M/s Chansal Education Society, Oachghat V. ITO)Exemption), Solan

ITA 1133/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1255 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-11-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 14-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 143(3); 147; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B,CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1133/CHD/2019 ! / ASSESSMENT YEAR : 2011-12 M/S CHANSAL EDUCATION SOCIETY, CHANSHAL PARK, P.O. OACHGHAT, DISTT.SOLAN '# THE ITO (EXEMPTION) , DISTT. SOLAN $ % ./PAN NO: AAAAC5929M $&/ APPELLANT ()$& /RESPONDENT HEARING THOUGH VIDEO CONFERENCING *+ , - /ASSESSEE BY : SHRI VISHAL MOHAN, ADVOCATE , - / REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL C IT . / , +0% /DATE OF HEARING : 25.11.2020 12! , +0% / DATE OF PRONOUNCEMENT : 15.12 .2020 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 20.6.2019 OF THE COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA [HEREINAFTER REFERRED TO AS CIT(A)] 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING EFFECTIVE GROUNDS OF APPEAL:- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFI ED IN UPHOLDING THE REOPENING OF THE CASE UNDER SECTIO N 147 R.W.S 148 OF THE INCOME TAX ACT , 1961. THE 2 REOPENING OF THE CASE IS BAD IN LAW AND AS SUCH IS NOT SUSTAINABLE IN THE EYES OF LAW. 2. THAT IN THE FACTS CIRCUMSTANCES OF THE CASE THE LD COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFI ED IN UPHOLDING THE ASSESSMENT OF INCOME OF THE APPELL ANT AT RS. 11,50,110/- AND FURTHER UPHOLDING THAT THE B ENEFIT OF THE EXEMPTION UNDER SECTION 10(23C)(IIIAD) WAS N OT AVAILABLE TO THE ASSESSEE . THAT FACT OF THE MATTER IS THAT THE INCOME OF THE APPELLANT IS EXEMPT UNDER SECTION 10(23C)(IIIAD) AND ALSO QUALIFIES FOR EXEMPTION UND ER SECTION 11 AND 12 OF THEL.T. ACT, 1961. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD ASSESSING OFFICER IS NOT JUSTIFIED IN NOT CONSIDERING THE CASE OF THE APPELLANT UNDER SECTION 11 AND 12 IN THE TRUE SPIRIT. THE ENTIRE INCOME OF THE APPELLANT ALSO QUALIFIES FOR EXEMPTION UNDER THIS SECTION. 3. GROUND NO.1 : VIDE GROUND NO.1 THE ASSESSEE HAS CONTESTED THE REOPENING OF THE ASSESSMENT U/S 147 READ WITH S ECTION 148 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). THE LD. COUNSEL FOR THE ASSESSEE IN THIS RESPECT HAS SUBMITTED THAT THE REO PENING OF THE ASSESSMENT HAS BEEN DONE IN THIS CASE ON THE GROUND THAT THE ASSESSING OFFICER HAS NOTICED THAT SINCE 85% OF THE INCOME FOR THE YEAR UNDER CONSIDERATION WAS NOT APPLIED BY THE ASS ESSEE FOR CHARITABLE PURPOSE, THEREFORE, THE ASSESSEE WAS NOT ENTITLED TO EXEMPTION U/S 11 OF THE ACT. THE LD. COUNSEL FOR TH E ASSESSEE IN THIS RESPECT HAS SUBMITTED THAT THE ASSESSMENT WAS REOPE NED AFTER FOUR YEARS AND THAT AS PER THE PROVISIONS OF SECTION 147 OF THE ACT, ASSESSMENT AFTER EXPIRY OF THE FOUR YEARS CANNOT BE REOPENED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME 3 CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH A SSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSE E TO MAKE A RETURN OR TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NE CESSARY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR. THE LD. COUNSE L HAS SUBMITTED THAT THE ASSESSEE HAD FULLY AND TRULY DISCLOSED ALL THE MATERIAL FACTS. THAT THE COPY OF THE AUDIT REPORT WAS ATTACHED WITH THE RETURN FROM WHICH IT COULD HAVE BEEN GATHERED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD NOT APPLIED 85% OF HIS RECEIPTS FOR CH ARITABLE PURPOSES FOR THE YEAR UNDER CONSIDERATION. HOWEVER, THE LD. COUNSEL IS FAIR ENOUGH TO ADMIT THAT IN THIS CASE EVEN FORM NO.10B WAS NOT FILED BY THE ASSESSEE BUT THE LD. COUNSEL IN THIS RESPECT HA S SUBMITTED THAT EVEN WITHOUT FORM NO.10B, THE ASSESSING OFFICER, AT THE FIRST INSTANCE, HAD ADMITTED THE RETURN AND ASSESSED THE INCOME OF THE ASSESSEE U/S 143(3) OF THE ACT, THEREFORE, THERE W AS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL NECESSARY FACTS FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO RELIED UPON CERTAIN CASE LAWS IN THIS RESPECT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES AND HAVE GONE T HROUGH THE RECORD. WE ARE NOT CONVINCED WITH THE ARGUMENTS OF THE LD. COUNSEL OF THE ASSESSEE THAT THE ASSESSEE HAS FULLY AND TRU LY DISCLOSED ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. IT IS APPARENT FROM THE 4 ASSESSMENT ORDER DATED 13.2.2014 THAT THE ASSESSEE DID NOT DISCLOSE FULLY AND TRULY THE VERY MATERIAL FACT THAT THE ASS ESSEE HAD NOT APPLIED 85% OF THE INCOME / RECEIPTS OF THE YEAR FO R CHARITABLE PURPOSES WHICH WAS A PRE-CONDITION FOR GRANT OF E XEMPTION U/S 11 OF THE ACT. HAD THE ASSESSEE DISCLOSED THIS MATERIA L FACT TO THE ASSESSING OFFICER, THE ASSESSING OFFICER WOULD NOT HAVE ACCEPTED THE RETURN OF THE INCOME OF THE ASSESSEE. IN VIEW OF THIS, WE DO NOT FIND ANY MERIT IN GROUN D NO.1 OF THE APPEAL AND THE SAME IS, THEREFORE, DISMISSED 5. GROUND NO.2: VIDE GROUND NO.2, IT HAS BEEN CONTENDED THAT EVEN THOUGH DURING THE RE-ASSESSMENT PROCEEDINGS TH E ASSESSEE WAS NOT FOUND ELIGIBLE TO CLAIM DEDUCTION U/S 11 OF THE ACT, HOWEVER, THE ALTERNATIVE CLAIM U/S 10(23C)(IIIAD) WAS ALSO MADE BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER WAS SUP POSED TO CONSIDER THE SAME. 6. THE LD. COUNSEL IN THIS RESPECT HAS SUBMITTED T HAT EVEN THOUGH IN THE ORIGINAL RETURN OF INCOME, THE CLAIM WAS MAD E U/S 11 OF THE ACT, HOWEVER, THE ASSESSEE WAS ELIGIBLE FOR EXEMPT ION FROM TAXATION UNDER THE PROVISIONS OF SECTION 10(23C)(IIIAD) ALSO . THAT ONCE THE ASSESSING OFFICER DURING THE RE-ASSESSMENT PROCEEDI NGS FOUND THAT THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM DEDUCTION U/ S 11 OF THE ACT BECAUSE OF THE DEFAULT ON THE PART OF THE ASSESSEE IN APPLYING 85% OF 5 THE ASSESSEES RECEIPT FOR CHARITABLE PURPOSES, THE N, THE ASSESSING OFFICER SHOULD HAVE CONSIDERED THE ALTERNATIVE CLAI M OF THE ASSESSEE U/S 10(23C)(IIIAD) OF THE ACT. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIN D FORCE IN THE ABOVE CONTENTION OF THE ASSESSEE. IF THE ASSESSEE O THERWISE IS ELIGIBLE FOR DEDUCTION UNDER THE PROVISIONS OF SECT ION 10(23C)(IIIAD) OF THE ACT, THE SAID CLAIM OF THE ASSESSEE, IN OUR VIEW, IS REQUIRED TO BE EXAMINED BY THE ASSESSING OFFICER. THE ISSUE IS, THEREFORE, RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ALTERNATIVE CLAIM OF THE ASSESSEE OF I TS ELIGIBILITY TO CLAIM EXEMPTION FROM TAXATION UNDER THE PROVISIONS OF SECTION 10(23C)(IIIAD) OF THE ACT IF THE ASSESSEE OTHERWIS E QUALIFY FOR THE SAME IRRESPECTIVE OF THE FACT WHETHER OR NOT THE AS SESSEE HAD MADE A SPECIFIC CLAIM IN THE ORIGINAL RETURN OF INCOME IN THIS RESPECT. THIS ISSUE IS ACCORDINGLY RESTORED TO THE FILE OF THE AS SESSING OFFICER. 8. GROUND NO.3: VIDE GROUND NO.3 THE ASSESSEE HAS CONTESTED THE DENIAL OF CLAIM OF EXEMPTION UNDER THE PROVISIONS O F SECTION 11 OF THE ACT. ADMITTEDLY, THE ASSESSEE DID NOT APPLY 85% OF THE INCOME / RECEIPT ON CHARITABLE PURPOSES AS REQUIRED UNDER TH E PROVISIONS OF SECTION 11 OF THE ACT. THEREFORE, THERE IS NO MERI T IN THIS GROUND OF APPEAL, AND THE SAME IS ACCORDINGLY DISMISSED. 6 IN VIEW OF OUR FINDINGS ARRIVING WHILE DECIDING GR OUND NO.2 OF THE APPEAL OF THE ASSESSEE, THE APPEAL OF THE ASSES SEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 15.12.2020. SD/- SD/- ( . . / N.K. SAINI) ( ! ' / SANJAY GARG) #$% / VICE PRESIDENT &' / JUDICIAL MEMBER DATED : 15.12.2020 .. 3,(+45 65!+ / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. ()$& / THE RESPONDENT 3. . 7+ / CIT 4. . 7+ ( )/ THE CIT(A) 5. 58(+9 , 09 , :;<= / DR, ITAT, CHANDIGARH 6. <>/ / GUARD FILE 3 . / BY ORDER, ? / ASSISTANT REGISTRAR