Laxmi Narsimha Swamy Educational Society, Hyderabad V. Income Tax Officer, (Exemptions)-3, Hyderabad

ITA 1858/Hyd/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8132 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-11-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 13-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Capital expenditure
• Section: 271(1)(c); 12A; 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NO S . 1858 & 185 9 /HYD/201 7 ASSESSMENT YEAR S : 2012 - 13 & 20 1 3 - 1 4 LAXMI NARSIMHA SW AMY EDUCATIONAL SOCIETY, ZAHIRABAD [PAN: A AAA L 2081R ] VS INCOME TAX OFFICER (EXEMPTIONS) - 3 , HYDER ABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. R A MA RAO , AR FOR REVENUE : S HRI PAWAN KUMAR, D R DATE OF HEARING : 08 - 1 1 - 201 8 DATE OF PR ONOUNCEMENT : 26 - 1 2 - 201 8 O R D E R PER S. RIFAUR RAHMAN, A.M. : TH E S E TWO APPEAL S FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 9 , HYDERABAD , DATED 0 6 - 0 7 - 201 7 , FOR THE AY S . 20 1 2 - 1 3 & 2013 - 14 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , A REGISTERED SOCIETY , RUNNING EDUCATIONAL INSTITUTION , FILED ITS RETURN OF INCOME FOR THE AYS. 2012 - 13 & 2013 - 14 DECLARING NIL INCOME FOR BOTH THE YEARS. T HE GROSS RECEIPTS FOR THE AY S . 201 2 - 13 & ITA NO S . 1858 & 1859 /HYD/201 7 : - 2 - : 2013 - 14 STOOD AT RS. 1,21,27,575/ - AND RS. 1,77,80,710/ - RESP ECTIVELY. I T WAS OBSERVED THAT ASSESSEE HAS CLAIMED EXEMPTION U/S. 10(23C)(IIIAD) OF THE INCOME TAX ACT [ACT] , EVEN THOUGH THE GROSS RECEIPTS EXCEEDED RS. 1 CRORE. T HE ASSESS EE IS ALSO NO T RE G IS TERED NEITHER U/S. 12A NOR U/S. 10(23C) OF THE ACT. T HE EXCESS OF INCOME O VER EXPENDITURE WAS DECLARED BY ASSESSEE IN THE FINANCIAL STATEMENT OF THE SOCIETY. I T IS FURTHER OBSERVED THAT THE ASSESSEE IN THE COMPUTATION OF INCOME , REDUCE D 15% O F T HE RECEIPT S AN D ALSO THE CAPITAL EXPENDITURE FROM THE GROSS RECEIPTS AND FILED THE RETURN OF INCOME AS NIL. S UBSEQU ENTLY, THE ASSESSMENT WAS RE - OPENED BY ISSUE OF NOTICE U/S. 148 ON 21 - 03 - 2016 . A CCORDINGLY, ASSESSMENT S WERE COMPLE TED ON 30 - 06 - 20 16 BY A S SE SSING THE TOTAL INCOME AT RS. 9,43,020/ - AND RS. 22,37,480/ - RE SP ECTIVELY FOR BOTH THE ASSESSMENT YEAR S. P ENALTY PROCEEDINGS U/S. 271(1)(C) O F THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME WERE INITIATED FOR BOTH THE YEARS AND PEN ALTY W AS LEVI ED FOR BOTH THE ASSESSMENT YEAR S WI TH THE MINI MUM LEVY OF RS. 98,971/ - AND RS. 4,91,496/ - RESPECTIVELY FOR THE AYS. 2012 - 13 AND 2013 - 14. 2.1. A GGRIEVED WITH THE ABOVE ORDER , ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A) , WHO CONFIRMED THE PE NALTY LEVIED BY ASSESSING OFFICER . A GGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED APPEAL BEFORE US BY RAISING THE FOLLOWING GRO U NDS OF APPEAL , WHICH ARE COMMON FOR BOTH THE ASSE SSMENT YEAR S , EXCEPT CHANGE IN THE AMOUNTS : 2. THE LEARNED COMMISSIONER OF IN COME - TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N H OLDING THAT THE ITA NO S . 1858 & 1859 /HYD/201 7 : - 3 - : ASSESSEE FURNISHED INACCURATE PAR TICULARS OF INCOME ATTRACTING LEVY OF PENALTY U/S. 271(1)(C) OF THE I. T . ACT. 3. THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEAL S) ERRED IN CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) OF RS. 98,971/ - . 3. LD. AR SUBMITTED THAT - IT IS A FACT THAT ASSESSEE IS RU NNING EDUCATIONAL INSTITU TION AND D URING THESE ASSESSMENT YEAR S I.E., AYS. 2012 - 1 3 AND 2013 - 14, THE GROSS RECEIPTS OF T HE ASS ESSEE CROSS ED RS. 1 CROR E , THEREFORE, ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S. 10(23C)(IIIAD) OF THE ACT. I N THE SAME ASSESSMENT YEAR , ASSESSEE APPLIED FOR EXEMPTION U/S. 10(23C)(VI) OF THE A CT ON 30 - 11 - 2012 F OR AY. 2012 - 13 AND 2 3 - 09 - 2 013 FOR AY. 2013 - 14. T HE A BOVE APPLICATIONS WERE REJECTED BY THE CIT(EX EMPTI ONS) ON TECHNICAL GROUN DS LIKE DELAY IN FILING THE APPLICATION FOR EXEMPTION FOR THE AY. 2012 - 13 AND FOR AY. 2013 - 14, IT IS ON THE OBJECT C LAUSE DISCREPAN CIES. H E SUBMITTED T HAT AL L THE RELEVANT IN FORMATION WHICH WERE REQUIRED FOR COMPLETION OF THE ASSESSM ENT S WERE MADE AVAILABLE TO THE ASSESSING OFFICER AT THE TIME OF RE - ASSESSMENT AND THE INFORMATION W AS MADE AVAILABLE TO THE DEPARTMENT WHILE APPLYING FOR EXE MP TION U/S. 10 ( 2 3 C ) (VI ) OF THE ACT. H E SUBMITTED THAT IT IS ONLY A MISTAKE IN CAL CULATING THE EXEMPT INCO ME WHILE FILING THE RETURN OF INCOME AND IT IS NOT FURNISHING OF INACCURATE PARTICULARS . 4. LD.DR OBJECTED TO THE SUBMISSIONS OF THE LD.AR AND SU BMITTED THAT SOCIETY IS FO RMED IN THE YEAR 2006 AND ALL ALON G ASSESSEE IS WELL AWARE OF THE PROVISION S OF THE IT ACT AND AWARE THAT IT IS NOT ELIGIBLE TO CLAIM EXEMP TION U/S. 10(23C) OF THE ACT ITA NO S . 1858 & 1859 /HYD/201 7 : - 4 - : EVEN THOUGH ASSESSEE CLAIMED EXEMPTION U/S. 10(23C)(IIIAD) OF THE ACT TO AVO ID PAY MENT O F TAX. H E RELI ED ON THE ORDERS OF THE LD.CIT(A) . 5. IN THE REJOINDER, LD.AR SUBMITTED THAT WRONG AND INACCURATE A R E DIFFERENT TERMS , IT IS CLEAR FROM THE RETURN OF INCOME THAT ASSESSEE HAS CLAIMED 15% AS DEDUCTION WHICH IS NOT ALLOWED U/ S. 10( 23C). IT S HOWS THAT ASSESSEE IS NOT AWARE OF THE INCOME TAX LAW AND HE FURTHER SUBMITTED THAT ALL THE I NFORMATION WAS FILED BY ASSESSEE WHILE APPLYING FOR EXEMPTION U/S. 10(23C)( VI) OF THE ACT. 6 . CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL ON RE CORD. W E OBSE RVE THAT ASSESSEE IS RUN NING AN EDUC ATIONAL INSTITUTION IN THE NAME AND STYLE OF S HRI KRISHNA VENI TALENT SCHOO L . I N T H E AY. 2012 - 13, THE GROSS RECEIPTS C ROSSED THE EXEMPTION LIMIT PRESCRIBED U/S. 10(23C)(IIIAD) OF THE ACT. T HEREFORE, ASSESSE E IS NOT ELIGI BLE FOR EXEMPTION U/S. 10(23C)(IIIAD) OF THE ACT FROM THE AY. 2012 - 13 ONWARDS. S UBSEQUENTLY, ASSESSEE HAS APPLI ED FOR EXEMPTION U/S. 10(23C)(VI) OF THE ACT BY MAKING AN APPLICATION BEFORE THE CCIT ON 30 - 11 - 2012 FOR THE AY. 2012 - 13 AND ON 2 3 - 09 - 2013 FOR TH E AY. 2013 - 14. I T IS NOTICED THAT IN THE APPL ICATION FOR EXEMPTION U/S. 10(23C)( VI) OF THE A CT , ASSESSEE HAS FIL ED FORM NO. 56 - D IN WHICH ASSESSEE HAS DECLARED THE GROSS RECEIPTS FOR THREE ASSESSMENT YEAR S . T HE ABOVE APP LICATION WAS REJECTE D BY THE LD.CC IT (E ) ON TECH NICAL GROUNDS I.E., FILING OF APPLICATION WITHIN SIX MONTHS RELEVANT FOR THE ASSESSM ENT YEAR SEEKING EXE MPTION . W E ITA NO S . 1858 & 1859 /HYD/201 7 : - 5 - : NOTICE D THAT ALL ALONG THE INFORMATION RELATING TO GROSS RECEIPTS OF ASSESSEE WERE IN THE K NOWLEDGE OF THE DEPARTMENT , T HE ASSES SING OFFICER HAS INITIATED THE REOPENING PROCEEDINGS SUBSEQUENT TO REJECTION OF APPLICATION FOR EXEM PTION U/S. 10(23C)( VI) ON 06 - 11 - 2013 , THE RE - OPENING PROCEEDINGS WERE INITIATED ONLY ON 11 - 05 - 2016. A CCORDINGLY, ASSESSMENT S WERE COMPLE TED ON 30 - 0 6 - 2016 . F URTHER, WE NOTICED TH AT WHEN T HIS INFORMATION WAS B ROUGHT TO THE NOTICE OF THE ASSESSEE , ASSESSEE AGREED THAT IT DOE S NOT HAVE EXEMPTIONS U/S. 10(23C) OF THE ACT AND PAID THE RELEVANT TAX. I T IS ALSO IMPORTANT TO NOTE THAT THE ASSESSEE HAS F ILED IT S RETU RN OF INCOME ON 24 - 09 - 2012 AND APPLIED FOR EXEMPTION U/S. 10(23C)( V I ) OF THE ACT ON 30 - 11 - 2012 WITH A BELIEF THA T THE EXEMPTION WILL BE GRANTED. F OR LEVY OF PENALTY U/S. 271(1)(C) , IT IS IMPORTANT THAT THE INT ENTION OF ASSESSEE IS RELEVANT. I N THIS CASE, ASSESSEE W AS IN MISTAKEN BELIEF THAT THE EXEMPTION WILL BE GRANTED U/S. 10(23C)( V I ) OF THE ACT AND ACCORDINGLY, IT DID NOT CARE TO MODIFY THE RETURN OF INCOME FILED BEFORE APPLYING FOR EXEM PTION U/S. 10(23C)( V I ) OF THE ACT . S INCE THE EXEMPTIO N APPLI CATION S WERE REJECTED ON TECHNICAL G ROUND, AND IN THE APPLICATION, ASSESSEE HAS DISCLOSED ALL THE INFORM ATION AND ALSO FI LED THE RELEVANT FINANCIAL STATEMENTS, IN SUPPORT OF CLAIMING EXEMPTION U/S. 10(23C) , S INCE THE APPLICATION FOR EXEMPTION WAS RE JECTED AND TH E DEPARTMENT HAS REOPEN ED ASSESSMENT IN ORDER TO BRING TH E WRONGLY CLAIMED INCOME AS EXEMPTION TO TAX, ASSESSEE HAS ALSO AGREED AND PAID THE RELEVANT TAX AND DID NOT PROCEED FOR ANY APPEAL. I T SHOWS T HAT THE ASSESSEE AGREED ITS MISTAKE AND AS SESSEE H AS SUP PLIED ALL THE RELEVANT INFORMATION BEFORE THE ITA NO S . 1858 & 1859 /HYD/201 7 : - 6 - : ASSESSING OFFICER AND ALSO IN THE APPLICATION FOR E XEM P TION. A SSESS EE HAS NOT CONCEALED THE GROSS RECEIPTS NOR ALTERED THE GROSS RECEIPTS IN O RDER TO CLAIM ANY EX EMPTION. A SSESSEE HAS FILED THE RETURN O F INCO ME BY CLAIMING THE EXEMPTIONS INADVERTENTLY OR WITH THE MISTAKEN BELIEF THAT IT IS EXEMPT FROM TA X OR WITH THE MIS TAKEN BELIEF THAT ITS APPLICATION FOR EXEMPTION U/S. 10(23C)( V I ) OF THE ACT WIL L BE APPROVED. T HEREFORE, WE DO NOT SEE ANY REAS ON TO BEL IEVE T HAT ASSESSEE HAS FILED INACCU RATE PA RTICULARS OF INCOME AT THE TIME OF RE - ASSESSMENT . W HAT IS RELEVANT FOR P ENALTY IS THE BEHAVIOUR OF THE ASSESSEE AND IN THE RE - ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FURNISHED ALL THE RELEVANT INFORMATION FOR COM PLETIO N OF RE - ASSESSMENT AND PAID THE RELEVANT TAX IN DUE COURSE. T HEREFORE, WE ARE CA NCELLING THE PEN ALTY IMPOSED U/S. 271(1)(C) ON THE GR OUND THAT ASSESSEE HAS NOT SUBMITTED IN ACCURATE PARTICU L A RS. GR OUNDS FOR BOTH THE ASSESSMENT Y EAR S ARE ALLOWED. 7 . IN TH E RESULT, BOTH THE APPEAL S OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 26 TH DECEMBER, 2018 SD/ - SD/ - (P. MA DHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMB ER ACCOUNTANT MEMBER HYDERABAD, DATED : 26 TH DECEMBER, 2018 TNMM ITA NO S . 1858 & 1859 /HYD/201 7 : - 7 - : COPY TO : 1 . LA XMI NARSIMHA SWAMY EDUCATIONAL SOCIETY, H. NO. 8 - 99, ALLIPUR VILLAGE, ZAHIRABAD. 2. INCOME TAX OFFICER (EXEMPTIONS) - 3 , HYDERA BA D. 3 . CIT(APPEALS) - 9 , HYDERABAD . 4 . PR. CIT - (EXEMPTIONS) , HYDERABAD . 5 . D .R. ITAT, HYDERABAD. 6 . GUARD FILE.