Appeal details
Counselvise Citation
[2024] 130 COUNSELVISE.COM (IT) 2076 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 14 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-09-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
21-08-2024
Assessment Year
2013-2014
Appeal Filed On
20-05-2024
Judgement Text
आयकर अपीलीय अिधकरण “ए” ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI माननीय ी एबी टी. वक , ाियक सद" एवं माननीय ी मनोज कु मार अ'वाल ,लेखा सद" के सम)। BEFORE HON’BLE SHRI ABY T. VARKEY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.1543/Chn y/2024 (िनधा*रणवष* / As sessment Year: 2013-14) Yelchur Venkata Kotaiah Charities 1, Audiappa Naicken Street, George Town, Chennai-600 001. बनाम/ Vs . CIT (Exemption) Chennai. थायीलेखासं./जीआइआरसं./PAN/GIR No. AAATY-0056-C (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri J. Prabhakar (FCA) -Ld. AR थ कीओरसे/Respondent by : Shri Nilay Baran Som (CIT) -Ld. DR सुनवाईकीतारीख/Date of Hearing : 22-08-2024 घोषणाकीतारीख /Date of Pronouncement : 04-09-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. By way of this appeal, the assessee assail invocation of revisionary jurisdiction u/s 263 by Ld. Commissioner of Income Tax (Exemption), Chennai [CIT(E)] vide impugned order dated 28-03-2024 seeking revision of an assessment order passed by Ld. Assessing Officer (AO) u/s.147 r.w.s 144B of the Act on 19-03-2022. Having heard rival submissions, our adjudication would be as under. 2. It emerges that in assessment order dated 19-03-2022, Ld. AO observed that the assessee did not file return of income. Accordingly, the 2 case was reopened and notice u/s 148 was issued to the assessee on 22-03-2021. The assessee declared nil income in its return filed on 21- 04-2021. After calling for various details, Ld. AO accepted the returned income and finalized the assessment. The assessee furnished various replies during the course of assessment proceedings. 3. Subsequently, upon perusal of case records, Ld. CIT(E) noted that the assessee was registered u/s 12AA on 06-09-2016. The Ld. AO inadvertently allowed exemption u/s 11 and arrived at nil income. In terms of statutory requirement, the assessee was required to file the return of income within time allowed u/s 139(1). However, the assessee filed return of income during reassessment proceedings only on 21-04- 2021. Therefore, the aforesaid exemption would not be available to the assessee. The Ld. AO simply accepted the claim of the assessee which necessitates invocation of revisionary powers u/s 263. Accordingly, the assessee was show-caused. 4. The assessee submitted that it continue to be a registered trust even under erstwhile provisions of the Income Tax Act, 1922 after establishment as a public charitable trust on 15-04-1954. The assessee trust was regularly filing the return of income and claiming the exemption and there was no cancellation of registration at any point of time. The assessee claimed that it had submitted a physical copy of return of income through registered post on 01-10-2013 since the Tapal Section of ADI (exemption) refused to accept the physical return on 30-09-2013 which forced the assessee to dispatch the return of income along with Audit Report in Form No.10B as well as Form No.10 for accumulation of income by registered post. 3 5. However, Ld. CIT(E) held that there was no evidence to prove that the assessee furnished aforesaid documents. It only furnished copy of acknowledgement card with postal stamp. More so, as per acknowledgement card, the documents were received only on 03-10- 2013 which is also beyond due date as specified u/s 139(1). Therefore, the assessee was not eligible to claim such exemption. Accordingly Ld. AO was directed to reframe the assessment after considering the flagged issue. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 6. From the written submissions of Ld. AR, it would emerge that the assessee trust was established in the year 1954 and continue to enjoy the exemption as applicable to a charitable trust. Its registration has never been cancelled at any point of time. The assessee has been assessed to Income tax even under the erstwhile provisions of the Income Tax Act 1922. The assessee is filing return of income and granted this exemption since past many decades. The Ld. AR has submitted that the erstwhile provisions of Sec. 12A granted automatic approval as a charity on filing of requisite Form No. l0A before the CIT- TN III to grant exemption u/s.11 to 13 since the year 1973 without seeking any explanation on the nature of activities of the Trust, so long as it was hitherto registered and assessed to tax under the provisions of Income Tax Act under Chapter III. 7. Post the introduction of Sec. 12AA effective from 01-04-1997, the CIT was mandated to make enquiries for grant of registration u/s.12A in respect of fresh registrations after the said date to satisfy the genuineness of the activities with reference to the objects of the Trust. The assessee-trust, post the aforesaid amendment, to distinguish itself 4 as an existing charity covered by erstwhile provisions of Section 12A, had to percolate the registration number granted in terms of said section since 1973 in the return of income filed or furnish a copy of the said registration or make a reference thereof during the course of assessment proceedings. Due to efflux of time and change in office bearers of the assessee trust, the grant of registration by the CIT-TN III could not be traced and hence the reference thereto by way of identification as C. No. could not be furnished qua the returns filed or assessment, if any framed post the aforesaid amendment, from assessment year 1997-98, while it continued to seamlessly file the returns of income for every year. 8. On account of the aforesaid anomaly, the department re-opened the assessment for Assessment Years 2002-03 and 2007-08 to treat the assessee as not a registered charity under the amended provision of Section 12AA of the Act. However, the assessments so framed to deny exemption under Chapter III was carried in appeal which was decided in assessee’s favor by the Tribunal by treating the assessee as a registered trust within the meaning of Sec. 12A of the Act. The Tribunal in ITA No.2076 and 2077/Mds/2011 order dated 16-04-2012, set aside the assessments framed to cause enquiry about the availability of registration in the office of the CIT in view of the ex-facie availability thereof qua the assessments framed for assessment years 1980-81, 1987-88 and 1988-89 post scrutiny of returns filed there-under. Though the department again denied the exemption to the assessee, the Tribunal reinforced its views vehemently in favour of the assessee that registration, ab-initio, was indeed available to the Trust vide its further orders in ITA Nos.1902, 1903 and 1904/Mds/2013 dated 24/02/2014 which includes not only Assessment Years 2002-03 and 2007-08 but 5 also AY 2010-11 which came to be rendered against the assessee along with set-aside assessments by the Tribunal. 9. However, despite the favorable appellate orders, the appellant was facing resistance from the department on account of summary assessment scheme framed by the CPC to grant exemption in the absence of specific C. No. allotted ab-initio since 1973 which led the assessee to seek fresh registration number by filing Form No. 10A which was allotted on 09-06-2016. In the meanwhile, the assessee was also unable to file the returns of income online made statutorily applicable from 01-04-2013 due to non-availability of C.No. which was compulsorily required to be percolated in ITR 7 since the online portal refused to accept the return uploaded with an error message due to non-availability of the number. This forced the assessee to file the return of income in physical mode to comply with the provisions of Section 139(1) of the Act which again faced resistance or non-acceptance for the same reason as to non-availability of registration number and the Tapal section refused physical acceptance and issue acknowledgement thereof at the threshold. 10. Under these circumstances, the assessee had to dispatch the physical return forms and connected enclosures such as audit report in Form No.10B, accumulation notice in Form No.10 etc., by registered post at the post office available at the Income Tax Department premises itself. The returns of income, in this manner, were filed for AYs 2013-14 to 2015-16, through registered post only to ensure compliance with the requirement of filing of Returns of income. It has further been submitted that this method of physical filing of return of income for AY 2013-14 is suspected by the CIT (Exemption) to state that there is no original return 6 of income available on record to invoke the provisions of Section 12A(l)(ba) retrospectively so as to deny the benefit of exemption of receipts and expenditure u/s.11 to 13 of the Income Tax Act. The Ld. AR has further submitted that Ld. CIT(E) has refused to take cognizance of the aforesaid explanations rendered by the assessee. In fact, Ld. AO, in its letter dated 09-10-2015, for AY 2015-16, treated the physical return filed on 30-09-2015 as non-est and advised the assessee to file the same electronically in ITR-7 since the same was mandated with effect from 01-04-2013. Therefore, the stand of Ld. CIT(E) has no legal or factual basis to countenance the physical availability of return of income filed for this assessment year through registered Post and available in the repository of the department soon after the dispatch by Registered Post on 01-10-2013 and Ld. CIT(E) did not bother to cause enquires with his office to trace the contents of the registered post to ascertain the factum of physical return being available on record. 11. On the issue of delayed filing of return of income on 03-10-2013, Ld. AR has submitted that the requirement of filing return of income before due date u/s 139(1), as mandated u/s 12A(1)(ba), was introduced by the Finance Act 2017 with effect from 01-04-2018 and therefore, the same could not be applied retrospectively for AY 2013-14. 12. After going through aforesaid elaborate written submissions of Ld. AR, we concur that the impugned revision of the order u/s 263 is certainly bad-in-law. It is undisputed fact that the assessee is enjoying the exemption as applicable to a charitable trust since 1954. It has been granted this exemption in scrutiny assessment for AYs 1980-81, 1987-88 and 1988-89. The issue of exemption has been decided in assessee’s favor by the Tribunal for AYs 2002-03, 2007-08 and 2010-11. The only 7 reason to invoke the revisionary power is the allegation that the assessee has not filed the return of income as mandated u/s 139(1). However, the circumstances under which the return of income could not be filed have not been considered in the required perspective. Due to efflux of time and change in office bearers of the assessee trust, the grant of registration by the CIT-TN III could not be traced and hence the reference thereto by way of identification as C. No. could not be furnished in the returns of income for AY 1997-98. However, in the era of electronic filing of return of income w.e.f. 01-04-2013, the mentioning of this information became mandatory and the assessee was unable to e- file the returns for AYs 2013-14 to 2015-16. Ultimately, the assessee sought fresh registration which was granted on 09-06-2016. To ensure compliance of Sec.139(1), the assessee made efforts to file the returns of income in physical mode and unfortunately, in the absence of such information, the same was also not accepted at Tapal center of the department. Left with no option, the assessee dispatched the returns through registered post which is evidenced by postal acknowledgements. The Ld. CIT(A), though admitted receipt of post on 03-10-2013, doubted the contents of the same without verifying the submissions of the assessee. 13. Therefore, on totality of facts and circumstances of the case, the revision of the order could not be upheld in the eyes of law. We have no hesitation in quashing the same. The assessment framed by Ld. AO stand restored back. 8 14. The appeal stand allowed in terms of our above order. Order pronounced on 4 th September, 2024 Sd/- Sd/- (ABY T. VARKEY) (MANOJ KUMAR AGGARWAL) ाियक सद" /JUDICIAL MEMBER लेखा सद" / ACCOUNTANT MEMBER चे3ई Chennai; िदनांक Dated :04-09-2024 DS आदेशकीHितिलिपअ'ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु
