Young Presidents Organisation (Chennai Chapter), CHENNAI V. DDIT, CHENNAI

ITA 1900/CHNY/2015

• Counselvise Citation: 190021714 RSA 2015
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Charitable institution; Revised return
• Section: 12A; 12AA; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1900/MDS/2015 ' (' / ASSESSMENT YEAR : 2009-10 M/S YOUNG PRESIDENTS ORGANISATION (CHENNAI CHAPTER), 9, CATHEDRAL ROAD, CHENNAI - 600 086. PAN : AAATY 0382 K V. THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS) I, CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SH. R. VIJAYARAGHAVAN, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 0 . 1$ / DATE OF HEARING : 16.06.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 09.09.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 17, CHEN NAI, DATED 27.03.2015 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO LEVY OF SURCHARGE BY THE ASSESSING OFFICER. 2 I.T.A. NO.1900/MDS/15 3. SH. R. VIJAYARAGHAVAN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ASSESSEE FILED THE REVISED RETUR N. HOWEVER, THE EXEMPTION UNDER SECTION 11 OF THE INCOME-TAX ACT, 1 961 (IN SHORT 'THE ACT') WAS NOT CLAIMED. IN THE ORIGINAL RETURN , THE ASSESSEE WRONGLY CLAIMED EXEMPTION UNDER SECTION 11 OF THE A CT. THEREFORE, BY WAY OF REVISED RETURN, THE ASSESSEE COMPUTED TAX ABLE INCOME. THE ASSESSING OFFICER TREATED THE ASSESSEE AS ASSOC IATION OF PERSON UNDER SECTION 164(2) OF THE ACT AND LEVIED T AX. THE ASSESSING OFFICER HAS ALSO LEVIED SURCHARGE. ACCOR DING TO THE LD. COUNSEL, THE ASSESSEE IS A COMPANY UNDER SECTION 25 OF THE COMPANIES ACT AND ALSO REGISTERED UNDER SECTION 12A A OF THE ACT AS CHARITABLE INSTITUTION. HOWEVER, THE ASSESSEE I S NOT CLAIMING EXEMPTION UNDER SECTION 11 OF THE ACT. THEREFORE, THE ASSESSEE HAS TO BE NECESSARILY TREATED AS ASSOCIATION OF PER SON UNDER SECTION 164(2) OF THE ACT AND TAX HAS TO BE LEVIED ACCORDINGLY. HOWEVER, ACCORDING TO THE LD. COUNSEL, THE CHARITAB LE INSTITUTION IS NOT LIABLE TO PAY SURCHARGE. REFERRING TO THE FINA NCE ACT, 2008, THE LD. COUNSEL SUBMITTED THAT IN THE CASE OF ASSOCIATI ON OF PERSON, AS PER PARAGRAPH A OF PART I, THE ASSESSEE HAS TO PAY INCOME-TAX. WHILE COMING TO SURCHARGE IN THE CASE OF COMPANIES, SURCHARGE CAN 3 I.T.A. NO.1900/MDS/15 BE LEVIED ONLY IF IT EXCEEDS ` 1 CRORE. IN THIS CASE THE INCOME HAS NOT EXCEEDED ` 1 CRORE SINCE IT IS A COMPANY, ACCORDING TO THE LD. COUNSEL, AS PER THE FINANCE ACT, 2008, THE ASSESSEE IS NOT LIABLE FOR SURCHARGE. 4. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT HE IS PLACING HIS RE LIANCE ON THE OBSERVATION MADE BY THE CIT(APPEALS). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ARTICLE 271 OF CONSTITUTION OF INDIA ENABLES THE PARLIAMENT TO LEV Y SURCHARGE ON CERTAIN DUTIES AND TAXES. THE APEX COURT IN SAROJI NI TEA CO.(P) LTD. V. COLLECTOR OF DIBRUGARH AIR 1992 SC 1264 AND IN C IT V. SRINIVASAN (1972) 83 ITR 346, WHILE INTERPRETING AR TICLES 265 AND 271 OF CONSTITUTION OF INDIA HELD THAT SURCHARGE LE VIED UNDER THE INCOME-TAX ACT, IS PART OF THE TAX. ACCORDINGLY, T HE LEVY OF SURCHARGE IS UPHELD BY THE APEX COURT. THE ASSESSEE BEFORE T HIS TRIBUNAL ADMITS THAT IT IS NOT ENTITLED FOR EXEMPTION UNDER SECTION 11 OF THE ACT, THEREFORE, IT HAS TO BE NECESSARILY ASSESSED A S ASSOCIATION OF PERSON UNDER SECTION 164(2) OF THE ACT. 4 I.T.A. NO.1900/MDS/15 6. NOW IN VIEW OF FINANCE ACT, 2008, THE ASSESSEE C LAIMS BEFORE THIS TRIBUNAL THAT IN THE CASE OF COMPANIES, SURCHARGE CAN BE LEVIED ONLY IF THE INCOME EXCEEDS ` 1 CRORE. IN THE CASE BEFORE US, EVEN THOUGH THE ASSESSEE IS REGISTERED UNDER SECTIO N 25 OF THE COMPANIES ACT, IT IS REGISTERED AS CHARITABLE INSTI TUTION UNDER SECTION 12AA OF THE INCOME-TAX ACT, 1961. SINCE TH E ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT, IT IS TREATED AS ASSOCIATION OF PERSON UNDER SECTION 164(2) OF TH E ACT. IN OTHER WORDS, THE ASSESSEE-COMPANY IS TREATED AS ASSOCIATI ON OF PERSON FOR ASSESSMENT UNDER INCOME-TAX ACT. IN VIEW OF TH E JUDGMENT OF APEX COURT IN K. SRINIVASAN (SUPRA), SURCHARGE BEIN G A PART OF INCOME-TAX, THE ASSESSEE CANNOT BE TREATED SEPARATE LY AS COMPANY. IN OTHER WORDS, ONCE THE ASSESSEE WAS TRE ATED AS ASSOCIATION OF PERSON UNDER SECTION 164(2) OF THE A CT, FOR LEVY OF INCOME-TAX, THE SAME STATUS SHALL CONTINUE FOR LEVY OF SURCHARGE ALSO. THEREFORE, THE CLAIM OF THE ASSESSEE THAT IT HAS TO BE TREATED AS COMPANY FOR THE PURPOSE OF SURCHARGE IS MISCONST RUED. THIS TRIBUNAL DO NOT FIND ANY MERIT IN THE CONTENTION OF THE ASSESSEE. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW AR E CONFIRMED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. 5 I.T.A. NO.1900/MDS/15 ORDER PRONOUNCED ON 9 TH SEPTEMBER, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 9 TH SEPTEMBER, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-17, CHENNAI-34 4. DIT (EXEMPTIONS), CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.