M/s. Rabiya Basari Rahmat-Ulla Hi-Allayaha Charitable Trust, Sagar V. Deputy Commissioner of Income-Tax, Shimoga

ITA 1362/BANG/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2339 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-03-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 29-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: V SRINIVASAN
• Keywords: Depreciation; Charitable institution; Benefit of exemption
• Section: 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NOS. 1362 & 1363/BANG/2016 ASSESSMENT YEAR S : 2011 - 12 & 2012 - 13 M/S. RABIYA BASARI RAHMAT ULLA HI-ALLAYAHA CHARITABLE TRUST, RABIYA EDUCATION CENTRE, G P ROAD, SAGARA 577 401. SHIMOGA DISTRICT. PAN: AABTR3112R VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, SHIMOGA. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : DR. P.V. PRADEEP KUMAR, ADDL. CIT (DR) DATE OF HEARING : 26. 0 7 .2018 DATE OF PRONOUNCEMENT : 31. 0 8 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER BOTH THESE APPEALS ARE FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A), DAVANGERE BOTH DATED 31.03.2016 FOR ASSESSMENT YEARS 2011-12 AND 2012-13. BOTH THESE A PPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2011-12 IN ITA NO. 1362/BANG/2016 ARE AS UNDER. 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, AND WEIGH T OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE AUTHORITIES BELOW OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD SECURED REGISTRATION U/S. 12AA OF THE ACT IN TE RMS OF THE ORDERS OF THE HON'BLE ITAT AND IN ACCORDANCE WITH THE PROVISI ONS OF THE FIRST AND SECOND PROVISO TO SEC. 12A[2] OF THE ACT, THE A PPELLANT WAS ENTITLED TO THE BENEFITS OF THE REGISTRATION SECURE D EVEN FOR THE EARLIER ITA NOS. 1362 & 1363/BANG/2016 PAGE 2 OF 4 ASSESSMENT YEARS AND HENCE, THE COMPUTATION OF INCO ME WITHOUT ALLOWING THE BENEFIT OF EXEMPTION U/S. 11 OF THE AC T IS UNJUSTIFIED AND LIABLE TO BE VACATED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE AUTHORITIES BELOW HAVE ERRED IN DETERMINING THE TAXABLE INCOME OF THE APPELLANT AT RS.50,44,995/-, WHICH IS NOT ONLY HIGHLY EXCESSIVE AND UNREASONABLE BUT, ALSO WITHOUT ANY BASIS ESPECIALLY WHEN VARIOUS EXPENSES AND APPL ICATION OF INCOME HAVE BEEN DISREGARDED BY THE AUTHORITIES BELOW AND HENCE, THE INCOME OF THE APPELLANT REQUIRES TO BE REDUCED SUBSTANTIAL LY. 4. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT ON THE APPELLANT IN THE STATUS OF AOP WITHOUT NOTICING THAT THE APPELLANT HAD ALREADY SECURED REGISTRATION AND THEREFORE, THE SAID FINDING OF THE LEARNED CIT[A] DESERVES TO BE VACATED AND THE IMPUG NED ORDERS PASSED REQUIRE TO BE ANNULLED. 5. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE C.C.I.T./D.G. THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST U/S. 234-A AND 234-B OF THE ACT, WHICH UND ER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO BE CANCELLED. 6. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 3. THE GROUNDS RAISED BY THE ASSESSEE FOR A. Y. 201 2-13 ARE AS UNDER. 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, AND WEIGH T OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE AUTHORITIES BELOW OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD SECURED REGISTRATION U/S. 12AA OF THE ACT IN TE RMS OF THE ORDERS OF THE HON'BLE ITAT AND IN ACCORDANCE WITH THE PROVISI ONS OF THE FIRST AND SECOND PROVISO TO SEC. 12A[2] OF THE ACT, THE A PPELLANT WAS ENTITLED TO THE BENEFITS OF THE REGISTRATION SECURE D EVEN FOR THE EARLIER ASSESSMENT YEARS AND HENCE, THE COMPUTATION OF INCO ME WITHOUT ALLOWING THE BENEFIT OF EXEMPTION U/S. 11 OF THE AC T IS UNJUSTIFIED AND LIABLE TO BE VACATED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE AUTHORITIES BELOW HAVE ERRED IN DETERMINING THE TAXABLE INCOME OF THE APPELLANT AT RS.42,41,970/- UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANT'S CASE, WHICH IS LIABLE TO BE VACATED. 4. THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THA T THE APPELLANT WAS ENTITLED TO THE CLAIM OF DEPRECIATION OF RS. 26 ,57,757/-, WHICH ITA NOS. 1362 & 1363/BANG/2016 PAGE 3 OF 4 OUGHT TO HAVE BEEN ALLOWED UNDER THE FACTS AND IN T HE CIRCUMSTANCES OF THE APPELLANT'S CASE. 5. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.33,15,000/- BEING THE CORPUS DONATIONS ASSESSED BY DENYING THE EXEMPTION CLAIMED U/S. 11[1][D] OF THE ACT IN THE A BSENCE OF REGISTRATION UNDER THE FACTS AND IN THE CIRCUMSTANC ES OF THE APPELLANT'S CASE. 6. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT ON THE APPELLANT IN THE STATUS OF AOP WITHOUT NOTICING THAT THE APPELLANT HAD ALREADY SECURED REGISTRATION AND THEREFORE, THE SAID FINDING OF THE LEARNED CIT[A] DESERVES TO BE VACATED AND THE IMPUG NED ORDERS PASSED REQUIRE TO BE ANNULLED. 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE C.C.I.T./D.G. THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST U/S. 234-A AND 234-B OF THE ACT, WHICH UND ER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO BE CANCELLED. 8. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 4. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT IN BOTH THESE YEARS, THE ISSUE WAS DECIDED AGAINST THE ASSESSEE O N THIS BASIS THAT THE ASSESSEE IS NOT A REGISTERED CHARITABLE TRUST U/S. 12AA OF IT ACT. THEREAFTER, HE DRAWN OUR ATTENTION TO PAGE NO. 65 OF PAPER BOOK AN D POINTED OUT THAT ON THIS PAGE IS THE CERTIFICATE ISSUED BY CIT(EXEMPTIONS), BANGALORE DATED 19.10.2016 AND AS PER THE SAME, THE REGISTRATION IS GRANTED U/ S. 12AA W.E.F. ASSESSMENT YEAR 2011-12 (DATE OF APPLICATION BEING 30.03.2011) . HE SUBMITTED THAT IN VIEW OF THIS, IN BOTH YEARS THE ISSUE SHOULD BE RESTORED BACK TO THE FILE OF AO FOR FRESH DECISION AFTER TREATING THE ASSESSEE AS REGIS TERED TRUST. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND FORCE IN THE SUBMISSIONS OF LD. AR OF ASSESSEE BECAUSE WE FIND THAT THE ORDE R OF CIT (A) IS DATED 31.03.2016 AND THE REGISTRATION WAS GRANTED TO THE ASSESSEE TRUST ON 19.10.2016 W.E.F. ASSESSMENT YEAR 2011-12. HENCE I N OUR CONSIDERED OPINION, THE ASSESSMENT HAS TO BE FRAMED BY AO DENOVO BY TREATING THE ASSESSEE AS ITA NOS. 1362 & 1363/BANG/2016 PAGE 4 OF 4 REGISTERED TRUST. HENCE WE SET ASIDE THE ORDER OF CIT (A) IN BOTH YEARS AND RESTORE THE MATTER BACK TO THE FILE OF AO IN BOTH Y EARS FOR FRESH DECISION WITH THE DIRECTION THAT THE ASSESSEE SHOULD BE TREATED AS A REGISTERED TRUST AND THEN, ONLY ALLOWABILITY OF EXEMPTION U/S. 11 OF IT ACT SH OULD BE EXAMINED AND DECIDED ON MERIT. IN VIEW OF THIS DECISION, NO ADJUDICATIO N IS CALLED FOR REGARDING THE MERIT OF THE CASE AT THE PRESENT STAGE. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (SUNIL KUMAR YADAV) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 31 ST AUGUST, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.