Shri KBL Sharma Memorial Educational & Cultural Society, Defence Public School, E-Block, Amrapali Circle, Vaishali Nagar, Jaipur V. ITO(Exemption), Ward-1, Jaipur

ITA 251/JPR/2023

AI Insights

The case involves Shri KBL Sharma Memorial Educational & Cultural Society, an educational society registered under section 12AA of the Income Tax Act, which filed an appeal against the order of the CIT(A), NFAC, rejecting their rectification application concerning the assessment year 2012-13. The society had initially filed a return declaring nil income and later faced a reassessment where income was computed at Rs.20,45,990, disallowing certain claims including depreciation and accumulation of income under section 11(2). The CIT(A) had allowed the depreciation claim but did not address the accumulation of income in the initial appeal, leading to the rectification application. The Tribunal found that the CIT(A)'s rejection of the rectification application was unjustified as the necessary documents were already on record and the issue was not barred by limitation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132406 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-06-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 20-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Rectification of order
• Section: 147; 154; 143(3); 12AA

Judgement Text

vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, ‘’SMC” JAIPUR JhlaanhixkslkbZ]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 251/JP/2023 fu/kZkj.ko"kZ@AssessmentYear : 2012-13 Shri KBL Sharma Memorial Educational & Cultural Society, Defence Public School E-Block, Amarpali Circle, Vaishali Nagar, Jaipur cuke Vs. The ITO ( Exemption) Ward -1 Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABAS 2518 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri P.C. Parwal, CA jktLo dh vksj ls@Revenue by: Mrs. MonishaChoudhary, Addl. CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 06/06/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 14 /06/2023 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by the assessee is directed against order passed u/s 154 of the Act, 1961 by the ld. CIT(A) dated 31-03-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2012- 13 wherein the assessee has raised the following grounds of appeal. ‘’1. The ld. CIT(A), NFAC has erred on fact and in law in rejecting the application u/s 154 dated 07-012-2019 by not providing adequate opportunity of hearing, not considering the material already on record and by wrongly holding that rectification application is getting barred by limitation on 31-03- 2023. 2 ITA NO. 251/JP/2023 SHRI KBL SHARMA MEMORIAL EDUCATIONAL & CULTURAL SOCIETY VS ITO (EXEMPTION), JAIPUR 2. The ld. CIT(A), NFAC has erred on fact and in law in not deciding the ground relating to not allowing accumulation of income of Rs.6,65,147/- u/s 11(2) of the Act even when assessee has furnished Form No. 10 for accumulation of income on 20-09-2012 2.1 In this appeal, it is noted that the ld.CIT(A) has rejected the rectification petition of the assessee wherein relevant facts as well as his observation emerges out as under:- ‘’1. This application for rectification of Appellate order pertains to the appellate order passed by the erstwhile CIT(A)-3, Jaipur in appeal No. 203/2017-18 for AY 2012-13 dated 16-10-2018.The appellant has claimed that some factual mistake were committed in the appeal viz: (a) While allowing depreciation of Rs.13,80,846/- as claimed, factual mistake was made by mentioning Rs.13,30,846/- And (b) Ground to allow computed income at Rs.20,45,990/- not considered \ ignored. 2. The appellant has further added that the first ground with reference to depreciation claimed by the appellant and that allowed by the erstwhile CIT(A) has been rectified by earlier rectification order, however, the second ground related to computed income of Rs.20,45,990/- is long pending settlement. 3. It was observed that the appellant has submitted only application for early settlement of the case but has not enclosed other details / documents regarding the case viz. Assessment order, ITR, Reassessment order, Form No. 35, order of CIT(A) etc. 4. In this regard, the appellant was issued notice on 23-03-2023 wherein above documents as mentioned above were requested to be submitted to this office electronically on or before 27 th of March 2023. The same was requested specifically as the rectification was getting barred by limitation on31-03- 2023. It is observed that the aforesaid letter is shown as delivered to the assessee on 23-03-2023 as per acknowledgement available on record. But till date, no response has been received from the appellant. Therefore, in absence 3 ITA NO. 251/JP/2023 SHRI KBL SHARMA MEMORIAL EDUCATIONAL & CULTURAL SOCIETY VS ITO (EXEMPTION), JAIPUR of the aforesaid documents and as the rectification order is getting barred by limitation on 31-03-2023, I am left with no other alternative but to reject the claim of the appellant as the claim of the appellant is not verifiable. In view of the above facts, the rectification sought by the rectification petition is accordingly rejected.’’ 2.2 During the course of hearing, the ld. AR of the assessee prayed that the ITR, reassessment order, Form No.35, order of ld. CIT(A)-3,Jaipur etc. are already a part of record and there is no provision under the Act to again submit all these documents with the rectification application. The notice issued on 23.03.2023 did not come to the notice of assessee and therefore it could not be responded. Further before ld. CIT(A) NFAC, there is no limitation to pass an order and therefore, it is incorrect to state that rectification order is barred by limitation on 31.03.2023. Hence the order passed by CIT(A), NFAC rejecting the application of assessee is not legally valid. 2.3 On the other hand, the ld. DR supported the order of the ld. CIT(A). 2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the assessee is an educational society registered u/s 12AA of the Act. It filed the return declaring Nil income (PB 2-3). The assessment was completed u/s 143(3) dt. 27.02.2015 at Nil income (PB 12- 13). The AO issued notice u/s 147 dt. 24.08.2017 and order u/s 147 dt. 31.10.2017 was framed at total income of Rs.20,45,990/- by disallowing the claim of depreciation of Rs.13,80,486/- and not allowing application u/s 11(2) of 4 ITA NO. 251/JP/2023 SHRI KBL SHARMA MEMORIAL EDUCATIONAL & CULTURAL SOCIETY VS ITO (EXEMPTION), JAIPUR Rs.6,65,147/-. Against this order, assessee filed an appeal before the Ld. CIT(A) who after reproducing the grounds of appeal at Pg 2 of the order allowed the appeal but in the order the discussion was made only in respect of disallowance of depreciation. However, no discussion was made in respect of application of income u/s 11(2) of Rs.6,65,147/-. Accordingly, assessee moved a rectification application dt. 02.07.2019 (PB 14-15) wherein it further explained the utilization of application of income of Rs.6,65,147/- in subsequent years and vide letter dt. 21.10.2020 (PB 16) requested for early disposal of rectification application. The Ld. CIT(A),NFAC however, held that assessee only submitted application for early settlement of case but not enclosed any other detail/document, i.e. assessment order, ITR, reassessment order, Form No.35, order of CIT(A), etc. and has not responded to notice issued on 23.03.2023. The rectification order is getting barred by limitation on 31.03.2023 and therefore he rejected the rectification application. It is pertinent to mention that ld.CIT(A), NFAC, Delhi should have decided this scanty issue on the basis of material/ record available with him. However, from the records, it can be noted that assessee had moved an application for accumulation of income u/s 11(2) in Form No.10 on 20.09.2012 (PB 10-11). Considering the same, AO in the original assessment order allowed the application of income. In the reassessment order there is no discussion for not allowing the application of income but in the computation the same has been left to be included. Before the 5 ITA NO. 251/JP/2023 SHRI KBL SHARMA MEMORIAL EDUCATIONAL & CULTURAL SOCIETY VS ITO (EXEMPTION), JAIPUR Ld. CIT(A)-3, Jaipur a specific Ground No.4 was taken. The Ld. CIT(A)-3, Jaipur decided Ground No.1 to 4 together but only dealt with the issue regarding disallowance of depreciation while allowing the appeal of assessee. Thus when all these facts are evident from record, the order passed by Ld. CIT(A), NFAC rejecting the application u/s 154 is not justified and the AO is directed to allow accumulation of income of Rs.6,65,147/- u/s 11(2) of the Act in computing the total income as these details are available at page 2 of Computation of total income. In view of the above deliberation, the appeal of the assessee is allowed as indicated herein above. 3.0 In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 14-06-2023 Sd/- Sd/- ¼lanhi xkslkbZ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 14 /06/2023 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri KBL Sharma Memorial Educational & Cultural Society, Jaipur 2. izR;FkhZ@ The Respondent-The ITOn (Exemption), Jaipur 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No.251/JP/2023) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar