Kakinada Port Workers Pool, Kakinada V. ITO, Kakinada

ITA 145/VIZ/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2872 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 16-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• Assessee Lawyers: G V S S PRASAD
• Keywords: Bonafide belief; Set aside
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.145/VIZAG/2009 ASSESSMENT YEAR : 2006-07 THE KAKINADA PORT WORKERS POOL, KAKINADA ITO, WARD-2, KAKINADA (APPELLANT) VS. (RESPONDENT) PAN NO.AABTT 1469M APPELLANT BY: SHRI G.V.S.S. PRASAD, CA RESPONDENT BY: SHRI SUBRATA SARKAR, DR ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT(A) ON VARIOUS GROUNDS. DURING THE COURSE OF HE ARING, THE ASSESSEE HAS FILED THE REVISED GROUNDS OF APPEAL. WE ACCORDINGL Y TAKE THE REVISED GROUNDS OF APPEAL ON RECORD AND PREFER TO ADJUDICATE THE SA ME. FOR THE SAKE OF REFERENCE, WE REPRODUCE THE REVISED GROUNDS OF APPE AL AS UNDER:- 1) THE ORDER OF THE LD. CIT(A) IS CONTRARY TO THE FACT S AND LAW. 2) THE LD. CIT(A) IS UNJUSTIFIED IN DENYING EXEMPTION U/S 11 OF THE INCOME TAX ACT, FOR THE ASSESSMENT YEAR 2006-07 COM PLETELY IGNORING THE FACT THAT APPELLANTS APPLICATION FOR REGISTRATION U/S 12A WAS NOT REJECTED BY THE AUTHORITIES AS SUCH REGISTR ATION PROCESS U/S 12A A WOULD BE DEEMED AS COMPLETED AND REGISTRATION WAS DEEMED GRANTED. 3) THE LD. CIT(A) SHOULD HAVE DULY CONSIDERED THE FACT THAT THE APPELLANTS GOT REGISTRATION U/S 12A ON THE SUBSEQU ENT APPLICATION BY WHICH THE ACTIVITIES OF THE TRUST ARE APPROVED F OR EXEMPTION U/S 11 AND THERE WERE NO MATERIAL CHANGES IN THE RELEVA NT ASSESSMENT YEAR TO THAT OF THE YEAR FOR WHICH REGISTRATION WAS GRANTED. 4) THE LD. CIT(A) FAILED TO NOTE THAT THE APPELLANT SU BMITTED SECOND APPLICATION FOR REGISTRATION ON THE ADVISE OF THE A UTHORITIES UNDER BONAFIDE BELIEF THAT THE REGISTRATION WILL BE GRANT ED WITH REFERENCE TO THE EARLIER APPLICATION AND NEVER UNDER THE IMPR ESSION THAT SECOND APPLICATION WILL BE TREATED A FRESH, IGNORIN G THE STATUS OF REGISTRATION U/S 11 FOR THE INTERVENING PERIOD BETW EEN FIRST APPLICATION AND SECOND APPLICATION. 2 FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED ON OR BEFORE THE DATE OF HEARING, THE ORDER OF THE LD. CIT(A) MA Y BE SET ASIDE, DECLARING THE INCOME OF THE TRUST AS NON TAX ABLE FOR THE ASSESSMENT YEAR 2006-07 BY TREATING THE TRUST AS RE GISTERED UNDER SECTION 12AA OF THE INCOME TAX ACT WITH EFFEC T FROM 22.8.2005, OR MAY PASS SUCH ORDERS AS DEEMED FIT, C ONSIDERING THE CIRCUMSTANCES OF THE CASE. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND DOCUMENTS PLACED ON RE CORD. 3. THE BRIEF FACTS OF THE CASE ARE THAT CONSEQUENT TO FILING OF NIL RETURN BY THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR CLAIM ING EXEMPTION OF THE WHOLE OF ITS INCOME U/S 11 OF THE INCOME TAX ACT (H EREINAFTER CALLED AS AN ACT), THE ASSESSING OFFICER SOUGHT TO VERIFY WHETHE R SUCH CLAIM OF EXEMPTION WAS SUPPORTED BY GRANT OF REGISTRATION BY THE CONCE RNED COMMISSIONER OF INCOME TAX U/S 12A OF THE ACT. IN ITS REPLY, THE A SSESSEE SUBMITTED INTERALIA THAT ASSESSEE IS A TRUST CREATED BY A TRUST DEED DA TED 22.8.2005 AND THEREAFTER MADE AN APPLICATION TO THE CIT, RAJAHMUN DRY FOR REGISTRATION OF TRUST U/S 12A OF THE ACT ON 23.9.2005 I.E. WITHIN 6 MONTHS FROM THE DATE OF INCEPTION OF THE TRUST. THE ASSESSEE DID NOT RECEI VE ANY COMMUNICATION FROM THE OFFICE OF THE CIT, EVEN THOUGH 6 MONTHS ELAPSED FROM THE DATE OF FILING OF THE APPLICATION FOR REGISTRATION AND THUS ASSESSEE WAS UNDER THE BELIEF THAT REGISTRATION PROCESSED U/S 12AA WAS DEEMED TO HAVE BEEN COMPLETED AS THE AUTHORITY HAS NOT REJECTED ITS APPLICATION DURING T HE STIPULATED PERIOD OF 6 MONTHS. AFTER A LONG TIME, ASSESSEE RECEIVED A COM MUNICATION FROM THE OFFICE OF THE CIT, REFERRING TO THE APPLICATION OF THE ASSESSEE DATED 23.9.2005 THROUGH WHICH ASSESSEE WAS REQUIRED TO FILE A FRESH APPLICATION TO REGULARIZE THE MATTER AND ACCORDINGLY THE ASSESSEE FILED A FRE SH APPLICATION DATED 11.6.2007 AFTER WHICH ASSESSEE RECEIVED THE ORDER D ATED 13.11.2007 FROM THE OFFICE OF THE CIT, GRANTING REGISTRATION WEF 11.6.2 007. SINCE THE ASSESSEE HAD NOT BEEN DENIED REGISTRATION FOR THE EARLIER PE RIOD I.E. FROM 22.8.2005 TO 10.6.2007, THE ASSESSEE WAS UNDER THE IMPRESSION TH AT IT WAS ENTITLED TO THE EXEMPTION AVAILABLE UNDER THE PROVISIONS OF THE ACT FOR THE EARLIER PERIOD AS WELL. THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATIONS OF THE 3 ASSESSEES AND HE HAS DENIED THE EXEMPTION AS THERE WAS NO SPECIFIC ORDER OF THE CIT AND ASSESSED THE INCOME OF THE ASSESSEES. 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) A ND REITERATED ITS CONTENTIONS. 5. CIT(A) RE-EXAMINED THE CLAIM OF THE ASSESSEES IN THE LIGHT OF HIS SUBMISSIONS BUT WAS NOT CONVINCED WITH IT AND HE CO NFIRMED THE ORDER OF THE A.O. AFTER HAVING OBSERVED THAT THE CLAIM OF THE AS SESSEE FOR EXEMPTION U/S 11 OF THE ACT HAS NECESSARILY TO BE SUPPORTED BY AN EXPRESS ORDER FROM THE CONCERNED COMMISSIONER OF INCOME TAX, GRANTING REGI STRATION FOR THE RELEVANT PERIOD IN RESPECT OF WHICH EXEMPTION IS SOUGHT AND SINCE THERE WAS NO REGISTRATION PRIOR TO 11.6.2007, THE ASSESSEES CLA IM FOR EXEMPTIONS CANNOT BE ENTERTAINED. 6. NOW THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND HAS REITERATED ITS SUBMISSIONS. THE LD. D.R. ON THE OT HER HAND HAS PLACED A RELIANCE UPON THE ORDER OF THE CIT(A). 7. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES IN THE LIGHT OF ASSESSEES SUBMISSIONS, WE ARE OF THE VIEW THAT ASSESSING OFFICER HAS NO JURISDICTION TO ALLOW AN EXEMPTION IN THE ABSENC E OF A SPECIFIC ORDER OF EXEMPTION FROM THE CIT. ASSESSING OFFICER WAS NOT CONFERRED WITH ANY POWER TO DRAW ANY PRESUMPTIONS ON THE BASIS OF CERTAIN FA CTS AND THAT TOO IN THE ABSENCE OF A SPECIFIC ORDER OF THE CIT WITH REGARD TO THE EXEMPTION U/S 11 OF THE ACT. THE RIGHT COURSE AVAILABLE WITH THE ASSES SEE WAS TO SEEK EITHER RECTIFICATION OR THE AMENDMENT IN THE ORDER OF THE CIT, GRANTING REGISTRATION ON THE BASIS OF THE DEEMED PROVISIONS, BUT THE DEEM ED PROVISIONS DOES NOT ENTITLE THE ASSESSING OFFICER TO DRAW ANY PRESUMPTI ON WITH RESPECT TO THE EXEMPTION IN FAVOUR OF THE ASSESSEES. THE ORDER OF THE CIT IS NEITHER RECTIFIED NOR IT IS CHALLENGED BEFORE THE TRIBUNAL. IT RATHER BECOMES FINAL AS IT WAS PASSED ON 13.11.2007 AND HAS NOT BEEN CHALLENGE D TILL DATE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT ASSESSING OF FICER HAS RIGHTLY ACTED IN 4 NOT DRAWING ANY PRESUMPTION OF DEEMED EXEMPTION IN FAVOUR OF THE ASSESSEES. WE THEREFORE FIND NO INFIRMITY IN THE O RDER OF THE CIT(A). 8. IN THE RESULT, WE CONFIRM HIS ORDER. PRONOUNCED IN THE OPEN COURT ON 10.12.2009 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 10 TH DECEMBER, 2009 COPY TO 1 SHRI G.V.S.S. PRASAD, CHARTERED ACCOUNTANT, FLAT NO.6,5 TH FLOOR, MADHURI MANOR APARTMENTS, OPP. ANDHRA BANK, LAWSONS BAY COL ONY, VISAKHAPATNAM-530 017. 2 THE ASSESSING OFFICER, WARD-2, OFFICE OF ADDL. CI T, MAIN ROAD, KAKINADA- 533001 3 THE CIT, RAJAHMUNDRY 4 THE CIT(A), RAJAHMUNDRY 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM