issued show cause notice to the assessee. It is stated that the assessee could not give any proper explanation and failed to counter the findings of the Special Audit Team that the assessee is operating as a commercial pharmaceutical company by making its own products and maximising its projects. The activities of the assessee were not charitable and purely commercial in nature. The Learned Commissioner (Exemption), Delhi withdrew the approval under section 10(23C)(iv) granted to the assessee. Consequently, the Learned Assessing Officer rejected the assessees claim of exemption and held its income to be taxable as AOP. Accordingly, he completed the assessment on income of Rs. 1,84,49,07,500 under section 143(3) read with section 144B of the Act on 13-5-2021.