BHARATPUR ROYAL FAMILY RELIGIOUR & CEREMONIAL TRUST, Jaipur V. ACIT, BHARATPUR

ITA 254/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2054 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 25-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 18-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Rectification of order; Charitable institution
• Section: 234B; 12A; 12AA; 147; 148; 12; 10; 154; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 254/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST, MOTI MAHAL, BHARATPUR. CUKE VS. THE ACIT, CIRCLE- BHARATPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABTB 6641 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26.5.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23/06/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), ALWAR, DATED 11.01.2016 PERTAINING TO ASSESSMENT YE AR 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL :- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT THE APPLICATION U/S 154 FILED BY THE ASSESSEE AGAINST T HE INTIMATION U/S 143(1)(A) DETERMINING THE TOTAL INCOME AT RS. 1,84, 97,570/- AS AGAINST NIL DECLARED BY THE ASSESSEE BY NOT ALLOWING THE EX EMPTION CLAIMED BY IT IS OUTSIDE THE AMBIT OF THE SCOPE OF PROVISIONS OF SEC. 154 OF THE IT ACT. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT INCOME OF THE APPLICANT IS NOT EXEMPT UNDER THE IT ACT, 1961 AND THEREBY UPHOLDING THE INCOME ASSESSED IN INTIMATION U/S 143 (1). 3. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY ANY OF THE GROUNDS OF APPEAL. 4. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE . 2 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . 2. BRIEFLY, STATED THE FACTS ARE THAT THE ASSESSEE FILED A RETURN OF INCOME ON 30/09/2011 DECLARING NIL INCOME. THE ASSESSEE DERI VED INCOME FROM HOUSE PROPERTY AT RS. 1,84,97,011 & INCOME FROM OTHER SOURCES OF R S. 557/- AND CLAIM THE SAME AS EXEMPT U/S 10 & 11(1A) OF THE INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO AS THE ACT). THE AO REJECTED THE CLAIM OF EXEMPTION. SUB SEQUENTLY, THE ASSESSEE FILED RECTIFICATION PETITION U/S 154 OF THE ACT AND SAME WAS REJECTED. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL. 3. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAI NST DECLINING THE CLAIM OF EXEMPTION TO THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN RE JECTING THE CLAIM OF EXEMPTION. HE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN S YNOPSIS. HE SUBMITTED THAT THE ASSESSEE TRUST WAS CONSTITUTED VIDE TRUST DEED 29/0 6/1957 BY SHRI SWAI BRIJENDRA SINGH JI, MAHARAJA OF BHARATPUR. HE SUBMITTED THAT THE MINISTRY OF HOME AFFAIRS, GOVERNMENT OF INDIA VIDE LETTER DATED 12/11/1958 HA D COMMUNICATED THAT THE TRUST AND ITS PROPERTIES WOULD BE EXEMPT FROM INCOME TAX, WEALTH TAX, AND EXPENDITURE TAX. HE SUBMITTED THAT THE TRUST WAS ALSO REGISTER ED WITH THE DEVSTHAN VIBHAAG UNDER THE RAJASTHAN PUBLIC TRUST ACT, 1959 VIDE REG ISTRATION CERTIFICATE DATED 03/02/1979 AND U/S 12AA(1)(B) OF THE INCOME TAX ACT W.E.F. 03/08/2016. HE SUBMITTED THAT THE TRUST FILED ITS RETURN OF INCOME FOR THE FIRST TIME FOR AY 2011-12 ON 30/09/2011 DECLARING NIL INCOME AFTER CLAIMING REFU ND OF RS. 26,42,430/- BEING TAX DEDUCTED AT SOURCE ON THE ARREARS OF RENT OF RS. 2, 64,24,302/- RECEIVED DURING THE YEAR. IT WAS CLAIMED THAT THIS AMOUNT WAS EXEMPT U /S 10 OF THE ACT. HOWEVER, 3 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . WHILE PROCESSING THE RETURN, THE INCOME WAS TAKEN A T RS. 1,84,97,570/- AND A DEMAND OF RS. 54,03,271/- WAS RAISED. 4. AGAINST THIS INTIMATION, ASSESSEE FILED AN APPL ICATION U/S 154. IN THESE PROCEEDINGS, ASSESSEE FILED A DETAILED REPLY DATED 28/08/2013 EXPLAINING HOW ITS INCOME IS EXEMPT FROM TAX UNDER THE ACT. HOWEVER, THE AO REJECTED THE CLAIM OF THE ASSESSEE THAT ITS INCOME WAS EXEMPT FROM TAX BY HOLDING THAT THE TRUST FAILED TO FILE ANY DOCUMENTARY EVIDENCE OF HAVING BEING REGIS TERED U/S 12A/12AA OF THE ACT. HE SUBMITTED THAT THE LD. CIT(A) UPHELD THE ORDER O F THE AO BY HOLDING THAT NO MISTAKE APPARENT ON RECORD IN THE TAX COMPUTATION O R IN CHARGING OF INTEREST COULD BE BROUGHT TO HIS NOTICE. FURTHER, AS PER LD. CIT( A) THE OTHER ISSUES RAISED BY THE APPELLANT WERE IRRELEVANT AND OUTSIDE THE SCOPE OF PROVISIONS OF SECTION 154. HE SUBMITTED THAT, HITHERTO, THE TRUST HAD NOT FILED A NY RETURN OF INCOME AS THE EXPENDITURE ON MAINTENANCE OF THE TEMPLES WAS MORE THAN THE RENT RECEIVED FROM THE PROPERTIES. IT HAD A CUMULATIVE DEFICIT OF RS. 9,75,313/- AS ON 31/03/2010. HOWEVER, DURING THE YEAR THE TRUST RECEIVED ARREARS OF RENT AMOUNTING TO RS. 2,64,24,302/- IN RESPECT OF ITS PROPERTY SITUATED A T MATHURA GIVEN ON RENT TO THE GOVERNMENT OF UTTAR PRADESH. NO RENT WAS RECEIVED FOR THE PERIOD OF 05/07/1976 TO 14/01/1992 TILL IT WAS SOLD BY THE TRUST TO SOME OT HER PERSONS. THE TRUST HAD FILED A SUIT AGAINST THE UTTAR PRADESH GOVERNMENT FOR INCRE ASING THE RENT AND TO PAY THE SAME FOR THE PERIOD OF 05/07/1976 TO 14/01/1992 TO THE TRUST AND THEREAFTER TO THE PERSON TO WHOM IT WAS SOLD. THE CASE WAS DECIDED A GAINST THE TRUST BUT IN FURTHER APPEAL, THE HONBLE APEX COURT VIDE JUDGMENT DATED 09/09/2002 DIRECTED TO PAY THE RENT. AS NO COMPLIANCE WAS MADE, A CONTEMPT APPLIC ATION WAS FILED BEFORE THE 4 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . HONBLE SUPREME COURT AND HONBLE COURT VIDE ORDER DATED 20/07/2010 DIRECTED THE STATE OF UTTAR PRADESH TO PAY THE RENT AS DIRECTED IN ITS ORDER DATED 09/09/2002. IN PURSUANCE TO THAT DIRECTION THE ASSESSEE RECEIVED A SUM OF RS. 2,64,24,302/- ON WHICH TAX AT SOURCE WAS DEDUCTED AT RS. 26,42,430/- . HE SUBMITTED, UNDER THESE FACTS WHEN THE TRUST WAS DULY GRANTED EXEMPTION FRO M PAYING INCOME TAX VIDE LETTER OF THE HOME MINISTRY DATED 12/11/2001, DESPITE THAT THE REVENUE AUTHORITY HAVE DENIED THE EXEMPTION. NOW, THE ISSUE REQUIRES TO B E EXAMINED WHETHER THE REVENUE AUTHORITY WAS JUSTIFIED IN DENYING THE EXEMPTION. ANOTHER ARGUMENT RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE INCOME OF THE TRUST IS EXEMPT U/S 11 OF THE ACT IN AS MUCH AS IT WAS REGISTERED U/S 12AA ALBEI T THE REGISTRATION WAS GIVEN W.E.F. 05/09/2016 BUT IN VIEW OF THE FIRST PROVISO TO SECT ION 12(2) WHERE REGISTRATION IS BEEN GRANTED TO THE TRUST U/S 12AA, THEN THE PROVIS IONS OF SECTIONS 11 & 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM PROPERT Y HELD UNDER TRUST OF ANY AY PRECEDING THE AY FOR WHICH ASSESSMENT PROCEEDINGS A RE PENDING BEFORE THE AO AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS ON SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PROCEEDING OF RELATED TO THE AY. HE SUBMITTED THAT IN THE PRESENT CASE, THOUGH ON THE DATE OF GRANT OF REGISTRATION, THE ASSESSMENT PROCEEDINGS WERE NOT PENDING BEFORE THE AO BUT SINCE THE APPLICATION FOR REGISTRATION WAS FILED ON 30/03/2016, AS PER SECTION 12A(2), THE PROVISIONS O F SECTION 11 & 12 SHALL APPLY FOR THE AY IMMEDIATELY FOLLOWING THE FY IN WHICH SUCH A PPLICATION IS MADE. AS APPLICATION IS MADE ON 30/03/2016, THE PROVISION OF SECTION 11 &12 WOULD APPLY TO THE ASSESSEE FROM AY 2016-17 STARTING FROM 1/4/2015 . IN VIEW, OF THIS STATUTORY PROVISION, THOUGH THE ORDER WAS PASSED BY THE AO ON 29/10/2013, THE APPELLATE 5 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . PROCEEDINGS WERE PENDING ON 01/04/2015 AND SINCE TH E APPELLATE PROCEEDINGS ARE ONLY AN EXTENSION OF THE ASSESSMENT PROCEEDINGS, TH E REGISTRATION GRANTED U/S 12AA WOULD ALSO APPLY TO THE AY UNDER CONSIDERATION AS H ELD BY THE TRIBUNAL IN THE CASE OF ADIVASI MEEN BHAGWAN JAN SEWA SANSTHAN IN ITA NOS. 780 & 781/JP/2015 VIDE ORDER DATED 07/06/2016. HE SUBMITTED THAT EVEN OTH ERWISE ALSO, THE RENTAL INCOME IS RECEIVED FOR THE PERIOD 05/07/1976 TO 14/01/1992 . THE HONBLE SUPREME COURT AWARDED SUCH RENT VIDE ORDER DATED 09/09/2002. THU S, THE RENTAL INCOME AS ACCRUED TO THE TRUST IN AY 2003-04. THE SAME CANNO T BE TAXED IN AY 2011-12. THE RELIANCE IS PLACED ON THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. (2013) 358 ITR 0295 AND A LSO JUDGMENT OF THE HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. DI NESH KUMAR GOEL 331 ITR 10. HE SUBMITTED THAT IN THIS CASE ALSO THE INCOME HAD ACC RUED TO THE ASSESSEE IN THE YEAR 2002 WHEN THE SUPREME COURT HAD AWARDED THE PAYMENT TO IT THEREBY CREATING A LIABILITY FOR THE OTHER PARTY. HE SUBMITTED THAT T HE INCOME SINCE ACCRUED CANNOT BE TAX IN THE YEAR ON RECEIPT, BASIS. 5. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVES OPPOSED THE SUBMISSIONS OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE HAS FA ILED TO FURNISH THE PROOF OF EXEMPTION GRANTED BY THE INCOME TAX DEPARTMENT. HE SUBMITTED THAT LETTER BY THE HOME MINISTRY WOULD NOT BE SUFFICIENT PROOF TO ESTA BLISH THAT THE ASSESSEE WAS GRANTED THE EXEMPTION BY THE DEPARTMENT OF INCOME T AX. 5.1 SECONDLY, HE SUBMITTED THAT THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE RENT IS TO BE TAXED IN THE YEAR W HEN IT IS ACCRUED FOUNDED. ADMITTEDLY, THE ASSESSEE HAD NOT OFFERED THIS INCOM E ON THE ACCRUAL BASIS AS THE 6 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . ASSESSEE HAD FILED FIRST TIME THE INCOME TAX RETURN . THEREFORE, THIS CONTENTION OF THE ASSESSEE IS NOT JUSTIFIED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THOUGH THE ORDER OF THE AUTHORITIES BELOW. THE LD. CIT(A) HAS DECIDED THIS ISSUE IN HIS ORDER AS UNDER:- 4.3 I HAVE PERUSED THE RECTIFICATION ORDER AND SUB MISSIONS MADE BY THE APPELLANT AND FIND THAT ISSUE RAISED IS AGAINST THE DENIAL OF EXEMPTION OF INCOME U/S 10 & 11 OF THE IT ACT BY THE AO. THE AP PELLANT HAS ALSO STATED THAT AO HAS WRONGLY CHARGED INTEREST U/S 234A, 234B , AND 234C OF THE IT ACT. 4.4 THE APPELLANT HAS FILED DETAILED SUBMISSIONS. IT IS STATED THAT VIDE A CERTIFICATE NO. 4/26/56-PO11.III OF MINISTRY OF HOM E AFFAIRS, PO11 III SECTION INTIMATED VIDE LETTER DATED 12 TH NOVEMBER, 1958, EXEMPTION FROM INCOME TAX WAS GIVEN TO THE TRUST. THE APPELLANT HAS STATED T HAT AO HAS FAILED TO APPRECIATE THAT SECTION 4(3)(I) OF THE INDIAN INCOM E-TAX ACT, 1922 (CORRESPONDING TO SECTION 11(1) OF THE ACT) IS AVAI LABLE TO THE ASSESSEE, AS THE FOLLOWING INCOMES ARE EXEMPTED FROM THE APPLICA TION OF INCOME TAX AND NO TAX IS PAYABLE ON THEM U/S 11(1)(A) OF THE IT AC T. 4.5 HAVING CONSIDERED CAREFULLY THE SUBMISSIONS MAD E BY THE APPELLANT INCLUDING THE JUDICIAL CITATIONS GIVEN THEREIN, I F IND THAT NO PRIMA FACIE MISTAKE HAS BEEN BROUGHT TO THE NOTICE OF THE AO IN THE APP LICATION FOR RECTIFICATION FILED BY THE APPELLANT. SIMILAR FACTS HAVE BEEN RA ISED IN THE COURSE OF PRESENT PROCEEDINGS AND NO MISTAKE APPARENT FROM RECORD IN THE TAX COMPUTATION OR IN THE CHARGING OF INTEREST COULD BE BROUGHT TO THE NOTICE OF THE UNDERSIGNED. 4.6 THE OTHER ISSUES RAISED BY THE APPELLANT ARE IR RELEVANT AND OUTSIDE THE AMBIT OF THE SCOPE OF THE PROVISIONS OF SECTION 154 OF THE IT ACT. THUS, I FIND NO INFIRMITY IN THE ORDER PASSED BY THE AO. THEREF ORE, I DO NOT FIND ANY MERIT IN THE APPEAL FILED BY THE APPELLANT AND HENCE, THE SAME IS DISMISSED. 7 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . 6.1 FROM THE ABOVE IT CAN BE INFERRED THAT LD. CIT( A) WAS OF THE VIEW THAT THE ISSUES RAISED WERE BEYOND THE SCOPE OF THE RECTIFIC ATION U/S 154 OF THE ACT. AS PER THE ASSESSEE WHEN THE ASSESSEE WAS ENTITLED FOR EXE MPTION AND SUCH EXEMPTION IS NOT ALLOWED IN COMPUTATION OF TOTAL INCOME, SUCH AC T IS A MISTAKE APPARENT FROM THE RECORD AND CAN BE RECTIFIED U/S 154 OF THE ACT. TH E HONBLE SUPREME COURT IN THE CASE OF MEPCO INDUSTRIES LTD. VS. CIT 319 ITR 208 ( SC) HAD OCCASION TO EXAMINE. THE SCOPE OF THE SECTION 154 OF THE ACT AND FOLLOWI NG THE EARLIER JUDGMENTS OF HONBLE SUPREME COURT IN THE CASE OF DENA METAL POW DER (P) LTD. VS. COMMISSIONER, TRADE TAX [2008] 2 SEC 439 AND COMMISSIONER OF CENT RAL EXCISE, CALCUTTA [2003] 151 ECTM 81 HELD THAT UNDER THE FACTS OF THAT CASE IT WAS NOT OPEN TO AO RECTIFYING HIS OWN ORDER. IN THE CASE OF DENA METAL POWDER(P) LTD. VS. COMMISSIONER OF TRADE TAX, IT WAS A RECTIFIABLE MISTAKE IS A MISTAKE WH ICH IS OBVIOUS AND THE SAME MUST BE APPARENT FROM RECORD. IT IS MUST BE A PATENT MI STAKE, WHICH IS OBVIOUS AND WHOSE DISCOVERY IS NOT DEPENDENT ON ELABORATE ARGUM ENTS. IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE, CALCUTTA VS. A.S.C. U. LTD. (SUPRA) HELD THAT A RECTIFIABLE MISTAKE IS MISTAKE WHICH IS OBVIOUS A ND NOT SOMETHING WHICH HAS TO BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING OR WHERE TWO OPINIONS ARE POSSIBLE. THE DECISION ON DEBATABLE POINT OF LAW C ANNOT BE TREATED AS MISTAKE APPARENT FROM THE RECORD 6.2 IN THE PRESENT CASE, THE AO DECLINED THE CLAIM OF THE EXEMPTION ON THE BASIS THAT THE TRUST WAS NO REGISTERED U/S 12AA OF THE AC T. UNDISPUTEDLY, WHEN THE ASSESSMENT ORDER WAS PASSED, THE TRUST WAS NOT REGI STERED U/S 12AA, THEREFORE, IT CANNOT BE CONSTRUED THAT THERE WAS ANY MISTAKE APPA RENT FROM RECORD IN RECORDING 8 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . FINDING ON FACT IN THIS REGARD. THE HONBLE APEX C OURT IN THE CASE OF U.P. FOREST CORPORATION & ANR VS. DCIT (2008) 297 ITR 001 (SC) HELD THAT A CONJOINT READING OF SECTION 11,12 AND 12A MAKES IT CLEAR THAT REGISTRAT ION UNDER SECTION 12A IS A CONDITION PRECEDENT FOR AVAILING BENEFIT UNDER SECT ION 11 AND 12 UNLESS AND UNTIL AN INSTITUTION IS REGISTERED U/S 12A IT CANNOT CLAIM T HE BENEFIT OF SECTION 11(1)(A). IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF U.P. FOREST CORP. & ANR VS. DCIT(SUPRA), THERE IS NO INFIRMITY INTO THE ORDER OF THE AO IN DECLINING THE CLAIM OF EXEMPTION ON THE GROUND THAT THE TRUST WAS NOT REGISTERED U/S 12A OF THE ACT. 6.3 ANOTHER ARGUMENT OF THE ASSESSEE IS THAT SINCE THE TRUST WAS GRANTED EXEMPTION BY THE GOVERNMENT OF INDIA WAY BACK IN TH E YEAR 1958, IT WAS NOT OPEN TO REVENUE TO TAX THE RECEIPTS OF THE ASSESSEE TRUS T NOW UNDER THE EXCUSE OF NOT HAVING REGISTERED U/S 12A OF THE ACT. WE FIND THAT THE AO HAS DEALT THIS ISSUE AS UNDER:- VIDE LETTER DATED 11.09.2013 THE ASSESSEE HAS FILE D PETITION U/S 154 THAT THE EXEMPTION WAS GIVEN U/S 4(3)(I) OF THE INC OME TAX ACT 1922 BY THE THEN CBR (CENTRAL BOARD OF REVENUE) ON 05.11.1958 B Y ACCEPTING THE STATUS OF THE TRUST AS CHARITABLE INSTITUTION. THE ASSEES SEE HAS FURTHER CONTENDED THAT THE PROVISIONS OF EARLIER INDIAN INCOME TAX AC T 1922 U/S 4(3)(I) ARE CORRESPONDING TO THE PROVISIONS OF SECTION 11(1) OF THE INCOME TAX ACT 1961. THE ASSESSEE HAS ALSO RE-PRODUCED LANGUAGE OF SECTI ON 4(3)(I) OF INCOME TAX ACT 1922. I HAVE GONE THROUGH THE PETITION OF ASSESSEE AND I HAVE ALSO PERUSED THE LETTER DATED 12.11.1958 BY THE MINISTRY OF HOME AFFAIRS. IT IS FOUND THAT THE SAID LETTER NEITHER CONTAINS ANY MENTION OF THE INCOME TAX ACT 1922 OR ITS PROVISIONS RELEVANT TO SECTION 4(3)(I). THEREFORE, IT CANNOT BE ASSUMED THAT 9 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . THE EXEMPTION HAS BEEN GRANTED UNDER THE PROVISIONS OF SECTION 4(3)(I) OF INCOME TAX ACT 1922. 6.4 FURTHER, THE LD. COUNSEL HAS PLACED ON RECORD, THE REPORT OF THE LAW COMMISSION UNDER THE INCOME TAX ACT, 1922 THE RELEV ANT CONTENTS ARE REPRODUCED HEREIN BELOW. FROM THE FACTS STATED ABOVE, IT WILL APPEAR THAT T HE TRUST IS PARTLY RELIGIOUS AND PARTLY CHARITABLE. AS SUCH, IT APPEARS TO ME T HAT THAT PART OF THE INCOME OF THE TRUST AS IS APPLIED TO RELIGIOUS PURPOSE AND ALSO THAT PART WHICH IS APPLIED FOR CHARITABLE PURPOSES WILL BE EXEMPTS FRO M INCOME-TAX U/S 4(3)(I) IN THE HANDS OF THE TRUST. 6.5 FROM THE FACTS STATED ABOVE, WILL BE EXEMPT FRO M INCOME U/S 4(3)(I) IN THE HANDS OF THE ASSESSEE. FURTHER THE LD. LAW COMMISS ION HAS OBSERVED AS UNDER:- REFERENCE FINANCE MINISTRYS NOTE ABOVE. IN THIS CONNECTION NOTES FROM PAGE 9/ANTE MAY PLEASE BE SEEN. IT APPEARS FROM THE NOT E DATED 5.11.1958 BY THE MEMBER, INCOME-TAX, CBR THAT HE HAS AGREED TO THE E NTIRE TRUST BEING EXEMPTED FROM WEALTH, EXPENDITURE AND INCOME TAXES WITHOUT THE RESTRICTION MENTIONED AT B ON 14 ANTE. WE MAY SEND A REPLY T O HH OF BHARATPUR AS IN THE DRAFT SUBMITTED FOR APPROVAL . 6.6 FROM THE ABOVE OBSERVATION OF LD. LAW COMMISSIO N, IT IS EVIDENT THAT THE ASSESSING OFFICER COMMITTED MISTAKE BY OBSERVING TH AT THERE IS NO MENTION OF SECTION 4(3)(I) OF THE INCOME TAX ACT, 1922. THE A SSESSING OFFICER HAS ALSO NOT GIVEN A FINDING AS TO WHAT WAS THE STATUS OF TRUST WHO WAS GRANTED THE EXEMPTION UNDER THE OLD ACT I.E. INCOME TAX ACT, 1922, AFTER REPEAL OF THAT ACT. WHETHER SUCH ACTS FALL UNDER THE SAVING CLAUSE OR NOT IF FALLS U NDER THE SAVING CLAUSE THEN IT WOULD BE DEEMED THAT THE EXEMPTION WAS AVAILABLE TO THE A SSESSEE TRUST. IT WOULD BE 10 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . PROPER AT THIS STAGE TO REFER TO SECTION 297 OF THE ACT. SECTION 297 IS REPRODUCED HEREIN BELOW:- 297. REPEALS AND SAVINGS . (1) THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), IS HE REBY REPEALED. (2) NOTWITHSTANDING THE REPEAL OF THE INDIAN INCOME -TAX ACT, 1922 (11 OF 1922) (HEREINAFTER REFERRED TO AS THE REPEAL ED ACT),- (A) WHERE A RETURN OF INCOME HAS BEEN FILED BEFORE THE COMMENCEMENT OF THIS AT BY ANY PERSON FOR ANY ASSES SMENT YEAR, PROCEEDINGS FOR THE ASSESSMENT OF THAT PERSON FOR THAT YEAR MAY BE TAKEN AND CONTINUED AS IF THIS ACT HAD NOT BEEN PASSED; (B) WHERE A RETURN OF INCOME IS FILED AFTER THE COMMENCEMENT OF THIS ACT OTHERWISE THAN IN PURSUANC E OF A NOTICE U/S 34 OF THE REPEALED ACT BY ANY PERSON FOR THE ASSESSMENT YEAR ENDING ON THE 31 ST DAY OF MARCH, 1962, OR ANY EARLIER YEAR, THE ASSESSMENT OF THAT PERSON FOR THA T YEAR SHALL BE MADE IN ACCORDANCE WITH THE PROCEDURE SPECIFIED IN THIS ACT; (C) ANY PROCEEDING PENDING ON THE COMMENCEMENT OF T HIS ACT BEFORE ANY INCOME-TAX AUTHORITY, THE APPELLATE TRIB UNAL OR ANY COURT, BY WAY OF APPEAL, REFERENCE, OR REVISION, SH ALL BE CONTINUED AND DISPOSED OF AS IF THIS ACT HAD NOT BE EN PASSED; (D) WHERE IN RESPECT OF ANY ASSESSMENT YEAR AFTER T HE YEAR ENDING ON THE 31ST DAY OF MARCH, 1940,- (I) A NOTICE UNDER SECTION 34 OF THE REPEALED ACT H AD BEEN ISSUED BEFORE THE COMMENCEMENT OF THIS ACCT, T HE PROCEEDINGS IN PURSUANCE OF SUCH NOTICE MAY BE CONTINUED AND DISPOSED OF AS IF THIS ACCT HAD NOT B EEN PASSED; (II) ANY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF THAT EXPRESSIONS SECTION 147 AND NO PROCEEDINGS UNDER SECTION 34 OF THE REPEALED ACT IN RESPECT OF ANY SUCH INCOME ARE PEND ING AT THE COMMENCEMENT OF THIS ACT, A NOTICE UNDER SEC TION 148 MAY, SUBJECT TO THE PROVISIONS CONTAINED IN SEC TION 149 OR SECTION 150, BE ISSUED WITH RESPECT TO THAT ASSESSMENT YEAR AND ALL THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY; 11 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . (E) [SUBJECT TO THE PROVISIONS OF CLAUSE (G) AND CL AUSE (I) OF THIS SUB-SECTION,] SECTION 23A OF THE REPEALED ACT SHALL CONTINUE TO HAVE EFFECT IN RELATION TO THE ASSESSMENT OF ANY CO MPANY OR ITS SHAREHOLDERS FOR THE ASSESSMENT YEAR ENDING ON THE 31ST DAY OF MARCH, 1962 OR ANY EARLIER YEAR, AND THE PROVISIONS OF THE REPEALED ACT SHALL APPLY TO ALL MATTERS ARISING OUT OF SUCH ASSESSMENT AS FULLY AND EFFECTUALLY AS IF THIS ACT HAD NOT BEEN PASSED; (F) ANY PROCEEDING FOR THE IMPOSITION OF A PENALTY IN RESPECT OF ANY ASSESSMENT COMPLETE BEFORE THE FIRST DAY OF APR IL, 1962, MAY BE INITIATED AND ANY SUCH PENALTY MAY BE IMPOSE D AS IF THIS ACT HAD NOT BEEN PASSED; (G) ANY PROCEEDING FOR THE IMPOSITION OF A PENALTY IN RESPECT OF ANY ASSESSMENT FOR THE YEAR ENDING ON THE 31ST DAY OF MARCH, 1962, OR ANY EARLIER YEAR, WHICH IS COMPLETED ON OR AFTER THE 1ST DAY OF APRIL, 1962, MAY BE INITIATED AND ANY SUCH P ENALTY MAY BE IMPOSED UNDER THIS ACT; (H) ANY ELECTION OR DECLARATION MADE OR OPTION EXER CISED BY AN ASSESSEE UNDER ANY PROVISION OF THE REPEALED ACT AN D IN FORCE IMMEDIATELY BEFORE THE COMMENCEMENT OF THIS ACT SHA LL BE DEEMED TO HAVE BEEN AN ELECTION OR DECLARATION MADE OR OPTION EXERCISED UNDER THE CORRESPONDING PROVISION OF THIS ACT; (I) WHERE, IN RESPECT OF ANY ASSESSMENT COMPLETED B EFORE THE COMMENCEMENT OF THIS ACT, A REFUND FALLS DUE AFTER SUCH COMMENCEMENT OR DEFAULT IS MADE AFTER SUCH COMMENCE MENT IN THE PAYMENT OF ANY SUM DUE UNDER SUCH COMPLETED ASS ESSMENT, THE PROVISIONS OF THIS ACT RELATING TO INTEREST PAY ABLE BY THE CENTRAL GOVERNMENT ON REFUNDS AND INTEREST PAYABLE BY THE ASSESSEE FOR DEFAULT SHALL APPLY; (J) ANY SUM PAYABLE BY WAY OF INCOME-TAX, SUPER-TAX , INTEREST, PENALTY OR OTHERWISE UNDER THE REPEALED ACT MAY BE RECOVERED UNDER THIS ACT, BUT WITHOUT PREJUDICE TO ANY ACTION ALREADY TAKEN FOR THE RECOVERY OF SUCH SUM UNDER THE REPEALED ACT ; (K) ANY AGREEMENT ENTERED INTO, APPOINTMENT MADE, A PPROVAL GIVEN, RECOGNITION GRANTED, DIRECTION, INSTRUCTION, NOTIFICATION, ORDER OR RULE ISSUED UNDER ANY PROVISION OF THE REP EALED ACT SHALL, SO FAR AS IT IS NOT INCONSISTENT WITH THE CO RRESPONDING PROVISION OF THIS ACCT, BE DEEMED TO HAVE BEEN ENTE RED INTO, MADE, GRANTED, GIVEN OR ISSUED UNDER THE CORRESPOND ING PROVISION AFORESAID AND SHALL CONTINUE IN FORCE ACC ORDINGLY; 12 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . (L) ANY NOTIFICATION ISSUED UNDER-SUB (1) OF SECTIO N 60 [OR SECTION 60A] OF THE REPEALED ACT AND IN FORCE IMMEDIATELY B EFORE THE COMMENCEMENT OF THIS ACT, TO THE EXTENT TO WHICH PR OVISION HAS NOT BEEN MADE UNDER THIS ACT, CONTINUE IN FORCE [PROVIDED THAT THE CENTRAL GOVERNMENT MAY RESCIND A NY SUCH NOTIFICATION OR AMEND IT SO AS TO RESCIND ANY EXEMPTION, REDUCTION IN RATE OR OTHER MODIFICATION MADE THEREU NDER;] (M) WHERE THE PERIOD PRESCRIBED FOR ANY APPLICATION , APPEAL, REFERENCE OR REVISION UNDER THE REPEALED ACT HAD EX PIRED ON OR BEFORE THE COMMENCEMENT OF THIS ACT, NOTHING IN THI S ACCT SHALL BE CONSTRUCTED AS ENABLING ANY SUCH APPLICATION, AP PEAL, REFERENCE OR REVISION TO BE MADE UNDER THIS ACT BY REASON ONLY OF THE FACT THAT A LONGER PERIOD THEREFORE IS PRESC RIBED OR PROVISION IS MADE FOR EXTENSION OF TIME IN SUITABLE CASES BY THE APPROPRIATE AUTHORITY. FROM A BARE READING OF SECTION 297(2)(K) OF THE ACT IS EVIDENT THAT ANY AGREEMENT ENTERED INTO, APPOINTMENT MADE, APPROVAL GIVEN, REC OGNITION GRANTED, DIRECTION, INSTRUCTION, NOTIFICATION, ORDER OR RULE ISSUED UND ER ANY PROVISION OF THE REPEALED ACT, SHALL, SO FAR IT IS NOT INCONSISTENT WITH THE CORRE SPONDING PROVISIONS OF THIS ACT, BE DEEMED TO HAVE BEEN ENTERED INTO, MADE, GRANTED, GI VEN OR ISSUED UNDER THE CORRESPONDING PROVISION AFORESAID AND SHALL CONTINU E IN FORCE ACCORDINGLY. 6.7 IN VIEW OF THE ABOVE, THE AO WAS REQUIRED TO EX AMINE WHETHER FIRSTLY EXEMPTION GRANTED UNDER THE REPEALED ACT WAS SAVED BY SECTION 297 OF THE ACT AND SECONDLY, WHETHER IT WAS CONSISTENT WITH THE CORRES PONDING PROVISIONS OF LAW UNDER THE NEW ACT. 6.8 UNDER THESE FACTS, WE ARE OF THE CONSIDERED VIE W THAT BY NOT ADVERTING THESE ISSUES. THE AO HAS COMMITTED MISTAKE APPARENT FROM THE RECORD AND NEEDS FRESH CONSIDERATION. ACCORDING THE AO IS DIRECTED TO DEC IDE THE ISSUE OF AVAILABILITY OF EXEMPTION AFRESH. THE ASSESSEE ALSO ARGUED THAT TH E RENT WAS ACCRUED WHEN THIS 13 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST . WAS ORDERED BY THE HONBLE SUPREME COURT IN THE YEA R 2002, WE FIND NO SUCH ISSUE WAS RAISED BEFORE THE ASSESSING OFFICER HENCE COULD NOT BE RECTIFIED. WE FIND EVEN NO SUCH GROUND WAS RAISED BEFORE THE LD. CIT(A). T HEREFORE, THIS ISSUE IS NOT ARISING OUT OF THE ORDER UNDER SECTION 154 OF THE ACT. UND ER THESE FACTS, THIS PLEA OF THE ASSESSEE THAT THE RECEIPTS CANNOT BE TAXED UNDER TH E YEAR UNDER APPEAL IS DEVOID OF ANY MERIT HENCE REJECTED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 23 RD DAY OF JUNE 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 23/06/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST. 2. THE RESPONDENT-. THE ACIT, CIRCLE- BHARATPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO.254/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 14 ITA NO. 254/JP/2016 BHARATPUR ROYAL FAMILY RELIGIOUS & CEREMONIAL TRUST .