ACIT Vs Mother Theressa Educational Society (ITAT Visakhapatnam)
ITAT Visakhapatnam held that revision u/s. 263 quashed as AO already disallowed the claim of depreciation while framing assessment and assessed income at NIL due to proper application of funds.
Facts- The assessee being the society is registered u/s. 12A r.w.s. 12AA(1)(b) of the Act and also registered u/s. 80G of the Act. The assessee filed its return of income declaring NIL income after claiming of application of income u/s. 11 of the Act. The case was selected for complete scrutiny and accordingly the assessment was completed u/s. 143(3) r.w.s. 144B of the Act assessing the total income at Rs. Nil.
However, during the scrutiny assessment proceedings, AO noticed that assessee has mis-reported claim of expenditure on account of depreciation amounting to Rs.7,95,54,942/- and thereafter initiated penalty proceedings u/s. 270A of the Act. AO observing that the assessee has claimed application of fund as capital application while acquiring the assets amounting to Rs.8,36,91,167/- and simultaneously has claimed depreciation amounting to Rs.7,95,54,942/-. Therefore, AO treated the claim of depreciation as tantamount to double deduction. The AO noticed that assessee has claimed application on revenue account Rs.56,70,42,821/-after deducting the depreciation claimed but included application of capital expenditure aggregating to total claim u/s 11 for Rs. 65,07,33,988/- which is more than 85% of total receipts of Rs.73,04,73,622/- i.e. Rs.62,09,02,578/-. Thereafter, AO accepted the assessee income at Rs. NIL while finalising the assessment. However, AO considered that the assessee has mis-reported the claim of expenditure on account of depreciation and therefore initiated penalty proceedings u/s. 274 r.w.s. 270A of the Act. AO imposed penalty of Rs.4,91,64,956/- which is 200% of the amount of tax on the under-reporting of the income.
