Ramanaidu Charitable Trust , Hyderabad V. ITO, (Exemption)-3, Hyderabad

ITA 1151/Hyd/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6276 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Assessment Year: 2014-2015
• Appeal Filed On: 04-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA GUPTA
• Keywords: Depreciation; Charitable institution; Maximum Marginal Rate
• Section: 143(3); 12AA; 143(2); 13; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A - SMC , HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. 1151/HYD/2018 ASSESSMENT YEAR: 2014 - 15 RAMANAIDU CHARITABLE TRUST, HYDERABAD. PAN: AAATR 0554 J VS. INCOME TAX OFFICER, EXEMPTIONS - 3, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: NONE REVENUE BY: SMT. AMISHA GUPTA, DR DATE OF HEARING: 10 /09/2020 DATE OF PRONOUNCEMENT: 10 /09/2020 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 9, HYDERABAD IN APPEAL NO. 10038/ITO (EXE - ) - 3, HYD/2016 - 17, DATED 29/03/2018 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE AY 2014 - 15. 2. THE ASSESSEE HAS RAISED 12 GROUNDS IN ITS APPEAL WHICH ARE EXTRACTED HEREIN BELOW FOR REFERENCE: - (I) THE LD. CIT (A) HAS FAILED TO GIVE AN OPPORTUNITY TO THE APPELLANT TO REPRESENT ITS CASE BEFORE HIM AND THUS ERRED IN DISMISSING THE APPEAL. 2 (II) THE LD. CIT (A) HAS ERRED IN PASSING THE ORDER WITHOUT CONSIDERING THE WRITTEN SUBMISSIONS, NARRATED IN THE STATEMENT OF FACTS. (III) THE LD. CIT (A) HAS FAILED TO CONSIDER THE FACTS AND GROUNDS PERTAINING TO CORPUS DONATIONS, APPLICABI LITY OF SECTION 11, 12 NON - VIOLATION OF THE PROVISIONS OF SECTION 13 (8), NON - APPLICABILITY OF PROVISO TO SECTION 2(15) AND THE APPLICABILITY OF THE CIRCULAR ISSUED BY THE CBDT ON APPLICABILITY OF THE PROVISO TO SECTION 2(15). (IV) THE LD. CIT (A) DISMISSED THE APPEAL FOLLOWING THE DECISION OF THE ITAT, CHENNAI BENCH IN THE CASE OF THE APPELLANTS OWN CASE WITHOUT INDEPENDENTLY CONSIDERING THE EACH GROUND RAISED BY THE APPELLANT ESPECIALLY WHEN THE ORDER PASSED BY ITAT IS FACTUALLY NOT CORRECT. (V) THE LD. CIT (A) I S WRONG IN RELYING ON THE DECISION OF ITAT CHENNAI BENCH IN SO FAR AS THE PROVISIONS OF THE TRUST ACT, 1882 WHICH IS NOT RELEVANT TO THE CASE OF THE APPELLANT. (VI) THE LD. CIT (A) ERRED IN NOT GRANTING EXEMPTION TO THE CORPUS DONATIONS AND TREATING THE ENTIRE CORPUS DONATIONS RECEIVED EVEN FROM OUTSIDERS ALSO AS INCOME OF THE TRUST WHICH INDICATE THAT THE FACTS HAVE NOT BEEN FULLY LOOKED IN TO AND APPRECIATED BOTH BY HIM AND IN THE ORDER ON WHICH RELIANCE WAS PLACED BY HIM. (VII) THE LD. CIT (A) ERRED IN STATING THAT THE PROVISIONS OF SECTION 11 AND 12 ARE NOT APPLICABLE TO THE CASE OF THE APPELLANT WITHOUT BRINGING OUT ANY FACTS AS TO HOW THEY ARE NOT APPLICABLE. (VIII) THE LD. CIT (A) ERRED IN NOT HOLDING TH A T THE ENTIRE INCOME OF THE TRUST IS EXEMPT AND HENCE SHOULD HAVE HELD THAT THE INCOME AS RETURNED WAS CORRECT INCOME AND THERE WAS NO NECESSITY TO CHANGE THE SAME OR TO MAKE ANY ADDITIONS TO THE SAME. (IX) WITHOUT PREJUDICE TO THE ABOVE GROUNDS THE LD. CIT (A) HAVING HELD THAT THE INCOME IS TO BE TAXED OUGHT TO HAVE GIVEN DI RECTIONS TO THE AO TO COMPUTE THE INCOME AS PER ALL THE PROVISIONS OF THE ACT ALLOWING DEPRECIATION AND SET OFF OF EXCESS EXPENDITURE OF PREVIOUS YEARS IN THIS YEAR. (X) THE APPELLANT PRAYS IF THERE IS SMALL DELAY IN FILING THE APPEAL MAY KINDLY BE CON DONED. (XI) THE APPELLANT CRAVES LEAVE TO FILE ANY ADDITIONAL GROUND IF NEED BEFORE THE HEARING OR AT THE TIME OF HEARING. (XII) THE APPELLANT PRAYS THAT IT MAY BE RENDERED JUSTICE AFTER CONSIDERING THE ABOVE FACTS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRUST REGISTERED U/S. 12AA OF THE ACT , FILED ITS RETURN OF INCOME FOR THE AY 2014 - 15 ON 26/09/2014 DECLARING NIL INCOME. THE CASE WAS SELECTED FOR SCRUTINY. SUBSEQUENTLY , NOTICE U/S. 143(2) WAS ISSUED, AND THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF TH E ACT ON 30/12/2016 WHEREIN THE LD. AO MADE CERTAIN ADDITIONS TOWARDS VIZ., (I) EXCESS OF EXPENDITURE OVER 3 INCOME RS. 26,90,797/ - ; (II) DONATION PAID RS. 3,43,200/ - AND (III) NET CORPUS DONATION RECEIVED RS. 61,72,000/ - . ACCORDINGLY, THE LD. AO DETERMINED THE TOTAL TAXABLE INCOME AT MMR (MAXIMUM MARGINAL RATES) AT RS. 38,24,403/ - AND RAISED DEMAND OF RS. 15,71,700/ - . ON APPEAL, NONE APPEARED BEFORE THE LD. CIT (A) TO REPRESENT THE CASE OF THE ASSESSEE. THEREFORE, THE LD. CIT (A) BASED ON THE MA TERIAL AVAILABLE ON RECORD AND ALSO FOLLOWING THE DECISION OF THE ITAT, CHENNAI BENCH IN THE ASSESSEES OWN CASE DISMISSED THE APPEAL. HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING BEFORE ME, NONE APPEARED ON BEHALF OF TH E ASSESSEE. AT THE OUTSET, LD. DR SUBMITTED THAT THE LD. CIT (A) HAS DECIDED THE MATTER FOLLOWING THE ORDER OF THE CHENNAI BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE. THE LD. DR FURTHER SUBMITTED THAT THE LD. CIT (A) HAD REMITTED CERTAIN ISSUES IN T HE APPEAL TO THE FILE OF THE LD. AO FOR VERIFICATION. HENCE, HE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD. AO FOR FRESH CONSIDERATION. 5. I HAVE HEARD THE LD. DR AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. ON GOING THROUGH THE ORDER OF THE LD. CIT (A), I FIND MERIT IN THE CONTENTION OF THE LD. DR. THEREFORE, IN THE INTEREST OF JUSTICE, I HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. AO FOR DE NOVO CONSIDERATION AND TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH MERIT AND LAW AFTER AFFORDING PROPER OPPORTUNITY TO THE ASSESSEE OF BEING 4 HEARD. THE ASSESSEE IS ALSO DIRECTED TO PROMPTLY CO - OPERATE BEFORE THE LD. REVENUE AUTHORITI ES AND IF THEY FAIL TO DO SO THE LD. REVENUE AUTHORITIES SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW AND MERITS BASED ON THE MATERIALS ON RECORD . 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOU NCED IN THE OPEN COURT ON THE 10 TH SEPTEMBER, 2020. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 10 TH SEPTEMBER , 2020. OKK COPY TO: - 1) RAMANAIDU CHARITABLE TRUST, 8 - 2 - 293/82/JIII/6 , RAMANAIDU STUDIOS, FILM NAGAR, JUBILEE HILLS, HYDERABAD. 2) INCOME TAX OFFICER (EXEMPTIONS - 3), HYDERABAD. 3) THE CIT (A) - 9, HYDERABAD. 4) THE PR. CIT, AP & TS, HYDERABAD. (II)THE CIT (EXEMPTIONS), HYDERABAD. (III) ADDL. CIT (EXEMPTIONS), HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE