M/s.Sree Chitra Thirunal College of Engineering, Trivandrum V. The ACDIT(Exemption), Trivandrum

ITA 114/COCH/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7286 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 03-03-2016
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: GOVIND SHASTHRI
• Keywords: Depreciation; Charitable institution; Retrospective amendment; Revenue expenditure
• Section: 143(3); 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI ABRAHAM P. GEORGE, AM & GEORGE GEORGE K., JM I.T.A. NO.114/COCH/2016 ASSESSMENT YEAR : 2007 - 08 M/S. SREE CHITRA TIRUNAL COLLEGE OF ENGINEERING,PAPPANAMCODE, TRIVANDRUM. [PAN: AADTS 5972K] VS. THE A SSISTANT DIRECTOR OF INCOME - TAX(SEXEMPTION), TRIVANDRUM. (ASSESSEE - APPELLANT) (REVENU E - RESPONDENT) ASSESSEE BY SHRI GOVIND SHASTHRI, CA REVENUE BY SHRI A. DHANARAJ , SR. DR DATE OF HEARING 22/ 0 3 / 201 7 DATE OF PRONOUNCEMENT 24 TH /03/2017 O R D E R PER GEORGE GEORGE K.,JUDICIAL MEMBER: THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DIRECTED AGAINST THE ORDER OF THE CIT(A), TRIVANDRUM DATED 25/01/2016. THE RELEVA NT ASSESSMENT YEAR IS 2007-08. 2. IN ITS GROUNDS OF APPEAL, THE ASSESSEE HAS RAI SED THREE GROUNDS. THE THIRD GROUND IS GENERAL IN NATURE AND NO SPECIFIC ADJUDIC ATION IS REQUIRED , H ENCE THE I.T. A. NO.114/COCH/2016 2 SAME IS REJECTED. THE LD. COUNSEL FOR THE ASSESSEE IN THE COURSE OF HEARING, SUBMITTED THAT HE IS NOT PRESSING GROUND NO. 1, HEN CE THIS GROUND IS ALSO DISMISSED AS NOT PRESSED. THE SOLITARY GROUND WHIC H REQUIRES ADJUDICATION IS GROUND NO. 2 WHICH READS AS FOLLOWS: WITHOUT PREJUDICE TO THE ABOVE GROUND, LEARNED COM MISSIONER OF INCOME- TAX(APPEALS) SHOULD HAVE PERMITTED ACCUMULATION OF THE SURPLUS AS PER CLAUSE(A) OF THIRD PROVISO TO SECTION 10(23C), SINCE THE APPELLA NT IS ELIGIBLE FOR SUCH ACCUMULATION AS PER THE APPROVAL OBTAINED U/S. 10(2 3C)(VI), SUBSEQUENT TO THE COMPLETION OF THE ORIGINAL ASSESSMENT, WITH RETROSP ECTIVE EFFECT FROM ASST. YEAR 1999-2000. 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A CHARITABLE INSTITUTION REG ISTERED U/S. 12A OF THE INCOME TAX ACT, 1961. ASSESSMENT U/S. 143(3) R.W.S. 147 OF THE ACT WAS COMPLETED VIDE ORDER DATED 12/03/2014 DETERMINING THE TAXABLE INCO ME AT RS.1,30,18,236/. IN THE RE-ASSESSMENT PROCEEDINGS U/S. 143(3) R.W.S. 14 7 OF THE ACT, THE ASSESSING OFFICER DID NOT ALLOW CERTAIN REVENUE EXPENDITURE A ND RESTRICTED THE SURPLUS TO BE CARRIED FORWARD TO THE EXTENT CLAIMED IN THE ORIGIN AL RETURN FILED. 4. AGGRIEVED BY THE ORDER OF THE ASSESSMENT IN RE STRICTING THE SURPLUS TO BE CARRIED FORWARD TO THE EXTENT OF CLAIM FILED IN THE ORIGINAL RETURN, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORIT Y. BEFORE THE CIT(A), IT WAS CONTENDED THAT THE AMOUNT OF RS.1,30,18,236/- SHOU LD BE ALLOWED TO BE ACCUMULATED U/S. 11(2) OF THE ACT IN ADDITION TO RS .94,38,002/- ALREADY ALLOWED. I.T. A. NO.114/COCH/2016 3 IT WAS SUBMITTED BEFORE THE CIT(A) FOR THE YEAR UND ER CONSIDERATION, THAT THE ASSESSEE HAD ORIGINALLY CLAIMED THE AMOUNT OF RS.94 ,38,002/- TO BE ACCUMULATED BY FURNISHING FORM NO. 10 AS REQUIRED UNDER RULE 17 OF THE I.T. RULES. IT WAS SUBMITTED THAT THE ADDITIONAL ACCUMULATION WAS REQU IRED ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION MADE BY THE ITAT VIDE ITS ORDER DATED 16/02/2009. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS GRAN TED APPROVAL U/S. 10(23C) (VI) OF THE I.T. ACT BY THE CITS ORDER DATED 18/08 /2010 AND WAS GIVEN RETROSPECTIVE EFFECT FROM THE ASSESSMENT YEAR 1999- 2000 ONWARDS. IT WAS STATED THAT AS PER CLAUSE (A) OF THE THIRD PROVISO TO SECT ION 10(23C) OF THE ACT, THE ASSESSEE WAS ENTITLED TO ACCUMULATION FOR A PERIOD OF 5 YEARS, WITHOUT THE PERMISSION OF THE ASSESSING OFFICER. 5. THE CIT(A) HOWEVER REJECTED THE CONTENTIONS R AISED BY THE ASSESSEE AND DID NOT GRANT ACCUMULATION OF DISALLOWED DEPRECIATION BOTH U/S. 11(2) AND ALSO AS PER CLAUSE (A) OF THE THIRD PROVISO TO SECTION 10(2 3C) OF THE ACT. 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE T HE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BE FORE THE CIT(A) WHEREAS THE LD. DR RELIED ON THE FINDINGS/CONCLUSIONS OF THE AS SESSING OFFICER AND THE CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON RECORD. IT IS ADMITTED THAT THE ASSESSEE WAS GRANTED APPROVAL U/S. 10(23C) OF THE ACT VIDE I.T. A. NO.114/COCH/2016 4 ORDER OF THE LD. CIT(A) DATED 18/08/2010 FROM THE A SSESSMENT YEAR 1999-2000 ONWARDS. THE CASE OF THE ASSESSEE IS THAT IT MAY BE PERMITTED TO ACCUMULATE SURPLUS AS PER CLAUSE (A) OF THE THIRD PROVISO TO S ECTION 10(23C) OF THE ACT. THIS PLEA OF THE ASSESSEE WAS REJECTED BY THE CIT(A). BY OBSERVING AS UNDER: ANOTHER ARGUMENT OF THE APPELLANT THAT THEY ARE AL SO ENTITLED TO ACCUMULATE THE SURPLUS U/S. 10(23C)(VI) OF THE ACT, CANNOT BE ENTE RTAINED SINCE NO SUCH CLAIM WAS MADE IN THE RETURN ORIGINALLY FILED AND ANY CLAIM M ADE WITHOUT FILING THE REQUISITE AUDIT REPORT FROM THE ACCOUNTANT AS SPECIFIED IN SE CTION 288(2) NEED NOT BE ENTERTAINED. 7.1 AS MENTIONED EARLIER, THE APPROVAL U/S. 10( 23C) WAS OBTAINED SUBSEQUENT TO THE COMPLETION OF THE ASSESSMENT MADE BY THE ASS ESSING OFFICER. THEREFORE, THE ASSESSEE COULD NOT CLAIM ACCUMULATION OF SURPLU S AS PER CLAUSE (A) OF THE THIRD PROVISO TO SECTION 10(23C) OF THE ACT IN THE ORIGINAL RETURN. SINCE THE APPROVAL HAS BEEN GRANTED WITH RETROSPECTIVE EFFECT FROM ASSESSMENT YEAR 1999- 2000 ONWARDS WHICH COVERS THE CURRENT ASSESSMENT YE AR, WE ARE OF THE VIEW, IN THE INTEREST OF JUSTICE AND EQUITY, THIS ISSUE REQU IRES TO BE RE-CONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY, WE RESTORE THE ISSU E OF ACCUMULATION UNDER CLAUSE (A) OF THE THIRD PROVISO TO SECTION 10(23C) OF THE ACT TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL DISPOSE OF TH E MATTER AS EXPEDITIOUSLY AS POSSIBLE AFTER GIVING A REASONABLE OPPORTUNITY OF H EARING TO THE ASSESSEE. IT IS ORDERED ACCORDINGLY. I.T. A. NO.114/COCH/2016 5 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 24 TH -03-2017. SD/- SD/- (ABRAHAM P. GEORGE) ( GEORGE GEORGE K.) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: KOCHI DATED: 24 TH MARCH, 2017 GJ COPY TO: 1. M/S. SREE CHITRA TIRUNAL COLLEGE OF ENGINEERING,P APPANAMCODE, TRIVANDRUM. 2. THE ASSISTANT DIRECTOR OF INCOME-TAX(EXEMPTION),T RIVANDURM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), TRIVAND RUM. 4. THE PRINCIPAL COMMISSIONER OF INCOME-TAX, TRIVAN DRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN