Layul Tribal Welfare Association, Manali V. ITO, Kullu

ITA 17/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1292 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S KEHLON
• Assessee Lawyers: SWAMI P BHARTI ITP
• Keywords: Rectification of order
• Section: 12A; 154; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 17/CHD/2018 ASSESSMENT YEAR : 2010-11 LAYUL TRIBAL WELFARE ASSOCIATION, VS. THE ITO, POLICE STATION ROAD, KULLU, H.P.-175131 MANALI, DISTT.KULLU, H.P. PAN NO. AAAAL0445R (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SWAMI P. BHARTI, ITP RESPONDENT BY : SH. J.S.KEHLON, SR.DR DATE OF HEARING : 24.07.2018 DATE OF PRONOUNCEMENT : 07.09. 2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 28.11.2017 OF THE COMMISSIONER OF INCOME TAX(A), PALAMPUR [HEREINAFTER REFERRED TO AS CIT(A)] AG ITATING THE ACTION OF THE CIT(A) IN REJECTING THE APPLICATION OF THE ASSESSEE FILED U/S 154 OF ACT PLEADING RECTIFICATION OF THE ORDER D ATED 30.09.2016 OF THE CIT(A). 2. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT A SSESSEE IS A CHARITABLE SOCIETY REGISTERED U/S 12A OF THE INCOM E-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING NIL INCOME. THE ASSESSING OFFICER ASSESSED THE IN COME OF THE ITA NO. 17/CHD/2018- LOYAL TRIBAL WELFARE ASSOCIATION, MOHALI 2 ASSESSEE AT RS. 1,08,784/- HOLDING THAT CERTAIN IN COME OF THE ASSESSEE FROM TIMBER DEPOT WAS NOT EXEMPT U/S 11 OF THE ACT. SINCE THE INCOME ASSESSED BY THE ASSESSING OFFICER WAS BE LOW THE LIMIT PRESCRIBED AND, THEREFORE, WAS NOT CHARGEABLE TO TA X, HENCE, THE ASSESSEE SOCIETY DID NOT FILE THE APPEAL AGAINST TH E ORDER OF THE ASSESSING OFFICER. THE ASSESSING OFFICER, HOWEVER, MADE CERTAIN WRONG CALCULATIONS AND IMPOSED TAX ON THE ASSESSEE SOCIETY. HE ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND IMPOSED THE IMPUGNED PENALTY. HOWEVER, THE ASSESSEE SOCIET Y MOVED A RECTIFICATION APPLICATION U/S 154 OF THE ACT TO THE ASSESSING OFFICER PLEADING THEREIN THAT INCOME ASSESSED BY THE ASSESS ING OFFICER IN THE CASE OF THE ASSESSEE WAS BELOW TAXABLE LIMIT, HENC E, NO TAX WAS LIABLE TO BE IMPOSED. THE ASSESSING OFFICER ACCEPTE D THE APPLICATION AND ACCORDINGLY HELD THAT NO TAX WAS PAYABLE BY THE ASSESSEE SOCIETY. 3. IN THE MEANWHILE, PENALTY IMPOSED U/S 271(1)(C) OF THE ACT WAS FURTHER CONFIRMED BY THE LD. CIT(A) VIDE HIS OR DER DATED 30.9.2016. THE ASSESSEE SOCIETY ACCORDINGLY MOVED A N APPLICATION U/S 154 OF THE ACT TO THE LD. CIT(A) FOR RECTIFICATION OF THE SAID ORDER PLEADING THEREIN THAT SINCE NO TAX WAS PAYABLE BY T HE ASSESSEE SOCIETY EVEN ON THE ASSESSED INCOME, HENCE, THE PENALTY LEV IED BY THE ASSESSING OFFICER AND FURTHER CONFIRMED BY THE LD. CIT(A) WAS NOT SUSTAINABLE. HOWEVER, THE LD. CIT(A) REJECTED THE APPLICATION OF THE ASSESSEE SOCIETY. THE ASSESSEE SOCIETY, THUS, HAS C OME IN APPEAL BEFORE US. ITA NO. 17/CHD/2018- LOYAL TRIBAL WELFARE ASSOCIATION, MOHALI 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES. APPARENTLY, THE DEMAND OF TAX HAS BEEN TAKEN BACK / DELETED IN THE RECTIFICATION ORDER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE ACT. UNDER THE CIRCUMSTANCES, SINCE NO TAX WAS PAYA BLE EVEN ON THE ASSESSED INCOME OF THE ASSESSEE BEING BELOW THE PRE SCRIBED TAXABLE LIMIT OF INCOME, HENCE, IT WAS NOT CASE OF EVASION OF TAX. THE PENALTY UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE A CT CAN BE IMPOSED @ 100% OR MORE OF THE TAX SOUGHT TO HE EVADED. SINC E, IN THE RECTIFICATION ORDER, THE ASSESSING OFFICER NOTED TH AT THERE WAS NO TAX PAYABLE BY THE ASSESSEE, HENCE, UNDER THE CIRCUMSTA NCES, THE LD. CIT(A) WAS ALSO SUPPOSED TO RECTIFY HIS ORDER ACCOR DINGLY. IN VIEW OF THIS, THE IMPUGNED ORDER OF THE CIT(A) I S REVERSED AND THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IS ORDERED TO BE DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREB Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.09.2018 SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07.09.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR