M/s. Sadia Educational & Charitable Trust, Shimoga V. The Deputy Commissioner of Income Tax, Shimoga

ITA 1371/BANG/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4580 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-08-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 01-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C H SUNDAR RAO C IT DR I
• Assessee Lawyers: V SRINIVASAN
• Keywords: Depreciation; Charitable institution; Benefit of exemption
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO S . 1371 AND 1372 / BANG/201 6 ASSESSMENT YEAR S : 20 11 - 12, 2012 - 13 M/S. SADIA EDUCATIONAL AND CHARITABLE TRUST, SADIANAGAR, SHIRALAKOPPA 577 428. SHIMOGA DISTRICT. PAN : AAKTS 8671 H VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, SHIMOGA. APPELLANT RESPONDENT ASSESSEE BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : SHRI. C. H. SUNDAR RAO, CIT - DR - I DATE OF HEARING : 07 . 0 6 .201 8 DATE OF PRONOUNCEMENT : 22 . 0 6 .201 8 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF THE CIT(A) ON VARIOUS GROUNDS, AS UNDER. GROUNDS OF APPEAL IN ITA NO.1371/BANG/2016 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, AND WEIGHT 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 TERMS OF THE ORDERS OF THE HON'BLE ITAT AND IN ACCORDANCE WITH THE PROVISIONS OF THE FIRST AND SECOND PROVISO TO SEC. 12A[2] OF ITA NOS. 1371 AND 1372/BANG/2016 PAGE 2 OF 4 THE ACT, THE APPELLANT WAS ENTITLED TO THE BENEFITS OF THE REGISTRATION SECURED EVEN FOR THE EARLIER ASSESSMENT YEARS AND HENCE, THE COMPUTATION OF INCOME WITHOUT ALLOWING THE BENEFIT OF EXEMPTION U/S. 11 OF THE ACT 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.33,35,990/-, WHICH IS NOT ONLY HIGHLY EXCESSIVE AND UNREASONABLE BUT, ALSO WITHOUT ANY BASIS ESPECIALLY WHEN VARIOUS EXPENSES AND APPLICATION OF INCOME HAVE BEEN DISREGARDED BY THE AUTHORITIES BELOW AND HENCE, THE INCOME OF THE APPELLANT REQUIRES TO BE REDUCED SUBSTANTIALLY. 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 IMPUGNED ORDERS PASSED REQUIRE TO BE ANNULLED. 5. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH 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 UNDER 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 URGED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. GROUNDS OF APPEAL IN ITA NO.1372/BANG/2016 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE EXPELLANT ARE OPPOSED TO LAW, EQUITY, AND WEIGHT 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 TERMS OF THE ORDERS OF THE HON'BLE ITAT AND IN ACCORDANCE WITH THE PROVISIONS OF THE FIRST AND SECOND PROVISO TO SEC. 12A[2] OF THE ACT, THE APPELLANT WAS ENTITLED TO THE BENEFITS OF THE REGISTRATION SECURED EVEN FOR THE EARLIER ASSESSMENT YEARS AND HENCE, THE COMPUTATION OF INCOME WITHOUT ALLOWING THE BENEFIT OF EXEMPTION U/S. 11 OF THE ACT 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.2,52,31,350/- UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE, WHICH IS LIABLE TO BE VACATED. 4. THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE APPELLANT WAS ENTITLED TO THE CLAIM OF DEPRECIATION OF RS. 24,00,172/-, WHICH OUGHT TO HAVE BEEN ALLOWED UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 5. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.2,31,88,000/- BEING THE CORPUS DONATIONS ASSESSED BY DENYING THE EXEMPTION CLAIMED U/S. ITA NOS. 1371 AND 1372/BANG/2016 PAGE 3 OF 4 11[1][D] OF THE ACT IN THE ABSENCE OF REGISTRATION UNDER THE FACTS AND IN THE CIRCUMSTANCES 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 IMPUGNED ORDERS PASSED REQUIRE TO BE ANNULLED. 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH 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 UNDER 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 URGED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT ASSESSMENT IN THESE YEARS WERE FRAMED IN THE STATUS OF AOP ON THE GROUND THAT ASSESSEE WAS NOT GRANTED REGISTRATION UNDER SECTION 12A, THEREFORE, NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT. NOW THE ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA W.E.F. ASSESSMENT YEAR 2011-12. THEREFORE, THE ASSESSMENTS ARE REQUIRED TO BE REFRAMED BY THE AO KEEPING IN MIND THAT ASSESSEE ENJOYS THE REGISTRATION UNDER SECTION 12AA OF THE ACT. THE LEARNED DR DID NOT DISPUTE THESE FACTS. 3. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY AO HAS COMPLETED THE ASSESSMENT AFTER TREATING THE ASSESSEE AS AOP FOR THE REASONS THAT ASSESSEE WAS NOT GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT. NOW REGISTRATION HAS BEEN GRANTED TO THE ASSESSEE W.E.F. THE ASSESSMENT YEAR 2011-12 ONWARDS, THEREFORE, THE ASSESSMENT IN BOTH THE ASSESSMENT YEARS REQUIRES TO BE REFRAMED KEEPING IN MIND THE ASSESSEE ENJOYS THE BENEFIT OF REGISTRATION GRANTED UNDER SECTION 12AA OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND MATTER IS RESTORED TO THE AO TO FRAME THE ASSESSMENT DENOVO IN TERMS INDICATED ABOVE. 4. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 1371 AND 1372/BANG/2016 PAGE 4 OF 4 PRONOUNCED IN THE OPEN COURT ON 22 ND JUNE, 2018. SD/- SD/- BANGALORE. DATED: 22 ND JUNE, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE. (INTURI RAMA RAO) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER