SRINIVASA EDUCATIONAL TRUST, KRISHNAGIRI V. ITO EXEMPTIONS WARD, SALEM

ITA 1328/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1281 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 01-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR
• Keywords: Set aside
• Section: 12AA; 143(1); 154; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NOS.1327 & 1328/CHNY/2019 ) *) / ASSESSMENT YEAR : 2013-14 & M/S SRINIVASA EDUCATIONAL TRUST, 190-B, ADHIYAMAN EDUCATIONAL INSTITUTION, ADHIYAMAN NAGAR, UTHANGARI, KRISHNAGIRI 635 207. PAN : AAGTS 0014 E V. THE INCOME TAX OFFICER, EXEMPTIONS WARD, 3, GANDHI ROAD, SALEM. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI G. BASKAR, ADVOCATE ./,- 0 1 / RESPONDENT BY : SHRI SRIDHAR DORA, JCIT 2 0 3% / DATE OF HEARING : 05.08.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 05.09.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, FOR THE ASSESSMENT YEAR 2013-14. SINCE COMM ON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HE ARD THESE APPEALS TOGETHER AND DISPOSING THE SAME BY THIS COM MON ORDER. 2 I.T.A. NOS.1327 & 1328/CHNY/19 2. THERE WAS A DELAY OF 24 DAYS IN FILING THE APPEA L BY THE ASSESSEE IN I.T.A. NO.1328/CHNY/2019 . THE ASSESSE E HAS FILED A PETITION FOR CONDONATION OF DELAY. WE HAVE HEARD T HE LD. COUNSEL FOR THE ASSESSEE AND THE LD. D.R. WE FIND THAT THE RE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE STIPULAT ED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE FILED THE RETURN OF INCOME CLAIMI NG EXEMPTION UNDER SECTION 11 OF THE INCOME-TAX ACT, 1961 (IN SH ORT 'THE ACT'). THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF TH E ACT. ACCORDING TO THE LD. COUNSEL, SINCE NO REGISTRATION WAS AVAILABLE ON THE DATE OF FILING OF THE RETURN, THE CLAIM OF DEDU CTION UNDER SECTION 11 OF THE ACT WAS REJECTED AND THE ENTIRE RECEIPT O F MONEY WITHOUT CONSIDERING THE EXPENDITURE WAS TAKEN AS INCOME AND TAX WAS LEVIED. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE FILED PETITION UNDER SECTION 154 OF THE ACT WHICH WAS REJECTED BY THE ASSESSING OFFICER. FOR THE SUBSEQUENT YEAR, REGISTRATION WAS GRANTED UNDER SECTION 12AA OF THE ACT. ACCORDING TO THE LD. COUN SEL, SINCE ADMITTEDLY REGISTRATION WAS NOT AVAILABLE UNDER SEC TION 12AA OF THE ACT FOR THIS ASSESSMENT YEAR, THE INCOME HAS TO BE COMPUTED 3 I.T.A. NOS.1327 & 1328/CHNY/19 COMMERCIALLY AND THE INCOME OVER THE EXPENDITURE AL ONE NEEDS TO BE TAKEN INTO CONSIDERATION. IN RESPECT OF CORPUS DONATION RECEIVED BY THE ASSESSEE, THE RECEIPT HAS TO BE TAKEN AS INC OME UNDER THE PROVISIONS OF THE ACT. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE TOTAL EXPENDITURE HAS TO BE REDUCED FROM THE TOTAL RECEIPT AND THE BALANCE HAS TO BE BROUGHT TO TAXATION FOR THE YEAR UNDER CONSIDERATION. THE LD.COUNSEL SUBMITTED THAT THE M ATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION AND BRING TO TAX ONLY THE NET INCOME AVAILABLE WITH THE ASSESSEE AFTER ALLOWING THE EXPENDITURE. 4. WE HEARD SHRI SRIDHAR DORA, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. WE FIND SOME SUBSTANCE IN THE SUBMISSION OF THE LD.COUNSEL FOR THE ASSESSEE. ADMITTEDLY, REGIS TRATION UNDER SECTION 12AA OF THE ACT WAS NOT AVAILABLE TO THE AS SESSEE DURING THE YEAR UNDER CONSIDERATION. THEREFORE, INCOME OF THE ASSESSEE HAS TO BE COMPUTED COMMERCIALLY BY ALLOWING ALL THE EXPENDITURE FOR EARNING THE INCOME. IN OTHER WORDS, THE TOTAL EXPE NDITURE INCURRED BY THE ASSESSEE FOR EARNING THE INCOME HAS TO BE RE DUCED AND WHATEVER REMAINS HAS TO BE BROUGHT FOR TAXATION. A S RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THE C ORPUS DONATION 4 I.T.A. NOS.1327 & 1328/CHNY/19 HAS ALSO TO BE TAKEN AS INCOME / RECEIPT. SINCE SU CH AN EXERCISE WAS NOT DONE, THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFF ICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO TAKE THE NET I NCOME AFTER REDUCING THE EXPENDITURE AND LEVY TAX THEREON. WE ARE CONSCIOUS THAT PROCEEDING ARISES FOR CONSIDERING IS UNDER SEC TION 143(1) OF THE ACT. THIS IS PRIMA FACIE ADJUSTMENT, THEREFORE, THE ASSESSING OFFICER WHILE CONSIDERING THE MATTER, HAS TO KEEP IN MIND T HE PROVISIONS OF SECTION 143(1) OF THE ACT WHICH ENABLES HIM TO MAKE PRIMA FACIE ADJUSTMENT. 5. WITH THE ABOVE OBSERVATION, BOTH THE APPEALS FIL ED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 5 TH SEPTEMBER, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 5 TH SEPTEMBER, 2019. KRI. 5 I.T.A. NOS.1327 & 1328/CHNY/19 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A), SALEM 4. CIT (EXEMPTION), CHENNAI 5. 9< .3 /DR 6. =) > /GF.