K.J. Mehta T.B. Hospital, Baroda V. The ADIT.,(Exemp), Bhavnagar

ITA 1053/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1359 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N P PATEL
• Keywords: Opportunity of being heard; Corroborative evidences; Benefit of exemption
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER . / ITA NO. 1053 /AHD/201 3 / ASSESSMENT YEAR : 2009 - 10 K.J. MEHTA T.B. HOSPITAL, AMARGADH DIST : BHAVNAGAR - 364210 PAN : AAATK 3503 K VS ASSISTANT DIRECTOR OF INCOME - TAX (EXEMPTION), BHAVNAGAR / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI SANJAY R. SHAH, AR REVENUE BY : SHRI N.P. PATEL, SR DR / DATE OF HEARING : 10 / 0 6 /201 6 / DATE OF PRONOUNCEMENT: 20 / 06 /201 6 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME - T AX (APPEALS) - XXI , AHMEDABAD DATED 01 . 0 1 .201 3 FOR ASSESSMENT YEAR 200 9 - 10 . OUT OF VARIOUS ISSUES RAISED BY THE ASSESSEE , THE EFFECTIVE GROUNDS ARE TO THE EFFECT THAT LD. CIT(A) ERRED IN LAW AND ON FACTS : - ( I ) IN DENYING THE BENEFIT OF EXEMPTION U/S 11 & 12 OF THE ACT TO THE ASSESSEE; ( II ) IN NOT ALLOWING THE DEFICIT OF RS.3,72,91,681/ - BEING EXCESS OF EXPENDITURE OVER INCOME WHICH IS CLAIMED TO BE CARRIED FORWARD; ( III ) IN CONSIDERING THE SURPLUS OF RS.15,64,660/ - OF THE EARLIER YEAR AS INCOME FOR THE YEAR UNDER CONSIDERATION. 2. THE FACTS AND THE CIRCUMSTANCES CAN BE ASCERTAINED FROM THE FOLLOWING OBSERVATIONS : - FROM AOS ORDER A ) THE ASSESSEE HAS FILED ALONGWITH ITS RETURN OF INCOME A STATEMENT OF INCOME CLAIMING THE DEDUCTIONS AVAILABLE UNDER PROVISIONS OF SECTION 11 AND 12 FOR THE REGISTERED TRUST FOR ITS INCOME AND EXPENDITURE. THE RETURN INCLUDES AUDITORS REPORT IN FORM NO.10B. SOME DETAILS WERE SUBMITTED SMC - ITA NO.1053/AHD/ 2013 KJ MEHTA TB HOSPITAL VS. ADIT AY : 2009 - 10 2 ON 17.09.2011 DURING THE COURSE OF SCRUTINY, BUT THERE WAS NO FURTHER COMPLIANCE OF QUERIES RAISED DURING THE COURSE OF SCRUTINY. B ) IT IS CLEAR FROM THE ABOVE THE DETAILS SUBMITTED BY ASSESSEE THAT THEY HAVE NO PROPER RECORD, NO MEDICAL SERVICES FOR TREATMENT OF T.B . PATIENTS AS PER THE OBJECTS OF THE TRUST WERE PROVIDED, THEY HAD NOT RECEIVED ANY PERMISSION LETTER FROM MEDICAL BOARD/GOVERNMENT TILL 17.06.2011 AND THEIR F.Y. WAS OF 01.04.2008 TO 31.03.2009. C ) ASSESSEES OBJECTS AS PER MEMORANDUM OF ASSOCIATION ONLY INCLUDES TREATMENT OF TUBERCULOSIS AND THE TRUST HAD NOT DONE ANY ACTIVITY EXCEPT TURNING IT INTO A COLLEGE, WHICH WAS NOT PERMITTED BY GOVERNMENT. D ) THE TRUST HAS SHOWN ONLY INCOME OF RS.73400/ - AS INTEREST RECEIVED DURING THE YEAR AND ADJUSTED AGAINST SURPLUS OF RS.1564659.65 OF LAST PREVIOUS YEAR, FOR WHICH THE ASSESSEE HAD NOT APPLIED IT FOR ITS OBJECTS OR SET - ASIDE U/S 11(1)A, (11)(1)(B), OR U/S 11 (2), THE TRUST HAD NOT EXPLAINED THE BALANCE OF PREVIOUS YEAR, HENCE IT WILL BE TREATED INCOME OF THIS YEAR, AS THE AMOUNT NOT APPLIED FOR ITS OBJECTS. E ) ON VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE AND DATA AVAILABLE ON RECORD AND CHECKING THE EXPENDITURE AND INCOME OF THE TRUST INCOME, ACCUMULATION OF INCOME, DISALLOWANCES AS ABOVE IN THIS REGARD AS MENTIONED ABOVE. FROM CIT(A)S ORDER F ) I HAVE CAREFULLY PERUSED THE ORDER OF THE AO AND THE SUBMISSIONS MADE IN THIS REGARD. IT HAS ALREADY BEEN POINTED OUT BY THE AO THAT MORE THAN ADEQUATE OPPORTUNITY WAS GIVEN TO FILE NECESSARY EVIDENCES AS REQUIRED BY HIM TO DO NECESSARY VERIFICATION FOR THE CHARITABLE ACTIVITIES CARRIED OUT BY THE APPELLANT. SUCH EVIDENCES WERE NOT PRODUCED BEFORE THE AO. A LSO, DURING THE COURSE OF APPELLATE PROCEEDINGS, A SIMILAR STAND HAS BEEN ADOPTED BY THE APPELLANT WHEREIN UNSUBSTANTIATED WRITTEN SUBMISSIONS HAVE BEEN MADE. EVEN AT THE APPELLATE STAGES, THE APPELLANT HAS POINTED OUT THAT NECESSARY RECORDS WILL BE PRODU CED ON THE NEXT DATE OF HEARING SINCE THE SAME IS NOT AVAILABLE (AS POINTED OUT ABOVE). NO SUCH RECORDS OR SUPPORTING EVIDENCES HAVE BEEN PRODUCED BEFORE ME REGARDING THE CLAIMS MADE AS PER THE GROUNDS OF APPEAL. UNDER THE STATED CIRCUMSTANCES, I AM OF T HE VIEW THAT THE BENEFIT OF EXEMPTION U/S 11 & 12 CANNOT BE GRANTED TO THE APPELLANT AS THE CHARITABLE ACTIVITIES AND THE CLAIMS MADE IN THE COMPUTATION OF INCOME REMAINED UNVERIFIED TO THE SATISFACTION OF THE AO. SUCH CLAIMS, ETC. WERE ALSO NOT SUBSTANTI ATED DURING THE COURSE OF APPELLATE PROCEEDINGS. UNDER THE STATED CIRCUMSTANCES, I AM OF THE VIEW THAT THE BENEFIT OF SECTION 11 & 12 CANNOT BE GRANTED TO THE APPELLANT TRUST FOR THE ASST. YEAR 2009 - 10. THE AO IS DIRECTED TO RE - COMPUTE THE SMC - ITA NO.1053/AHD/ 2013 KJ MEHTA TB HOSPITAL VS. ADIT AY : 2009 - 10 3 TAXABLE INCOME OF THE APPELLANT. GROUNDS RAISED BY THE APPELLANT ARE DISPOSED OFF, AS ABOVE. 3. ON THE QUERY OF THE BENCH ABOUT THE REASONS FOR NOT BEING COOPERATIVE BEFORE THE LD. AO AND CIT(A), THE ASSESSEE MERELY CONTENDS THAT THE RELEVANT RECORDS WERE NOT AVAILAB LE AT THAT TIME. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS N O W IN THE POSSESSION OF THE RELEVANT RECORD S WHICH CAN BE PRODUCED BEFORE THE LOWER AUTHORITIES; THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE MAY BE SET ASIDE AND RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH , AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. THE LD. COUNSEL THE ASSESSEE UNDER TOOK ON BEHALF OF THE ASSESSEE TO FULLY COOPERATE WITH THE LD. AO IN THE ASSESSMENT PROCEEDINGS IN A DILIGENT MANNER. 3.1 LD. DR, ON THE OTHER HAND, CONTENDS THAT THE ASSESSEE IS A TRUST WHICH IS SUPPOSED TO KEEP ALL THE RECORDS WITHIN THE PURVIEW OF RELEVANT L A W S . BESIDES, GOVERNMENT GRANTS HAVE BEEN CLAIMED BY THE ASSESSEE. THEREFORE, ASSESSEE CANNOT BE FOUND TO BE INDOLENT IN MAINTENANCE OF STATUTORY RECORD ; N ON - COOPERAT ION OF THE ASSESSEE - TRUST CANNOT BE EXONERATED LIGHTLY . IT IS REQUESTED THAT IN THE EVENT THE ITAT INTENDS TO SET ASIDE THE MATTER, THEN SUITABLE COST MAY BE IMPOSED ON THE ASSESSEE FOR BEING NON - COOPERATIVE IN THE TAX PROCEEDINGS. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORI TIES. I FIND MERIT IN THE CONTENTION OF THE LD. DR; THEREFORE, A COST OF RS.5000/ - IS IMPOSED ON THE ASSESSEE WHICH IS TO BE PAID IN ACCORDANCE WITH LAW. ACCORDINGLY, T HE MATTER IS SET ASIDE AND RESTORED BACK TO THE FILE OF ASSESSING OFFICER TO DECIDE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS REMINDED ABOUT ITS UNDERTAKING SMC - ITA NO.1053/AHD/ 2013 KJ MEHTA TB HOSPITAL VS. ADIT AY : 2009 - 10 4 TO BE FULLY CO - OPERATIVE IN A D ILIGENT MANNER BEFORE THE LD. AO. PROOF OF COST SHOULD BE PRODUCED BEFORE THE LD. AO AT THE TIME OF FIRST HEARING. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES WITH THE ABOVE OBSERVATIONS. 5. IN THE RESULT, ASSESSEES APP EAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 2 0 T H JUNE , 201 6 AT AHMEDABAD. SD/ - R.P. TOLANI ( JUDICIAL MEMBER ) AHMEDABAD; DATED 2 0 / 0 6 /201 6 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD