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The Income Tax Officer, Ward-1(2), Room No.2417, 24th Floor, E-2 Block, Pratyaksh Kar Bhawan, vs. M/s. Innovative Welfare and Educational Society, Plot No.6, Knowledge Park- II, Greater Noida, Gautam Budh Nagar, U.P.
May, 09th 2019
       IN THE INCOME TAX APPELLATE TRIBUNAL
              DELHI BENCHES "C" : DELHI

  BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
                        AND
      SHRI N.S. SAINI, ACCOUNTANT MEMBER

                 ITA.No.4304/Del./2016
               Assessment Year 2011-2012

The Income Tax Officer,         M/s. Innovative Welfare
Ward-1(2), Room
                                and Educational Society,
No.2417, 24th Floor, E-2
Block, Pratyaksh Kar       vs   Plot No.6, Knowledge Park-
Bhawan, Dr. Shyama
                                II, Greater Noida, Gautam
Prasad Mukherjee Civic
Centre, Jawahar Lal             Budh Nagar, U.P.
Nehru Marg, New Delhi.
                                PIN ­ 201301.
PIN ­ 110 002.
                                PAN AAATI4207R

       (Appellant                      (Respondent)

              For Revenue : Shri Amit Katoch, Sr. D.R.
              For Assessee :           -None-

             Date of Hearing : 06.05.2019
     Date of Pronouncement : 08.05.2019

                           ORDER

PER BHAVNESH SAINI, J.M.


          This appeal by Revenue has been directed against

the Order of Ld. CIT(A)-40, New Delhi, Dated 02.05.2016,

for the A.Y. 2011-2012 on the following grounds :
                              2
                     ITA.No.4304/Del./2016 M/s. Innovative Welfare and
             Educational Society, Greater Noida, Gautam Budh Nagar, U.P.


(i)    "On the facts and in the circumstances of the case

       and in law, the Ld. CIT(A) has erred in ignoring the

       fact that the assessee failed to produce any

       document regarding approval of the governing

       body of    the    assessee society regarding the

       appointment      and       remuneration       of   both     the

       specified persons Sh. Devashish Gaur, Director

       cum Administrator (son of              Chairman of          the

       assessee    society)       and   Ms.    Sharda       Sharma,

       Principal/Administrator (wife of Chairman of the

       assessee society).


(ii)   On the facts and in the circumstances of the case

       and in law, the Ld. CIT(A) has erred in ignoring the

       fact the salaries paid by assessee to these

       specified persons were excessive in comparison to

       the normal practice followed for other employees,

       thereby committed violation within the meaning of

       provisions of section 13(1)(c) of the Act by

       providing benefits to the above specified persons."
                                  3
                         ITA.No.4304/Del./2016 M/s. Innovative Welfare and
                 Educational Society, Greater Noida, Gautam Budh Nagar, U.P.


2.        Briefly the facts of the case are that assessee

society is registered under section 12A of the I.T. Act, 1961,

vide Registration Dated 16.02.2005 w.e.f. 11.02.2004. The

society is also registered under section 80G of the I.T. Act.

The society was established with the primary object to

educate and train Indian citizen under the cause of

"Education for All". The society has established three

educational institutions to train students in their fields. The

assessments for the A.Ys. 2009-2010 and 2010-2011 were

passed on the basis of the special audit. The assessee was

asked to compare the facts of this case with the facts of

preceding assessment        year. The        assessee      in support

furnished affidavit of the Chairman of the Society stating

that there has been no purchase by the society from M/s.

Global Enterprises and M/s. Ruchi Construction in this

year. All the bills of additions to the fixed assets were

produced. The assessee society deducted TDS properly.

There is no loan process fees payable as was paid in earlier

year. No loan was taken in this year. The assessee was

asked to furnish the details of interested persons under
                                    4
                           ITA.No.4304/Del./2016 M/s. Innovative Welfare and
                   Educational Society, Greater Noida, Gautam Budh Nagar, U.P.







section 13(3) of the I.T. Act and their status in the society.

The assessee furnished details of interested persons. It

provides   that    Shri    Devasish       Gaur      is    Director      cum

Administrator to whom salary of Rs.2,74,640/- has been

paid.   Smt.      Sharda     Sharma,        Principal/Administrator,

Innovative Institute of Law and have been paid salary of

Rs.5,23,680/-. Both are son and wife of the Chairman of the

society Shri K.R. Sharma. Both are specified persons. The

A.O. noted that in previous assessment years the assessee

could not produce any documents regarding approval of

Governing Body of the society regarding the appointment

and remuneration of both these persons. The salary paid to

these specified persons are excessive in comparison to the

normal practice followed for other employees, therefore,

exemption under section 11 was denied and the income was

computed in the status of AOP. The total income was

computed at Rs.1.37 crores.


3.         The assessee challenged the findings of the A.O.

before the Ld. CIT(A) and the same facts were reiterated. It

was further submitted that both these persons were
                                  5
                         ITA.No.4304/Del./2016 M/s. Innovative Welfare and
                 Educational Society, Greater Noida, Gautam Budh Nagar, U.P.


appointed through Resolution passed under the General

Body Meeting dated 04.06.2008 and are devoting full time

to the institution to the best of their knowledge, ability and

experience. The salary was paid to them reasonably. The

salary paid to them was less than the amount as prescribed

by Sixth Pay Commission introduced by the Government of

India, as per their education ability, experience and

devotion for the institution. It was, therefore, submitted that

A.O. was absolutely wrong in denying the exemption under

section 11 of the I.T. Act. The assessee also submitted that

issue is covered by the Order of the ITAT, Delhi Bench in the

case of ACIT vs. Idicula Trust Society [2014] 151 ITD 739

(Del.) in which similar disallowances were deleted. It was

also observed that in January, 2006, the Government of

India has notified Sixth Pay Commission which resulted into

handsome     enhancement        of    salary     of   the     employees

including Government teaching staff and salary have been

almost enhanced by 30%-40%, therefore, it is not excessive

salary paid to the above persons. The assessee also pleaded

that in the case of the assessee the matter have been
                                    6
                           ITA.No.4304/Del./2016 M/s. Innovative Welfare and
                   Educational Society, Greater Noida, Gautam Budh Nagar, U.P.


considered and decided by the Tribunal. The Ld. CIT(A)

following the same, allowed the appeal of assessee.


4.        We have heard the Ld. D.R. who has relied upon

the Order of the A.O.


5.        On the other hand, none appeared on behalf of

the assessee, despite notifying the date of hearing through

registered post.


6.        After considering the submissions of the Ld. D.R,

we are of the view that no interference is called for in the

matter. The A.O. noted that salary have been paid to two

persons who were specified persons under section 13(3) of

the I.T. Act. A.O. also noted that in previous assessment

years, the assessee could not produce any documents

regarding approval of the governing body of the society

including the appointment and remuneration of both these

persons. The A.O. also found that salary paid to these

persons are excessive in comparison to the normal practice

followed for other employees. The assessee, however,

submitted before Ld. CIT(A) that both these persons were
                                  7
                         ITA.No.4304/Del./2016 M/s. Innovative Welfare and
                 Educational Society, Greater Noida, Gautam Budh Nagar, U.P.







appointed through the resolution passed under the General

Body Meeting dated 04.06.2008. It was also submitted that

both these persons have devoted full time to the educational

institution to the best of their knowledge, ability and

experience. It, therefore, appears that A.O. followed the

orders for earlier years, in which the assessee did not

produce documents regarding approval of the Governing

Body. Further assessee explained that Governing Body

passed resolution in earlier year on 04.06.2008. The A.O.

did not bring any evidence on record as to how the salary

paid to these persons with reference to their qualification

was excessive or unreasonable. A.O. did not make any

comparison, but, appears to have followed order for earlier

years. In earlier year, the matter have been decided in

favour of the assessee as is noted by the Ld. CIT(A) in his

Order because the same salary have been considered in

earlier years. The Ld. CIT(A) also referred to decisions of the

Coordinate Bench of Delhi Tribunal in the case of ACIT vs.

Idicula Trust Society (supra), in which the Tribunal has

referred to the enhancement in pay/salary by Sixth Pay
                                  8
                         ITA.No.4304/Del./2016 M/s. Innovative Welfare and
                 Educational Society, Greater Noida, Gautam Budh Nagar, U.P.


Commission in January, 2006. In the case of the assessee,

assessee explained that salary paid to these persons was

even less than the salary prescribed by the Sixty Pay

Commission. Since the A.O. compared the facts of this year

for earlier years, in which, relief has already been granted to

the assessee as per findings of the Ld. CIT(A), therefore, Ld.

CIT(A) correctly following the earlier precedence, deleted the

addition. No interference is called for in the matter. Appeal

of Revenue dismissed.


7.        In the result, appeal of Revenue dismissed.


          Order pronounced in the open Court.


      Sd/-                                   Sd/-
     (N.S. SAINI)                           (BHAVNESH SAINI)
ACCOUNTANT MEMBER                           JUDICIAL MEMBER
Delhi, Dated 08th May, 2019.
VBP/-
Copy to
1.   The appellant
2.   The respondent
3.   CIT(A) concerned
4.   CIT concerned
5.   D.R. ITAT `C' Bench, Delhi
6.   Guard File.
                        9
               ITA.No.4304/Del./2016 M/s. Innovative Welfare and
       Educational Society, Greater Noida, Gautam Budh Nagar, U.P.



            // BY Order //



Assistant Registrar : ITAT Delhi Benches :
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