Appeal details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 1114 (ITAT-AMRITSAR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 6 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-09-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2011-2012
Appeal Filed On
18-02-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH.SANJAY ARORA, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.104 (ASR)/2015 ASSESSMENT YEAR: 2011-12 SAI WIRAN WALI EDUCATIONAL TRUST, VPO JADLA, TEHSIL NAWANSHAHR, DIST:-S.B.S NAGAR [PAN:AAGTS 0719J] VS. DY. CIT, CIRCLE-II, JALANDHAR (APPELLANT) (RESPONDENT) I.T.A. NO.10(ASR)/2017 ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER (EXEMPTIONS), WARD JALANDHAR [PAN:AAGTS 0719J] VS. SAI WIRAN WALI EDUCATIONAL TRUST, VPO JADLA, TEHSIL NAWANSHAHR, DIST:-S.B.S NAGAR [PAN:AAGTS 0719J] (APPELLANT) (RESPONDENT) APPELLANT BY: SH. NIRMAL MAHAJAN (LD. CA) RESPONDENT BY: SH. CHARAN DASS (LD. DR) DATE OF HEARING: 23.08.2018 DATE OF PRONOUNCEMENT: 11.09. 2018 ORDER PER N. K. CHOUDHRY (JM): THE ASSESSEE/APPELLANT HAS PREFERRED THE APPEAL I.E ., ITA NO.104(ASR)/2015 AGAINST THE ORDER OF THE LD. CIT(A) , JALANDHAR, DT. 13.01.2015 FOR THE ASST. YEAR:2011-12, WHEREBY THE LD. CIT(A) HAS AFFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. THE REVENUE DEPARTMENT HAS ALSO PREFERRED THE APPEAL ITA NOS.104 & 10 (ASR)/2015 & 2 017 (A.Y.: 201 1-12) SAI WIRAN WALI EDUCATIONAL TRUST VS. DCIT 2 I.E., ITA NO.10(ASR)/2017, ON FEELING AGGRIEVED AGAI NST THE ORDER DATED 01.10.2016 PASSED BY THE LD. CIT(A)-2, JALANDHA R, WHEREBY HE HAS DELETED THE PENALTY IMPOSED BY THE ASSE SSING OFFICER. 2. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE SOCIETY IS REGISTERED WITH REGI STRAR OF SOCIETY UNDER THE SOCIETIES REGISTRATION ACT (XXI OF 186 0) AND AS AMENDED BY PUNJAB AMENDMENT ACT, 1957 VIDE REGN. NO . DIC/542 OF 2004 ON 25.06.2004, ENGAGED IN RUNNING O F EDUCATION INSTITUTIONS, HAS FILED ITS RETURN OF INCOME FO R THE YEAR UNDER CONSIDERATION ON 30.09.2011 DECLARING THEREIN N IL INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT ALTHOUGH THE GROSS RECEIPT S OF THE ASSESSEE SOCIETY EXCEEDS RS.1,00,00,000/- BUT IT HAS NOT GOT ITSELF APPROVED UNDER SECTION 10(23C)(VI) OF THE ACT F ROM THE COMPETENT AUTHORITY FOR CLAIMING THE EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. AS SUCH THE ASSESSING OFFICER HA S CONCLUDED THAT ASSESSEE SOCIETY IS NOT ENTITLED FOR EXEMPTIO N OF ITS INCOME UNDER SECTION 10(23C)(IIIAD) OF THE ACT AS WA S ORIGINALLY BEING CLAIMED. IT WAS ALSO NOTICED BY THE ASS ESSING OFFICER THAT THE ASSESSEE SOCIETY GOT REGISTRATION UNDER SECTION 12A/12AA OF THE ACT WITH EFFECT FROM 01.04.2011 ONLY, THEREFORE, THE ASSESSEE SOCIETY WAS ALSO NOT ELIGIBLE FOR EXEMPTION OF ITS INCOME UNDER SECTION 11/12 OF THE ACT AND THE YEAR UNDE R CONSIDERATION. THE ASSESSING OFFICER, THEREFORE, DENIED T HE EXEMPTION TO THE ASSESSEE SOCIETY UNDER SECTION 11/12 AS WEL L AS UNDER SECTION 10(23C)(IIIAD) OF THE ACT AND BROUGHT TO TAX THE EXCESS OF INCOME OVER EXPENDITURE AFTER REJECTING THE EXPLANATION OFFERED BY THE ASSESSEE WITH REGARD TO GROSS RECEIPTS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSMENT IN TH IS CASE ITA NOS.104 & 10 (ASR)/2015 & 2 017 (A.Y.: 201 1-12) SAI WIRAN WALI EDUCATIONAL TRUST VS. DCIT 3 WAS ULTIMATELY COMPLETED BY THE ASSESSING OFFICER UNDER SECT ION 143(3) OF THE ACT VIDE ORDER DATED 29.01.2014 AT AN ASSESSED INCOME OF RS.52,12,072/-. 3. LET US TO DECIDE THE QUANTUM APPEAL FILED BY THE ASSESSE E FIRST. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. THE COMMISSIONER OF INCOME TAX (A) IS WRONG IN HOLDING, THAT WHILE CALCULATING RECEIPT UNDER S.10(23C)(IIIAD), THE FEE FORMING PART OF CORPUS, F EE PERTAINING TO EARLIER YEARS AND FEE RECEIVED IN ADV ANCE IS NOT TO BE EXCLUDED. 2. WITHOUT PREJUDICE TO GROUND 1, THE COMMISSIONER OF INCOME TAX (APPEALS) IS WRONG IN HOLDING THAT THE NEWLY ADDED PROVISO TO SECTION12A( 2) IS NOT APPLICABLE IN THE CASE OF APPELLANT AS THE PROCEEDINGS WERE NOT PENDING. WHEREAS CIT(A) HAVING POWER TO ENHANCE THE ASSESSMENT IS HAVING POWERS CO-TERMINUS WITH AO AND AS SUCH PROCEEDINGS ARE PENDING BEFORE HIM. 3. WITHOUT PREJUDICE TO GROUND 1 & 2, THE COMMISSIONER OF INCOME TAX (APPEALS) IS WRONG IN HOLDING THAT IN CASE INCOME IS TO BE COMPUTED WITHO UT GIVING RELIEF UNDER S.10(23C)(IIIAD), IT IS NOT TO BE CALCULATED UNDER MERCANTILE SYSTEM TAKING INTO CONSIDERATION CONCEPT OF CAPITAL AND REVENUE RECEIP T. AS IN THE INSTANT CASE, THE LEGAL GROUND IS INVOLVED QUA APPLICABILITY OF PROVISO OF SEC.12A(2) WHICH WAS INSERT ED W.E.F 1 ST OCTOBER, 2014, THEREFORE, WE FEEL IT APPROPRIATE TO DEAL THE LEGAL ISSUE FIRST BEFORE THE GOING ON MERIT OF THE CASE. THE BENEFIT OF SEC. 11/12 AS WELL AS 10(23C)(IIAD) OF THE ACT WAS DENIED TO THE ASSESSEE SOCIETY ON THE GROUND THAT T HE ASSESSEE IS NOT REGISTERED U/S. 12AA OF THE ACT, HOWEVER, IT IS THE CLAIM OF THE ASSESSEE SOCIETY THAT THE ASSESSEE SOCIETY GOT REGISTRATION U/S 12A OF THE ACT W.E.F. 1 ST APRIL, 2011, THEREFORE, AS ON THAT DATE ASSESSMENT PROCEEDING WERE PENDING AND HENCE, THE ASSESSEE SOCIETY IS ENTITLED TO GET THE BENEFIT OF THE SAME. ITA NOS.104 & 10 (ASR)/2015 & 2 017 (A.Y.: 201 1-12) SAI WIRAN WALI EDUCATIONAL TRUST VS. DCIT 4 IN THE INSTANT CASE, THE ASSESSMENT ORDER WAS PASSED ON 29 TH JANUARY, 2014 AND THE AMENDMENT WAS MADE IN SEC.12A BY FINANCE ACT, 2014 BY INSERTING A PROVISION WITH EFFECT F ROM 1 ST OCTOBER, 2014. FOR THE SAKE OF CONVENIENCE AND CLARITY T HE PROVISIONS OF SEC. 12A IS REPRODUCED HEREIN BELOW. SEC.12A. THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY: (A) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRE SCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE [***] COMMISSIONER BEF ORE THE 1ST DAY OF JULY, 1973, OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABL ISHMENT OF THE INSTITUTION, [WHICHEVER IS LATER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA ] : [PROVIDED THAT WHERE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF THE PERIOD AFORESAID, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN REL ATION TO THE INCOME OF SUCH TRUST OR INSTITUTION, (I) FROM THE DATE OF THE CREATION OF THE TRUST OR T HE ESTABLISHMENT OF THE INSTITUTION IF THE [***] COMMI SSIONER IS, FOR REASONS TO BE RECORDED IN WRITING, SATISFIE D THAT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EXPIRY OF THE PERIOD AFO RESAID FOR SUFFICIENT REASONS; (II) FROM THE 1ST DAY OF THE FINANCIAL YEAR IN WHIC H THE APPLICATION IS MADE, IF THE [***] COMMISSIONER IS N OT SO SATISFIED:] [PROVIDED FURTHER THAT THE PROVISIONS OF THIS CLAUSE SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007;] [(AA) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION ON OR AFTER THE 1ST DAY OF JUNE, 2007 IN THE PRESCRIBED FORM AND MANNER TO THE COMMISSIONER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER S ECTION 12AA;] (B) WHERE THE TOTAL INCOME OF THE TRUST OR INSTITUT ION AS COMPUTED UNDER THIS ACT WITHOUT GIVING EFFECT TO [THE PROVIS IONS OF SECTION 11 AND SECTION 12 EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT ITA NOS.104 & 10 (ASR)/2015 & 2 017 (A.Y.: 201 1-12) SAI WIRAN WALI EDUCATIONAL TRUST VS. DCIT 5 CHARGEABLE TO INCOME-TAX IN ANY PREVIOUS YEAR], THE ACCOUNTS OF THE TRUST OR INSTITUTION FOR THAT YEAR HAVE BEEN AUDITE D BY AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288 AND THE PERSON IN RECEIPT OF THE INCOME FURNISHES A LONG WITH THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR T HE REPORT OF SUCH AUDIT IN THE PRES-CRIBED FORM DULY SIGNED AND VERIF IED BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULARS AS MA Y BE PRESCRIBED.] (C)[******] [(2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1 ST DAY OF JUNE, 2007 THE PROVISIONS OF SECTIONS 11 & 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE.] [PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVIS IONS OF SECTION 11 & 12 SHALL APPLY IN RESPECT OF ANY INCOM E DERIVED FROM PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YE AR PRECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICE R AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIV ITIES OF SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PRECE DING ASSESSMENT YEAR: PROVIDED FURTHER THAT NO ACTION UNDER SECTION 147 SHALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR I NSTITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUTION FOR T HE SAID ASSESSMENT YEAR: PROVIDED ALSO THAT PROVISIONS CONTAINED IN THE FIRST AND SECOND PROVISO SHALL NOT APPLY IN CASE OF ANY TRUST OR INS TITUTION WHICH WAS REFUSED REGISTRATION OR THE REGISTRATION GRANTED TO IT WAS CANCELLED AT ANY TIME UNDER SECTION 12AA.] IN THE INSTANT CASE REGISTRATION WAS GRANTED ON DATED 0 9- 04-2012 WHICH WAS EFFECTIVE FROM 01-04-2011 AND THE ASSESSMENT ORDER WAS PASSED ON 29-01-2014, THEREFORE, ADMITTEDLY IN THE INSTANT CASE THE ASSESSMENT PROCEEDINGS CAN BE CONSTRUED AS PENDING AS ON THE DATE OF THE ORDER UND ER SECTION 12AA OF THE ACT. THE SIMILAR AND IDENTICAL ISSUE H AS ALSO ITA NOS.104 & 10 (ASR)/2015 & 2 017 (A.Y.: 201 1-12) SAI WIRAN WALI EDUCATIONAL TRUST VS. DCIT 6 BEEN ARISEN IN VARIOUS CASES BEFORE THE CO-ORDINATE BENCH ES IN THE BELOW MENTION CASES. (I) ST. JUDES CONVENT SCHOOL, NAKODAR VS. ACIT, ITA NO.749(ASR)/2013 (ITAT, AMRITSAR) (II) SREE SREE RAMKRISHNA SAMITY VS. DCIT, CIRCLE-2, SILIGURI, ITA NO.1680-1685/2012 (ITAT, KOLKATA) (III) SHYAM MANDIR COMMITTEE, KHATUSHYAM JI VS. ACIT, CIRCLE SIKAR (ITAT, JAIPUR) (IV) SNDP YOGAM VS. ADIT (EXEMPTION), RANGE-4, KOCHI, IT A NO.503-506 & 569/COCH/2014 (ITAT, COCH) AND SPECIFICALLY BEFORE THIS PARTICULAR BENCH ITSELF IN I TA NO.621(ASR)/ 2015 & 91(ASR)/2017 IN THE CASE OF TILLA B ABA FARID RELIGIOUS & CHARITABLE SOCIETY V. ITO (EXEMPTIO NS), FOR A.Y.2012-13. THE CRUX PART OF THE ORDER IN ITA NO.62 1(ASR)/2015 & 91(ASR)/2017 IS REPRODUCED HEREIN BELOW. WITH REGARD TO THE LEGAL ISSUE, WE, AGAIN, FIND TH E ASSESSEES CLAIM ACCEPTABLE. NO DOUBT REGISTRATION IS A CONDIT ION PRECEDENT FOR SECTIONS 11 AND 12 TO APPLY (REFER SECTION 12A(1); UP FOREST CORPORATION & ORS. V. CIT [2008] 297 ITR 1 (SC)). HOWEVER, EVEN WHERE GRANTED SUBSEQUENT TO THE ASSESSMENT, AS IN THE PRESENT CAS E, AN ASSESSEE CANNOT, GIVEN THE SCHEME OF THE ACT, BE DENIED THE BENEFIT OF SECTIONS 11 AND 12. ALL THE CO-ORDINATE BENCHES IN THE AFORESAID CASES CATEGORICALLY HELD THAT AMENDMENT MADE BY FINANCE ACT, 2014 BY INSERTING A PROVISO IN SEC.12A OF THE ACT SHALL BE CON STRUED RETROSPECTIVELY IN OPERATION BECAUSE THE LEGISLATOR IN I TS WISDOM HAS BROUGHT THIS PROVISO TO PREVENT GENUINE HARDSHIP W HICH COULD BE CAUSED ON THE ASSESSEE DUE TO NON-REGISTRATION U/S 12A OF THE ACT. EVEN OTHERWISE THE APEX COURT IN THE CASE OF CIT VS. VATIKA TOWNSHIP PVT. LTD. [2014] 236 ITR 466(SC) CLEA RLY HELD ITA NOS.104 & 10 (ASR)/2015 & 2 017 (A.Y.: 201 1-12) SAI WIRAN WALI EDUCATIONAL TRUST VS. DCIT 7 IF A LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT WITHOUT INFLICTING A CORRESPONDING DETRIMENT ON SOME OTHER PERSO N OR ON THE PUBLIC GENERALLY, AND WHERE TO CONFER SUCH BENEFIT APPEARS TO HAVE BEEN THE LEGISLATORS, OBJECT, THEN THE PRESUMPTI ON WOULD BE THAT SUCH A LEGISLATION, GIVING IT A PURPOSIVE CONSTR UCTION, WOULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. CONSEQUENTLY, CONSIDERING THE DICTUM OF THE APEX COUR T AS WELL AS THE CO-ORDINATE BENCHES, THE ISSUE IS SQUARELY COVE RED BY THE AFORESAID DECISIONS, THEREFORE, WE DO NOT HAVE A NY HESITATION TO HOLD THAT PROVISO TO SEC.12A(2) WHICH WA S ADDED BY FINANCE ACT, 2014 SHALL BE RETROSPECTIVE IN OPERATIO N. HENCE, THE ASSESSEE SHALL BE ENTITLED TO GET THE BENEFIT OF REG ISTRATION, THEREFORE, WE ARE INCLINED TO SET ASIDE THE IMPUGNED O RDER PASSED BY THE LD. CIT(A) AS WELL AS ASSESSMENT ORDER AND REMAND THE CASE TO THE FILE OF THE ASSESSING OFFICER TO DE CIDE AFRESH, IN VIEW OF THE OBSERVATIONS MADE IN THIS ORDER AFTER GIVING PROPER AND REASONABLE OPPORTUNITIES OF BEING H EARD TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ITA NO.10(ASR)/2017 WHILE DISPOSING APPEAL OF THE ASSESSEE I.E. ITA NO.104(ASR)/2015, THE ORDERS PASSED BY THE AUTHORITIES B ELOW ARE SET ASIDE, HENCE, CONSEQUENTLY, THE PENALTY ORDER CA NNOT SURVIVE AND RESULTANTLY THE APPEAL OF REVENUE IS ALSO L IABLE TO BE DISMISSED. ITA NOS.104 & 10 (ASR)/2015 & 2 017 (A.Y.: 201 1-12) SAI WIRAN WALI EDUCATIONAL TRUST VS. DCIT 8 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE AND THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 11 .09.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 11.09.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SAI WIRAN WALI EDUCATIONAL TRUST, VPO JA DLA, TEHSIL NAWANSHAHR, DIST:-S.B.S NAGAR (2) THE DY. CIT, CIRCLE-II, JALANDHAR (3) THE CIT(A),1, JALNDHAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER
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