DCIT, Pune V. Shri Mukund Bhavan Trust, Pune

ITA 2216/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76305 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: V L JAIN
• Keywords: Capital asset; Charitable institution; Revised return
• Section: 43B; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.2216/PN/2012 (ASSESSMENT YEAR 2008-09) DCIT CENTRAL CIRCLE1(1), PUNE .. APPELLANT VS. SHRI MUKUND BHAWAN TRUST, 1105, RAVIWAR PETH, PUNE -411002 PAN NO.AAATS5170R .. RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI P.L. PATHADE DATE OF HEARING : 19-03-2014 DATE OF PRONOUNCEMENT : 21-03-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 03-05-2012 OF THE CIT(A)-I, PUNE RELATING TO ASSESS MENT YEAR 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A CHARITABLE TRUST AND FILED ITS RETURN OF INCOME ON 30-09-2008 DECLAR ING TOTAL INCOME OF RS.19,67,15,860/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SH OWN INCOME FROM OTHER SOURCES IN FORM OF INTEREST ON FDS, INTEREST ON BON DS, DIVIDEND ON MUTUAL FUNDS, RENTAL INCOME ETC. FURTHER, THE ASSESSEE HA S SHOWN DEEMED CAPITAL GAIN U/S.11 (1B) OF THE INCOME TAX ACT, 1961 OF RS. 19.67 CRORES AND HAS PAID TAX @20%. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS THE ASSESSEE CONTENDED THAT THE CONSIDERATION RECEIVED IN PREVIO US YEAR RELEVANT TO THE 2 ASSESSMENT YEAR UNDER CONSIDERATION HAS BEEN UTILIS ED FOR ACQUISITION OF THE CAPITAL ASSETS AND IN THIS CONTEXT FOR A.Y. 200 8-09 THE SECTION 11(1B) HAS BEEN ERRONEOUSLY APPLIED. THE ASSESSEE ACCORDI NGLY REQUESTED THE ASSESSING OFFICER TO RECTIFY THE ERROR AND COMPUTE THE INCOME. 3. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT TH E ABOVE CONTENTION. RELYING ON THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF GOETZE INDIA LTD. REPORTED IN 204 CTR 182 WHEREIN I T HAS BEEN HELD THAT THE CLAIM FOR A DEDUCTION NOT MADE IN THE RETURN OF INCOME CANNOT BE ENTERTAINED BY THE ASSESSING OFFICER OTHERWISE THAN BY FILING A REVISED RETURN THE ASSESSING OFFICER HELD THAT THE CONTENTI ON OF THE ASSESSEE IS NOT ACCEPTABLE. SINCE THE ORDER U/S.143(1) OF THE INCO ME TAX ACT HAS BEEN PASSED ON 25-03-2009 AND THEREFORE THE TIME LIMIT F OR FILING REVISED RETURN HAS ALREADY EXPIRED THE ASSESSING OFFICER ASSESSED THE INCOME AT RS.19,67,15,860/- AS RETURNED BY THE ASSESSEE. 4. BEFORE CIT(A) IT WAS SUBMITTED THAT THE CASE OF THE ASSESSEE IS NOT A CLAIM FOR DEDUCTION BUT A CASE OF RECTIFICATION OF ERRONEOUS INCLUSION. RELYING ON THE DECISION OF THE HONBLE SUPREME COUR T REPORTED IN AIR 1975 SC 2065 IT WAS ARGUED THAT WHAT IS NOT INCOME, CANNOT BECOME INCOME BY AN ERRONEOUS INCLUSION AND CONSENT CANNOT CONFER JURISDICTION. RELYING ON VARIOUS DECISIONS OF THE TRIBUNAL IT WAS ARGUED THAT DEDUCTION OMITTED TO BE CLAIMED IN THE RETURN IS ALLOWABLE EV EN THOUGH THERE WAS NO CLAIM IN THE RETURN OWING TO INADVERTENCE AND NO RE VISED RETURN WAS FILED FOR MAKING THE CLAIM. HE SUBMITTED THAT ALL THE DE CISIONS CITED HAVE CONSIDERED THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF GOETZE INDIA LTD.(SUPRA) 3 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER : 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE LAW IS ARE APPARENT FROM THE RECORDS. THE APPELLANT IS A TRUST ENJOYING EXEMPTION OF INCOME COMPUTABLE U/S.11 TO 13 OF THE INCOME TAX ACT . FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT IS APPARENT THAT THE ASSESSING O FFICER WAS SATISFIED ABOUT THE CLAIM OF THE APPELLANT THAT THE I NCOME DECLARED IN THE RETURN U/S.11(1B) WAS DONE ERRONEOUSLY, AS ON THIS CLAI M MADE BY THE APPELLANT DURING ASSESSMENT, NO ADVERSE FINDING HAS BEEN MADE. HE HAS ONLY HARPED ON THE DECISION OF THE HONBLE SUPREME C OURT GIVEN IN THE CASE OF GOETZE INDIA LTD. TO SAY THAT THE CLAIM CANNOT B E ENTERTAINED AS THE SAME WAS NOT MADE THROUGH A REVISED RETURN WITHIN THE TIME AVAILABLE U/S 139(5). AS AGAINST THAT THE APPELLANT HAS MADE THE CLA IM THAT SUCH A CLAIM WAS ENTERTAINABLE IN LAW AS HAS BEEN HELD IN MANY CASES. THE AR HAS ALSO TRIED TO DISTINGUISH THE AFORESAID JUDGMENT ON THE GRO UND THAT THE HON'BLE SUPREME COURT IN THAT CASE HAS REFERRED TO THE CLAIM OF DEDUCTION NOT MADE IN THE ORIGINAL RETURN OR WITHIN THE TIME AVAILABLE U/S 139(5) THROUGH A REVISED RETURN. AS PER THE AR THE CLAIM MADE DURING T HE SCRUTINY ASSESSMENT WAS FOR THE RECTIFICATION OF ERRONEOUS INCLUSIO N OF INCOME, OTHERWISE NOT TAXABLE IN LAW. IT HAS BEEN STATED IN TH IS RESPECT THAT AN AMOUNT WHICH IS NOT AN INCOME CANNOT BECOME INCOME D UE TO ERRONEOUS INCLUSION IN THE RETURN. ON CAREFUL CONSIDERATION OF THE FACTS AND THE LAW, IT IS A FACT THAT THE CLAIM OF THE APPELLANT IS NOT A C LAIM FOR DEDUCTION OF A BENEFIT BUT WAS FOR EXCLUSION OF AN AMOUNT WHICH WAS N OT AN INCOME UNDER THE INCOME TAX ACT. THEREFORE, IN THESE FACTS OF THE CASE, WHAT WAS MORE IMPORTANT TO BE CONSIDERED, IN MY HUMBLE OPINION, WA S THE CONCEPT OF REAL INCOME, WHICH IS THE DUTY AND THE RESPONSIBILITY OF TH E ASSESSING OFFICER TO ARRIVE AT IN ANY ASSESSMENT PROCEEDING. THE ASSESSING OFFI CER WAS ENGAGED IN THE PROCESS OF MAKING A SCRUTINY ASSESSMENT AND IF HE W AS SATISFIED, AS THE RECORD SHOWS, THEN HE CANNOT HIDE UNDER THE SHELTE R OF A TECHNICALITIES TO TAX A PERSON IN RESPECT OF AN AMOUNT WHICH IS OTHER WISE NOT TAXABLE IN LAW BUT HAS BEEN SO SHOWN ERRONEOUSLY IN THE RETURN. TH EREFORE, IF THE APPELLANT HAS MADE THE CLAIM DURING THE SCRUTINY ASSESSME NT, THE ASSESSING OFFICER WAS NOT ENTERTAINING A CLAIM FOR DEDUC TION BUT WAS TO APPRECIATE WHETHER THE RECEIPT IS AN INCOME OR NOT. IF AN AMOUNT IS NOT A TAXABLE INCOME, THE SAME CAN BECOME SO ONLY BECAUSE I T WAS INCLUDED ERRONEOUSLY IN THE RETURN. THEREFORE, IN THE FACTS OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OFFICER HAS ERRED IN NOT ACC EPTING THE CLAIM OF THE APPELLANT AND THEREFORE, GROUND NO.1 IS TREATED AS ALLOWED. 5.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE CLAIM OF ASSESSEE TRUST U/S.11(1) OF THE ACT WHICH WAS NOT ORIGINALLY CLAIMED IN RETURN OF INCOME AND AUDITORS REPORT ESPECIALLY FORM NO.10B READ WITH RULE 17B OF INCOME TAX RULES, 1962. 4 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD.CIT(A) ERRED IN ENTERTAINING THE CLAIM OF ASSESSEE I N CONTRAVENTION OF THE RATIO LAID DOWN BY HONBLE APEX COURT IN THE CA SE OF GOETZE INDIA LTD. 284 ITR 323. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT( A) BE VACATED AND THAT OF THE ASSESSING OFFICERS MAY BE RESTORED. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE ONLY DIS PUTE TO BE ADJUDICATED IN THE GROUNDS RAISED BY THE REVENUE IS AS TO WHETHER THE CIT(A) IS JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE TRUST US/.11( 1) OF THE ACT WHICH WAS NOT ORIGINALLY CLAIMED IN THE RETURN OF INCOME AND THE ASSESSEE HAS NOT FILED A REVISED RETURN TO CLAIM SUCH DEDUCTION. 6.1 WE FIND THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS (P) LTD. REPORTED IN 349 ITR 336. WE FIND THE QUESTIONS BEFORE THE HONBLE HIGH COURT WE RE AS UNDER : (A) WHETHER AN ASSESSEE CAN AMEND A RETURN FILED BY HI M FOR MAKING ADDITIONAL CLAIM FOR DEDUCTION OTHER THAN FILING A REVISED RETURN? (B) WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE HONBLE INCOME-TAX APPELLATE TRIBUNAL, IN LAW, WAS RIGHT IN HOLDING THAT A CLAIM OF DEDUCTION NOT MADE IN THE ORIGINAL RETURN AND NOT SU PPORTED BY THE REVISED RETURN, IS ADMISSIBLE? (C) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HONBLE TRIBUNAL, IN LAW, WAS RIGHT IN NOT APPRECIAT ING THE FACT THAT THE ASSESSING OFFICER HAS NO POWER TO ENTERTAIN A CLAIM MADE BY AN ASSESSEE AFTER FILING A ORIGINAL RETURN OTHERWISE THAN BY FIL ING A REVISED RETURN. 6.2 WE FIND THE HONBLE HIGH COURT AFTER THOROUGHLY DISCUSSING THE ISSUE HELD AS UNDER : 5 IN THE CASE BEFORE US, THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL HAVE HELD THE OMISSION TO CLAIM THE DEDUCTIO N OF RS. 40 LAKHS TO BE INADVERTENT. BOTH THE APPELLATE AUTHORITIES HELD, AFTER CONSIDERING ALL THE FACTS, THAT THE ASSESSEE HAD INADVERTENTLY CLAIMED A DEDUCTION OF RS. 20 LAKHS PAID AFTER THE END OF THE YEAR IN QUESTION. WE SEE NO REASON TO INTERFERE WITH THIS FINDING. WE SEE LESS REASON TO INTER FERE WITH THE EXERCISE OF DISCRETION BY THE APPELLATE AUTHORITIES IN PERMITT ING THE RESPONDENT TO RAISE THIS CLAIM. THAT THE RESPONDENT IS ENTITLED TO TH E DEDUCTION IN LAW IS ADMITTED AND, IN ANY EVENT, CLEARLY ESTABLISHED. IN T HE CIRCUMSTANCES, THE RESPONDENT OUGHT NOT BE PREJUDICED. THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) , AND THE TRIBUNAL CLEARLY INDICATE THAT BOTH THE APPELLATE AUTHORITIE S HAD EXERCISED THEIR JURISDICTION TO CONSIDER THE ADDITIONAL CLAIM AS THEY WERE ENTITLED TO IN VIEW OF THE VARIOUS JUDGMENTS ON THE ISSUE, INCLUDING T HE JUDGMENT OF THE SUPREME COURT IN NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC). THIS IS CLEAR FROM THE FACT THAT THESE JUDGM ENTS HAVE BEEN EXPRESSLY REFERRED TO IN DETAIL BY THE COMMISSIONER OF INCOME-TAX (APPEALS) AND BY THE TRIBUNAL. WE WISH TO CLARIFY THAT BOTH THE APPELLATE AUTHORITI ES HAVE THEMSELVES CONSIDERED THE ADDITIONAL CLAIM AND ALLOWED IT. THEY HAVE NOT REMANDED THE MATTER TO THE ASSESSING OFFICER TO CONSIDER THE SAME . BOTH THE ORDERS EXPRESSLY DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDU CTION OF RS. 40 LAKHS UNDER SECTION 43B OF THE ACT. THE ASSESSING OFFICER IS, T HEREFORE, NOW ONLY . TO COMPUTE THE RESPONDENT'S TAX LIABILITY WHICH HE MU ST DO IN ACCORDANCE WITH THE ORDERS ALLOWING THE RESPONDENT A DEDUCTION O F RS. 40 LAKHS UNDER SECTION 43B OF THE ACT. THE CONCLUSION THAT THE ERROR IN NOT CLAIMING THE DE DUCTION IN THE RETURN OF INCOME WAS INADVERTENT CANNOT BE FAULTED FOR MORE TH AN ONE REASON. IT IS A FINDING OF FACT WHICH CANNOT BE TERMED PERVERSE. THE RE IS NOTHING ON RECORD THAT MILITATES AGAINST THE FINDING. THE APPELL ANT HAS NOT SUGGESTED, MUCH LESS ESTABLISHED THAT THE OMISSION WAS DELIBERATE, MA LA FIDE OR EVEN OTHERWISE. THE INFERENCE THAT THE OMISSION WAS INADVERT ENT IS, THEREFORE, IRRESISTIBLE. IT WAS THEN SUBMITTED BY MR. GUPTA THAT THE SUPREME C OURT HAD TAKEN A DIFFERENT VIEW IN GOETZE (INDIA) LTD. V. CIT [2006] 284 ITR 323 (SC); [2006] 157 TAXMAN 1. WE ARE UNABLE TO AGREE. THE DECISION W AS RENDERED BY A BENCH OF TWO LEARNED JUDGES AND EXPRESSLY REFERS TO THE JUDGMENT OF THE BENCH OF THREE LEARNED JUDGES IN NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC). THE QUESTION BEFORE THE COU RT WAS WHETHER THE APPELLANT-ASSESSEE COULD MAKE A CLAIM FOR DEDUCTION, O THER THAN BY FILING A REVISED RETURN. AFTER THE RETURN WAS FILED, THE APPE LLANT SOUGHT TO CLAIM A DEDUCTION BY WAY OF A LETTER BEFORE THE ASSESSING OFFIC ER. THE CLAIM, THERE- FORE, WAS NOT BEFORE THE APPELLATE AUTHORITIES. THE D EDUCTION WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THERE WAS NO PROVISION UNDER THE ACT TO MAKE AN AMENDMENT IN THE RETURN OF INCOME BY MODIFYING AN APPLICATION AT THE ASSESSMENT STAGE WITHOUT REVISING THE 6 RETURN. THE COMMISSIONER OF INCOME-TAX (APPEALS) ALLOW ED THE ASSESSEE'S APPEAL. THE TRIBUNAL, HOWEVER, ALLOWED THE DEPARTME NT'S APPEAL. IN THE SUPREME COURT, THE ASSESSEE RELIED UPON THE JUDGMENT I N NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC) CONTENDING THAT IT WAS OPEN TO THE ASSESSEE TO RAISE THE POINTS OF LAW EVEN BEFORE T HE TRIBUNAL. THE SUPREME COURT HELD (PAGE 324 OF 284 ITR): 'THE DECISION IN QUESTION IS THAT THE POWER OF THE TRI BUNAL UNDER SECTION 254 OF THE INCOME-TAX ACT, 1961, IS TO ENTERT AIN FOR THE FIRST TIME A POINT OF LAW PROVIDED THE FACT ON THE BASIS OF WHICH THE ISSUE OF LAW CAN BE RAISED BEFORE THE TRIBUNAL. THE DECISIO N DOES NOT IN ANY WAY RELATE TO THE POWER OF THE ASSESSING OFFICER TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERWISE THAN BY FILING A REVISE D RETURN. IN THE CIRCUMSTANCES OF THE CASE, WE DISMISS THE CIVIL APPEAL. HOWEVER, WE MAKE IT CLEAR THAT THE ISSUE IN THIS CASE IS LIMITE D TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NOT IMPINGE ON THE POW ER OF THE INCOME- TAX APPELLATE TRIBUNAL UNDER SECTION 254 OF THE INCO ME-TAX ACT, 1961. THERE SHALL BE NO ORDER AS TO COSTS.' (EMPHASIS SUPPLIED) IT IS CLEAR TO US THAT THE SUPREME COURT DID NOT HOLD ANYTHING CONTRARY TO WHAT WAS HELD IN THE PREVIOUS JUDGMENTS TO THE EFFECT THAT EVEN IF A CLAIM IS NOT MADE BEFORE THE ASSESSING OFFICER, IT CAN BE MADE BEFORE THE APPELLATE AUTHORITIES. THE JURISDICTION OF THE APPELLATE AUTHOR ITIES TO ENTERTAIN SUCH A CLAIM HAS NOT BEEN NEGATED BY THE SUPREME COURT IN T HIS JUDGMENT. IN FACT, THE SUPREME COURT MADE IT CLEAR THAT THE ISSUE IN THE CASE WAS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY AND THAT THE JUDGM ENT DOES NOT IMPINGE ON THE POWER OF THE TRIBUNAL UNDER SECTION 2 54. A DIVISION BENCH OF THE DELHI HIGH COURT DEALT WITH A SIMILAR SUBMISSION IN CIT V. JAI PARABOLIC SPRINGS LTD. [2008] 306 ITR 42 (DELHI). THE DIVISION BENCH, IN PARAGRAPH 17 OF THE JUDGMENT HELD THAT TH E SUPREME COURT DISMISSED THE APPEAL MAKING IT CLEAR THAT THE DECISION WAS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY TO ENTERTAIN A CLAIM F OR DEDUCTION OTHERWISE THAN BY A REVISED RETURN AND DID NOT IMPIN GE ON THE POWERS OF THE TRIBUNAL. IN PARAGRAPH 19, THE DIVISION BENCH HE LD THAT THERE WAS NO PROHIBITION ON THE POWERS OF THE TRIBUNAL TO ENTERTA IN AN ADDITIONAL GROUND WHICH, ACCORDING TO THE TRIBUNAL, ARISED IN T HE MATTER AND FOR THE JUST DECISION OF THE CASE. IN THE CIRCUMSTANCES, IT IS NOT NECESSARY TO DECIDE THE OTHER QUESTIONS RAISED BY MR. MISTRI. THE APPEAL IS, THEREFORE, DISMISSED. 6.3 SINCE THE ORDER OF THE CIT(A) IS IN CONSONANCE WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT CITED (SUPRA) , THEREFORE, WE FIND NO 7 INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21-03-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED 21 ST MARCH 2014 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE DR A BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE