Director of Income Tax (Exemption) vs Raunaq Education Foundation

The revenue is aggrieved by an order dated 9-3-2007 passed by the income tax Appellate Tribunal, Delhi Bench ''F'' in ITA No. 2657/Delhi/2006 relevant for the assessment year 2002-2003. The assessee received a cheque dated 22-4-2002 for which it gave a receipt on 31-3-2002. In other words the cheque was a post-dated cheque.

According to the revenue, the cheque amount fell foul of section. Section 13(2)(b), (d) and (h) of the income tax Act, 1961 (for short the Act).

The Tribunal found that it k only a post-dated cheque and it cannot be said to be an amount which was made available for the use of the drawer of the cheque and, therefore, the provisions of section 13(2)(b) of the Act do not apply.

Similarly, no service of the assessee was available to the drawer of cheque and, therefore, the provisions of section 13(2)(d) also did not apply.

With regard to section 13(2)(h) of the Act, it is submitted by learned counsel for the revenue that the amount can be said to be an investment made by the assessee with the drawer of the cheque for which the assessee did not receive any compensation. We are of the view that this is too broad a proposition to be accepted. If the contention of learned counsel for the revenue is accepted, then any post-dated cheque will amount to an investment.

We are of the opinion that the Tribunal did not err either on facts or in law in rejecting the contention of the Revenue. No substantial question of law arises.