M/S BHARTIYA SANSKRITI GYAN MANDIR , Bokaro V. DCIT EXEMPTION, RANCHI

ITA 226/RAN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0434 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 06-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MOHANTY
• Keywords: Retrospective amendment; Benefit of exemption
• Section: 12A; 12AA; 12

Judgement Text

1 ITA N O. 226 /RAN/20 1 7 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 2 26 / RAN/20 1 7 ASSESSMENT YEAR : 201 4 - 201 5 M /S BHARTIYA SANSKRITI GYAN MANDIR PTJM SARASWATI VIDYA MANDI R, SECTOR - 3C, BOKARO - 827003 V S DCIT, EXEMPTIONS CIRCLE , RANCHI PAN NO. : AA C TB 3736 G (APPELLANT ) .. RESPONDENT ASSESSEE BY : SHRI DEVESH PODDAR, ADVOCATE REVENUE BY : SHRI A.K.MOHANTY , J CIT( J R. DR) DATE OF HEARING : 2 6 . 11 .201 8 DATE OF PRONOUNCEMENT : 27 . 11 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER OF CIT( A ), HAZARIBAG , DATED 15.06 .201 7 ON THE FOLLOWING GROUNDS OF APPEAL : - 1. FO R THAT THE LD. CIT (A) DISMISSED THE APPEAL OF THE APPELLANT IN A SUMMARILY MANNER WITHOUT CONSIDERING THE SUBMISSION MADE BY THE APPELLANT REGARDING PROVISIONS OF SECTION 12AA(2) BASED ON WHICH APPELLANT WAS ENTITLED FOR EXEMPTION U/S 11 OF THE INCOME TAX ACT. INCOME OF THE APPELLANT WAS EXEMPTED BEING INCOME OF AN EDUCATIONAL INSTITUTE DEEMED TO BE REGISTERED U/ S 12AA WITH AFFECT FROM 01/04/2013 OR FROM DATE OF INCORPORATION AS PER PROVISIONS OF SECTION 12A (2). 2. FOR THAT LD. CIT WAS NOT JUSTIFIED IN BRINGING TO TAX THE SURPLUS WHICH WAS LESS THAN 15%. 3. FOR THAT THE INTEREST CHARGED U/S 234(A) AND 234(B) ON THE ASSESSED INCOME IS UNJUSTIFIED AND ILLEGAL FOLLOWING THE DECISION OF HON'BLE JHARKHAND HIGH COURT. 4. FOR THAT OTHER GROUNDS IN DETAI L WILL BE ARGUED AT THE TIME OF HEARING. 2 ITA N O. 226 /RAN/20 1 7 2. LD. AR OF THE ASSESSEE ARGUED THAT THE CIT(A) HAS ERRED IN CONFIRMING THE REJECTION OF REGISTRATION U/S.12AA(2) OF THE ACT AND THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S.11 OF THE ACT AND THE REGISTRATION U/S.12A A OF THE ACT IS EFFECTIVE FROM 01.04.2013 OR FROM THE DATE OF INCORPORATION. LD. AR FURTHER EMPHASIZED THAT THE AO IS NOT CORRECT IN REJECTING THE CLAIM AND THE TRUST IS REGISTERED THROUGH THE OFFICE ORDER DATED 31.08.2016 EFFECTIVE FROM 30.03.2016, WHERE AS THE ASSESSMENT YEAR UNDER CONSIDERATION BEING 201 4 - 2015. HENCE , THE AO AND CIT(A) HAS CAME TO A UNILATERAL CONCLUSION THAT THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION U/S.12AA OF THE ACT. LD. AR FURTHER SUBSTANTIATED HIS SUBMISSIONS WITH THE PAPER BOOK A ND REFERRED TO THE ORDER OF GRANTING REGISTRATION U/S.12AA AND COPY OF THE ASSESSMENT ORDER OF THE EARLIER ASSESSMENT YEAR 2013 - 2014 DATED 25.09.2017 WHEREIN REGISTRATION U/S.12AA HAS BEEN CONSIDERED AND ACCEPT ED THE RETURN OF INCOME . FURTHER LD. AR FILED THE JUDICIAL DECISIONS TO SUBSTANTIATE THE CLAIM THOUGH THE REGISTRATION WAS GRANTED ON A PARTICULAR DATE BUT IT IS RETROSPECTIVELY AVAILABLE TO THE ASSESSEE WHERE SIMILAR PROCEEDINGS ARE PENDING BEFORE THE INCOME - TAX AUTHORITIES AND PRAYED FOR ALLOWING TH E APPEAL. 3 . CONTRA, LD. DR SUPPORTED THE ORDER OF CIT( A ). 4 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. LD. ARS SUB MISSIONS ARE IN RESPECT OF GRANTING REGISTRATION U/S.12AA WHICH WAS CONSIDERED BY THE INCOME TAX AUTHORITIES AND WAS GRANTED REGISTRATION VIDE ORDER DATED 31.08.2016 EFFECTIVE FROM 30.03.2016. 3 ITA N O. 226 /RAN/20 1 7 LD. AR FURTHER SUBSTANTIATED THAT IN THE ASSESSMENT YEAR 2013 - 2014, THE AO HAVING CONSIDERED THE SIMILAR FACTS AND HAS COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT AND RE LIEF WAS GRANTED U/S.11 OF THE ACT. LD. CIT(A) IS OF THE OPINION THAT THE REGISTRATION HAS BEEN GRANTED ON 31.08.2016 W.E.F 30.03.2016 AND, THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION U/S.11 OF THE ACT FOR THE ASSESSMENT YEAR 2014 - 2015. LD. AR FU RTHER SUBMITTED THAT ASSESSMENT PROCEEDINGS OF THE ASSESSMENT YEAR 2014 - 2015 IS PENDING BEFORE THE AO AND THE AO HAS PASSED THE ORDER WITHOUT GRANTING EXEMPTION U/S.11 OF THE ACT DATED 29.12.2016. WE HAVE PERUSED THE PROVISIONS OF SECTION 12A(2) OF THE ACT WHICH READS AS UNDER : - [(2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE] [PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEED INGS ARE PENDING 17 BEFORE THE ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION R EMAIN THE SAME FOR SUCH PRECEDING ASSESSMENT YEAR: 5 . WE ALSO SUPPORT OUR VIEW RELYING ON THE DECISION OF KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF SREE SREE RAMKRISHNA SAMITY VS. DCIT, [2015] 64 TAXMANN.COM 330 (KOLKATA - TRIB.), WHERE SIMILAR ISSUE W AS CONSIDERED IN RESPECT OF RETROSPECTIVE EFFECT OF REGISTRATION U/S.12AA WHILE PROCEEDINGS ARE PENDING. THE OBSERVATION OF THE TRIBUNAL IN PARA 6.13 IS AS UNDER : - 4 ITA N O. 226 /RAN/20 1 7 6.13 WE HOLD THAT SINCE THE ONLY REASON FOR DENIAL OF EXEMPTION U/S 11 WAS ABSENCE OF REGI STRATION U/S 12AA (WHICH WAS GRANTED TO ASSESSEE SOCIETY ON 29.10.2010 WITH EFFECT FROM 1.4.2010) FOR THE RELEVANT ASSESSMENT YEARS AND ON NO OTHER GROUND, THE BENEFIT OF CHANGE IN LAW AS ABOVE BY FINANCE ACT 2014 SHOULD BE AVAILABLE AND FOR ALL THE YEARS, THE BENEFIT OF EXEMPTION SHOULD BE AVAILABLE ON THE DATE OF REGISTRATION AS ALL THE ASSESSMENTS WERE PENDING AS SHOWN ABOVE. IN THIS CONNECTION, IT REQUIRES MENTION SPECIFICALLY THAT ALL THE RECEIPTS OF THE DONATION WERE PROVED ON ENQUIRY TO HAVE BEEN REC EIVED FROM THE CLAIMED DONORS AND UTILIZED FOR THE SPECIFIC PURPOSE (CONSTRUCTION OF OLD AGE HOME) FOR WHICH THEY WERE RECEIVED. IN CONCLUSION, WE HOLD THAT THE INSERT ION OF THE PROVISO TO SECTION 12A(2) OF THE ACT HAS T O BE CONSTRUED AS RETROSPECTIVE IN OPERATION. RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRECEDENTS RELIED UPON AND IN THE FACTS AND CI R CUMSTANCES OF THE CASE, WE ALLOW THE GROUND NOS. 3 TO 8 RAISED BY THE ASSESSEE. 6 . CONSIDERING THE FACTS AND APPLYING THE RATIO OF DECISION TO THE ASSESSMENT YEAR UNDER CONSIDERATION, WE FIND THAT THE REGISTRATION WAS GRANTED EFFECTIVE FROM 30.03.2016 BUT SINCE THE PROCEEDINGS ARE PENDING, WE ARE OF THE OPINION THAT T HE ASSESSEE IS ENTITLED FOR THE EXEMPTION U/S.11 OF THE ACT. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) IN DECLINING THE EXEMPTION U/S.11 OF THE ACT AND DIRECT THE AO TO GRANT EXEMPTION U/S.11 OF THE ACT AND THE APPLICABILITY OF THE JUDICIAL DECISION S T O THE PRESENT FACTS OF THE CASE AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 / 11 /201 8 SD/ - SD/ - (N.S.SAINI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 27 / 11 /2018 PRAKASH KUMAR MISHRA , SR. PS 5 ITA N O. 226 /RAN/20 1 7 COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT M/S BHARTIYA SANSKRITI GYAN MANDIR PTJM SARASWATI VIDYA MANDIR, SECTOR - 3C, BOKARO - 827003 2. THE RESPONDENT D CIT, EXEMPTIONS CIRCLE, RANCHI 3. THE CI T(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.