DCIT, CHENNAI V. Sri Adinath Jain Swethember Temple, CHENNAI

ITA 2217/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81243 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 13-10-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 05-09-2014
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: D ANAND
• Keywords: Cancellation of registration
• Section: 143(3); 142(1); 12AA; 145; 92

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 2 217 /MDS/2014 / ASSESSMENT YEAR :201 1 - 1 2 THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS) III , AYAKAR BHAVAN, ANNEXE BUILDING III FLOOR , 121, M.G. ROAD, NUNGAMBAKKAM, CHENNAI 600 034. VS. M/S. SRI A DINATH JAIN SWETHEMBER TEMPLE, NO. 37, GANDHI ROAD, PUZHAL, CHENNAI 600 066. [PAN: AABTS7904E ] ( APPELLANT ) ( R ESPONDENT ) / APPELLANT BY : SHRI A. B. KOLI , JCIT / RESPONDENT BY : SHRI D. ANAND , ADVOCATE / DATE OF HEARING : 1 3 . 1 0 .201 5 / DATE OF P RONOUNCEMENT : 29 . 1 0 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH I S APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF I NCOME TAX (APPEALS) VI I , C HENNAI , DATED 26 . 0 5 .201 4 RELEVANT TO THE ASSESSMENT YEAR 20 1 1 - 1 2 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A JAIN TEMPLE AND FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011 - 12 ON 28.09.2011 ADMITTING NIL INCOM E. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE IN ITS RETURN OF INCOME HAS FURNISHED THE I.T.A. NO . 2 217 /M/ 1 4 2 12A/12AA REGISTRATION NUMBER AS 11(111)81 DATED 01.10.1981. HOWEVER, THE ASSESSEE HAS NOT FILED COPY OF THE REGISTRATION GRANTED TO T HE ASSESSEE. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] WAS ISSUED ON 14.09.2012. SUBSEQUENTLY, NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED ON 23.09.2013 REQUIRING T HE ASSESSEE TO PRODUCE COPIES OF THE TRUST DEED, AMENDMENT DEED, COPY OF REGISTRATION UNDER SECTION 12A/12AA/ 10(23C)/80G, ETC. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED A LETTER DATED 18.10.2013, WHEREIN THE ASSESSEE HAS STATED AS UNDER: THE TRUST WAS REGISTERED IN LATE 80S AND THE REQUIRED DETAILS OF SUBMISSION OF FORM 10A AND THE REGISTRATION DETAILS HAVE BEEN WITH THE OLD TRUSTEES AND WE ARE PURSUING THEM TO SEARCH THE DETAILS OF SUBMISSIONS AND THE REGISTERED CERTIFICATE. WE ARE FILING THE RETU RNS SINCE THE DAY OF REGISTRATION, WE WILL SUBMIT THE CERTIFICATE AT THE EARLIEST. HOWEVER, WE ARE ENCLOSING HEREWITH THE ASSESSMENT ORDER U/S. 143(3) OF A.Y.1991 - 92 AND ORDERS U/S. 143(1)(A) OF 92 - 93, 93 - 94, 96 - 97, 97 - 98 FOR YOUR KIND PERUSAL. 3. DESPI TE OPPORTUNITY WAS GIVEN TO THE ASSESSEE AS PER ITS REQUEST BY THE ASSESSING OFFICER, THE ASSESSEE COULD NOT FILE COPY OF THE REGISTRATION UNDER SECTION 12AA OF THE ACT. BY FOLLOWING THE DECISION IN THE CASE OF NEW LIFE IN CHRIST EVANGELISTIC ASSOCIATION V . CIT 246 ITR 532 (MAD), WHEREIN, THE HON BLE HIGH COURT HAS HELD THAT REGISTRATION IS MANDATORY FOR CLAIMING EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT; IN THE CASE OF UP FOREST CORPORATION V. DCIT 165 TAXMANN 533 (SC), WHEREIN, THE HON BLE SUPREME COURT HAS HELD THAT REGISTRATION IS A CONDITION PRECEDENT FOR AVAILING I.T.A. NO . 2 217 /M/ 1 4 3 EXEMPTION, THE ASSESSING OFFICER HAS TREATED THE ASSESSEE AS AOP AND COMPLETED THE ASSESSMENT. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A), AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: 4. IT IS A FACT THAT THE APPELLANT COULD NOT PRODUCE THE COPY OF CERTIFICATE OF REGISTRATION U/S 12A(A)/12AA OF THE ACT EITHER BEFORE THE AO OR BE FORE THE UNDERSIGNED. BUT THE APPELLANT FILED COPIES OF FORM NO.15AA (CERTIFICATE U/S 197(1) OF THE ACT RELATING TO DEDUCTION OF TAX) FOR THE PERIOD ENDING 31.03.2007 AND 31.03.2005 ISSUED TO IOB, SOWCARPET BRANCH, CHENNAI AND CSB, PURASAWALKAM, CHENNAI BY THE DDIT(E) - I, CHENNAI FOR PERUSAL. COPIES OF 143(2) NOTICES RELATING TO AY 1992 - 93 AND 1994 - 95 ISSUED TO THE APPELLANT WERE ALSO FILED FOR PERUSAL. BEFORE THE ASSESSING OFFICER, COPY OF ORDER U/S 143(3) OF THE ACT FOR AY 1991 - 92, COPIES OF INTIMATION U/S 143(1)(A) FOR AY 1996 - 97 AND 1997 - 98 WERE FURNISHED. PERUSAL OF THOSE ORDERS REVEALS THAT THE APPELLANT WAS ASSESSED AT NIL INCOME. IN THE ORDER U/S 143(3) OF THE ACT FOR AY 1991 - 92, THE STATUS OF THE ASSESSEE WAS MENTIONED AS 'AOP (TRUSTS)'. COPY OF TRUS T DEED DATED 30.12.1986 FILED BEFORE THE AO REVEALED THAT THE SAME WAS REGISTERED IN THE OFFICE OF THE REGISTRAR, MADRAS NORTH SIGNED BY JOINT SUB - REGISTRAR - II. ON PAGE 14 OF THE TRUST DEED, IT WAS MENTIONED AS THIS POWER OF THE BOARD SHALL ALWAYS BE SUBJ ECT TO THE RELEVANT PROVISIONS OF INCOME - TAX ACT, 1961. 4.1 THE EVIDENTIAL DOCUMENTS ARE NOT LIMITED TO DOCUMENTS WHICH DIRECTLY PROVE THE CREATION OF THE TRUST AND CONSEQUENT EXEMPTION GRANTED; THEY WILL EMBRACE ALL DOCUMENTS WHICH AFFORD A LOGICAL BA SIS FOR INFERRING THE SAME. IN THE PRESENT CASE, THE ASSESSEE COULD NOT PRODUCE DIRECT EVIDENCE TO PROVE THE AVAILABILITY OF EXEMPTION U/S 11 OF THE ACT. BUT THE TRUST WAS ABLE TO PRODUCE CORROBORATIVE EVIDENCE TO PROVE THE AVAILABILITY OF EXEMPTION U/S 11 OF THE ACT. 4.2 THE PROVISIONS OF SECTION 12AA(3) OF THE ACT PROVIDES FOR CANCELLATION OF REGISTRATION GRANTED U/S 12A(A)/12AA OF THE ACT. IN THE ABSENCE OF SUCH CANCELLATION, THE AO IS NOT JUSTIFIED IN DENYING EXEMPTION U/S 11 OF THE ACT TO THE APPELL ANT FOR THE AY 2011 - 12. IT IS PERTINENT TO NOTE THAT THE EXEMPTION U/S 11 OF THE ACT WAS ALLOWED TO THE I.T.A. NO . 2 217 /M/ 1 4 4 APPELLANT FOR THE AY 1991 - 92 IN THE ORDER PASSED U/S 143(3) OF THE ACT. HENCE THE CASE LAW RELIED ON BY THE APPELLANT IS SQUARELY APPLICABLE TO THE FAC TS OF THE PRESENT CASE. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S 11 AND 12 OF THE ACT FOR THE AY 2011 - 12. CIRCUMSTANTIAL EVIDENCE SUGGESTS THAT THE ASSESSEE AVAILED EXEMPTION U/S 11 OF THE ACT IN EARLIER YEARS. HENCE, THE APPELLANT CONTINUES TO BE ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT FOR THE AY 2011 - 12 AND SUBSEQUENT YEARS UNLESS VIOLATION OF SECTIONS 11 TO 13 OF THE ACT IS NOTICED/ESTABLISHED. 4.3 IN VIEW OF THE ABOVE FACTS AND CIRC UMSTANCES OF THE CASE, THE ASSESSMENT MADE U/S 143(3) OF THE ACT FOR THE AY 2011 - 12 IS SET ASIDE AND THE AO IS DIRECTED TO ALLOW EXEMPTION U/S 11 OF THE ACT TO THE APPELLANT. 5. IN FINE, THE APPEAL OF THE APPELLANT IS FULLY ALLOWED. 5. ON BEING AGGRIE VED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR HAS SUBMITTED THAT IN THE ABSENCE OF COPY OF REGISTRATION UNDER SECTION 12A/12AA OF THE ACT, THE ASSESSEE S CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT CANNOT BE ACCEDED TO AND PRAYED THAT TH E ORDER OF THE LD. CIT(A) SHOULD BE REVERTED. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS O F AUTHORITIES BELOW. IN THIS CASE, THE ASSESSEE IS A JAIN TEMPLE AND STATED TO HAVE REGISTERED BUT COULD NOT FILE COPY OF THE REGISTRATION OF THE ASSESSEE AS A TRUST UNDER SECTION 12A/12AA OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED THE CLAI M OF DEDUCTION UNDER I.T.A. NO . 2 217 /M/ 1 4 5 SECTION 11 OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION BY TREATING THE ASSESSEE AS AN AOP. THE LD. CIT(A) HAS OBSERVED THAT THE INCOME OF THE ASSESSEE WAS ASSESSED AS NIL FOR THE ASSESSMENT YEAR 1991 - 92 AND ORDER UNDER 143(3 ) OF THE A CT WAS PASSED AND MOREOVER, THE STATUS OF THE ASSESSEE WAS MENTIONED AS AOP (TRUSTS) . HE ALSO OBSERVED THAT THE TRUST DEED DATED 30.12.1986 FILED BEFORE THE ASSESSING OFFICER WAS REGISTERED IN THE OFFICE OF THE REGISTRAR, MADRAS NORTH, WHEREIN , IT WAS MENTIONED THAT THIS POWER OF THE BOARD SHALL ALWAYS BE SUBJECT TO THE RELEVANT PROVISIONS OF INCOME TAX ACT, 1961 . SINCE THE PROVISIONS OF SECTION 12AA(3) OF THE ACT PROVIDES FOR CANCELLATION OF REGISTRATION GRANTED UNDER SECTION 12A(A)/12AA OF T HE ACT AND IN THE ABSENCE OF SUCH CANCELLATION AND ALSO IN VIEW OF THE ABOVE FACTS, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW EXEMPTION UNDER SECTION 11 OF THE ACT. 8. IN VIEW OF THE ABOVE FACTS AND OBSERVATIONS OF THE LD. CIT(A), WE FIND THAT THE ASSESSEE IS A JAIN TEMPLE AND ONLY ON 30.12.1986 THE TRUST DEED OF THE ASSESSEE AS AOP (TRUSTS) WAS REGISTERED IN THE OFFICE OF THE REGISTRAR, MADRAS NORTH DULY SIGNED BY THE SUB - REGISTRAR II. SO, IT IS VERY CLEAR THAT TILL 29.12.1986, THE ASSES SEE HAS NOT EXECUTED THE TRUST DEED. IF IT IS SO, THE STATEMENT OF THE ASSESSEE THAT IT IS REGISTERED TRUST SINCE 1981 AND WAS ALLOTTED 11(111)81 AS REGISTRATION NUMBER IS CONTRARY. WITHOUT HAVING I.T.A. NO . 2 217 /M/ 1 4 6 EXECUTED THE TRUST DEED, HOW THE DEPARTMENT WOULD HAVE GIVE N REGISTRATION UNDER THE INCOME TAX ACT. 9. FOR CLAIMING EXEMPTION UNDER SECTION 11 OF THE ACT, THE ASSESSEE SHOULD FILE COPY OF THE REGISTRATION CERTIFICATE SO GRANTED BY THE DEPARTMENT UNDER THE PROVISIONS OF SECTIONS. THERE IS NOTHING STATED IN THE S TATUTE TO CONSIDER ANY OTHER PAPER IN PLACE OF REGISTRATION CERTIFICATE FOR CLAIMING EXEMPTION UNDER SECTION 11 OF THE ACT. THE DEPARTMENT CANNOT CONSIDER ANY OTHER PAPERS OTHER THAN FILING COPY OF THE REGISTRATION CERTIFICATE GRANTED UNDER SECTION 12A(A)/ 12AA OF THE ACT, OTHERWISE, THE VERY PURPOSE OF THE ENACTMENT OF THE PROVISIONS OF SECTIONS BY THE LEGISLATURE SHALL BE DEFEATED. 10. EVEN THOUGH THE FACTS ARE QUITE CONTRARY, IN THE INTEREST OF JUSTICE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSE E SHOULD BE GIVEN ONE MORE OPPORTUNITY FOR FILING THE COPY OF REGISTRATION CERTIFICATE GRANTED BY THE DEPARTMENT ALONG WITH OTHER RELEVANT DOCUMENTS BEFORE THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE FOR FILING THE COPY OF THE REGISTRATION GRANTED BY THE DEPARTME NT ALONG WITH OTHER RELEVANT DOCUMENTS. IF THE ASSESSEE FAILS TO FURNISH THE ABOVE DOCUMENTS, THE ASSESSEE SHALL BE TREATED AS AN AOP AND BROUGHT TO TAX THE EXCESS OF INCOME OVER THE EXPENDITURE. I.T.A. NO . 2 217 /M/ 1 4 7 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 29 TH OCTOBER , 2015 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 29 . 1 0 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.