Saraswati Bal Kalyan Nyas, Indore V. ITO Exeption, Indore, Indore

ITA 296/Ind/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7212 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 10-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Benefit of exemption; Revised return; Set aside
• Section: 10B; 143(1); 12; 154; 11

Judgement Text

[ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.296/IND/2018 ASSESSMENT YEAR:2014-15 SARASWATI BAL KALYAN NYAS 40, SAMVAD NAGAR INDORE / VS. ITO (EXEMPTION), INDORE ( APPELLANT ) ( REVENUE ) P.A. NO. AAETS0646L APPELLANT BY SHRI S.S. DESHPANDE, A.R. RESPONDENT BY SHRI R.P. MAURYA, D.R. DATE OF HEARING: 26.06.2019 DATE OF PRONOUNCEMENT: 30.07.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE CIT(A)-II, INDORE DATED 15.02.2018 PERTAINING TO THE [ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] 2 ASSESSMENT YEAR 2014-15. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD. A.O. AND NOT RECTIFYING THE MISTAKES AS POINTED OUT BY THE A SSESSEE. 2. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE AS SESSEE HAS SENT FORM NUMBER 10 ALONG WITH THE COPY OF RESOLUTION TO THE LD. CIT, BHOPAL AND THE SAID FORM WAS FILED ONLINE ON 4.2.20 17. 3. THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT TH AT THE ACCUMULATION COLUMN WAS FILED IN AND DEPICTED IN THE SUBSEQUENT COLUMN BY MISTAKE WHICH COULD BE RECTIFIED BY CONSIDERING FOR M NO.10 FILED SUBSEQUENTLY ONLINE AND ALSO SENT THROUGH POST. 4. THE DEMAND RAISED BY INTIMATION U/S 143(1) MAY PLEA SE BE CANCELLED AND THE ORDER MAY PLEASE BE RECTIFIED. 5. THE ASSESSEE PRAYS TO ALTER, AMEND, ADD OR DELETE A NY OF THE GROUNDS OF APPEAL. 2. THE BRIEFLY STATED FACTS ARE THAT THE ASSESSEE FILED E-RETURN ON 13.11.2014 DECLARING TOTAL INCOME AT NIL. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX AC T, 1961 (HEREINAFTER CALLED AS THE ACT) BY CENTRAL PROCE SSING CENTRE ON 28.2.2016, RAISING DEMAND OF RS.11,54,915/- ON TOTAL INCOME OF RS.59,07,380/-. THE ASSESSEE FILED AN APPLICATION FOR RECTIFICATION U/S 154 OF THE ACT ON 20.1.2017 PRAYING THEREIN FOR RECTIFICATION OF MISTA KE ON THE GROUND THAT THE ASSESSEE IS A SOCIETY DULY REGISTE RED [ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] 3 U/S 12AA(1)(B)(I) OF THE ACT VIDE ORDER DATED 9.1.20 08. IT WAS STATED THAT IT HAD FILED FORM NO.10 FOR ACCUMULATION OR SET APART OF INCOME AT RS.1,25,00,000/-, WHICH WAS NOT TAKEN INTO ACCOUNT AND DEMAND WAS RAISED BY THE CPC. THE ASSESSEE ALSO FILED A COPY OF AUDIT REPORT IN FORM NO.10B AND FORM NO.10 ALONG WITH OTHER DOCUMENTS BEFORE THE A.O. HOWEVER, THE A.O. REJECTED THIS APP LICATION. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A), WHO ALSO DISMISSED THE APPEAL AND SUSTAINED THE FINDING OF THE A.O. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BOTH T HE AUTHORITIES HAVE FAILED TO APPRECIATE THE FACT IN RIGHT PERSPECTIVE AND FAILED TO TAKE NOTE OF THE FACT THAT THE ASSESSEE HAD FILED FORM NO.10 AND OTHER DOCUMENTS. LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LAW IS WE LL SETTLED THAT IF AUDIT REPORT IS SUBMITTED SUBSEQUENTL Y, EVEN [ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] 4 THEN, THE AUTHORITIES SHOULD CONSIDER SUCH AUDIT REPO RTS AND THE FORM, WHICH WAS SUBMITTED LATER ON. LD. COUNS EL FOR THE ASSESSEE SUBMITTED THAT UNDER THE IDENTICAL FAC TS, HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF CIT VS. HARDEODAS AGARWALLA TRUST (1992)198 ITR 511 HAS HELD THAT THE ASSESSEE COULD FILE THE AUDIT REPORT AT ANY TIM E BEFORE THE COMPLETION OF ASSESSMENT REPORT. LD. COU NSEL FOR THE ASSESSEE RELIED ON THE JUDGEMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF NATIONAL HORTICULTURE BOARD VS. CCIT (2009) 319 ITR 0074. FU RTHER RELIANCE IS ALSO PLACED ON THE JUDGEMENT OF THE HON'B LE DELHI HIGH COURT RENDERED IN THE CASE OF ASSOCIATION OF CORPORATION & APEX SOCIETIES OF HANDLOOMS VS. ASSISTAN T DIRECTOR OF INCOME TAX IN ITA NOS.523 TO 526 OF 201 2 DATED 10.1.2013. FURTHER, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CBDT IN ITS INSTRUCTION F. NO.267/482/77-IT(PART) DATED 9.2.1978, WHEREIN IT HAS [ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] 5 BEEN INSTRUCTED THAT THE EXEMPTION AS AVAILABLE TO SUCH TRUST U/S 11 & 12 OF THE ACT MAY NOT BE DENIED MERE LY ON ACCOUNT OF DELAY IN FURNISHING THE AUDITORS REPORT. 4. LD. D.R. OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THE BOTH THE AUTHO RITIES HAVE REJECTED THE CLAIM OF THE ASSESSEE ON THE BASIS TH AT THERE IS NO MISTAKE APPARENT FROM THE RECORDS. THE REVENUE HAS NOT REBUTTED THE SUBMISSIONS OF THE ASSES SEE THAT IT HAD SENT FORM NO.10 TO THE OFFICE OF THE CIT, BHOPAL ON 2.12.2016. THIS FACT SHOWS THAT FORM NO.10 WAS SE NT BEFORE THE PROCESSING OF RETURN. IT IS NOT THAT THE LD. CIT BHOPAL HAS NO JURISDICTION, EVEN OTHERWISE, IT WAS EXP ECTED SAID DOCUMENT EITHER OUGHT TO HAVE BEEN RETURNED ADVIS ING THE ASSESSEE TO SUBMIT BEFORE APPROPRIATE OFFICE THROU GH [ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] 6 THE MODE PRESCRIBED OR OTHERWISE, SUO-MOTO TRANSMITT ED TO SUCH OFFICE GIVING CONSIDERATION OF THE FACT THAT FORM NO.10 WAS SENT THROUGH REGISTERED POST AND COUPLED WITH THE FACT THAT CBDT ITSELF HAD ISSUED INSTRUCTION VIDE F.NO. 267/482/77-IT(PART) DATED 9.2.1978. IN THIS RESPECT THE A.O. OUGHT TO HAVE GIVEN THE BENEFIT AS AVAILABLE U/S 11 & 12 OF THE ACT TO THE ASSESSEE AS PER LAW. THIS VIEW IS REINFORCED BY THE CASE LAWS RELIED BY THE LD. COUNSE L FOR THE ASSESSEE. THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. HARDEODAS AGARWALLA TRUST (SUPRA) HAS CATEGORICALLY HELD IN PARA-16 & 17 OF THE JUDGEMENT AS UNDER: 16. IN OUR VIEW, THE RESULT OF IGNORING SUCH RETURN OR THE AUDIT REPORT WILL BE DENIAL OF EXEMPTION TO THE TRUST ALT HOUGH THE INCOME HAS BEEN SPENT FOR CHARITABLE OR RELIGIOUS PURPOSES . THIS WAS NOT INTENDED BY THE LEGISLATORS. IF AN ASSESSEE FAILS TO OBTAIN THE AUDIT REPORT IN THE PRESCRIBED FORM BEFORE THE ASSESSMENT IS COMPLETED, HE MAY NOT, ORDINARILY, BE ENTITLED TO GET THE BENEFIT OF EXEMPTION. IN THIS CASE, HOWEVER, AS WE HAVE INDICATED, THE ASSES SEE WAS NOT GIVEN AN OPPORTUNITY TO FILE THE AUDIT REPORT IN TH E PRESCRIBED FORM WHICH WAS AVAILABLE WITH THE ASSESSEE BEFORE THE AS SESSMENT WAS COMPLETED. IN SUCH A CASE, THE APPEAL BEING A CONT INUATION OF THE ORIGINAL PROCEEDINGS, THE APPELLATE AUTHORITY HAS T HE POWER TO ACCEPT THE AUDIT REPORT AND DIRECT THE ASSESSING OFFICER T O REDO THE [ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] 7 ASSESSMENT. THE APPELLATE AUTHORITY HAS PLENARY PO WERS IN DISPOSING OF AN APPEAL AND THE SCOPE OF HIS POWER I S COTERMINOUS AND CO-EXTENSIVE WITH THAT OF THE ASSESSING OFFICER . HE MAY, THEREFORE, CONSIDER AND DECIDE ANY MATTER ARISING O UT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST IS PASSED. HE CAN DO WHAT THE ASSESSING OFFICER CAN DO AND DIRECT HIM TO DO WHAT HE HAS FAILED TO DO. SUCH POWERS ARE, HOWEVER, SUBJEC T TO THE LIMITATION THAT WHAT AN ASSESSING OFFICER COULD NOT DO VALIDLY , THE FIRST APPELLATE AUTHORITY ALSO CANNOT DO IN APPEAL. THIS QUESTION, HOWEVER, DOES NOT ARISE IN THIS CASE AS THE ASSESSE E WAS ENTITLED TO FILE THE AUDIT REPORT BEFORE THE COMPLETION OF THE ASSESSMENT WITH OR WITHOUT A REVISED RETURN FOR THE PURPOSE OF CURING THE DEFECT IN THE ORIGINAL RETURN FILED WITHOUT THE AUDIT REPORT. 17. FOR THE REASONS AFORESAID, WE ARE OF THE VIEW T HAT, ON THE FACTS OF THIS CASE, THE TRIBUNAL CAME TO A CORRECT CONCLUSION. 6. FURTHER, THE HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF NATIONAL HORTICULTURE BOARD VS. CCIT (SU PRA) AFTER CONSIDERING THE FACT THAT THE AUDIT REPORT WAS NOT FILED ALONG WITH THE RETURN AND THE EXEMPTION U/S 10(23C) O F THE ACT WAS REJECTED. THE HON'BLE COURT HAS HELD AS UNDER : THE VIEW TAKEN IN THE IMPUGNED ORDER IS HIGHLY TECH NICAL. THE PROVISION HAVING BEEN SUBSTANTIALLY COMPLIED WITH, THE AUDIT REPORT SHOULD HAVE BEEN TAKEN INTO ACCOUNT EVEN IF, STRICT LY SPEAKING, IT WAS NOT FILED WITH THE RETURN AND NOT IN FORM 10BB BUT IN FORM 10B AS STATED IN THE IMPUGNED ORDER. THIS MADE NO DIFFERE NCE TO THE SPIRIT OF THE REQUIREMENT LAID DOWN. 7. THE CBDT HAS ISSUED INSTRUCTIONS IN THIS REGARD, WHICH READS AS UNDER: [ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] 8 171. REQUIREMENT OF FILING AUDIT REPORT ALONG WITH RETURN, WHETHER MANDATORY 1. THE BOARD HAVE CONSIDERED WHETHER THE REQUIREMEN T UNDER SECTION 12A(B) OF FILING AUDIT REPORT ALONG WITH T HE RETURN OF INCOME IS MANDATORY SO AS TO DISENTITLE THE TRUST FROM CLA IMING EXEMPTION UNDER SECTIONS 11 AND 12 IN CASE OF OMISSION TO FUR NISH SUCH REPORT IN THE PRESCRIBED FORM ALONG WITH THE RETURN. 2. NORMALLY, IT SHOULD BE POSSIBLE FOR A CHARITABLE OR RELIGIOUS OR INSTITUTION TO FILE THE AUDITORS REPORT ALONG WITH THE RETURN OF TOTAL INCOME, WHERE SUCH TRUST OR INSTITUTION CLAIMS EXEM PTION UNDER SECTIONS 11 AND 12. HOWEVER, IN CASES WHERE FOR RE ASONS BEYOND THE CONTROL OF THE ASSESSEE SOME DELAY HAS OCCURRED IN FILING THE SAID REPORT THE EXEMPTION AS AVAILABLE TO SUCH TRUST UND ER SECTIONS 11 AND 12 MAY NOT BE DENIED MERELY ON ACCOUNT OF DELAY IN FURNISHING THE AUDITORS REPORT AND THE INCOME-TAX OFFICER SHO ULD RECORD REASONS FOR ACCEPTING A BELATED AUDIT REPORT. 8. IN THE LIGHT OF THE ABOVE, WE HEREBY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DIRECT THE A.O. TO ALLOW THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. THE GROUNDS OF THE ASSESSEE ARE ALLOWED IN THE TERMS INDIC ATED HEREIN ABOVE. THE APPEAL FILED BY THE ASSESSEE IS ALLOW ED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.296/IND/2018 FOR THE A.Y. 2014-15 IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30. 07.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 30/07/2019 VG/SPS [ITA NO.296/IND/2018] [SARASWATI BAL KALYAN NYAS, INDORE] 9 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE