M/S. MADHYA PRADESH RAJYA PATHYA PUSTAK NIGAM, Bhopal V. THE ACIT (EXEMPTION) CIRCLE, Bhopal

CO 45/IND/2015

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2165 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 25-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Retrospective amendment; Reasonable cause
• Section: 12AA; 10B; 11

Judgement Text

ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NOS. 233 & 234/IND/20 A.YS.2010-11 & 2011-12 ASSTT.COMMR. OF INCOME TAX (EXEMPTION) CIRCLE, BHOPAL ::: APPELLANT VS MADHYA PRADESH RAJYA PATHYA PUSTAK NIGAM, BHOPAL ::: RESPONDENT CO NOS. 45 & 46/IND/2015 ARISING OUT OF ITA NOS. 233 & 234/IND/2015 MADHYA PRADESH RAJYA PATHYA PUSTAK NIGAM, BHOPAL ::: OBJECTOR VS ASSTT.COMMR. OF INCOME TAX (EXEMPTION) CIRCLE, BHOPAL ::: RESPONDENT REVENUE BY SMT. ASHIMA GUPTA ASSESSEE BY SHRI PRAKASH JAIN DATE OF HEARING 23.12.2015 DATE OF PRONOUNCEMENT 9 . 2 .201 6 ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 2 O R D E R PER SHRI B.C. MEENA, AM THESE APPEALS FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE EMANATE FROM THE COMM ON ORDER OF THE LEARNED CIT(A), BHOPAL-2, DATED 15.1.20 15. IN THE DEPARTMENTAL APPEALS THE FOLLOWING COMMON GROUNDS HAVE BEEN TAKEN BY THE REVENUE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING EXEMPTION U/S 11 OF THE IT ACT TO THE ASSESSEE FOR THE A.Y. 2010-11 & 2011-12 MENTIONED ABOVE ESPECIALLY WHEN THE ASSESSING OFFICER ESTABLISHED BY BRINGING THE DOCUMENTARY EVIDENCES ON RECORD THAT THE ACTIVITIES OF THE SAID SOCIETY ARE COMMERCIAL AND THE PRINTING OF TEXT BOOK IS NOT COVERED UNDER EDUCATION. IN THE CROSS OBJECTIONS, THE ASSESSEE HAS RAISED THE FOLLOWING COMMON GROUND :- ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 3 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. A.O. ERRED IN NOT ALLOWING THE EXEMPTION U/ S 10(23C)(IIIAB)/10(23C)(VI) EVEN WHEN IN THE SIMILAR CIRCUMSTANCES THE EXEMPTIONS UNDER THESE SECTIONS WERE ALLOWED BY THE HON'BLE ITAT, INDORE BENCH IN T HE PAST ASSESSMENT YEARS CONSIDERING THE JUDICIAL PRONOUNCEMENT OF SUPREME COURT IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION & PUBLICATION CORPORATIO N LTD. VS. CIT REPORTED IN 319 ITR 317 AND VARIOUS DECISIONS OF OTHER HIGH COURTS. 2. AT THE OUTSET OF THE HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUES RAISED IN THE APPEALS AND CROSS OBJECTIONS ARE COVERED BY THE DECISIO N OF THE ITAT AND THE HON'BLE HIGH COURT. HE DREW OUR ATTENTION TO THE DECISION OF THE HON'BLE HIGH COURT PRINCIPAL BENCH IN THE ASSESSEES OWN CASE IN ITA NO. ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 4 164/2012. THE RELEVANT PARAS OF THE SAID ORDER READ AS UNDER :- 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND PERUSING THE DECISION OF THE SUPREME COURT IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PUBLICATION CORPN. LTD. VS. COMMISSIONER OF INCOME TAX, GUAHATI-I, IN OUR CONSIDERED OPINION, THE QUESTIONS HAVE ALREADY BEEN ANSWERED BY THE SUPREME COURT. 5. THE COUNSEL FOR THE DEPARTMENT DID NOT POINT OUT ANY CONTRARY DECISION ON THE PROPOSITION ANSWERED BY THE SUPREME COURT IN THE AFORESAID DECISIONS AS IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PUBLICATION CORPN. LTD. (SUPRA). ALTHOUGH THE SUBSTANTIAL QUESTIONS OF LAW NEED NOT BE ANSWERED BUT THE OPERATIVE ARRANGEMENT AS DIRECTED BY THE SUPREME COURT MAY HAVE TO BE ADOPTED EVEN IN ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 5 THESE APPEALS OF REMANDING THE MATTER TO THE ASSESSING OFFICER FOR DENOVO CONSIDERATION IN THE LIGHT OF THE DECISION OF THE SUPREME COURT AND THE DECISION OF THE RAJASTHAN HIGH COURT AND ORRISA HIGH COURT REFERRED TO THEREIN, WHICH HAVE BEEN AFFIRMED BY THE SUPREME COURT. 6. TO THIS LIMITED EXTENT, THE APPEALS WILL HAVE TO BE ALLOWED. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TO THE DECISION OF THE ITAT, INDORE BENCH, IN THE ASSESSEES OWN CASE IN ITA NO. 192/IND/2013 FOR THE ASSESSMENT YEAR 2009-10 DATED 22.10.2013. PARA 42 OF THE SAID ORDER READS AS UNDER :- 42. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM THE RECORD THAT IN THE ORIGINAL RETURNS, THE ASSESSEE HAS ONLY CLAIMED ONLY U/S 10(22)(23C). ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 6 HOWEVER, WHEN THE CIT HAS GRANTED REGISTRATION U/S 12AA WITH RETROSPECTIVE EFFECT FROM 7.8.1968 IN COMPLIANCE TO THE DIRECTIONS GIVEN BY THE ITAT IN I TS ORDER DATED 23.9.2009, THAT THE ASSESSEE HAS OBTAINED THE PRESCRIBED REPORT IN FORM 10-B AS PER RULE 17-B OF THE INCOME-TAX RULES. EVEN THOUGH ALONGWITH RETURNS OF ALL THE YEARS THE ASSESSEE HAD FILED AUDITED ACCOUNTS WHICH WERE DULY AUDITED FOR TAX PURPOSES AS WELL AS PER REQUIREMENTS OF THE LEARNED CIT(A)&AG BUT NO AUDIT REPORT WAS OBTAINED IN FORM NO. 10-B. FURTHERMORE, SINCE THE ASSESSEE WAS OWNED BY THE STATE GOVERNMENT IT WAS A LENGTHY PROCESS FOR APPOINTMENT OF AUDITOR, WHEN TH E LIST OF SUCH AUDITORS WAS GIVEN ONLY BY LEARNED CIT(A)&AG, THE ASSESSEE HAS TO GO THROUGH VARIOUS FORMALITIES FOR APPOINTMENT OF AUDITORS AND FIXING THEIR REMUNERATION, WHICH REQUIRED PROPER APPROVAL ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 7 AND SANCTION OF VARIOUS AUTHORITIES. AS SOON AS THE ASSESSEE HAS GOT THE REGISTRATION U/S 12AA, THE ASSESSEE HAS ALSO STARTED TO OBTAIN NECESSARY APPROVAL AND ALSO THE AUDIT REPORT IN PRESCRIBED FO RM 10B FOR THE CLAIM OF EXEMPTION U/S 11. THUS, WE FOUND THAT THERE WAS REASONABLE CAUSE FOR DELAY IN OBTAINING THE AUDIT REPORT. IN THE INTEREST OF JUS TICE, WE CONDONE THE DELAY IN OBTAINING THE AUDIT REPORT AND DIRECT THE A.O. TO EXAMINE THE ASSESSEES CLAIM FOR EXEMPTION U/S 11 ON MERITS, AFTER VERIFYING THE VARIOUS CONDITIONS WHICH ARE REQUIRED TO BE FULFILL ED, MORE PARTICULARLY THE UTILISATION OF RECEIPTS FOR T HE PURPOSE OF OBJECTS OF SOCIETY AS DISCUSSED HEREIN ABOVE TO THE EXTENT OF 85%. ASSESSEE IS ALSO DIRECT ED TO SUBMIT THE OTHER DETAILS AS DESIRED BY THE A.O. FOR VERIFYING ITS CLAIM OF EXEMPTION U/S 11 OF THE INCO ME TAX ACT, 1961. WE DIRECT ACCORDINGLY. ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 8 3. CONSIDERING THE DECISION OF THE HON'BLE HIGH COU RT AND ITAT IN THE ASSESSEES OWN CASE, ALL THE ISSUES RAIS ED IN THE APPEAL AS WELL AS THE CROSS OBJECTION ARE RESTOR ED TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED IN VIEW OF THE ABOVE DECISIONS AFTER PROVIDING AN OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE. 4. IN THE RESULT, THE DEPARTMENTAL APPEALS AND THE ASSESSEES CROSS OBJECTION ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 9 TH FEB., 2016 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 9 TH FEB., 2016 DN/- ACIT VS. M.P.RAJYA PATHYA PUSTAK NIGAM ITA NOS. 233 & 234 & CO 45 AND 46/IND/2015 9