SHRI KRISHNA MANDIR TRUST, JAIPUR V. ACIT,CIRCLE-5, JAIPUR

ITA 255/JPR/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0705 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 28-06-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 11; 143(1); 251

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC’’ JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JUDICIAL MEMBER vk;dj vihy la-@ITA No. 255/JP/2022 fu/kZkj.k o"kZ@Assessment Year : 2018-19 Shri Krishna Mandir Trust 20, Dukan, Adarsh Nagar Jaipur – 302 004 cuke Vs. The ACIT Circle-5 Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAUTS 3817 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal, CA jktLo dh vksj ls@ Revenue by: Smt. Manisha Choudhary, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 25/08/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 31/08/2022 vkns'k@ ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 28-04-2022, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2018-19 wherein the assessee has raised the following ground of appeal. ‘’1. On the facts and circumstances of the case and law, the ld. CIT(A) erred in passing the order without proper opportunity. 2. On the facts and circumstances of the case and law, the ld. CIT(A) erred in passing the order without providing the 2 ITA NO. 255/JP/2022 SHRI KRISHNA MANDIR TRUST VS ACIT, CIRCLE-5, JAIPUR proper service and effect of corona epidemic. The order sent by Mail only to CA and the Accountant of the Firm. No physical notice was served. 3. On the facts and circumstances of the case and law, the ld. CIT(A) erred in passing the order by relying the decision CIT vs Multiplan India Pvt Ltd. The case law is not applicable. 4. On the facts and circumstances of the case and law, the ld. CIT(A) erred in not allowing standard deduction u/s 24x of 30 per cent from the rental income of Rs.11,70,103/- on which TDS has been deducted. 5. On the facts and circumstances of the case and law, the ld. CIT(A) erred in not allowing the deduction of repair expenses of Rs.6,19,157/- from the rental income. 6. On the facts and circumstances of the case and law, the ld. CIT(A) erred that since the trust is created before 01-04- 1961, the income is not taxable u/s 11(1)(b) of the I.T. Act. The AO has taken the gross total income of the trust of Rs. 19,58,355/- which includes various religious function income and no deduction is allowed in respect of expenditure for such religious expenditure. The AO should adopt the net income. 7. On the facts and circumstances of the case and law, the ld. CIT(A) and the AO erred in not allowing the expenditure of Rs.22,87,764/- incurred by the Trust. 2.1 However, the ld. AR while filing the written submission to this case has concised the grounds as under:- ‘’Ground No.1: The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee for the reason that assessee appears not to be keen to pursue the appeal and thus, not deciding the appeal on merit. Ground No.2:The Ld. CIT(A), NFAC has erred on facts and in law in confirming the assessment of total income u/s 143(1) at Rs.19,58,355/- without allowing the claim of expenditure of Rs.22,87,764/- and also not allowing 3 ITA NO. 255/JP/2022 SHRI KRISHNA MANDIR TRUST VS ACIT, CIRCLE-5, JAIPUR standard deduction u/s 24 against the rental income of Rs.11,70,103/- declared in the Income & Expenditure A/c.’’ 2.2 Brief facts of the case are that the assessee trust filed its return of income on 12-10-2018 at Nil income after claiming deduction of expenditure of Rs.23,85,840/- against income of Rs.19,58,355/-. The CPC, Bangaluru while processing the return did not allow deduction of expenditure and assessed the gross receipts of Rs.19,58,355/- as total income of the assessee. 2.3 Against the said intimation, the assessee filed an appeal before the ld. CIT(A) but the ld. CIT(A) after providing the opportunity of hearing to both the parties dismissed the appeal filed by the assessee on account of non-prosecution. 2.4 Aggrieved by the order of the ld. CIT(A), the assessee filed the present appeal before us on the grounds mentioned herein below. ‘’Ground No.1: The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee for the reason that assessee appears not to be keen to pursue the appeal and thus, not deciding the appeal on merit. Ground No.2:The Ld. CIT(A), NFAC has erred on facts and in law in confirming the assessment of total income u/s 143(1) at Rs.19,58,355/- without allowing the claim of expenditure of Rs.22,87,764/- and also not allowing standard deduction u/s 24 against the rental income of Rs.11,70,103/- declared in the Income & Expenditure A/c.’’ All the grounds raised by the assessee are interrelated and interconnected challenging the order of the ld. CIT(A) in upholding the addition made by the AO. Therefore, the Bench decides to dispose off these grounds through a common order. 4 ITA NO. 255/JP/2022 SHRI KRISHNA MANDIR TRUST VS ACIT, CIRCLE-5, JAIPUR 2.5 At the outset of the hearing, it was submitted by the ld. AR that the lower authorities assessed the gross receipts as income ignoring the expenditure by the assessee. The ld. AR has drawn the attention of the Bench to the income and expenditure account placed at PB page15 from where it can be noticed that the assessee had incurred expenditure of Rs.2,87,764/- against receipt of Rs.19,58,355/-. According to the ld. AR, the said expenditure incurred by the assessee is directly connected with the receipts from specific activity/donation. It was further argued that the assessee is also eligible for standard deduction of 30% u/s 24 of the Act. Thus according to the ld. AR, the gross receipts cannot be taxed as income. In this regard, the reliance was placed of the Coordinate Bench, Jaipur dated 29-05-2019 in the case of Kund Kund Kahan Digambar Jain vs ITO (E) (ITA Nos. 165 to 168/JP/2019 ). 2.6 On the contrary, the ld. DR relied upon the orders of the lower authorities and it was submitted that the assessee neither cooperated with the revenue authorities nor put appearance before the ld. CIT(A) even in spite of fact that sufficient notices were served upon the assessee. Therefore, the assessee cannot be allowed to take advantage of its wrong. Hence, in these circumstances, the present appeal of the assessee deserves to be dismissed. 2.7 After hearing both the parties, perusing the materials available as well as the citation placed by the ld. AR of the assessee, the Bench noted that the assesse had 5 ITA NO. 255/JP/2022 SHRI KRISHNA MANDIR TRUST VS ACIT, CIRCLE-5, JAIPUR neither appeared nor cooperated before the ld. CIT(A). Therefore, the ld. CIT(A) decided to dispose off the appeal ex-parte and thus dismissed the appeal of the assessee. Although, in my view, the conduct of the assessee is deplorable yet the ld. CIT(A) was expected to decide the case on merit instead of dismissing the appeal of the assessee by applying the decision in the case of CIT vs Multiplan India Pvt. Ltd. While reaching to the conclusion in this regard, the Bench draws strength from the decision of Hon’ble Bombay High Court in the case of CIT vs Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). ‘’8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in a 250(4) of the Act. Further s. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A) Thus once an assessee files an appeal under s 246d of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CITA) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the 40 i.e. he can do all that AO could do. Therefore just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the 251(1)(a) and (b) and Explanation to s. 251(2) of the Act which requires the 6 ITA NO. 255/JP/2022 SHRI KRISHNA MANDIR TRUST VS ACIT, CIRCLE-5, JAIPUR CITA) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.’’ Now coming to the merit of the grounds raised by the assessee, it is an undisputed fact that lower authorities have assessed the gross receipts as income thereby ignoring the expenditure incurred by the assessee. According to the Bench, gross receipts cannot be taxed as income and what can be taxed as income is only the surplus. Therefore, the Bench relies upon the decision of Coordinate Bench, Jaipur in the case of Kund Kund Kahan Digamber Jain vs ITO (E) (Supra) wherein the Court has observed as under:- ‘’8. We have heard the rival contentions and perused the material available on record We find that where the exemption claimed under section 11 and 12 has been denied by the Assessing officer, what can be brought to tax is the net income in the hands of the assessee trust and not the gross receipts. In all these years, we find that while denying the exemption under section 11 and 12 for want of registration under section 12AA, the Assessing officer has brought gross receipts to tax which is against the basic tenets of law where only the real income which is determined after deducting expenses from gross receipts can be brought to tax We therefore agree with the alternate contention so advanced by the Id AR and without going into merit of the other contention which is left open, the matter is set-aside to the file of the Assessing officer to examine the claim of the expenditure so claimed by the assessee trust against the gross receipts for each of the relevant years and where the Assessing officer determines the net receipts as not exceeding the maximum amount not chargeable to tax, allow the necessary relief to the assessee trust. The Bench taking into consideration the submissions of the assessee and the decision of the Coordinate Bench, Jaipur in the case Kund Kund Kahan Digamber Jain vs ITO (E) (Supra) set aside the matter to the file of the AO to examine the claim of expenditure afresh so claimed by the assessee trust against the gross 7 ITA NO. 255/JP/2022 SHRI KRISHNA MANDIR TRUST VS ACIT, CIRCLE-5, JAIPUR receipt for the year under consideration by providing adequate opportunity of being heard to the assessee. Before parting, the Bench makes it clear that its decision to restore the matter back to the file of the A.O. shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by A.O. independently in accordance with law. Thus the appeal of the assessee is allowed for statistical purposes 3.0 In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 31/08/2022. Sd/- ¼lanhi xkslkbZ½ (Sandeep Gosain) U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 31/08/2022 *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Krishna Mandir Trust, Jaipur 2. izR;FkhZ@ The Respondent- The ACIT, Circle-5, Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 255/JP/2022) vkns'kkuqlkj@ By order, Asstt. Registrar