Krishi Upaj Mandi Samiti, Mandsaur V. The ACIT, Ratlam

ITA 106/IND/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2992 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: SANTOSH DESHMUKHCA
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12; 10; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NOS. 106 & 107/IND/2013 A.YS. 2005-06 AND 2006-07 KRISHI UPAJ MANDI SAMITI, BHANPURA MANDI, CAMPUS , BHANPURA :: APPELLANT PAN AAALK0468L VS ACIT-RATLAM :: RESPONDENT APPELLANT BY SHRI SANTOSH DESHMUKH,CA RESPONDENT BY SHRI R.A. VERMA, SR. DR DATE OF HEARING 27.05.2013 DATE OF PRONOUNCEMENT 27.05.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 15.11.2012 OF LD. 1ST AUTHORITY, UJJAIN, ON THE GRO UND THAT THE LD. 2 CIT (A) ERRED IN CONFIRMING DENY OF EXEMPTION U/S 1 1 OF THE ACT WITHOUT CONSIDERING THE FACTS THAT THE ASSESSEE WAS GRANTED REGISTRATION U/S 12A OF THE ACT BY THE LD CIT UJJAI N FROM THE DATE OF INCEPTION AND THUS THE ASSESSEE IS ENTITLED TO EXEM PTION U/S 11 MORE SPECIFICALLY WHEN THE ASSESSEE APPLIED ITS INC OME FOR CHARITABLE PURPOSES AND THE TOTAL INCOME OF THE ASS ESSEE IS NEGATIVE AND THUS TAX ALREADY PAID IS REFUNDABLE. 2. DURING HEARING WE HAVE HEARD SHRI SANTOSH DESHMU KH LD. COUNSEL FOR THE ASSESSEE AND SHRI R.A. VERMA. LD, S R. DR. THE CRUX OF ARGUMENT ON BEHALF OF THE ASSESSEE IS IDENTICAL TO THE GROUND RAISED WHEREAS THE LD. SR. DR DEFENDED THE IMPUGN ED ORDERS. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AT PERU SED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF AR E THAT THE ASSESSEE SAMITI WAS CREATED UNDER THE STATUTE AND IS PERFOR MING UNDER THE DIRECT CONTROL OF MADHYA PRADESH RAJYA KRISHI VIPNA N BOARD. AS PER THE ASSESSEE ON REINTRODUCTION OF SECTION 10 (20), CLAUSE 26 AAB BY THE FINANCE ACT 2008 BY WHICH THE SAMITIS WERE INCL UDED UNDER THE EXCEPTION CATEGORY. PURSUANT TO DIRECTION OF THE TR IBUNAL VIDE ORDER DATED 22.12.2006 ( ITA NO. 345/IND/2006) THE LD COM MISSIONER 3 GRANTED REGISTRATION U/S 12A TO THE ASSESSEE VIDE O RDER DATE 21.02.2007 FROM THE DATED OF INCEPTION TO THE ASSES SEE. AT THE TIME OF FILLING OF RETURN OF A.Y 2005-06 NO SUCH REGISTR ATIONS U/S 12 A WAS AVAILABLE TO THE ASSESSEE AND THUS RETURN OF IN COME DECLARING INCOME AT RS. 85,690/- WAS FILED ON 1.12.2005 WHICH WAS SUBSEQUENTLY REVISED AT RS. 82,720/- ON 23.12.2005. THE ASSESSEE VIDE ITS LETTER DATED 22TH AUGUST 2007 INFORMED THE ASSESSING OFFICER THAT THE ASSESSEE GOT REGISTRATION U/S 12A OF THE ACT AND THUS ENTITLED TO GET EXEMPTION U/S 11. THE CLAIM OF THE ASSESSEE WAS MERELY DENIED ON THE PLEA THAT SINCE IN THE ORI GINAL RETURN THE ASSESSEE CLAIMED THE STATUS OF LOCAL AUTHORITY AN D NOT OF A TRUST, ALSO VOLUNTARILY DISCLOSED TOTAL TAXABLE INCOME AN D PAID TAXES THEREON, THEREFORE, THE EXEMPTION U/S 11 IS NOT AVA ILABLE TO THE ASSESSEE. ANOTHER OBJECTION RAISED IN THE IMPUGNED ORDER IS THAT SINCE THE ASSESSEE DIVERTED 50% OF THE TOTAL INCOME TO KISHAN SADAK NIDHI, WHICH IS NOT IN ACCORDANCE WITH THE OB JECTIVES OF THE ASSESSEE THE CLAIMED DEDUCTION IS NOT ALLOWABLE. TH E STAND OF THE ASSESSEE IS THAT THE LD CIT (A) DID NOT WAIT FOR TH E REPLY DATED 22.12.2007 OF THE SHOW CAUSE NOTICE, ISSUED TO THE ASSESSEE, PASSED THE ORDER. OUR ATTENTION WAS INVITED TO PAGE 2 TO 6 OF THE PAPER 4 BOOK. IT WAS EXPLAINED BY THE LD. COUNSEL THAT AT T HE TIME OF FILING OF RETURN SINCE THE ASSESSEE WAS NOT HAVING REGISTRATI ON U/S 12A THEREFORE, THE RETURN WAS FILED IN THE STATUS OF LO CAL AUTHORITY AND SINCE SUCH REGISTRATION IS AVAILABLE FROM THE DATE OF INCEPTION ONE MORE OPPORTUNITY MAY BE GRANTED TO THE ASSESSEE TO EXPLAIN ITS CASE. THE LD. SR. DR, THOUGH DEFENDED THE IMPUGNED ORDER, BUT DID NOT OBJECT IF THE MATTER IS REMANDED BACK TO THE AS SESSING OFFICER. THE LD. COUNSEL INVITED OUR ATTENTION TO THE DECISI ON AND THE RATIO LAID DOWN IN THE CASE OF CIT VS. HARDEODAS AGRAWALA TRUST (1992 198 ITR 511 ( CALCUTTA) AND FROM HONBLE BOMBAY HIG H COURT IN CIT VS. M/S PRUTHVI BOKERS AND SHARE HOLDERS ( INCO ME TAX APPEAL NO. 3908 OF 2010). EVEN OTHERWISE THE INTENTION OF THE LEGISLATURE IS TO COLLECT DUE TAXES . IN THE INTEREST OF JUSTICE A ND ALSO THAT NO PREJUDICE IS CAUSED TO EITHER SIDE, WE REMAND BOTH THE APPEALS TO THE FILE OF THE LD. ASSESSING OFFICER TO EXAMINE TH E CLAIM OF THE ASSESSEE/ AUDIT REPORT AND DECIDE IN ACCORDANCE WIT H LAW FOR WHICH DUE OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE A SSESSEE. 5 4. FINALLY BOTH THESE APPEALS ARE ALLOWED FOR STATI STICAL PURPOSES ONLY. 5. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLU SION OF THE HEARING ON 27.05.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 28.5.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE