Shaktipada Bhattarjee Technical Institute, Burdwan V. ITO (Exemption), Ward - 2(1), Durgapur, Burdwan

ITA 1437/KOL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6322 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 14-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Assessee Lawyers: P S GUPTA; K M ROY
• Keywords: Charitable institution; Application of stay; Retrospective amendment
• Section: 142(1); 12A; 12; 11

Judgement Text

ITA NOL.1437/KOL/2017 SHAKTIPADA BHATTACHARJEE TECH NICAL INSTITUTE A.Y.2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & SMT. MADHUMITA ROY, JM ] ITA NO.1437/KOL/2017 ASSESSMENT YEAR : 2013-14 SHAKTIPADA BHATTACHARJEE -VERSUS- I.T.O., (E XEMPTION), WARD-2(1) TECHNICAL INSTITUTE, NADIA DIST. DURGAPUR (PAN: AAEAS 1223 L) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI K.,M.ROY, FCA & SHRI P. S.GUPTA, ADVOCATE FOR THE RESPONDENT: SHRI G.HANGSHING, CIT DATE OF HEARING : 28.05.2018. DATE OF PRONOUNCEMENT : 01.06.2018. ORDER PER MADHUMITA ROY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 28.04.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) BURDWAN ARISING OUT OF THE ORDER DATED 17.03.2016 PASSED BY THE INC OME TAX OFFICER, (EXEMPTIONS) WARD 2(1) , DURGAPUR FOR THE ASSESSMENT YEAR 2013- 14 . 2. THE MAIN ISSUE IN THE INSTANT APPEAL IS WHETHER THE ASSESSEE IS ENTITLED TO CLAIM EXEMPTION OF RS 2,72,53,362 UNDER SECTION 11 OF THE INCOME TAX ACT FOR CHARITABLE PURPOSES BY VIRTUE OF IMPARTING EDUCATION TO THE S OCIETY. 3. THE FACT OF THE CASE IS THIS THAT IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 FILED ON 31.03.2014 THE ASSESSE HAS DECLARE D TOTAL INCOME AS NIL. NOTICES UNDER SECTION 143(2) FOLLOWED BY 142(1) ALONG WITH QUESTIONNAIRE WERE SERVED UPON THE ASSESSEE ON SCRUTINY. IN THE ASSESSMENT PROCEED ING UPON PERUSAL OF THE AUDIT REPORT UNDER SECTION 12 A(B) OF THE INCOME TAX ACT, 1961 ( THE ACT) IN FORM NO. 10B, IT WAS FOUND THAT THE ASSESSEE SOCIETY CLAIMED EXEMPTION O F RS.2,52,28,257 (FURTHER RECTIFIED TO RS.2,72,53,362/-) FOR CHARITABLE OR RELIGIOUS PU RPOSES UNDER SECTION 11 (1) OF THE ACT. FURTHER THAT FROM THE INCOME TAX RETURN FILED BY THE ASSESSEE ON 31.03.2014 THE ITA NOL.1437/KOL/2017 SHAKTIPADA BHATTACHARJEE TECH NICAL INSTITUTE A.Y.2013-14 2 ASSESSE HAS CLAIMED EXEMPTION OF THE SAME AMOUNT UN DER SECTION 10(23C) (VI) OF THE ACT. HOWEVER, SINCE THE ASSESSEE FAILED TO FURNISH THE COPY OF REGISTRATION UNDER SECTION 12A OF THE ACT OR THE COPY OF THE APPROVAL U/S 10(23C) (VI) OF THE ACT , SHOW CAUSE NOTICE DATED 08.03.2016 WAS ISSUED TO THE ASS ESSE. IN RESPONSE TO THE SAME THE AO WAS INFORMED THAT THE ASSESSEE HAD APPLIED FOR G RANTING EXEMPTION UNDER SECTION 10(23C) (VI) OF THE ACT IN DUE TIME, THE SAME HAS B EEN APPLIED BEFORE THE COMMISSIONER OF INCOME TAX, DURGAPUR INSTEAD OF BEF ORE THE CHIEF COMMISSIONER,DURGAPUR INADVERTENTLY AND PRAYED FOR TWO WEEKS TIME TO FURNISH THE ORDER OF REGISTRATION UNDER SECTION 12A OF THE ACT FROM THE HONBLE ITAT, KOLKATA. IN THE ABSENCE OF ANY VALID EVIDENCE SHOWN BY THE ASSE SSE IN SUPPORT OF HIS PRAYER MADE BEFORE THE AO THE LEARNED AO OBSERVED THAT THE ASSE SSE IS NOT A REGISTERED SOCIETY UNDER SECTION 12 A OF THE ACT NEITHER IS GRANTED A PPROVAL UNDER SECTION 10(23C) (VI) OF THE ACT; THE BASIC CONDITION FOR ANY EXEMPTION UNDER SECTION 11(1) HAS NOT BEEN FULFILLED BY THE ASSESSEE AND THUS NOT ELIGIBLE TO THE SAME. THE AO, THEREFORE, DISALLOWED THE CLAIM OF THE ASSESSEE AND ADDED RS 2 ,72,53,36/- TO THE TOTAL INCOME OF THE ASSESSEE. AGAINST THE SAID ORDER THE ASSESSE PR EFERRED AN APPEAL BEFORE THE CITA. SINCE THE ASSESSEE WAS NOT IN POSSESSION OF EITHER REGISTRATION UNDER SECTION 12A OR AN EXEMPTION UNDER SECTION 10(23C) OF THE ACT THE LEAR NED CITA DECLINED TO ALLOW THE PRAYER OF EXEMPTION UNDER SECTION 11(1) OF THE ACT OR ALTERNATIVELY UNDER SECTION 10(23C) OF THE ACT. 4. DURING THE HEARING OF THE MATTER THE LEARNED AR SUBMITTED BEFORE US THAT SUBSEQUENTLY BOTH THE APPLICATION FOR REGISTRATION UNDER SECTION 12 A AND THE GRANT OF APPROVAL UNDER SECTION 80G(5)(VI) WERE REJECTED BY THE LEARNED CIT, BURDWAN BY A COMMON ORDER DATED 30.09.2013 UPON WHICH TWO SEPARA TE APPEALS BEFORE THE HONBLE ITAT WERE MOVED. THOSE TWO APPEALS WERE DISPOSED OF ON 29.03.2017 WITH THE DIRECTION UPON THE LEARNED CIT FOR DE NOVO CONSIDER ATION IN ACCORDANCE WITH LAW. A FURTHER ORDER DATED 30.11.2017 WAS PASSED BY THE HO NBLE ITAT DIRECTING THE CONCERNED CIT (EXEMPTION ) TO DISPOSE OF THE APPLIC ATION OF THE ASSESSE FOR REGISTRATION UNDER SECTION 12 AA EXPEDITIOUSLY WHIL E DISPOSING OF A STAY APPLICATION IN ASSESSE'S OWN CASE. ULTIMATELY THE LEARNED CIT (EXE MPTION) PASSED AN ORDER ON ITA NOL.1437/KOL/2017 SHAKTIPADA BHATTACHARJEE TECH NICAL INSTITUTE A.Y.2013-14 3 14.05.2018 WHEREBY AND WHEREUNDER THE REGISTRATION UNDER SECTION 254/12AA(1)(B)(I) AND APPROVAL UNDER SECTION 254/80G(5)(VI) OF THE IN COME TAX ACT, 1961 WAS GRANTED. ACCORDINGLY UNIQUE REGISTRATION NUMBER(URN) AAEAS12 23L/10/2013-14/18-19/S- 0072 WITH EFFECT FROM ASSESSMENT YEAR 2014-15 WAS G RANTED. THE ENTIRE SET OF DOCUMENTS WERE ALSO PLACED BEFORE US DURING THE HEA RING OF THE MATTER BY THE LEARNED AR BY WAY OF WRITTEN SUBMISSION . THE LEARNED AR ON THE BASIS OF SUCH DOCUMENTS PRAYED FOR EXEMPTION BEFORE US UNDER SECTION 11 REA D WITH SECTION 10(23)(C)(VI) WITH RETROSPECTIVE EFFECT FROM THE ASSESSMENT YEAR 2013- 14. IN SUPPORT OF HIS ARGUMENT THE LEARNED AR RELIED UPON THE JUDGMENT IN ITA NO. 2101 TO 2105/KOL/2016 PASSED BY THE COORDINATE BENC H OF THIS LEARNED TRIBUNAL. 5. THE AR PRAYED FOR EXEMPTION FOR THE ASSESSEE WIT H RETROSPECTIVE EFFECT FROM ASSESSMENT YEAR 2013-14. 6. THE LEARNED DR OBJECTED TO THE SUBMISSION MADE B Y THE LEARNED AR RELYING UPON THE JUDGMENT PASSED BY THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE LEARNED COUNSEL APPEARING FOR THE PARTIES AND WE HAVE PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORDS . WE FIND THAT THE ASSESSEES CLAIM OF EXEMPTION IS REQUIRED TO BE CONSIDERED IN VIEW O F THE GRANT OF REGISTRATION UNDER SECTION 254/12AA(1)(B)(I) AND APPROVAL UNDER SECTI ON 254/80G(5)(VI) OF THE INCOME TAX ACT, 1961 BY THE CONCERNED AUTHORITY. HOWEVER, THE SAME CANNOT BE CONSIDERED BY US AT THE STAGE . IN THE JUDGMENT RELIED UPON BY THE LEARNED AR THE OBSERVATION MADE BY THE LEARNED CIT(A) WHILE GRANTING REGISTRAT ION UNDER SECTION 12A OF THE ACT AND FURTHER BENEFIT UNDER SECTION 11 OF THE ACT IN TERMS OF THE FIRST PROVISO TO SECTION 12 A(2) OF THE ACT IS NARRATED AS FOLLOWS :- THUS TO SOLVE, TO CONNECT, AND REGULARIZE THE OTHE RWISE INCONGRUOUS PARADOX, THEREBY I INVOKE THE LATER INSERTED 1 ST PROVISO TO SUB-SECTION (2) TO THE SECTION 12A, AND ALSO THAT THE POWERS OF THE CIT(A) ARE CO- TERMINUS WITH THAT OF THE AO, THUS THAT AS THE APPELLANT HAD BEEN GRANTED REGISTR ATION U/S 12A DATED 03.09.2013, THE PROVISIONS OF SECTION 11 SHALL APPLY TO THESE E ARLIER AYS 2008-09, 2009-10, 2010-11, 2011-12 AND 2012-13 FOR THE REASON THAT THE ASSESSMENT PROCEEDINGS FOR THESE 5 AYS WERE PENDING AT THE TIME OF GRANT O F THE REGISTRATION U/S 12A. ITA NOL.1437/KOL/2017 SHAKTIPADA BHATTACHARJEE TECH NICAL INSTITUTE A.Y.2013-14 4 THUS THE APPEALS ARE ALLOWED IN THE CONTEXT OF APPEAL GROUND NO.5 THAT THE APPELLANT EDUCATIONAL INSTITUTION HAD BEEN GRANTED REGISTRATION U/S 12A DATED 03.09.2013. 7.1. IN THE SAID JUDGMENT THE LEARNED TRIBUNAL REL IED UPON THE JUDGMENT PASSED BY THE COORDINATE BENCH IN THE CASE OF SREE SREE RAMAK RISHNA SAMITY VS DCIT WHERE IT WAS HELD AS FOLLOWS: 6.10. WE HOLD THAT IT IS AN ESTABLISHED POSITION I N LAW THAT A PROVISO WHICH IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND TO MAKE THE PROVISION WORKABLE, A PROVISO WHICH SUPPLIES AN OBVIOUS OMISSION IN T HE SECTION AND IS REQUIRED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONAB LE INTERPRETATION, REQUIRES TO BE TREATED AS RETROSPECTIVE IN OPERA TION, SO THAT A REASONABLE INTERPRETATION CAN BE GIVEN TO THE SECTION AS A WH OLE AND ACCORDINGLY THE SAID INSERTION OF FIRST PROVISO TO SECTION 12A(2) OF THE ACT WITH E FFECT FROM 1.10.2014 SHOULD BE READ AS RETROSPECTIVE IN OPERATION WITH EFFECT FROM TH E DATE WHEN THE CONDITION OF ELIGIBILITY FOR EXEMPTION UNDER SECTION 11 & 12 AS MENT IONED IN SECTION 12A PROVIDED FOR REGISTRATION U/S.12AA AS A PRE-CONDITIO N FOR APPLICABILITY OF SECTION 12A. THE SAID JUDGEMENT IS DISTINGUISHABLE ON THE FACT T HAT THE REGISTRATION WAS GRANTED DURING THE PENDENCY OF THE MATTER BEFORE THE LEARNE D CIT(A) AND THUS THE LEARNED CIT GRANTED EXEMPTION IN FAVOR OF THE ASSESSEE. IN THE INSTANT CASE AFTER THE MATTER WAS DISPOSED OF BY THE LEARNED CIT(A) BOTH THE REGISTRA TION AND THE APPROVAL WERE GRANTED BY THE CONCERNED AUTHORITY. WE FIND THAT THE POWER TO GRANT EXEMPTION CAN ONLY BE EXERCISED EITHER BY THE AO ORDER THE CIT(A) AND NOT BY US SITTING IN THE APPELLATE JURISDICTION. WE, THEREFORE, SET ASIDE THE MATTER T O THE AO TO DECIDE THE ISSUE OF EXEMPTION AS CLAIMED BY THE ASSESSEE IN VIEW OF THE REGISTRATION AND APPROVAL GRANTED BY THE CONCERNED AUTHORITY UPON GIVING REASONABLE O PPORTUNITY OF HEARING TO THE ASSESSE IN ACCORDANCE WITH LAW. 8. WE THEREFORE ALLOW THIS APPEAL PREFERRED BY THE ASSESSEE ON THE STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE COURT ON 01.06.2018. SD/- SD/- [J.SUDHAKAR REDDY ] [ MADHUMITA ROY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01.06.2018. [RG SR.PS] ITA NOL.1437/KOL/2017 SHAKTIPADA BHATTACHARJEE TECH NICAL INSTITUTE A.Y.2013-14 5 COPY OF THE ORDER FORWARDED TO: 1.SHAKTIPADA BHATTACHARJEETECHNICAL INSTITUTE, C/O PARTHA SARATHI GUPTA, ADVOCATE, 100, BANK LANE, P.O. KRISHNAGAR, DIST. NADIA, PIN-7 41101. 2 I.T.O., (EXEMPTION), WARD-2(1), DURGAPUR 3. C.I.T.(A)- BURDWAN 4. C.I.T-BURDWAN. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES