Madras Chinmaya Seva Trust, CHENNAI V. ITO (Exemptions) Ward 4, CHENNAI

ITA 1146/CHNY/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4668 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 04-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Assessee Lawyers: S RAMACHANDRAN
• Keywords: Opportunity of being heard; Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , . , BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ ITA NO.1146/CHNY/2018 /ASSESSMENT YEAR: 2012-13 MADRAS CHINMAYA SEVA TRUST, C/O S. RAMACHANDRAN, CHARTERED ACCOUNTANT, SETHURAM NO.15, SUNDARESA IYER LAYOUT, TRICHY ROAD, COIMBATORE 641 018 [PAN: AAATM3077D] VS. INCOME TAX OFFICER (EXEMPTIONS) WARD 4, CHENNAI 600 034 ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI S. RAMACHANDRAN, C.A /RESPONDENT BY : MS. R. ANITA, JCIT /DATE OF HEARING : 06.02.2020 /DATE OF PRONOUNCEMENT : 20.02.2020 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-17, CHENNAI DATED 25.01.2018 RELEVANT TO THE ASSESSMENT YEAR 2012-13 PASSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 28.09.2012 ADMITTING NIL INCOME. THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED BY ACCEPTING THE RETURNED INCOME OF THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER TREATED AN AMOUNT OF .44,80,000/- BEING :- 2 -: ITA NO.1146/CHNY/2018 CORPUS DONATIONS RECEIVED FROM THE STUDENTS, AS THE INCOME OF THE ASSESSEE IN THE ABSENCE OF ANY REPLY FROM THE ASSESSEE. THUS, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND LEVIED PENALTY OF .12,31,880/-. ON APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS FURNISHED COMPLETE PARTICULARS OF INCOME FOR ASSESSMENT EXCEPT FOR STATING THAT THE DONATIONS RECEIVED FROM THE STUDENTS WAS MISTAKENLY CLASSIFIED AS CORPUS DONATION IN THE CONSOLIDATED BALANCE SHEET. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE SHOW-CAUSE NOTICE DATED 28.09.2015 CALLING FOR OBJECTIONS FROM THE ASSESSEE FOR LEVY OF PENALTY BY JUST GIVING A TIME LIMIT OF ONE DAY AND SINCE THE ASSESSEE COULD NOT FURNISH REPLY, THE ASSESSING OFFICER LEVIED PENALTY BY PASSING ORDER UNDER SECTION 271(1)(C) OF THE ACT ON 30.09.2015. IT WAS FURTHER SUBMISSION THAT BECAUSE OF THE CLERICAL MISTAKE CREPT IN THE CONSOLIDATED BALANCE SHEET, THE ASSESSEE HAS NOT EARNED ANY ADDITIONAL INCOME OR SUCH INCOME WAS CHARGEABLE TO TAX AND MOREOVER, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF JCIT V. CLASSIC INDUSTRIES LTD. [2017] 393 ITR 20 AND PRAYED FOR FOLLOWING THE SAME TO DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW. :- 3 -: ITA NO.1146/CHNY/2018 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF .1,57,68,858/- IN THE CONSOLIDATED BALANCE SHEET AS ADDITION TO CORPUS FUND ON ACCOUNT OF C.V. STUDENTS DONATION. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN, BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS SUBMITTED THE DETAILS OF C.V. STUDENTS DONATION LIST, WHEREIN, IT WAS MENTIONED THAT THE DONATIONS DURING THE FINANCIAL YEAR 2011-12 AMOUNTS TO .44,80,000/-. SINCE THE ASSESSEE HAS FAILED TO FURNISH ANY REPLY TO THE QUERY, THE ASSESSING OFFICER TREATED THE AMOUNT OF .44,80,000/- AS INCOME OF THE ASSESSEE TRUST AND BROUGHT TO TAX. SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY OF .12,31,880/- UNDER SECTION 271(1)(C) OF THE ACT, WHICH WAS CONFIRMED BY THE LD. CIT(A). 4.1 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE MAINLY CONTENDED THAT WITHOUT GIVING SUFFICIENT OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE, THE ASSESSING OFFICER HAS LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ON PERUSAL OF THE PENALTY ORDER, WE FIND THAT THE ASSESSING OFFICER HAS ISSUED THE SHOW-CAUSE NOTICE DATED 28.09.2015 CALLING FOR OBJECTIONS FROM THE ASSESSEE FOR LEVY OF PENALTY AND CONCLUDED THE PENALTY ORDER HURRIEDLY ON 30.09.2015 BY JUST GIVING A TIME LIMIT OF ONE DAY, WHICH APPEARS TO BE INSUFFICIENT AND COULD NOT MEET THE ENDS OF JUSTICE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO GIVE ONE :- 4 -: ITA NO.1146/CHNY/2018 MORE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE FOR PRESENTING ITS CASE BEFORE THE ASSESSING OFFICER AND AFTER CONSIDERING THE SAME, THE ASSESSING OFFICER MAY DECIDE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT BY KEEPING IN MIND THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF JCIT V. CLASSIC INDUSTRIES LTD (SUPRA). 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 20 TH FEBRUARY, 2020 AT CHENNAI. SD/- SD/- (INTURI RAMA RAO) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, THE 20.02.2020 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.