BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI T.R.SOOD, ACCOUNTANT MEMBER
May, 23rd 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES `B' CHANDIGARH
BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT
AND SHRI T.R.SOOD, ACCOUNTANT MEMBER
M.A No. 54/Chd/2007
(In ITA No. 31/Chd/2002)
Assessment Year: 1997-98
The ACIT, Vs M/s Delta International Service(P) Ltd,
Circle 4(1), Chandigarh
PAN No. AABCD2944EV
Appellant By : Shri Ahkilesh Gupta
Respondent By : Shri Ravinder Bindlish
Date of hearing : 18.05.2012
Date of Pronouncement : 22.05.2012
PER H.L.KARWA, VP
This Misc. Application by the Revenue arises out of the order of the
Tribunal dated 23.3.2005 passed in ITA No. 31/Chd/2002 relating to
assessment year 1997-98.
2. The Asstt. CIT, Circle-4(1) Chandigarh vide his application dated
8.12.2005 has stated as under:-
1. The Hon'ble ITAT have passed order dated 23.3.05 in ITA
No.31/CHD/2002 in the case of M/s Delta Information service (P) Ltd for the
A.Y 1997-98.The revenue had taken the following grounds of appeal in
respect of fees received from students which is reproduced as under :-
" On the facts and circumstances of the case the Ld CIT(A) vide order
dated 10.10.2001 in appeal no. 7091/2000-01 had erred in deleting
addition of Rs.26,00,890/- representing fees received from students"
2. The Hon'ble ITAT have decided the issue against the revenue.
The observations of the Hon'ble ITAT in para 7 of their order are reproduced
as under :-
" 7. Considering the facts of the case, it is clear that assessee entered
into an agreement with M/s NIIT through which fees are received from
the students in ESCROW A/c which is disbursed by M/s NIIT to the
assessee on the basis of services provided by assessee to the students.
Therefore, the receipt of the fees cannot be treated as income of the
assessee. The disbursement of fees is subject to the services provided by
the assessee to the students. The account is thus not controlled by
assessee and the same accounting system was accepted in earlier years
as is admitted by both the parties. Therefore, the CIT(A) was justified in
deleting the entire addition as there was no accrual of income in favour
of the assessee on the basis of mere receipt of the fees in the ESCROW
A/c. We accordingly, do not find any infirmity in the order of the
CIT(A). We confirm the same and dismiss the appeal of the revenue"
3. It has been observed by the Hon'ble ITAT, vide para 7 of the order, as
reproduced above, that "same accounting system was accepted in earlier years
as is admitted by both the parties".
4. This observation of the Hon'ble ITAT is respectfully not correct looking
to the facts of the case. The correct facts of the case are that the assessment for
the A.Y 1994-95 was framed u/s 143(3) read with section 147/148 and the
accounting systems of the assessee was not accepted/Not only for this year, but
for the assessment year 1993- 94, 1995-96 and 1996-97 the accounting system
of the assessee was not accepted by the AO and assessment was framed us
143(3) read with section 147/148 in each of these years. Similarly, for the
assessment year 1998-9, assessment was made us 143(3) and accounting systems
was not accepted.
5. The Hon'ble ITAT is. therefore, requested to pass necessary orders us
254(2) of the Income-tax Act 1961 to rectify the mistake apparent from records.
6. This petition is filed with the approval/as per directions of the Worthy CIT-II,
Chandigarh vide his office letter No. CIT-II/CHD/Misc.Pet./761/2859 dated
28.11.2005. The order of the Hon'ble ITAT was received in the office of the CIT-II,
Chandigarh on 4th May 2005."
3. We have heard the rival submissions and have also perused the
materials available on record. Shri Ravinder Bindlish, Ld. Counsel for the
assessee pointed out that the averments made in para 4 of the application
filed u/s 254(2) of the Income Tax Act, 1961 (in s hort 'the Act') are factually
wrong and, therefore, the application of the Revenue deserves to be
dismissed. He further submitted that the assessee entered into an agreement
with M/s NIIT through which fees received from the students in ESCROW
A/c which is disbursed by M/s NIIT to the assessee on the basis of services
provided by assessee to the students. The disbursement of fee is subject to
the services provided by the assessee to the students. The account is thus not
controlled by the assessee and the same accounting system was accepted from
assessment years 1993-94 to 1998-99. In all the above years, the CIT(A)
after appreciating the facts and genuineness of the change of accounting
system accepted the contention of the assessee and deleted the entire
addition. The Tribunal vide its order dated 24.6.2005 in ITA Nos. 230, 231
& 232/Chandi/2003 relating to asses sment years 1993-94, 1995-96 and 1996-
97 confirmed the orders of CIT(A). In the year under consideration also, the
Tribunal has confirmed the order of CIT(A) in ITA No. 31/Chandi/2002 vide
its order dated 23.3.2005.
4. Shri Ravinder Bindlish, Ld. Counsel for the assessee submitted that the
Revenue has not challenged the above orders of the Tribunal in appeal before
the Hon'ble jurisdictional High Court. He, therefore, s ubmitted that the
orders of the Tribunal referred to above have attained finality and, therefore,
the present application of the Revenue deserves to be dismissed.
5. In our view there is a substance in the above submissions of Shri
Ravinder Bindlish, Ld. Counsel for the assessee and, therefore, we hold that
the Misc. Application is without any merit and deserves rejection.
Accordingly, we dis miss the misc. application filed by the Revenue.
6. In the result, Misc. Application is dismissed.
Order Pronounced in the Open Court on this 22 n d day of May, 2012
ACCOUNTANT MEMBER VI CE PRESIDENT
Dated : 22 n d May, 2012
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR