Agricultural Market Committee, Hyderabad V. ITO, Ward -1, Adilabad

ITA 1489/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74716 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 11-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Charitable institution
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NOS. 1489, 1490, 1491 & 1492/HYD/2013 ASSESSMENT YEARS: 2004-05, 2005-06, 2006-07 & 2007- 08 AGRICULTURAL MARKET COMMITTEE, ECHODA, ADILABAD DT. PAN AAACA0487B VS. INCOME TAX OFFICER, WARD 1, ADILABAD. APPELLANT RESPONDENT ASSESSEE BY: SHRI S. RAMA RAO REVENUE BY: SMT. K. HARITHA DATE OF HEARING: 19/03/2014 DATE OF PRONOUNCEMENT: 19/03/2014 O R D E R PER CHANDRA POOJARI, AM: THESE APPEALS ARE PERTAINING TO ONE ASSESSEE AND T HE SAME ARE DIRECTED AGAINST A COMMON ORDER OF THE CIT(A)-1 8, MUMBAI, DATED 20/08/2013 FOR THE ASSESSMENT YEARS 2004-05 TO 2007 -08. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THEY W ERE CLUBBED AND HEARD TOGETHER AND, THEREFORE, A COMMON ORDER IS PA SSED FOR THE SAKE OF CONVENIENCE. 2. THE FIRST COMMON GROUND RAISED IN THESE APPEALS, IS AS FOLLOWS: THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION O F THE ASSESSING OFFICER IN NOT ALLOWING EXEMPTION U/S 11 OF THE IT ACT IN SPITE OF THE FACT THAT THE HONBLE ITAT DIRECTED THE DIT(E) TO GRANT REGISTRATION U/S 12AA OF THE IT ACT. 3. AS THE ASSESSEE HAS NO REGISTRATION U/S 12A OF T HE ACT, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE QUESTION OF CONSIDERING EXEMPTION U/S 11 DOES NOT ARISE. HE, THEREFORE, COM PUTED THE INCOME OF THE ASSESSEE WITHOUT ALLOWING EXEMPTION U/S 10(2 0). ON APPEAL, 2 ITA NOS. 1489, 1490, 1491 & 1492/H/2013 AGRICULTURAL MARKET COMMITTEE, ECHODA THE CIT(A) FOLLOWING THE JUDGMENT OF THE HONBLE AP HIGH COURT IN THE CASE OF CIT VS. AGRICULTURAL MARKET COMMITTEE, 337 ITR 299, CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US, THE AR OF THE ASSESSEE SUBMITTED THAT WHEN THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION U/S 12AA OF THE IT ACT, THE DIT(E) DID NOT ALLOW SUCH REGISTRATION AND THE ITAT VIDE ITS ORDER DATED 21/11/2008 IN ITA NO. 182/11/2008 SET ASIDE T HE ISSUE TO THE FILE OF THE DIT(E) WITH A DIRECTION TO RECONSIDER THE APPLICATION. THE LEARNED AR CONTENDED THAT THOUGH THE SAID ORDER WAS PASSED BY THE TRIBUNAL FOUR YEARS BACK, THE DIT(E) DID NOT PASS A NY ORDER AS THE DIT(E) HAS TO PASS THE ORDERS WITHIN A PERIOD OF 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION IS MADE. HE POINTED OUT THAT THE DUE DATE FOR PASSING APPROPRIATE ORDERS EVEN WI TH REGARD TO SET ASIDE MATTER IS TO BE RECKONED AS SIX MONTHS AND RE GISTRATION U/S 12AA IS DEEMED TO HAVE BEEN GRANTED AND THE ASSESSE E SHOULD HAVE BEEN ALLOWED EXEMPTION U/S 11 OF THE IT ACT. THE L EARNED AR CONTENDED THAT THE ASSESSING OFFICER DID NOT ALLOW SUCH EXEMPTION, WHILE PASSING THE ASSESSMENT ORDER. HE, THEREFORE, PRAYED THAT THE ASSESSING OFFICER MAY BE DIRECTED TO ALLOW THE EXEM PTION U/S 11 OF THE ACT. 6. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THERE IS NO EVIDENCE ON RECORD THAT NO ORDER HAS BEEN PASSED BY THE DIT(E). THE LEARNED DR CONTENDED THAT THE ASSESSEES APPEAL IS AGAINST THE ORDER OF THE ASSESSING OFFICER PASSED U/S 143(3), WHICH W AS CONFIRMED BY THE CIT(A) AND NOT ON THE ISSUE OF GRANTING REGISTR ATION U/S 12AA. HE, THEREFORE, SUBMITTED THAT THE ISSUE OF GRANTING REG ISTRATION U/S 12AA SHALL NOT BE ENTERTAINED AT THIS STAGE. 3 ITA NOS. 1489, 1490, 1491 & 1492/H/2013 AGRICULTURAL MARKET COMMITTEE, ECHODA 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES, PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. WE FIND THAT THE TRIBUNAL ON THE ISSUE OF GRANTING REGISTRATION U/S 12A PASSED AN ORDER IN CASE OF NICE FOUNDATION IN ITA N O. 2039/HYD/2011 FOR AY 2007-08 VIDE ORDER DATED 08/08/2012 WHEREIN IT HAS BEEN HELD AS FOLLOWS: 8. GROUND NO. 4 REGARDING REGISTRATION U/S 12A, IS DISPOSED OF AS UNDER:- 9. IN THE CASE OF SOCIETY FOR THE PROMOTION OF EDUC ATION ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT VS. C IT & ORS., [2008] 5 DTR (ALL.) 329, THE HONBLE ALLAHABAD HIGH COURT HELD AS UNDER:- CHARITABLE TRUST-REGISTRATION U/S 12A EFFECT OF NON-PASSING OF ORDER WITHIN THE TIME-LIMIT- TAKING THE VIEW THAT N ON- CONSIDERATION OF THE REGISTRATION APPLICATION WITH IN THE TIME FIXED BY S. 12AA(2) WOULD RESULT IN DEEMED REGISTRA TION, MAY AT THE WORST CAUSE LOSS OF SOME REVENUE OR INCOME-TAX PAYABLE BY THE INDIVIDUAL ASSESSEE ON THE OTHER HAND, IF A C ONTRARY VIEW IS TAKEN, IT WOULD LEAVE THE ASSESSEE TOTALLY AT TH E MERCY OF THE IT AUTHORITIES INASMUCH AS THE ASSESSEE HAS NOT BEE N PROVIDED ANY REMEDY UNDER THE ACT AGAINST NON-DECISION MOR EOVER, THE FORMER VIEW FURTHERS THE OBJECT AND PURPOSE OF THE STATUTORY PROVISION THUS, THE BETTER INTERPRETATION WOULD B E TO HOLD THAT THE EFFECT OF NON-CONSIDERATION OF THE APPLICATION FOR REGISTRATION U/S 12A WITHIN THE TIME FIXED BY S. 12AA(2) WOULD B E A DEEMED GRANT OF REGISTRATION. 10. IN THE CASE OF SARDARILAL OBERAI MEMORIAL CHART IABLE TRUST VS. ITO, 3 SOT 229 (DELHI), IT HAS BEEN HELD THAT T HE CIT(A) HAVING PASSED NO ORDER OF REFUSAL WITHIN THE TIME P ERIOD OF SIX MONTHS PRESCRIBED IN SECTION 12AA(2) OF THE ACT, AP PLICATION U/S 12A FOR REGISTRATION OF TRUST SHALL BE DEEMED TO HA VE BEEN ALLOWED. 11. IN THE CASE OF REV FATHER TRUST OSCAR COLASCO MEMORIAL MEDICAL ASSOCIATION VS. CIT, [2009] 31 SOT 1 (MUMBA I), THE HONBLE MUMBAI HIGH COURT HELD THAT AS THE CIT IN T HE PRESENT CASE HAS FAILED TO INITIATE THE ENQUIRY IN TIME TO COMPLETE THE PROCESS OF GRANT OF REGISTRATION WITHIN THE STIPULA TED PERIOD OF SIX MONTHS AND AS THE ORDER HAS NOT BEEN PASSED WIT HIN THE TIME-LIMIT PRESCRIBED, THE APPLICATION IS DEEMED TO HAVE BEEN GRANTED. THE ORDER OF THE CIT REFUSING THE REGISTRA TION IS A NULLITY AND IS QUASHED. THE REGISTRATION IS DEEMED TO HAVE BEEN GRANTED TO THE ASSESSEE. CIT VS. SOHAN LAL CHHAJAN MAL [2009] 222 CTR (P&H) 190: [2008] 307 ITR 53 (P&H), BHAGWAD 4 ITA NOS. 1489, 1490, 1491 & 1492/H/2013 AGRICULTURAL MARKET COMMITTEE, ECHODA SWARUP SHRI SHRI DEVRAHA BABA MEMORIAL SHRI HARI PA RMARTH DHAM TRUST VS. CIT [2007] 111 TTJ (DEL)( (SB) 424: [2007] 17 SOT 281 (DEL)(SB) AND DHARMA SANSTHAPAK SANGH (NIYA S) VS. CIT [2008] 118 TTJ (DEL) 823 FOLLOWED. 12. IN VIEW OF THE RATIO LAID DOWN IN THE ABOVE DEC ISIONS, THE EFFECT OF NON-CONSIDERATION OF THE APPLICATION FOR REGISTRATION U/S 12A WITHIN THE TIME FIXED BY SECTION 12AA(2) WOULD BE A DEEMED GRANT OF REGISTRATION. THUS, GROUND NO. 4 RA ISED BY THE ASSESSEE IS ALLOWED. 7.1 AS HELD BY THE TRIBUNAL IN THE SAID CASE THE EF FECT OF NON- CONSIDERATION OF THE APPLICATION FOR REGISTRATION U /S 12AA WITHIN THE TIME FIXED BY SECTION 12AA(2) WOULD BE A DEEMED GRA NT OF REGISTRATION. 7.2 IN THE CASE UNDER CONSIDERATION, IF THE DIT(E) HAS NOT PASSED ANY ORDER TILL DATE, AFTER SETTING ASIDE THE ISSUE BY THE TRIBUNAL WITH A DIRECTION TO RECONSIDER THE ASSESSEES APPLICATION U/S 12AA OF THE IT ACT, IT IS TO BE DEEMED THAT REGISTRATION IS GRANTE D TO THE ASSESSEE U/S 12AA OF THE ACT. HENCE, WE REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO FIND OUT WHETHER THE DIT(E) HA S PASSED CONSEQUENTIAL ORDER WITH REFERENCE TO THE ORDER OF THE ITAT IN ASSESSEES OWN CASE IN ITA NO. 182/HYD/2008, DATED 21/11/2008 AND IF THE SAME HAS NOT BEEN PASSED BY THE DIT(E) WITHI N THE TIME FIXED AS PER SECTION 12AA(2), IT WOULD BE A DEEMED GRANT OF REGISTRATION U/S 12AA OF THE ACT. THEREFORE, THE ASSESSING OFFICER T O EXAMINE THE ISSUE OF EXEMPTION U/S 11 OF THE ACT IN THE LIGHT O F THE ABOVE FINDINGS AND IN ACCORDANCE WITH LAW. 8. AS REGARDS THE ISSUE OF EXEMPTION U/S 10(26AAB) OF THE IT ACT, THIS ISSUE WAS CONSIDERED BY THE HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS. AGRICULTURAL MARKET COMMITTEE, 337 ITR 299. RESPECTFULLY FOLLOWING THE SAID DECISION WE UPHOLD THE ORDER OF THE CIT(A) IN REJECTING THE ASSESSEES GROUND. ACCORDIN GLY, THIS GROUND IS DISMISSED. 5 ITA NOS. 1489, 1490, 1491 & 1492/H/2013 AGRICULTURAL MARKET COMMITTEE, ECHODA 9. AS REGARDS THE GROUND NOS. 6, 7 & 8, WHICH ARE NOT RELEVANT TO CONSIDER AT THIS STAGE AS THESE GROUNDS ARE TO BE D ECIDED BY THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R. THEREFORE, THESE GROUNDS ARE RESTORED TO THE FILE OF THE ASSES SING OFFICER FOR FRESH CONSIDERATION AS WE HAVE REMITTED THE MAIN IS SUE OF EXEMPTION U/S 11 OF THE ACT. 10. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSE SSEE ARE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 19/03/2014. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 19/03/2014. KV COPY FORWARDED TO: 1. AGRICULTURAL MARKET COMMITTEE, C/O S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, H.NO. 3-6-643, ST. NO. 9, HIMAYAT NAGAR, HYDERABAD 500 029. 2. ITO, WARD 1, ADILABAD 3. CIT(A)-18, MUMBAI 4. CIT-5/6, HYDERABAD. 5. THE DR, ITAT, HYDERABAD 6 ITA NOS. 1489, 1490, 1491 & 1492/H/2013 AGRICULTURAL MARKET COMMITTEE, ECHODA S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER