Sree Sudheendra Medical Mission, Cochin V. Dy.Dirctor of Incometax(Exemption), Ernakulam

ITA 30/COCH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6222 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 31-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2014
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: T JOHN GEORGE
• Keywords: Capital asset; Depreciation; Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 30/COCH/2014 ASSESSMENT YEAR: 2008-09 SREE SUDHEENDRA MEDICAL MISSION, CHITTOOR ROAD, ERNAKULAM, KOCHI-882 018. [PAN:AABTS 2786G] VS. THE DEPUTY DIRECTOR OF INCOME-TAX (EXEMPTION), ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI T. JOHN GEORGE, ADV. REVENUE BY SMT. LATHA V. KUMAR, JR. DR DATE OF HEARING 31/03/2014 DATE OF PRONOUNCEMENT 04/04/2014 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 20- 10-2013 PASSED BY THE LD. CIT(A)-II, KOCHI AND IT R ELATES TO THE ASSESSMENT YEAR 2008-09. 2. THOUGH THE ASSESSEE HAS RAISED AS MANY AS 13 GRO UNDS, ALL OF THEM ARE DIRECTED AGAINST A SINGLE ISSUE, I.E., WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION MADE BY THE ASSESSING OFFICER. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A CHARITABLE SOCIETY REGISTERED U/S. 12AA OF THE ACT. DURING THE COURSE OF I.T.A. NO. 30/COCH/2014 2 ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION IN RESPECT OF CAPITAL ASSETS, WHOSE COST HAS ALREADY BEEN ALLOWED FULLY AGAINST ITS INCOME TREATING IT AS APP LICATION OF INCOME. THE ASSESSING OFFICER NOTICED THAT THE HONBLE ITAT, COC HIN BENCH IN THE CASE OF M/S. LISSIE MEDICAL INSTITUTIONS IN I.T.A. NO. 1010/COCH /2008 DATED 26-10-2010 HAS HELD THAT A SOCIETY / TRUST REGISTERED U/S. 12AA OR 12A OF THE ACT IS NOT ELIGIBLE TO CLAIM DEPRECIATION IN RESPECT OF CAPITAL ASSETS, TH E COST OF WHICH WAS ALREADY ALLOWED AS APPLICATION OF INCOME. BY FOLLOWING THE SAID DECISION, THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) NOTICED THAT THE DECISI ON RENDERED BY THE ITAT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS HAS BEEN UP HELD BY THE HONBLE HIGH COURT OF KERALA. THE DECISION OF THE HIGH COURT WAS SEEN REPORTED IN 348 ITR 344. ACCORDINGLY, THE LD. CIT(A) UPHELD THE DISALLOWANCE OF DEPRECIATION MADE BY THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE HAS FIL ED THIS APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. THE LD. AR SUBMITTED THAT THE HONBLE HIGH COURT OF KER ALA IN THE CASE OF LISSIE MEDICAL INSTITUTIONS (REFERRED SUPRA) HAS ALLOWED T HE ASSESSEE TO WRITE BACK THE DEPRECIATION CLAIMED IN THE EARLIER YEARS AND CARRY FORWARD THE SAME TO SUBSEQUENT YEARS FOR APPLICATION FOR CHARITABLE PUR POSES. THE LD. AR HAS FURTHER SUBMITTED THAT THE ASSESSEE HAD MADE SIMILAR CLAIM BEFORE THE LD. CIT(A) BY URGING A SPECIFIC GROUND, BUT THE FIRST APPELLATE A UTHORITY HAS OMITTED TO I.T.A. NO. 30/COCH/2014 3 ADJUDICATE THE SAID GROUND. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THIS BENCH OF TRIBUNAL HAS ALREADY TAKEN A VIEW THAT THE TRIBUNAL IS NOT EMPOWERED TO GIVE SUCH KIND OF DIRECTION. 5. WE NOTICE THAT THE LD CIT(A) HAS FOLLOWED TH E BINDING DECISION OF HONBLE HIGH COURT OF KERALA RENDERED IN THE CASE OF LISSIE MEDICAL INSTITUTION (REFERRED SUPRA) TO UPHOLD THE DISALLOWANCE OF DEPRECIATION. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS DECISION ON THIS ISSUE . 6. WITH REGARD TO THE CLAIM OF WRITING BACK OF DEPRECIATION CLAIMED IN THE EARLIER YEARS, WE NOTICE THAT THIS BENCH OF THE TRI BUNAL HAS ALREADY CONSIDERED AN IDENTICAL CLAIM MADE IN THE CASE OF SHANTI SADAN SO CIETY IN I.T.A. NO. 74/COCH/2012 AND THE TRIBUNAL, VIDE ITS ORDER DATED 07-12-2012, HAS HELD AS UNDER: 6. HOWEVER, DURING THE COURSE OF HEARING, BOTH THE PARTIES AGREED THAT THE IMPUGNED ISSUE IS COVERED AGAINST THE ASSESSEE BY THE LATER DECISION DATED 26.10.2010 RENDERED BY THE HONBLE JURISDICTI ONAL KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS IN ITA N O.42 OF 2011. IN THE ABOVE SAID CASE, THE ASSESSING OFFICER HAD DISALLOW ED THE CLAIM OF DEPRECIATION BY HOLDING THAT THE ASSESSEE IS NOT EN TITLED TO CLAIM DEPRECIATION ON THOSE ASSETS WHOSE COST OF ACQUISIT ION WAS CLAIMED AS APPLICATION OF INCOME OF THE CHARITABLE TRUST FOR C HARITABLE PURPOSES, AS IT WOULD RESULT IN DOUBLE DEDUCTION OF CAPITAL EXPENDI TURE. THE VIEW OF THE AO WAS UPHELD BY THE TRIBUNAL BY FOLLOWING THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD & OTHERS VS . UNION OF INDIA, REPORTED IN 199 ITR 43. THE ASSESSEE CHALLENGED TH E ORDER OF THE TRIBUNAL AND THE HONBLE HIGH COURT UPHELD THE ORDE R OF THE TRIBUNAL WITH THE FOLLOWING OBSERVATIONS:- I.T.A. NO. 30/COCH/2014 4 FOR THE FOREGOING REASONS, WE DISPOSE OF THE APPEA L BY CONFIRMING THE ORDER OF THE TRIBUNAL. HOWEVER, AS R IGHTLY POINTED OUT BY THE COUNSEL FOR THE ASSESSEE THE SY STEM OF ALLOWING DEPRECIATION WAS FOLLOWED BY THE ASSESSEE FOR SEVERAL YEARS AND IT WAS CONSISTENT WITH THE VIEW T AKEN BY SEVERAL HIGH COURTS IN INDIA IN THE DECISIONS ABOVE CITED. WE FIND FORCE IN THIS CONTENTION BECAUSE ASSESSEE C ANNOT BE TAKEN BY SURPRISE BY DISALLOWING DEPRECIATION WH ICH WAS BEING ALLOWED FOR SEVERAL YEARS AND TO DEMAND TAX F OR ONE YEAR AFTER MAKING DISALLOWANCE. WE FEEL ASSESSEE S HOULD BE ALLOWED TO WRITE BACK DEPRECIATION AND IF DONE T HE ASSESSING OFFICER WILL MODIFY THE ASSESSMENT DETERM INING HIGHER INCOME AND ALLOW RECOMPUTED INCOME WITH THE DEPRECIATION WRITTEN BACK BY THE ASSESSEE TO BE CAR RIED FORWARD FOR SUBSEQUENT YEARS FOR APPLICATION FOR CH ARITABLE PURPOSES. SINCE THE DECISION RENDERED IN THE CASE OF LISSIE M EDICAL INSTITUTIONS IS A LATER ONE, THE SAME IS BINDING ON THE PARTIES HEREI N. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD CIT(A) . 7. IN THE CASE OF LISSIE MEDICAL INSTITUTION, TH E HONBLE HIGH COURT HAS GIVEN RELIEF WITH REGARD TO THE WRITE BACK OF THE D EPRECIATION. THE LD COUNSEL FOR THE ASSESSEE REQUESTED THE TRIBUNAL TO GIVE SIMILAR DIRECTIONS AS GIVEN BY THE HONBLE HIGH COURT FOR WRITING BACK OF THE DEPRECIATION IN THE INSTANT CASES ALSO. HOWEVER, WE ARE DOUBTFUL W HETHER THE TRIBUNAL IS EMPOWERED TO GIVE ANY SUCH DIRECTION. THE ACCUMULAT ION OF INCOME, AS SUBMITTED BY LD D.R, IS GOVERNED BY THE PROVISIONS OF EXPLANATION 2 TO SEC. 11(1) AND ALSO BY SEC. 11(2) OF THE ACT. IN T HE ABOVE CITED CASE, IT IS PERTINENT TO NOTE THAT THE HONBLE HIGH COURT HAS N OT MODIFIED THE ABOVE SAID PROVISIONS. INSTEAD, IT HAS GIVEN CONCESSION TO THE ASSESSEE, WHICH IN OUR VIEW, IS APPLICABLE TO THAT PARTICULAR ASSESSEE ONLY. THE ITAT, BEING A CREATURE OF STATUTE, IN OUR VIEW, CANNOT ARM ITSELF WITH ANY SUCH POWER, WHICH IS VESTED WITH THE HIGH COURT. ACCORDINGLY, WE ARE OF THE VIEW THAT THE TRIBUNAL IS NOT ENTITLED TO GIVE ANY SUCH RELIE F AS GIVEN BY THE HIGH COURT, SINCE THE TRIBUNAL HAS TO ACT WITHIN THE AUT HORITY OF THE PROVISIONS OF THE ACT. ACCORDINGLY, WE DECLINE TO GIVE ANY SU CH DIRECTION AS GIVEN BY THE HONBLE HIGH COURT. 5. IT CAN BE NOTICED THAT THE TRIBUNAL HAS ALREADY TAKEN A VIEW THAT THE TRIBUNAL IS NOT EMPOWERED TO GIVE ANY DIRECTION SIM ILAR TO THAT ONE GIVEN BY THE I.T.A. NO. 30/COCH/2014 5 HONBLE HIGH COURT OF KERALA IN THE CASE OF LISSIE MEDICAL INSTITUTIONS (REFERRED SUPRA) WITH REGARD TO WRITE BACK OF DEPRECIATION CL AIMED IN THE EARLIER YEARS. ACCORDINGLY, WE DECLINE TO GIVE ANY SUCH DIRECTION AS URGED BY LD. AR BEFORE US IN THIS REGARD. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 04-04-2014. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 4TH APRIL, 2014 GJ COPY TO: 1. SREE SUDHEENDRA MEDICAL MISSION, CHITTOOR ROAD, ERNAKULAM, KOCHI-682 018. 2. THE DEPUTY DIRECTOR OF INCOME-TAX(EXEMPTION), ERNA KULAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN