M/s. Sri Mahaveer Educational & Charitable Trust, Hassan V. Income Tax Officer, Ward-1, Hassan

ITA 1816/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7705 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 28-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VENKATESH
• Keywords: Charitable institution; Opportunity of being heard; Reasonable cause
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1816 / BANG/201 8 ASSESSMENT YEAR : 20 1 1 - 1 2 M/S. SRI MAHAVEER EDUCATIONAL & CHARITABLE TRUST, RAVINDRA NAGAR, HASSAN. PAN: AACTS4949Q VS. THE INCOME TAX OFFICER, WARD 1, HASSAN. APPELLANT RESPONDENT APPELLANT BY : SHRI SURESH MUTHUKRISHNAN, A DVOCATE RESPONDENT BY : SHRI S. VENKATESH, JCIT (DR) DATE OF HEARING : 0 3 .0 7 .2018 DATE OF PRONOUNCEMENT : 13 .0 7 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE EX-PARTE ORDER OF LD. CIT (A), MYSURU DATED 30.11.2017 FOR ASSESSM ENT YEAR 2011-12. 2. THE GROUNDS RAISED BY THE ASSESSEEARE AS UNDER. 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVID ENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER PASSED BY LEARNED AO AND UPHELD BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS ARBITRARY I N AS MUCH AS THE SAME WAS MADE WITHOUT PROVIDING THE MANDATORY OPPOR TUNITY TO BE HEARD UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE 3. THE LEARNED AO IS NOT JUSTIFIED IN LAW IN MAKING AN ADDITION OF RS.6,00,650/ - DENYING EXEMPTION U/S 11 OF THE INCO ME TAX ACT,1961 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED AO HAS ERRED IN CONCLUDING THAT THE ACTIVITIES OF THE TRUST CONSTITUTE BUSINESS AND THEREBY RECHARACTERIS ING THE APPELLANT AS A BUSINESS ENTITY AND DENYING THE BENEFITS OF SE CTION 11 OF THE ACT UNDER FACTS AND CIRCUMSTANCES OF THE APPELLANT' S CASE. ITA NO.1816/BANG/2018 PAGE 2 OF 3 5. THE LEARNED AO WHILE COMING TO THE AFORESAID CON CLUSION HAS ERRED IN RELYING ON THE DECISION OF THE HON'BLE ITAT IN T HE CASE OF SUBHARAM TRUST, THE FACTS OF WHICH CASE ARE DIFFERENT AND NO T APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 6. THE APPELLANT DENIES HIMSELF TO BE CHARGED WITH INTEREST UNDER SECTION 234B OF THE INCOME TAX ACT,1961 ON THE FACT S AND CIRCUMSTANCES OF THE CASE. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTI TUTE AND DELETE ANY OR ALL THE GROUNDS OF APPEAL URGED ABOVE. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT THE ORDER PASSED BY LD. CIT(A) IS EX-PARTE QUA THE ASSESSEE. HE DRA WN MY ATTENTION TO PARA 3 OF THE ORDER OF CIT(A) AND SUBMITTED THAT IT IS NOTED BY CIT(A) IN THIS PARA THAT THE HEARING OF THE APPEAL WAS FIXED ON 29.11.2017 AND O N THIS DATE, A LETTER WAS RECEIVED FROM LD. AR OF ASSESSEE SHRI S. LAKSHMINAR ASIMHA, FCA STATING THAT HE WAS NOT ABLE TO ATTEND THE HEARING AS HE WAS PRE OCCUPIED WITH OTHER PROFESSIONAL WORK. THE CIT(A) HAS NOT GRANTED ADJO URNMENT ON THIS BASIS THAT NO EVIDENCE WITH REGARD TO A REASONABLE CAUSE PREVE NTING EITHER THE ASSESSEE OR THE AUTHORIZED REPRESENTATIVE FROM APPEARING FOR THE HEARING FIXED WAS FURNISHED. HE SUBMITTED THAT IN THE INTEREST OF JU STICE, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECIS ION AFTER PROVIDING A REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, I REPRODUCE PARA 3 FROM THE ORDER OF CIT(A) WHICH IS AS UNDER. 3. THE APPELLANT IS AN ASSOCIATION OF PERSONS REGIS TERED U/S.12A OF THE ACT. FOR THE A.Y.2011-12, THE APPELLANT FILED T HE RETURN OF INCOME ON 29/09/2011, ADMITTING NIL INCOME. THE ASSESSING OFFICER CONCLUDED THE SCRUTINY ASSESSMENT U/S 143 (3) DETERMINING THE INCOME OF THE APPELLANT AT RS. 6,00,650/=. AGGRIEVED BY THE AFORE SAID ORDER OF ASSESSMENT, THE APPELLANT PREFERRED THIS APPEAL. WH EN THE FORM 35 WAS TAKEN UP FOR ADJUDICATION, IT WAS FOUND THAT TH E GROUNDS OF APPEAL THAT WERE STATED TO HAVE BEEN 'ATTACHED' WERE NOT F OUND IN THE PAPERS FILED WITH THE FORM 35, THOUGH THE COVER LET TER STATED THAT THE GROUNDS OF APPEAL WERE ENCLOSED. WHEN A HEARING WAS POSTED FOR THE APPEAL, A LETTER, DT.29/11/2017 WAS RECEIVED FROM T HE AUTHORIZED REPRESENTATIVE SHRI S. LAKHSMINARASIMHA, FCA STATIN G THAT HE WAS NOT ABLE TO ATTEND THE HEARING AS HE WAS PREOCCUPIED WI TH OTHER PROFESSIONAL WORK. THAT LETTER DATED 29.11.2017 WAS CONSIDERED AS PER ITA NO.1816/BANG/2018 PAGE 3 OF 3 LAW AND IT IS FOUND THAT NO EVIDENCE WITH REGARD TO A REASONABLE CAUSE PREVENTING EITHER THE APPELLANT OR THE AUTHORIZED R EPRESENTATIVE FROM APPEARING FOR THE HEARING FIXED WAS FURNISHED. THER EFORE, THE APPEAL IS DECIDED ON THE BASIS OF THE MATERIAL AVAILABLE O N RECORD AS FOLLOWS: THE APPEAL IS FOUND TO BE INVALID BECAUSE THE GROUN DS ON WHICH THE IMPUGNED ORDER IS DISPUTED WERE NOT EXPRESSED AND V ERIFIED IN THE MANNER PRESCRIBED IN FORM 35 AS PET RULE 45 OF THE INCOME TAX RULES, 1962, READ WITH SUB-SECTION (1) OF SECTION 2 49 OF THE INCOME TAX ACT, 1961. FURTHER, THE OPPORTUNITY PROVIDED TO THE APPELLANT AS PER THE PROVISIONS OF SUB-SECTION (5) OF SECTION 25 0 OF THE ACT ALSO WAS NOT AVAILED. THEREFORE, THE APPEAL IS DISMISSED FOR WANT OF LAWFUL GROUNDS. 5. FROM THE ABOVE PARA REPRODUCED FROM THE ORDER OF CIT (A), IT COMES OUT THAT HEARING WAS FIXED BY HIM ON 29.11.2017 AND ON THAT DATE, THE ASSESSEES AR REQUESTED FOR ADJOURNMENT BUT LD. CIT(A) HAS NOT GR ANTED ADJOURNMENT AND PASSED THE IMPUGNED ORDER ON 30.11.2017 EX-PARTE QU A THE ASSESSEE. IN THE INTEREST OF JUSTICE, I FEEL IT PROPER TO RESTORE TH E MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER PROVIDING REASONABLE OPPOR TUNITY OF BEING HEARD TO BOTH SIDES. I ORDER ACCORDINGLY. IN VIEW OF THIS DECISI ON, NO ADJUDICATION IS CALLED FOR REGARDING THE MERIT OF THE CASE AT THE PRESENT STAG E. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 13 TH JULY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.