Narayanasamy Educational Trust, Erode V. ITO, Erode

CO 12/CHNY/2010

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 5482 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-12-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 05-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: TAPAS KUMAR DUTTA
• Assessee Lawyers: S SRIDHAR
• Section: 143(3); 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI (BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER) ..... I.T.A. NO. 302/MDS/2010 ASSESSMENT YEAR : 2006-07 THE INCOME TAX OFFICER, WARD I(1), ERODE 638 001. (APPELLANT) V. M/S NARAYANASAMY EDUCATIONAL TRUST, NO.356, SATHY ROAD, ERODE 638 001. PAN : AAATN8126G (RESPONDENT) C.O. NO. 12/MDS/2010 (IN I.T.A. NO. 302/MDS/2010) ASSESSMENT YEAR : 2006-07 M/S NARAYANASAMY EDUCATIONAL TRUST, NO.356, SATHY ROAD, ERODE 638 001. (CROSS OBJECTOR) V. THE INCOME TAX OFFICER, WARD I(1), ERODE 638 001. (RESPONDENT) REVENUE BY: SHRI TAPAS KUMAR DUTTA ASSESSEE BY: SHRI S . SRIDHAR O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, COI MBATORE, DATED 21 ST DECEMBER, 2009, PERTAINING TO ASSESSMENT YEAR 2006 -07. I.T.A. NO. 302/MDS/10 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE-TRUST IS RUNNING POLYTECHNIC COLLEGE UNDER THE NAME ERODE INSTITUTE OF CHEMICAL TECHNOLOGY. IT FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 23 RD MARCH, 2007, ADMITTING NIL INCOME. LATER ON, THE ASSESSMENT WAS COMPLETED UND ER SECTION 143(3) OF INCOME-TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) VIDE ORDER DATED 31.12.2008, DETERMINING THE INCOME AT ` 18,51,103/-. THE A.O. WAS OF THE OPINION THAT SINCE THE GROSS AN NUAL RECEIPTS OF THE ASSESSEE-TRUST HAS EXCEEDED THE MONETARY LIMIT PRESCRIBED UNDER CLAUSE (VI) OF SECTION 10(23C) OF THE ACT AND SINCE THE ASSESSEE HAS NOT OBTAINED THE NECESSARY APPROVAL FR OM THE CHIEF CIT OR THE DIRECTOR-GENERAL OF INCOME TAX FOR THE A SSESSMENT YEAR 2006-07, AS CONTEMPLATED UNDER THE SAID CLAUSE, THE CLAIM OF EXEMPTION BY THE ASSESSEE CANNOT BE ACCEPTED AND TH E INCOME SHOWN AT ` 18,51,103/- WHICH WAS ALLOWED AS EXEMPT UNDER SECT ION 10(23C) IS DISALLOWED AND TAXED UNDER THE HEAD INC OME FROM OTHER SOURCES. AGGRIEVED, THE ASSESSEE PREFERRED APP EAL BEFORE THE LD. CIT(APPEALS) BY TAKING A PLEA THAT THE ASSESSEE HAD LONG BACK FILED APPLICATION FOR REGISTRATION UNDER SECTION 12AA(2) OF THE ACT BEFORE THE PRESCRIBED AUTHORITY BY FILING RELEVANT FORMS I N TIME, TO GET AN APPROVAL FOR CLAIMING EXEMPTION UNDER SECTION 10(23 C) OF THE ACT. THE LD. CIT(APPEALS) CONSIDERED THE FOLLOWING TWO P OINTS:- I.T.A. NO. 302/MDS/10 3 1. WHETHER THE APPELLANT IS ENTITLED FOR EXEMPTION U/S . 10(23C)(VI) OR SEC.11 OF THE I.T. ACT? 2. IF THE APPELLANT IS NOT ONE FALLING U/S.10(23C), WH ETHER IT IS ENTITLED FOR EXEMPTION U/S.11 ON THE PRINCIPLE O F DEEMED REGISTRATION? AT THE END CAME TO THE CONCLUSION THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT. THE MAIN TH RUST OF THE CIT(APPEALS)S FINDING IS THAT THE ASSESSEE HAD FIL ED NUMEROUS APPLICATIONS FOR REGISTRATION AND WHEN HE DID NOT R ECEIVE ANY REPLY FROM THE OFFICE OF COMMISSIONER AFTER THE EXPIRY OF SIX MONTHS FROM THE DATE OF RECEIPT OF APPLICATION IN HIS OFFICE. EVERY TIME THE ASSESSEE WENT ON FILING SIMILAR APPLICATIONS, BUT, FINALLY HE HAD TO RESORT TO THE PROVISIONS OF RIGHT TO INFORMATION AC T (RTI ACT) AND THEREBY ULTIMATELY HE WAS INFORMED THAT ITS LAST AP PLICATION WAS ALLOWED UNDER SECTION 12A OF THE ACT W.E.F. 1.4.200 8. THE CASE OF THE ASSESSEE BEFORE THE CIT(APPEALS) WAS THAT ITS EARLI ER APPLICATIONS WERE NEITHER REJECTED NOR REFUSED WITHIN THE TIME C ONTEMPLATED IN SECTION 12AA(2) OF THE ACT. THEREFORE, THE ASSESSE E-TRUST IS ENTITLED FOR DEEMED REGISTRATION AND IS ENTITLED TO CLAIM TH E EXEMPTION UNDER SECTION 11 OF THE ACT. REVENUE IS AGGRIEVED AND BE FORE US WITH THE FOLLOWING GROUNDS:- 2. THE LEARNED CIT(APPEALS) ERRED IN ALLOWING THE A SSESSEES CLAIM HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEE MED REGISTRATION U/S.12AA IN VIEW OF THE EARLIER APPLIC ATION FILED BY THE ASSESSEE. I.T.A. NO. 302/MDS/10 4 3. THE CIT(APPEALS) OUGHT TO HAVE CONSIDERED THE HO N'BLE TRIBUNALS ORDER IN I.T.A. NO. 1451/MDS/2009 DATED 04.12.2009 IN THE ASSESSEES APPEAL AGAINST THE ORDER OF THE C IT WHEREIN THE HON'BLE TRIBUNAL HAS UPHELD THE ORDER OF THE CI T GRANTING REGISTRATION W.E.F. 1.4.2008 ON THE GROUND THAT THE ASSESSEE HAD NOT SPECIFICALLY CLAIMED REGISTRATION FROM THE DATE OF ORIGINAL APPLICATION IN THE APPLICATION FILED SUBSEQUENTLY. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFUL LY PERUSED THE ENTIRE RECORDS AVAILABLE BEFORE US. IT IS TRUE THAT IN RELATION TO GRANTING OF REGISTRATION WITH EFFECT FROM 1.4.2008, THE ASSESSEE WENT BEFORE ITAT AND THE TRIBUNAL WHILE PASSING ORDER ON 4.12.2009 IN I.T.A. NO. 1451/MDS/2009 HAS OBSERVED AS UNDER:- 6. WE FIND THAT THE ASSESSEE IN HIS LAST APPLICATIO N DATED 22.12.2008 HAS NOT SPECIFICALLY PRAYED FOR REGISTRA TION WITH EFFECT FROM THE DATE OF FIRST APPLICATION I.E. 31.3 .2000. ACCORDINGLY, THE CIT GRANTED THE REGISTRATION W.E.F . 1.4.2008 VIDE IMPUGNED ORDER ON THE APPLICATION OF THE ASSES SEE FILED ON 22.12.2008. IN THE SAID APPLICATION, THE ASSESSEE SOUGHT THE REGISTRATION ONLY FROM THE DATE OF APPLICATION AND NOT FROM THE DATE OF FIRST APPLICATION. THEREFORE, IN THE STRIC T SENSE AND ON THE FACE OF THE IMPUGNED ORDER, THERE IS NO TECHNIC AL ERROR OR FAULT IN GRANTING THE REGISTRATION W.E.F. 1.4.2008. BUT WHEN IT IS AN UNDISPUTED FACT THAT PRIOR TO THIS APPLICATION, THE ASSESSEE HAS MOVED FOUR OTHER APPLICATIONS, IN THAT CASE, TH E REGISTRATION SHOULD HAVE BEEN GRANTED FROM THE DATE OF FIRST APP LICATION. THOUGH THE IMPUGNED ORDER IS VERY HARSH AND AGAINST JUSTICE ORIENTED APPROACH, WHEN THE ORDER IS ONLY WITH RESP ECT TO DECIDING THE APPLICATION DATED 22.12.2008, WE ARE N OT INCLINED TO INTERFERE WITH THE IMPUGNED ORDER. 4. FROM THE TRIBUNAL ORDER IT BECOMES MANIFEST THAT THE ASSESSEE HAD MOVED IN OTHER APPLICATIONS PRIOR TO THE APPLIC ATION ON WHICH REGISTRATION WITH EFFECT FROM 1.4.2008 WAS GRANTED. BUT, THE ISSUE OF I.T.A. NO. 302/MDS/10 5 DEEMED REGISTRATION UNDER SECTION 12AA(2) WAS NOT T HE SUBJECT MATTER OF THAT APPEAL. THE OBSERVATION MADE BY THE TRIBUNAL IN THE ABOVE CITED PARA ALSO MAKES IT CLEAR THAT THE ORDER OF ITAT IS NOT CORRECT BUT SINCE THEY WERE CONCERNED WITH THE APPL ICATION, THE TRIBUNAL WAS NOT PASSING ANY ORDER ON OTHER APPLICA TIONS. FOR THIS GROUND, THE ASSESSEE HAS REFERRED TO THE OTHER APPL ICATIONS AND HAS COME UNDER SECTION 12AA(2) OF THE ACT. THE ASSESSE E ALSO PRODUCED THE ENTIRE RECORDS FOR READY REFERENCE. PARAS 9, 1 0 AND 11 IN CIT(APPEALS)S ORDER ARE RELEVANT FOR OUR BENEFIT. THEREFORE, WE REPRODUCE THEM HEREIN AS FOLLOWS:- 9. THE PERMANENT ACCOUNT NUMBER ALLOTTED FOR THE AP PELLANT IS AAATN8126G. FOR THE ASSESSMENT YEARS 2002-03 AND 2003-04, THE GROSS ANNUAL RECEIPTS OF THE APPELLANT HAVE NOT EXCEEDED RS.1 CRORE. THERE WAS NO OBLIGATION TO FI LE THE RETURNS OF INCOME FOR THESE ASSESSMENT YEARS, FOR THE OBLIG ATION TO FILE THE RETURN FOR AN EDUCATIONAL INSTITUTION FALLING U /S 10(23C)(IIIAD) CAME INTO THE STATUTE ONLY WITH EFFECT FROM THE ASS ESSMENT YEAR 2006-07. MOREOVER, AS PER RULE 12(1), THERE IS NO FORM PRESCRIBED FOR AN ASSESSEE TO FILE A RETURN OF INCO ME CLAIMING EXEMPTION U/S.10(23C)(IIIAD) FOR THE ASSESSMENT YEA R 2002-03. FURTHER, THE APPELLANT, IN THE RETURNS FILED, HAS F ILLED UP COLUMN 7 EVERY YEAR, WHICH DEALS WITH NUMBER & DATE OF RE GISTRATION U/S 12A(A). THE APPELLANT HAS FILED THE COPIES AN D DETAILS OF THE APPLICATIONS FILED BEFORE THE CONCERNED AUTHORITY F OR REGISTRATION U/S 12A. IT ALSO FILED THE DETAILS OB TAINED UNDER THE RIGHT TO INFORMATION ACT. HENCE, HE SUBMITTED THAT, FROM THE COMBINED EFFECT OF THE ABOVE, IT IS EVIDENT THA T THE APPELLANT NEVER CLAIMED OR INTENDED TO CLAIM EXEMPT ION U/S 10(23C) AND ITS CLAIM WAS ONLY U/S 11 ALL ALONG. 10. THE RELEVANT RECORDS OF THE APPELLANT WERE CALL ED FOR FROM THE ASSESSING OFFICER TO VERIFY THE CLAIMS PUT FORTH BY THE I.T.A. NO. 302/MDS/10 6 APPELLANT. AFTER CAREFUL CONSIDERATION OF ALL THE MATERIALS PLACED ON RECORD, I PROCEED TO SET THE MATTER AS UNDER: 11. THE APPELLANT HAS FILED APPLICATIONS MORE THAN ONCE FOR REGISTRATION U/S 12A. THE ORDER DATED 18-08-2009 P ASSED UNDER SEC 7 OF THE RTI ACT MENTIONS THAT THE APPELLANT WA S NOT GRANTED REGISTRATION EARLIER. FROM THE PERUSAL ORDE R PASSED U/S 7 OF THE RTI ACT, IT IS EVIDENT THAT THE EARLIEST P OINT OF TIME AT WHICH THE APPELLANT CAME TO KNOW OF THE FATE OF THE APPLICATIONS FILED EARLIER FOR REGISTRATION U/S 12A WAS THE DATE OF COMMUNICATION OF THE ORDER DT. 18.08.2009 UNDER RTI ACT, WHICH WAS ON 19.08.2009. THE DEFECTS POINTED OUT IN THE APPLICATION FILED BY THE APPELLANT FOR REGISTRATION U/S.12A HAV E SINCE BEEN REMOVED. THE APPELLANT HAS BEEN GRANTED REGISTRATI ON U/S.12A WITH EFFECT FROM 01.04.2008 VIDE ORDER DATED 29.06. 2009. 5. ADMITTEDLY, THE OTHER APPLICATIONS FILED FOR REG ISTRATION UNDER SECTION 12A(1) OF THE ACT WERE NOT DECIDED IN TERMS OF SECTION 12AA(2). THEREFORE, WE ARE IN FULL AGREEMENT WITH THE LD. CIT(APPEALS) THAT THE ASSESSEE DEEMED TO HAVE BEEN REGISTERED UNDER SECTION 12AA(2) OF THE ACT. THE PROVISIONS O F SECTION 12AA(2) OF THE ACT READS AS UNDER:- EVERY ORDER GRANTING OR REFUSING REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFOR E THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN W HICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) [OR C LAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A.] 6. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE I MPUGNED ORDER AND DIRECT THE A.O. TO RECOMPUTE THE INCOME DEEMING AS IF THE ASSESSEE HAS BEEN GRANTED REGISTRATION AND DECIDE T HE SAME IN THE LIGHT OF RELEVANT SECTIONS INCLUDING SECTION 11 OF THE ACT. WITH THESE I.T.A. NO. 302/MDS/10 7 OBSERVATIONS, WE RESTORE BACK THE ISSUE OF COMPUTAT ION TO THE FILE OF THE A.O. 7. THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR ST ATISTICAL PURPOSES. 8. THE CROSS OBJECTION FILED BY THE ASSESSEE IS SIM PLY IN SUPPORT OF THE CIT(APPEALS)S ORDER. IT BECOMES INFRUCTUOU S IN THE LIGHT OF OUR ABOVE OBSERVATION. HENCE, IT IS DISMISSED AS INFRU CTUOUS. 9. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D CROSS OBJECTION OF THE ASSESSEE STAND DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 16 TH DECEMBER, 2010. SD/- SD/- (DR. O.K. NARAYANAN) (HARI OM MARATHA) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 16 TH DECEMBER, 2010. KRI . COPY FORWARDED TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-I, COIMBATORE (4) CIT-II, COIMBATORE (5) D.R. (6) GUARD FILE