Seva Mandir Trust, Cuddalore V. ITO, Cuddalore

CO 156/CHNY/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9238 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 19-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARI RAO
• Assessee Lawyers: G BASKAR
• Keywords: Condonation of delay; Revised return
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1647/MDS/2013 & C.O. NO. 156/MDS/2013 ( IN ITA NO. 1647/MDS/2013 ) ASSESSMENT YEAR : 2007-08 INCOME TAX OFFICER, WARD-I(3), CUDDALORE VS M/S. SEVA MANDIR TRUST, SEVA MANDIR, PARANGIPETTAI VIA, CHIDAMBARAM TALUK [PAN: AABTS 0118 G] (APPELLANT) (RESPONDENT/CROSS OBJECTOR) REVENUE BY : SHRI HARI RAO, JCIT ASSESSEE BY : SHRI G.BASKAR, ADVOCATE DATE OF HEARING : 21-01-2014 DATE OF PRONOUNCEMENT : 21-01-2014 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-XII, CHENNAI DATED 19-03-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 7-08. THE I.T.A. NO.1647/MDS/13 & C.O. NO.156/MDS/13 :- 2 -: ASSESSEE HAS FILED CROSS-OBJECTIONS SUPPORTING THE ORDER OF THE CIT(APPEALS). 2. THE APPEAL HAS BEEN FILED BY THE REVENUE WITH TH E DELAY OF 50 DAYS. AN APPLICATION FOR CONDONATION OF DELAY S UPPORTED BY AN AFFIDAVIT OF ITO WARD-I(3), CUDDALORE HAS BEEN FILE D FOR CONDONING THE DELAY IN FILING OF THE APPEAL. WE ARE SATISFIE D THAT THE DELAY IN FILING OF THE APPEAL IS UN-INTENTIONAL AND THE DELA Y HAS OCCURRED FOR THE REASONS STATED IN THE AFFIDAVIT. THE LD.COUNSE L FOR THE ASSESSEE HAS NOT SERIOUSLY OBJECTED TO THE CONDONAT ION OF DELAY. IN THE INTEREST OF JUSTICE, THE DELAY OF 50 DAYS IN FILING OF THE APPEAL IS CONDONED AND THE APPEAL OF THE REVENUE IS ADMITT ED TO BE HEARD AND DECIDED ON MERITS. 3. THE FACTS IN BRIEF ARE : THE ASSESSEE IS A TRUST AND IS RUNNING SEVAMANDIR PRIMARY SCHOOL. APART FROM TH E AFOREMENTIONED PRIMARY SCHOOL, THE TRUST IS ALSO RU NNING A HOSTEL FOR THE STUDENTS AND TEACHERS OF PRIMARY SCHOOL, A HIGHER SECONDARY SCHOOL FOR GIRLS, TEACHERS TRAINING INSTI TUTE FOR WOMEN AND A HOME FOR CHILDREN. I.T.A. NO.1647/MDS/13 & C.O. NO.156/MDS/13 :- 3 -: THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY. 2007-08 ON 29-10-2007 DECLARING ITS INCOME AS NIL AFTER CLAI MING EXEMPTION OF INCOME U/S.10(23C)(IIIAD) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). THE CASE OF THE A SSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 05-09-2008. DURING THE COURSE O F ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS HAVING RECEIPTS OF MORE THAN ` 1.00 CRORE AND THUS IS NOT ENTITLED TO CLAIM EXEMPTION UNDER THE PROVISIONS OF SECTION 10(23C)(IIIAD). THE ASSESSEE HAD ALSO NOT OBTAINED REGISTRATION U/S .12A OF THE ACT. THE ASSESSING OFFICER VIDE ORDER DATED 03-12- 2009, TREATED THE ASSESSEE AS ASSOCIATION OF PERSONS AND RAISED THE DEMAND OF ` 52,75,973/- FOR THE AY UNDER CONSIDERATION. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE C IT(APPEALS) OBSERVED THAT THE ASSESSEE HAD INCLUDED THE RECEIPT S IN RESPECT OF OTHER TWO TRUSTS I.E., SEVAMANDIR TEACHER TRAIN ING INSTITUTE AND SEVAMANDIR HIGHER SECONDARY SCHOOL FOR GIRLS WHICH ARE SEPARATE ENTITIES. IF THE RECEIPTS OF THE TWO AFOR ESAID TRUSTS ARE EXCLUDED FROM THE TOTAL RECEIPTS OF THE ASSESSEE, T HE I.T.A. NO.1647/MDS/13 & C.O. NO.156/MDS/13 :- 4 -: RECEIPTS/INCOME OF THE ASSESSEE WOULD BE LESS THAN ` 1.00 CRORE AND THE ASSESSEE WOULD BE ELIGIBLE FOR CLAIMING EXE MPTION U/S.10(23C)(IIIAD). THE CIT(APPEALS) ALLOWED THE A PPEAL OF THE ASSESSEE. AGGRIEVED AGAINST THE ORDER OF THE CIT(APPEALS), T HE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 4. SHRI HARI RAO, APPEARING ON BEHALF OF THE REVENU E SUBMITTED THAT THE CIT(APPEALS) HAS ERRED IN REVERS ING THE FINDINGS OF THE ASSESSING OFFICER. THE LD.DR CONTE NDED THAT THE ACCOUNT OF THE ASSESSEE ARE SUBJECT TO AUDIT. A PE RUSAL OF THE BOOKS OF ACCOUNT OF THE ASSESSEE WOULD SHOW THAT TH E ENTIRE RECEIPTS, WHICH ARE MORE THAN ` 1.00 CRORE ARE OF ASSESSEE AND DOES NOT INCLUDE RECEIPTS OF THE OTHER TWO ENTITIES AS ALLEGEDLY CLAIMED BY THE ASSESSEE. SINCE, THE ASSESSEE IS NE ITHER REGISTERED UNDER THE PROVISIONS OF SECTION 12AA NOR IT IS ELIGIBLE FOR CLAIMING EXEMPTION UNDER THE PROVISIONS OF SECT ION 10(23C)(IIIAD), THE ASSESSEE CANNOT CLAIM ANY EXEMP TION WHAT-SO-EVER. THE LD.DR VEHEMENTLY OPPOSED THE ORD ER OF THE CIT(APPEALS) AND PRAYED FOR SETTING ASIDE THE IMPUG NED ORDER. I.T.A. NO.1647/MDS/13 & C.O. NO.156/MDS/13 :- 5 -: 5. ON THE OTHER HAND, SHRI G.BASKAR, ADVOCATE, APPE ARING ON BEHALF OF THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF CIT(APPEALS) AND SUBMITTED THAT THE INCOME/RECEIPTS AS SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE INCLUDES AMOUN TS RECEIVED BY M/S.SEVAMANDIR TEACHER TRAINING INSTITUTE AND M/S.SEVAMANDIR GIRLS HIGHER SECONDARY SCHOOL WHICH ARE SEPARATE ENTITIES. THE ASSESSEE HAD INADVERTENTLY INCLUDED THE RECEIPTS OF THE SAID TWO TRUSTS IN THE INCOME AND R ECEIPTS OF THE PRESENT ASSESSEE. THE MISTAKE CAME TO LIGHT AFTER AN APPLICATION SEEKING EXEMPTION U/S.10(23C)(VI) WAS MADE TO THE C HIEF COMMISSIONER OF INCOME TAX, CHENNAI. THE CHIEF COM MISSIONER OF INCOME TAX OBSERVED THAT THE ANNUAL GROSS RECEIP TS OF THE TRUST FOR THE PERIOD ENDING 31-03-2009 ARE LESS THAN ` 1.00 CRORE. THEREFORE, THE TRUST IS NOT ENTITLED FOR EXEMPTION U/S. 10(23C)(VI) OF THE ACT. THE LD.COUNSEL PLACED ON RECORD THE CO PY OF THE ORDER OF THE CHIEF COMMISSIONER OF INCOME TAX DATED 22-03 -2010. THE ASSESSEE COULD NOT FILE REVISED RETURN OF INCOME, A S BY THE TIME THE MISTAKE WAS HIGHLIGHTED, THE TIME LIMIT FOR FIL ING OF THE REVISED RETURN FOR THE AY.2007-08 HAD ALREADY ELAPSED. FOR THE SUBSEQUENT AYS, SEPARATE RETURNS OF INCOME FOR THE AFORESAID TWO I.T.A. NO.1647/MDS/13 & C.O. NO.156/MDS/13 :- 6 -: TRUSTS ARE FILED AND BOTH THE ABOVE SAID TRUSTS/SOC IETIES ARE SEPARATELY REGISTERED UNDER THE PROVISIONS OF SECTI ON 12AA OF THE ACT. THE LD.COUNSEL PRAYED FOR DISMISSAL OF THE AP PEAL OF THE REVENUE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DOCU MENTS PLACED ON RECORD BY THE LD.COUNSEL FOR THE ASSESSEE. A PE RUSAL OF THE DOCUMENTS ON RECORD SHOW THAT THE ASSESSEE IS RUNNI NG A PRIMARY SCHOOL UNDER THE NAME AND STYLE OF SEVAMANDIR PRIM ARY SCHOOL. APART FROM THE PRIMARY SCHOOL, THERE ARE TWO OTHER INSTITUTIONS I.E. SEVAMANDIR HIGHER SECONDARY SCHOOL FOR GIRLS AND SE VAMANDIR TEACHER TRAINING INSTITUTE. HOWEVER, HIGHER SECOND ARY SCHOOL FOR GIRLS AND TEACHER TRAINING INSTITUTE ARE BEING RUN AND MANAGED BY TWO SEPARATE TRUSTS HAVING INDEPENDENT P ERMANENT ACCOUNT NUMBERS AND SEPARATE REGISTRATION UNDER THE PROVISIONS OF SECTION 12AA OF THE INCOME TAX ACT. FOR THE AY UNDER CONSIDERATION, THE ASSESSEE INADVERTENTLY INCLUDED THE RECEIPTS OF THE AFOREMENTIONED TWO TRUSTS IN ITS INCOME AND REC EIPTS. ALTHOUGH THE ACTUAL RECEIPTS OF THE ASSESSEE WERE L ESS THAN ` 1.00 I.T.A. NO.1647/MDS/13 & C.O. NO.156/MDS/13 :- 7 -: CRORE, BUT BY VIRTUE OF INCLUSION OF RECEIPTS OF TH E AFOREMENTIONED TWO TRUSTS, THE INCOME/RECEIPTS OF THE ASSESSEE EXC EED THE LIMIT OF ` 1.00 CRORE. AS SUCH, THE ASSESSEE BECAME INELIGIBL E FOR CLAIMING EXEMPTION U/S.10(23C)(IIIAD). THE LD.COUNS EL OF THE ASSESSEE HAS PLACED ON RECORD A COPY OF THE ORDER O F THE CHIEF COMMISSIONER OF INCOME TAX DATED 22-03-2010, WHEREI N, FOR THE AY.2009-10 THE ASSESSEE HAD SOUGHT EXEMPTION UNDER THE PROVISIONS OF SECTION 10(23C)(VI) OF THE ACT. THE C HIEF COMMISSIONER OF INCOME TAX AFTER VERIFICATION OF TH E RECORDS OBSERVED THAT THE ANNUAL GROSS RECEIPTS OF THE ASS ESSEE-TRUST FOR THE PERIOD ENDING 31-03-2009 ARE LESS THAN ` 1.00 CRORE AND THEREFORE, THE ASSESSEE IS NOT ENTITLED TO CLAIM EX EMPTION U/S.10(23C)(VI) OF THE ACT. THE MISTAKE CAME TO TH E KNOWLEDGE OF THE ASSESSEE, AFTER IT WAS POINTED OUT BY THE CHIEF COMMISSIONER OF INCOME TAX. IN THE MEANTIME, FOR THE AY UNDER C ONSIDERATION, THE PERIOD FOR FILING OF REVISED RETURN OF INCOME H AD ALREADY EXPIRED. HOWEVER, FOR THE SUBSEQUENT AYS, THE ASSE SSEE RECTIFIED HIS MISTAKE BY FILING REVISED RETURN OF INCOME. I.T.A. NO.1647/MDS/13 & C.O. NO.156/MDS/13 :- 8 -: 7. FROM THE DETAILED FINDINGS OF THE CIT(APPEALS) I T IS EVIDENT THAT THE TOTAL RECEIPTS OF THE ASSESSEE INCLUDING C APITAL RECEIPTS DURING THE RELEVANT FINANCIAL YEAR ARE LESS THAN ` 1.00 CRORE, THEREFORE, THE ASSESSEE IS ELIGIBLE FOR CLAIMING EX EMPTION U/S.10(23C)(IIIAD) OF THE ACT. WE CONCUR WITH THE FINDINGS OF THE CIT(APPEALS). THE LD.DR HAS NOT BEEN ABLE TO SHOW ANY INFIRMITY IN THE IMPUGNED ORDER. THE APPEAL OF THE REVENUE I S DISMISSED BEING DEVOID OF MERIT. 8. THE ASSESSEE HAS FILED CROSS-OBJECTIONS SUPPORTI NG THE ORDER OF THE CIT(APPEALS). SINCE, THE APPEAL OF TH E REVENUE HAS BEEN DISMISSED, THE CROSS-OBJECTIONS HAVE BECOME IN FRUCTUOUS AND ARE DISMISSED AS SUCH. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON TUESDAY, THE 21 ST JANUARY, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 21 ST JANUARY, 2014 TNMM COPY TO: ASSESSEE/AO/CIT(A)/CIT/DR