MAKHAN SINGH Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) The present appeal has been filed under Section 260A of the Income Tax Act, 1961 (hereinafter called as 'the Act') against the order dated 28.1.2014 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Amritsar (in short 'the Tribunal') in ITA No. 440/ASR/2012 for the assessment year 2009-10 claiming the following substantial questions of law:-

(2.) Brief facts of the case are that the appellant filed return of his income for the Assessment Year 2009-10 on 31.3.2010 declaring income of Rs. 2,10,870/-. The said return was processed under Section 143(1)(a) of the Act. Subsequently, the case was selected for scrutiny. Accordingly, notice under Section 143(2) of the Act was issued to the appellant, besides a notice under Section 139C(1)/139D(c) of the Act, requiring to file certain documents. In compliance thereto, the appellant filed copy of his Income Expenditure Account and other documents while submitting that no bank account was maintained by him in his name. Notice under Section 142(1) of the Act was served upon the appellant requiring him to furnish necessary information. However, he did not respond to the same. Thereafter, many questionnaires were issued to him from time to time, which he duly replied that "he was a religious preacher doing no business activity and not maintaining any personal bank account. He was residing in Dera of Sant Amir Singh Ji, Bazaar Satto Wala, Amritsar. Expenses towards electricity, telephone and water were being borne by aforesaid Dera. Some mobile phone expenses were incurred by him in 2008-09, details of which were furnished in the Income & Expenditure Account etc." The Assessing Officer vide assessment order dated 17.11.2011 (Annexure A-1) made an addition of Rs. 1,21,67,653/- by treating the bank deposits as his income from profession and vocation while, inter alia, disallowing the expenses towards insurance and 1/5 th expenses towards telephone, travelling and vehicle etc. amounting to Rs. 6,12,725/- besides, adding back Rs. 1,39,85,512/- claimed by the assessee towards donation of Chhattar of gold weighing 12.670 Kgs. to Sri Hazur Sahib, Abchalnagar, Nanded, Maharashtra and Rs. 13,35,658/- spent towards air conditioner, computer, vehicle, television, purchase of generator etc. Aggrieved with the same, the appellant filed an appeal before the Commissioner of Income Tax (Appeals), Amritsar [for brevity "the CIT(A)"], who dismissed the same vide order dated 18.10.2012 (Annexure A-2). Still dissatisfied, the assessee filed an appeal before the Tribunal. The Tribunal vide order dated 28.1.2014 (Annexure A-3) dismissed the appeal. Hence, the present appeal by the assessee.

(3.) Learned counsel for the appellant argued that the authorities below have failed to appreciate the dual capacity of the appellant, first as Preacher and other as Mukh Sevadar of Dera, Sant Amir Singh Ji Taksal. The said Dera is an old Historic Dera of about 100 years old being managed by the appellant. The said Dera is carrying various charitable and religious activities by utilizing the donations made by the general public etc. and thus, the donations so received by the appellant were deposited in the bank account. Though the said bank accounts are in the name of the appellant, but in fact, the same are of the Dera. The appellant was merely operating the same. The authorities below have miserably failed to appreciate that the appellant was only operating the bank account and doing his duty as care taker. The authorities below have erred in not appreciating the fact that the donations received from general public cannot be treated as income from business of the appellant, more particularly, when the same were 'corpus' donations. The Assessing Officer, the CIT(A) and the Tribunal have wrongly ignored the certificate issued by Takhat Sachkhand Sri Hazur Sahib, Abchalnagar, Nanded Sahib, Maharashtra, regarding donation of gold chhabba. In support of his contentions, learned counsel has relied upon the judgments in Commissioner of Income Tax-II, Chandigarh v. The Punjab State E-Governance Society, Income Tax Appeal No. 75 of 2011, decided on 21.4.2011; Director of Income Tax v. Society for Development Alternatives, ITA Nos. 12 of 2012 and 18 of 2012, decided on 13.1.2012; Sukhdeo Charity Estate, Landu v. CIT, Rajasthan, Jaipur, 1984 149 ITR 470 (Raj); Commissioner of Income Tax (Central), New Delhi v. Bijli Cotton Mills (P) Ltd., 1979 AIR(SC) 346; CIT, West Bengal v. Tollygunge Club Ltd., 1977 AIR(SC) 1343; CIT, Kanpur v. Sant Baba Mohan Singh, 1979 118 ITR 1015 (All.); and CIT v. Baba Avtar Singh, 1972 83 ITR 738 (Del.).