Shree Simandhar Swami Jain Derasarji, Valsad V. The ACIT, Vapi Circle, Vapi

ITA 165/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2184 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 22-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL DHAKA
• Assessee Lawyers: RAJESH M UPADHAYAY
• Keywords: Reopening of assessment; Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 148; 12AA

Judgement Text

SHREE SIMANDHAR SWAMI JIN KARYALAYA/I.T.A. NO. 165 AHD/2016/A.Y.06-07 & 3287/AHD/2015/A.Y. 11-12 PAGE 1 OF 8 , , INCOM TAX APPELLATE TRIBUNAL-SURAT-BENCH-SURAT . . , . . , BEFORE C .M. GARG, JM & O. P. MEENA, AM . . ./ I.T.A NO. 165 /AHD/2016 AND I.T.A.NO. 3287/AHD/2015 /ASSESSMENT YEAR :2006-07 & 2011-12 SHREE SIM AN DHAR SWAMI JIN MANDIR KARYALAYA , NANDIGRAM, NH-8, TALUKA UMERGAM VALSAD PAN:AABTS 3180J V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -VAPI APPELLANT /RESPONDENT ASSESSEE BY SHRI RAJESH M. UPADHAYAY, A.R. REVENUE BY SHRI ANIL DHAKA, SR. D. R DATE OF HEARING 18.09.2018 DATE OF PRONOUNCEMENT 12.10.2018 /ORDER PER O. P. MEENA, AM 1. THESE ARE TWO APPEALS AT THE INSTANCE OF THE ASSESSEE WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS DATED 02.12.2015 AND DATED 01.10.2015 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-VALSAD (IN SHORT THE CIT (A)) FOR THE ASSESSMENT YEAR 2006-07 AND ASSESSMENT YEAR 2011-12 RESPECTIVELY. I.T.A.NO. 165/AHD/2016 FOR A.Y. 2006-07: 2. GROUND NO. 1 TO 4 ARE AGAINST THE REOPENING OF ASSESSMENT NOT HOLDING AS INVALID AND NOT HOLDING ASSESSMENT ORDER AS ERRONEOUS AND DECLARING THE SHREE SIMANDHAR SWAMI JIN KARYALAYA/I.T.A. NO. 165 AHD/2016/A.Y.06-07 & 3287/AHD/2015/A.Y. 11-12 PAGE 2 OF 8 ADDITION OF RS. 68,54,662 BEING CASH DEPOSITS IN BANK ACCOUNT AND MUTUAL FUND EVEN THOUGH REFLECTED IN AUDITED BOOKS OF ACCOUNTS. 3. SUCCINCTLY, FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE IS A CHARITABLE TRUST REGISTERED UNDER SECTION 12AA OF THE ACT AND CARRIED OUT ACTIVITIES FOR NANDIGRAM, UMAR GAM VALSAD GUJARAT. IT HAS FAILURE ITS RETURN OF INCOME ON 29.03.2007 WITH ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE VAPI. THE ASSESSMENT WAS OPENED UNDER SECTION 148 ON THE GROUND THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME AND HAS MADE CASH DEPOSITS OF RS. 49,04,669 AND PURCHASED MUTUAL FUND OF RS. 19,50,000. THE AO MADE ASSESSMENT IN THE NAME OF SHREE SIMANDHAR SWAMI JAIN DEHRASARJI BY MENTIONING TWO ADDRESS AS 11/604, VADA CHARASTA, SURAT AND ANOTHER ONE NANDIGRAM, N.H. NO.8, TAL- UMAR GAM VALSAD GUJARAT IN THE ASSESSMENT ORDER. HOWEVER, NOTICE UNDER SECTION 148 WAS SERVED ON TRUST HAVING SURAT WHO HAD NOT FILED ANY RETURN OF INCOME, WHEREAS THE FIGURES FOR MAKING ADDITION WERE CONSIDERED THE TRUST HAVING ADDRESS OF UMAR GAM, TO WHOM NEITHER NOTICE UNDER SECTION 148 WAS SERVED NOR OPPORTUNITY OF BEING HEARD WAS ALLOWED. HOWEVER, ORIGINAL ASSESSMENT ORDER WAS SERVED ON THE TRUST HAVING ADDRESS, HENCE, THE ASSESSEE HAS PREFERRED THE APPEAL BEFORE CIT (A). 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). HOWEVER, CIT (A) HAS HELD THAT ASSESSMENT ORDER MADE IN THE NAME OF SHREE SHREE SIMANDHAR SWAMI JIN KARYALAYA/I.T.A. NO. 165 AHD/2016/A.Y.06-07 & 3287/AHD/2015/A.Y. 11-12 PAGE 3 OF 8 SIMANDHAR SWAMI JAIN DHERASARJI, WHEREAS APPEAL HAS BEEN FILED BY ANOTHER PERSON HAVING NAME OF SHREE SIMANDHAR SWAMI JIN KARYALAYA, NANDIGRAM. THE ASSESSEE HAS TWO ADDRESS ONE FOR SURAT AND ANOTHER OF NANDI GRAM, UMAR GAM. SHREE SIMANDHAR SWAMI JIN KARYALAYA NANDIGRAM HAS SAME PAN AS OF SHREE SIMANDHAR SWAMI JAIN DEHRASARJI. THERE IS ALSO CONFUSION IN THE MIND OF THE AO ALSO AS REFLECTED IN ASSESSMENT ORDER. IN VIEW OF THESE FACTS, THE CIT (A) HELD THAT IT IS PRESUMED THAT NO APPEAL FILED BY THE ENTITY IN WHOSE NAME ASSESSMENT HAS BEEN MADE. HENCE, THIS APPEAL SO FILED IS NONEST IN THE EYES OF LAW, AND CANNOT BE ADJUDICATED HENCE, DISMISSED. 5. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS CONSIDERED THE INCOME AND FIGURES OF THE RETURN FILED BY THE ASSESSEE TRUST IN THE NAME OF SHREE SIMANDHAR JAIN KARYALAYA, NANDI GRAM. HOWEVER, NO NOTICE UNDER SECTION 148 HAS BEEN SERVED ON THE ASSESSEE TRUST HAVING ADDRESS OF NANDIGRAM, UMAR GAM. HENCE, THE ADDITION MADE IN THE ASSESSMENT ORDER COULD NOT BE EXPLAINED. AS PER THE A.R. OF TRUST NAMED SHREE SIMANDHAR JAIN DEHRASARJI, SURAT HAS BEEN APPEARED BEFORE THE AO. BOTH TRUST WERE HAVING SAME PAN. THE SURAT TRUST HAS NOT FILED ANY RETURN OF INCOME. THE ADDITION MADE IN ASSESSMENT ORDER IS DULY REFLECTED IN AUDITED BOOKS OF ACCOUNTS. BUT NANDIGRAM TRUST HAS NOT RECEIVED THE NOTICE FROM THE AO HENCE, THERE WAS NO OCCASION TO EXPLAIN. IN SHREE SIMANDHAR SWAMI JIN KARYALAYA/I.T.A. NO. 165 AHD/2016/A.Y.06-07 & 3287/AHD/2015/A.Y. 11-12 PAGE 4 OF 8 APPEAL ALSO , BOTH THE A.R. OF THE ASSESSEE TRUST APPEARED. HOWEVER, THE CIT (A) TREATED THE APPEAL AS NONEST. IT WAS CONTENDED THAT THE AO HAS MENTIONED THE NAME OF SURAT TRUST AND USED FIGURES ON THE BASIS OF RETURN FILED BY UMAR GAM TRUST. THE ASSESSMENT ORDER HAS BEEN PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -VAPI HAVING JURISDICTION OVER UMAR GAM TRUST. THEREFORE, PRACTICALLY THIS APPEAL PERTAINS TO UMAR GAM TRUST, WHO HAD NOT RECEIVED ANY NOTICE OF HEARING I.E. NEITHER NOTICE UNDER SECTION 148 NOR NOTICE UNDER SECTION 143(2) DURING ASSESSMENT PROCEEDINGS. THE UMAR GAM TRUST IS BEING ASSESSED FROM SO MANY YEARS WITH SAME PAN. HOWEVER, NOW , THE UMAR GAM TRUST HAS OBTAINED SEPARATE PAN TO AVOID CONFUSION. THEREFORE, IT WAS URGED BEFORE US THAT THE PRESENT ASSESSMENT MAY BE SET-ASIDE THE AO TO ENABLE THE ASSESSEE TO EXPLAIN THE ADDITION SO MADE BASED ON ITS RETURN FOR WHICH NO OPPORTUNITY WAS PROVIDED. 6. PER CONTRA, THE LD. SR. D.R. RELIED ON THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE AO HAS REOPEN THE ASSESSMENT BY STATING THAT NO RETURN WAS FILED BY THE ASSESSEE TRUST. THE AO THEREFORE, SERVED A NOTICE UNDER SECTION 148 ON THE ASSESSEE TRUST HAVING ADDRESS OF SURAT, WHO HAD NOT FILED ANY RETURN OF INCOME. HOWEVER, WHILE MAKING THE ASSESSMENT , THE AO HAS CONSIDERED THE RETURN AS FILED BY THE HAVING UMAR GAM TRUST WHO HAD FAILURE SHREE SIMANDHAR SWAMI JIN KARYALAYA/I.T.A. NO. 165 AHD/2016/A.Y.06-07 & 3287/AHD/2015/A.Y. 11-12 PAGE 5 OF 8 THE RETURN. THE FIGURES REFLECTED IN THE RETURN OF UMAR GAM TRUST HAVE BEEN CONSIDERED BY THE AO FOR MAKING ADDITION. THE ADDITION SO MADE WERE DULY REFLECTED IN AUDITED BOOKS OF ACCOUNTS OF UMAR GAM TRUST. BUT SAID TRUST HAS NOT RECEIVED ANY NOTICE UNDER SECTION 148 OR UNDER SECTION 143(2) HENCE, NO EXPLANATION OF THE SAME COULD BE OFFERED. THUS, NUS 148 WAS ISSUED TO SURAT TRUST BUT ASSESSMENT WAS MADE IN RESPECT OF UMAR GAM TRUST AND ORIGINAL ASSESSMENT ORDER WAS SERVED UPON THE UMAR GAM WHEREAS BOTH THE ADDRESSES WERE USED FOR MAKING ASSESSMENT. THE LD. CIT (A) HAS CONSIDERED THE APPEAL AS NONEST ON THE GROUND THAT THE APPEAL HAS NOT BEEN FILED BY THE ASSESSEE WHOSE NAME IS MENTIONED IN THE ASSESSMENT ORDER. ON CAREFUL CONSIDERATION OF FACTS, WE FIND THAT THE ORDER OF CIT (A) IS NOT CORRECT AS THE AO HAS CONSIDERED THE RETURN OF UMAR GAM TRUST WHOSE ADDRESS IS ALSO MENTIONED IN THE ASSESSMENT ORDER. THEREFORE, JUST BECAUSE THE NAME IS DIFFERENT AND WRONGLY MENTIONED BY THE AO DOES NOT MEAN THAT THE ASSESSEE WHO IS BEING AGGRIEVED SHOULD NOT GET THE REMEDY AVAILABLE UNDER THE STATUTE. IF VIEW OF CIT (A) IS TAKEN CORRECT THEN NO DEMAND COULD BE RAISED IN THE NAME OF UMAR GAM TRUST WHEREAS IN PRACTICAL THE AO HAS SERVED THE ASSESSMENT ORDER ON UMAR GAM TRUST AND ALSO DEMANDING DEMAND CREATED AS RESULT OF ASSESSMENT ORDER. IF UMAR GAM TRUST IS NOT CORRECT IN EYES OF LAW, THE N NO RECOVERY OF DEMAND COULD BE MADE FROM IT. BUT THIS IS NOT THE CASE. IT MAY ALSO BE NOTED UMAR GAM TRUST IS ALSO HAVING SAME PAN SHREE SIMANDHAR SWAMI JIN KARYALAYA/I.T.A. NO. 165 AHD/2016/A.Y.06-07 & 3287/AHD/2015/A.Y. 11-12 PAGE 6 OF 8 WHICH HAS BEEN USED WHILE MAKING ASSESSMENT. IN SUCH A SITUATION , WE ARE OF THE VIEW THAT WHEN THE ASSESSEE NAME AND ADDRESS AND PAN ARE OF UMAR GAM TRUST AND RETURN IS ALSO USED AS FILED BY THE UMAR GAM TRUST. FURTHER, THE ASSESSMENT ORDER IS PASSED BY THE AO WHO HAD JURISDICTION OVER VAPI ONLY AND NOT OVER SURAT TRUST NAMELY SHREE SIMANDHAR SWAMI JAIN DEHRASARJI SURAT. HENCE, IN SUCH A SITUATION WE ARE OF THE CONSIDERED OPINION THAT IN THE SUM AND SUBSTANCE THE ASSESSMENT ORDER SO PASSED IS IN RESPECT OF SHREE SIMANDHAR JIN KARYALAYA TRUST UMAR GAM TO WHOM NO NUS 148 WAS SERVED. THEREFORE, IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT CIT (A) SHOULD HAVE DECIDED THE APPEAL ON MERIT RATHER DISMISSING ON TECHNICAL FAULT COMMITTED BY THE AO. . THEREFORE, IT WILL MEET THE JUSTICE IF THE ASSESSMENT IS SET-ASIDE TO THE FILE OF THE AO TO ALLOW THE ASSESSEE TRUST SHREE SIMANDHAR SWAMI JIN KARYALAYA, UMARMGAM OF DUE OPPORTUNITY OF BEING HEARD AND MAKE A FRESH ASSESSMENT IN ACCORDANCE WITH LAW AFTER ALLOWING PROPER OPPORTUNITY OF BEING HEARD. THE AO IS DIRECTED TO PASS SPEAKING ORDER TAKING ALL MATERIAL IN TO ACCOUNT IN THE NAME OF SHREE SIMANDHAR SWAMI JIN KARYALAYA, UMARMGAM. THE AO WILL NOW USE THE NEW PAN AS OBTAINED BY THE UMAR GAM TRUST. 8. IN THE RESULT, APPEAL OF THE ASSESSEE FOR A.Y. 2006-07 IS SET-ASIDE TO THE AO AND IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A.NO. 3287/AHD/2015 FOR A.Y. 2011-12: SHREE SIMANDHAR SWAMI JIN KARYALAYA/I.T.A. NO. 165 AHD/2016/A.Y.06-07 & 3287/AHD/2015/A.Y. 11-12 PAGE 7 OF 8 9. GROUND NO. 1 TO 4 ARE AGAINST THE DISMISSING THE APPEAL BY PRESSING ONLY DIFFERENCE IN THE NAME OF THE APPELLANT AND NOT DECIDING APPEAL ON MERIT CONSIDERING ALL ASPECTS OF THE APPELLANT CASE AND INSTEAD HOLDING ASSESSMENT ORDER AS ERRONEOUS AND DECLARING THE ADDITION OF RS. 57,35,732 DISALLOWANCE UNDER SECTION 57 AND DISALLOWING INTEREST OF RS. 58,919 RAISED BEFORE HIM. 10. SINCE THE FACTS AND CIRCUMSTANCES AND ORDER OF CIT (A) ARE SAME, AS IN A.Y. 2006-07 EXCEPT FIGURES AND REOPENING OF ASSESSMENT. THE CIT (A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY TREATING AS NONEST ON THE GROUND THAT NAME OF APPELLANT IS NOT SAME AS MENTIONED IN ASSESSMENT ORDER. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ISSUE IS COVERED BY OUR FINDING FOR THE ASSESSMENT YEAR 2006-07 DISCUSSED IN ABOVE PART OF THIS ORDER. THEREFORE, FOLLOWING THE SAME REASONING AND IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT CIT (A) SHOULD HAVE DECIDED THE APPEAL ON MERIT RATHER DISMISSING IT ON TECHNICAL FAULT COMMITTED BY THE AO. THEREFORE, IT WILL MEET THE JUSTICE IF THE ASSESSMENT IS SET-ASIDE TO THE FILE OF THE AO TO ALLOW THE ASSESSEE TRUST SHREE SIMANDHAR SWAMI JIN KARYALAYA, UMARMGAM OF DUE OPPORTUNITY OF BEING HEARD AND MAKE A FRESH ASSESSMENT IN ACCORDANCE WITH LAW AFTER ALLOWING PROPER OPPORTUNITY OF BEING HEARD. THE AO IS DIRECTED TO PASS SPEAKING ORDER TAKING ALL MATERIAL IN TO SHREE SIMANDHAR SWAMI JIN KARYALAYA/I.T.A. NO. 165 AHD/2016/A.Y.06-07 & 3287/AHD/2015/A.Y. 11-12 PAGE 8 OF 8 ACCOUNT IN THE NAME OF SHREE SIMANDHAR SWAMI JIN KARYALAYA, UMARMGAM. THE AO WILL NOW USE THE NEW PAN AS OBTAINED BY THE UMAR GAM TRUST. 11. IN THE RESULT, APPEAL OF THE ASSESSEE FOR A.Y. 2011-12 IS SET-ASIDE TO THE AO AND IS ALLOWED FOR STATISTICAL PURPOSES. 12. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.10.2018 SD/- SD/- (C.M. GARG) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT: DATED: 12/10/2018/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT