Astt. Commisioner of Income Tax (Exemption), Lucknow V. M/s U.P Expressway Industrial Development Authority, Lucknow

ITA 163/LKW/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6586 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-05-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Revised return
• Section: 12A; 12; 11

Judgement Text

I.T.A. NO.163/LKW/2017 ASSESSMENT YEAR:2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.163/LKW/2017 ASSESSMENT YEAR:2009-10 A.C.I.T. (EXEMPTIONS), LUCKNOW. VS. M/S U.P. EXPRESSWAY INDUSTRIAL DEVELOPMENT AUTHORITY, C-13, 2 ND FLOOR, PARYATAN BHAWAN, VIPIN KHAND, GOMTI NAGAR, LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 14/12/2016. THE GROUNDS OF APPEAL TAKEN BY TH E REVENUE ARE REPRODUCED BELOW: 1. LEARNED CIT(A) HAS ERRED IN LAW BY ALLOWING THE ASSESSEE FOR ACCUMULATION OF INCOME IGNORING THE FACT THAT F ORM NO. 10, IS A NOTICE FOR ACCUMULATION OF INCOME BY CHARITABL E OR RELIGIOUS TRUST OR INSTITUTION OR ASSOCIATION U/S 11(2) OF TH E INCOME TAX ACT, SHOULD BE FILED WITHIN THE TIME ALLOWED FOR FU RNISHING OF RETURN U/S 139(1) OF THE I.T.ACT, HOWEVER IN THIS C ASE THE ASSESSEE HAD SUBMITTED FORM NO. 10 DATED 18/06/2010 RELEVANT TO ASSESSMENT YEAR 2009-10 ON 21.01.2016. 2. THE ORDER OF LD. CIT(A) BE CANCELLED AND THE ORD ER OF THE A.O. RESTORED. APPELLANT BY DR. A. K. SINGH, CIT (D.R.) RESPONDENT BY SHRI YOGESH AGRAWAL, ADVOCATE DATE OF HEARING 02/05/2018 DATE OF PRONOUNCEMENT 03 / 05 /201 8 I.T.A. NO.163/LKW/2017 ASSESSMENT YEAR:2009-10 2 2. AT THE OUTSET, LEARNED D. R. SUBMITTED THAT ASSE SSEE HAD NOT FILED FORM NO. 10 WHICH IS A NECESSARY DOCUMENT FOR CLAIM ING EXEMPTION U/S 11 OF THE ACT AND LEARNED CIT(A) HAS WRONGLY ALLOWED R ELIEF TO THE ASSESSEE IGNORING THE FACT THAT FORM NO. 10 WAS NOT FILED. HE SUBMITTED THAT FORM NO. 10 WAS FILED ON 21/01/2016 WHEREAS IT WAS TO BE FILED ALONG WITH THE RETURN OF INCOME. 3. LEARNED A. R., ON THE OTHER HAND, SUBMITTED THAT FORM NO. 10 WAS DULY FILED ALONG WITH REVISED RETURN OF INCOME AND WAS ACTUALLY FILED ON 26/07/2010. IT WAS SUBMITTED THAT ON 21/01/2016, F ORM NO. 10 WAS AGAIN FILED BEFORE THE ASSESSING OFFICER ONLY ON HIS SPEC IFIC REQUEST AS THE FILES CONTAINING ORIGINAL AS WELL AS REVISED RETURN WERE NOT TRACEABLE BY HIM IN HIS OFFICE. LEARNED A. R. SUBMITTED THAT THE ASSESSING OFFICER HAD COMPLETED THE ASSESSMENT ON 25/02/2014 BY NOT CONSIDERING THE EXEMPTION U/S 11 AND 12 OF THE ACT AS BY THAT TIME THE ASSESSEE WAS NOT ENJOYING REGISTRATION U/S 12A OF THE ACT. HOWEVER, BY AN ORDER DATED 27/05/2 014 OF I.T.A.T. LUCKNOW BENCH, THE ASSESSEE WAS GRANTED REGISTRATIO N WITH EFFECT FROM 01/04/2008 AND THEREFORE, THE LEARNED CIT(A) VIDE O RDER DATED 28/03/2014 DIRECTED THE ASSESSING OFFICER TO ASSESS THE INCOME AFTER ALLOWING EXEMPTION U/S 11 OF THE ACT. IT WAS SUBMITTED THAT THE ASSES SING OFFICER VIDE ORDER DATED 25/02/2016 INSTEAD OF GIVING EFFECT TO THE OR DER OF LEARNED CIT(A), PASSED ORDER ON 25/02/2016 AND HELD THAT THE ACCUMU LATION OF INCOME WAS NOT ALLOWABLE IN VIEW OF NON FILING OF FORM NO. 10. IT WAS SUBMITTED THAT AGAIN THE ASSESSEE FILED APPEAL BEFORE LEARNED CIT( A) AND EXPLAINED THE WHOLE FACTS AND LEARNED CIT(A) VIDE ORDER DATED 14/ 12/2016 HAS RIGHTLY ALLOWED RELIEF TO THE ASSESSEE. IT WAS SUBMITTED T HAT LEARNED CIT(A) HAS MADE A FINDING OF FACT THAT ASSESSEE HAD FILED FORM NO. 10 ALONG WITH THE REVISED RETURN ON 26/07/2010. I.T.A. NO.163/LKW/2017 ASSESSMENT YEAR:2009-10 3 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSING OFFIC ER VIDE ORIGINAL ASSESSMENT ORDER DATED 25/02/2014 DISALLOWED THE CL AIM OF ASSESSEE REGARDING EXEMPT INCOME U/S 11 BECAUSE OF THE FACT THAT THE ASSESSEE WAS NOT ENJOYING REGISTRATION U/S 12A OF THE ACT. THE ASSESSEE IN THE MEANTIME GOT ORDERS FOR REGISTRATION U/S 11 FROM I.T.A.T., L UCKNOW VIDE ORDER DATED 27/05/2014 WHICH WAS PLACED BEFORE LEARNED CIT(A) A ND THEREFORE, LEARNED CIT(A) VIDE ORDER DATED 23/12/2015 DIRECTED THE ASS ESSING OFFICER TO CALCULATE THE EXEMPTION U/S 11 OF THE ACT. HOWEVER , THE ASSESSING OFFICER DISALLOWED ACCUMULATED BALANCE OF INCOME BY HOLDING THAT FORM NO. 10 WAS FILED ON 21/01/2016. FROM THE ARGUMENTS OF LEARNED A. R., WE FIND THAT FORM NO. 10 WAS ORIGINALLY FILED ALONG WITH THE RE TURN OF INCOME ON 26/07/2010 AND IT WAS ONLY ON THE REQUEST OF THE AS SESSING OFFICER IN SECOND ROUND BEFORE HIM THAT HE WANTED COPY OF FORM NO. 10 AS THE ORIGINAL FILE WAS NOT TRACEABLE WITH HIM AND THEREF ORE, THE SAME WAS FILED. WE FIND THAT LEARNED CIT(A) HAS DULY NOTED SUCH ARG UMENTS OF THE ASSESSEE IN HIS ORDER IN PARA 7 AND VIDE PARA 9.4 HAS CATEGO RICALLY HELD THAT ASSESSEE HAD FILED FORM NO. 10 ALONG WITH THE REVISED RETURN ON 26/07/2010 ITSELF. FOR THE SAKE OF COMPLETENESS THE FINDINGS OF LEARNE D CIT(A) ARE REPRODUCED BELOW: 6. I HAVE GONE THROUGH THE ORDER PASSED OF THE A.O . U/S 143(3)/250 OF THE ACT ALONG WITH WRITTEN SUBMISSION S FILED BY THE APPELLANT DURING APPELLATE PROCEEDINGS AS WELL AS THE FACTS OF THE CASE. I NOW PROCEED TO DECIDE THE APPEAL ON THE BASIS OF THE GROUNDS OF APPEAL RAISED BEFORE ME. GROUND NO. I TO V RELATE TO ONLY ONE ISSUE THAT BEING THE DISALLOWANC E OF ACCUMULATION OF THE INCOME FOR THE YEAR. THIS HAS BEEN DISALLOWED BY THE AO FOR THE REASON THAT ACCORDING TO HIM THE FORM NO. 10 HAS BEEN FILED ONLY ON 21-01-2016 AND H ENCE THE SURPLUS CANNOT BE ALLOWED TO BE ACCUMULATED. 7. THE APPELLANT CONTENDS THAT THE FORM NO. 10 WAS DULY FILED ON 26-07-2010 ALONG WITH THE REVISED RETURN F OR THE YEAR I.T.A. NO.163/LKW/2017 ASSESSMENT YEAR:2009-10 4 UNDER CONSIDERATION. THAT THE SAME WAS AGAIN FILED BEFORE THE AO ONLY ON HIS SPECIFIC REQUEST THAT THE FILE CONTA INING THE ORIGINAL AS WELL AS THE REVISED RETURN ARE NOT TRAC EABLE BY HIM IN THE OFFICE. THUS THE APPELLANT CLAIMS THAT THE F ORM WAS FILED WELL WITHIN THE TIME ALLOWED AND FURTHER THIS ASPEC T WAS NEVER EVER RAISED OR CONFRONTED BY THE AO DURING PROCEEDI NGS U/S 250 OF THE ACT. THE APPELLANT HAS ALSO RAISED AN ISSUE THAT THE AO WAS ONLY DIRECTED TO COMPUTE THE INCOME OF THE YEAR AND ALLOW THE ACCUMULATION AND HE HAS EXCEEDED HIS JURISDICTI ON BY DISALLOWING THE SAME ON A NEW GROUND. 8. FIRSTLY I FIND THAT IN MY PREVIOUS ORDER 1 HAD G IVEN DIRECTION THAT THE AO SHOULD CALCULATE THE EXEMPTIO N U/S 11 OF THE ACT AND ASSESS THE TOTAL INCOME OF THE APPELLAN T ACCORDINGLY. THE AO WHILE PASSING THE ORDER HAS TRA VELED BEYOND HIS JURISDICTION BY DISALLOWING THE ACCUMULA TION ON THE GROUND THAT THE FORM NO. 10 HAS BEEN FILED LATE. T HE DIRECTION OF MY PREVIOUS ORDER ARE VERY CATEGORICAL THAT THE ASSESSING OFFICER SHOULD CALCULATE THE EXEMPTION U/S 11 OF TH E ACT AND ASSESS THE TOTAL INCOME OF THE APPELLANT. THE APPE LLANT HAS SUBMITTED THE COPY OF THE JUDGMENT OF THE HON'BLE M ADRAS HIGH COURT IN THE CASE OF RAJA D. V. SEETHARAMAYYA BAHAD UR VS. SIXTH WEALTH TAX OFFICER REPORTED IN 213 ITR 502. A CCORDING TO THE JUDGMENT OF THE HON'BLE HIGH COURT THE AO WAS C ONFINED TO THE POINTS MENTIONED IN THE APPELLATE ORDER AND HEN CE HE WAS BOUND TO LOOK INTO THOSE POINTS ONLY. THE SAME VIEW IS HAS ALSO BEEN FOLLOWED IN THE JUDGMENT OF THE HON'BLE CALCUT TA HIGH COURT IN THE CASE OF SURENDRA OVERSEAS LTD. VS. CIT REPORTED IN 120 ITR 872 AND ALSO THE DECISION OF THE HON'BLE AL LAHABAD HIGH COURT IN THE CASE OF CAWNPORE CHEMICALS WORKS (P.) LTD. VS. CIT-REPORTED IN 197 ITR 296. THEREFORE I FEEL T HAT THE AO HAS EXCEEDED HIS JURISDICTION BY DISALLOWING THE AC CUMULATION WITHOUT ANY VALID REASON BY TAKING A FRESH PLEA. TH EREFORE I AM INCLINED TO AGREE WITH THE APPELLANT THAT THE ACCUM ULATION OF INCOME FOR THE YEAR OF RS.2,13,90,859/- SHOULD BE A LLOWED. 9.1 WITHOUT PREJUDICE TO ABOVE, THE APPELLANT HAS S TATED THAT FORM 10 WAS FILED ALONGWITH THE REVISED RETURN OF I NCOME ON 26.07.2010. IT WAS CONTENDED THAT INSPITE OF THESE FACTS THE AO HAS RAISED OBJECTION THAT FORM 10 WAS NOT FILED DUE TO THE REASON THAT RELEVANT FILES WERE NOT TRACEABLE IN HI S OFFICE. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW A ND CONFIRM THAT FORM 10 WAS NOT FILED EARLIER BY THE APPELLANT AND IT WAS ONLY FILED ON 21.01.2016. I.T.A. NO.163/LKW/2017 ASSESSMENT YEAR:2009-10 5 9.2 THE HON'BLE APEX COURT IN THE CASE OF NAGPUR HO TEL OWNERS ASSOCIATION REPORTED IN 247 ITR 201 HAS HELD THAT EVEN IF FORM NO. 10 IS NOT FILED IN THE TIME ALLOWED U/S 139(1) OF THE ACT, EVEN THEN, IF THE SAME IS PROVIDED BEFORE THE COMPLETION OF ASSESSMENT (DURING COURSE OF COMPUTATION OF EXEMPTI ON) THEN THE EXEMPTION HAS TO BE ALLOWED. THUS, THE HON'BLE APEX COURT HAS HELD THAT EVEN IF FORM 10 IS FILED LATE AND HAS BEEN FILED BEFORE COMPLETION OF THE ASSESSMENT (DURING COURSE OF COMPUTATION OF EXEMPTION), EVEN THEN, THE EXEMPTION HAS TO BE ALLOWED. 9.3 THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF M AYUR FOUNDATION REPORTED IN 194 CTR 197 (GUJ.) DECIDED U PON THE ISSUE OF SPECIFIC TIME LIMIT PRESCRIBED U/S 11(2) O F THE ACT I.E. WHETHER THE TIME LIMIT PRESCRIBED IN RULE 17 FOR SU BMISSION OF FORM 10 RULE MAKING AUTHORITY IS VALID. THE QUESTIO N, THEREFORE, AROSE IS WHEN CAN AN ASSESSMENT BE SAID TO BE COMPL ETE OR TILL WHAT POINT OF TIME THE ASSESSMENT PROCEEDINGS CAN B E SAID TO BE ALIVE. ON THIS ISSUE THE HON'BLE COURT HELD AS U NDER:-] '13. THUS, THE PROCEEDINGS BEFORE THE TRIBUNAL ARE MEANT TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSE E. IF THIS BE SO, IT FOLLOWS THAT THE ASSESSMENT PROCEEDINGS C ANNOT BE SAID TO BE COMPLETE AND IS PENDING TILL THE APPE AL IS HEARD AND DISPOSED OF BY THE TRIBUNAL AND THE ORDER OF THE TRIBUNAL IS GIVEN EFFECT TO BY THE ASSESSING AU THORITY BY COMPUTING THE CORRECT TAX LIABILITY OF AN ASSESS EE. IN OTHER WORDS, WHETHER AN ASSESSEE IS REQUIRED TO PAY TAX OR BECOMES ENTITLED TO A REFUND, WOULD BE ASCERTAIN ED BY THE ASSESSING AUTHORITY AFTER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL. 9.4 IN THE PRESENT CASE THE APPELLANT HAD FILED FOR M NO. 10 ALONGWITH THE REVISED RETURN ON 26.07.2010. IN VIEW OF THESE FACTS AND DECISIONS OF HON'BLE APEX COURT (AS OUTLI NED IN PARA 9.2 ABOVE) AND HON'BLE GUJRAT HIGH COURT (AS OUTLIN ED IN PARA 9.3 ABOVE) THE ADDITION MADE BY THE AO CANNOT BE SU STAINED. THE ADDITION OF RS. 2,13,90,859/- MADE BY THE AO IS ORDERED TO BE DELETED. GROUNDS OF APPEAL NO. I TO V ARE ALLOWE D AND AO IS DIRECTED TO GIVE THE RELIEF ACCORDINGLY. I.T.A. NO.163/LKW/2017 ASSESSMENT YEAR:2009-10 6 4.1 THE ABOVE FINDINGS OF LEARNED CIT(A) ARE QUITE EXHAUSTIVE AND HE HAS PASSED A SPEAKING ORDER AFTER TAKING ENTIRE FACTS A ND CIRCUMSTANCES OF THE CASE AND WE DO NOT FIND ANY INFIRMITY IN THE SAME. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 03/05/2 018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:03/05/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW