Asst.Director of Income-tax (Exemptions)-I, Hyderabad V. Aravinda Educational Society, Karimnagar

ITA 1636/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7700 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 28-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: S RAMA RAO
• Keywords: Tax effect
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1636/HYD/2013 ASSESSMENT YEAR 2004-2005 ASST. DIRECTOR OF INCOME TAX (EXEMPTIONS)-I, HYDERABAD. VS. ARAVINDA EDUCATIONAL SOCIETY, MANKAMMATHOTA, KARIMNAGAR. PANAABTA1310J (APPELLANT) (RESPONDENT) FOR REVENUE : MR. RAJAT MITRA FOR ASSESSEE : MR. S. RAMA RAO DATE OF HEARING : 10.12.2014 DATE OF PRONOUNCEMENT : 29.12.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-IV, HYDERABAD DATED 06.09.2013. 2. BRIEFLY STATED, ASSESSEE-SOCIETY IS REGISTERED UNDER A.P.(TELANGANA AREAS) PUBLIC SOCIETIES REGISTRATION ACT, HYDERABAD BUT IT WAS NOT REGISTERED UNDER SECTION 1 2A OF IT ACT 1961. ASSESSEE RUNS ONE SCHOOL AND ONE JUNIOR C OLLEGE. THE AGGREGATE ANNUAL GROSS RECEIPTS OF BOTH INSTITU TIONS PUT TOGETHER WAS ADMITTED AT RS.1,40,46,704 AS PER INCO ME AND EXPENDITURE STATEMENT. ASSESSEE CLAIMED EXEMPTION U NDER SECTION 10(23C) AND THE ORIGINAL ASSESSMENT ACCEPTI NG ASSESSEES CLAIM WAS PASSED ON 27.11.2006 FOR THE A .Y. 2004- 05. SUBSEQUENTLY, A.O. NOTICED THAT THE ANNUAL RECE IPTS HAVING EXCEEDED RS. 1 CRORE, ASSESSEE SHOULD HAVE OBTAINED APPROVAL 2 ITA.NO.1636/HYD/2013 ARVINDA EDUCATIONAL SOCIETY, KARIMNAGAR. FROM THE PRESCRIBED INCOME TAX AUTHORITY AS PER SEC TION 10(23C)(VI) OF THE ACT. SINCE ASSESSEE HAS NOT OBTA INED ANY APPROVAL, HE WAS OF THE OPINION THAT THE CLAIM OF E XEMPTION CANNOT BE ALLOWED. ACCORDINGLY, HE INITIATED PROCEE DINGS UNDER SECTION 147 AND ISSUED NOTICE ON 12.11.2009. IN THE COURSE OF RE-ASSESSMENT PROCEEDINGS, ON A QUERRY BY A.O. ASSE SSEE SUBMITTED THAT IT IS RUNNING TWO DIFFERENT EDUCATIO NAL INSTITUTIONS AND RECEIPTS FROM EACH OF THE INSTITUT ION IS LESS THAN RS. 1 CRORE AND THEREFORE, ASSESSEE CLAIMED EX EMPTION UNDER SECTION 10(23C)(IIIAD) OF THE I.T. ACT AND FU RTHER SUBMITTED THAT ALL THESE FACTS WERE ALSO PLACED BEF ORE A.O. AT THE TIME OF ORIGINAL ASSESSMENT WHO ALLOWED EXEMPTI ON IN THE SCRUTINY ASSESSMENTS. THEREFORE, IT QUESTIONED REOP ENING OF THE ASSESSMENT. A.O. HOWEVER, BRUSHED ASIDE OBJECTIONS AND COMPUTED THE TOTAL INCOME AT RS.3,49,539 RAISING DE MAND OF RS.2,11,086. 3. LD. CIT(A) ON THE OBJECTIONS RAISED BY ASSESSEE HELD THAT A.O. HAS NEITHER SATISFIED ON THE REASONS RECORDED FOR ISSUE OF NOTICE UNDER SECTION 148 NOR SATISFIED THE CONDITION OF FAILURE ON THE PART OF ASSESSEE TO DISCLOSE ALL MAT ERIAL FACTS FULLY AND TRULY. SINCE LD. CIT(A) DID NOT FIND ANY FAILURE AT THE END OF ASSESSEE TO DISCLOSE THE MATERIAL FACTS, THE ISSUE OF NOTICE UNDER SECTION 148 IS THEREFORE HELD TO BE BA D IN LAW AND THE RE-ASSESSMENT IS SET ASIDE AS VOID AB INITIO . LD. CIT(A) FURTHER HELD THAT OTHER GROUNDS OF APPEAL BECOMES INFRUCTUOUS. REVENUE IS AGGRIEVED ON THE ABOVE. 4. EVEN THOUGH LD. D.R. RELIED ON THE ORDERS OF A. O. AND LD. COUNSEL RELIED ON SUBMISSIONS MADE BEFORE L D. CIT(A), WE DO NOT SEE ANY MERIT IN REVENUE APPEAL, BASICALL Y ON THE REASON THAT THE TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THAN 3 ITA.NO.1636/HYD/2013 ARVINDA EDUCATIONAL SOCIETY, KARIMNAGAR. RS. 3 LAKHS. THE REVENUE HAS NOT EXPLAINED WHY IT P REFERRED THE APPEAL IN VIOLATION OF THE BOARD CIRCULAR. WITH OUT GOING INTO THE MERITS OF DETERMINATION OF THE ADDITIONS MADE B Y A.O., WE HOLD THAT REVENUE SHOULD NOT HAVE PREFERRED AN APPE AL ON THE ORDER OF LD. CIT(A), ON THE REASON OF TAX EFFECT. BOARD CIRCULAR BEING BINDING ON THE AUTHORITIES, THE REVENUE SHOUL D NOT HAVE PREFERRED THE APPEAL. IN VIEW OF THIS, WE DISMISS T HE APPEAL AS NOT MAINTAINABLE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.12.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED DECEMBER, 2014 VBP/- COPY TO 1. ASST. DIRECTOR OF INCOME TAX, (EXEMPTIONS)-I, 3 RD FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. ARVINDA EDUCAITONAL SOCIETY, 7-1-740/1, MANKAMMATHO TA, KARIMNAGAR, 3. CIT(A)-IV, HYDERABAD 5. DIT-(EXEMPTIONS), HYDERABAD 6. D.R. ITAT B BENCH, HYDERABAD.