Gayatri Gyan Mandir Charitable Trust, JUNAGADH V. The Income Tax Officer, Ward-1 (1), JUNAGADH

ITA 304/RJT/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9171 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 16-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12AA; 143(1); 201; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , RAJKOT BENCH, RAJKOT BEFORE SHRI RAJPAL YADAV , HON BLE JUDICIAL MEMBER AND SHRI WASEEM AHMED HON BLE ACCOUNTANT MEMBER ITA NO. 304 / RJT /201 6 / ASSTT. YEAR: 2013 - 14 GAYATRI GYAN MANDIR CHARITABLE TRUST VRUNDAVAN COMPLEX NR. SHITALA KUND ROAD, JUNAGADH. VS . ITO, WARD - 1(1) JUNAGADH. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : NONE REVENUE BY : SHRI ANIL KUMAR DAS, DR / DATE OF HEARING : 1 9 / 0 9 / 201 9 / DATE OF PRONOUNCEMENT: 19 / 0 9 /201 9 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE I S IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF LD.CIT(A) - 3 , RAJKOT DATED 21.6.2016 PASSED FOR THE ASSTT.YEAR 2013 - 14. 2. IN RESPONSE TO THE NOTICE OF HEARING, AN ADJOURNMENT APPLICATION WAS FILED BY SRHI SAMIR JANI, TAX CONSULTANT. HOWEVER, AFTER GOING THROUGH THE SAME , WE DO NOT FIND ANY FORCE IN THIS ADJOURNM ENT APPLICATION. IT IS REJECTED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS NOT ENJOYING CERTIFICATE OF REGISTRATION UNDER SECTION 12AA OF THE ACT , T HOUGH IT CLAIMED ITSELF AS A TRUST WHO IS NOT HAVING REGISTRATION UNDER THE INCOME TAX ACT. IT HAS FILED ITS RETURN OF INCOME ELECTRONICALLY ON 8.1.2015 SHOWING GROSS INCOME OF THE TRUST ITA NO. 304/RJT/2016 2 AT RS.6,65,190/ - . THE TRUST HAS CLAIMED EXPENSES RELATED TO ITS ACTIVITIES AT RS.4,91,510/ - AND NET INCOME OF RS.1,73,680/ - WAS REQUIRED TO BE TAXED. BUT CPC HAS TRANSFERRED THIS CASE TO THE JURISDICTIONAL AO WHO HAS PROCESSED ITR AND DID NOT ALLOW EXPENDITURE CLAIMED BY THE ASSE SSEE WHILE PROCESSING RETURN UNDER SECTION 143(1) OF THE ACT . 4 . DISSATISFIED WITH THE ACTION OF THE AO AN APPLICATION UNDER SECTION 154 OF THE ACT WAS FILED WHICH WAS REJECTED BY THE AO. DISSATISFIED WITH THE ORDER OF THE AO, THE ASSESSEE FI LED AN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) REJECTED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT ADJUSTMENT OR RELIEF SOUGHT BY THE ASSES SEE DOES NOT FALL WITHIN THE AMBIT OF PRIMA FACIE APPARENT ER R OR WHICH CAN BE RECTIFIED UNDER SECTION 154 OF THE ACT. 5. WITH THE ASSISTANCE OF THE LD.DR , WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT IS PERTINENT TO OBSERVE THAT EVEN IF THE TRUST W A S N O T HAVING REGISTRATION UNDER SECTION 12AA THEN ALSO ONLY NET INCOME IS REQUIRED TO BE TAXED AND NOT THE GROSS INCOME. THE ASSESSEE HAS NOT CLAIMED ANY BENEFIT UNDER SEC TION 11(1)(A) OR 11(1)(D) OF THE ACT. ITS GRIEVANCE IS THAT WHATEVER ACTIVITIES IT HAS BEEN CARRIED OUT, THE EXPENSES INCURRED FOR SUCH ACTIVITY DESERVES TO BE ALLOWED, AND ONLY THE NET INCOME IS TO BE TAXED. IN OTHER WORDS, EVEN IF WE CONSTRUE THAT THE ACTIVITIES OF THE ASSESSEE AS BUSINESS, FOR THE SAKE OF ARGUMENTS, TH E N ALSO ONLY NET INCOME HAS TO BE CARVED OUT FOR TAXATION. THIS WAS APPARENT ERROR WHICH OUGHT NOT TO HAVE BEEN PROCESSED BY THE CPC OR THE AO UNDER SECTION 143(1). THE MOMENT IT WAS BRO U GHT TO THE NOTICE OF THE AO, HE SHOULD HAVE IMMEDIATELY RECTIFIED IT. THE SCOPE OF SECTION 143(1) IS NO T AVAILABLE WITH THE AO TO MAKE SUCH AN ADJUSTMENT. THEREFORE, THE LD.CIT(A) HAS ERRED IN PUTTING THE BLAME UPON THE ASSESSEE THAT IT IS SE EKING ADJU S T MENT OF SUCH WHICH ARE BEYOND THE SCOPE OF SECTION 154 ; T HE DISPUTE IS OTHER WAY AROUND. IT IS THE AO WHO HAS EXERCISED POWERS ITA NO. 304/RJT/2016 3 BEYOND HIS JURISDICTION UNDER SECTION 143(1), AND IMMEDIATELY WHEN SUCH ERRO R WAS POINTED OUT TO HIM, HE SHOULD HAV E RECTIFIED THE MISTAKE. WE ACCORDINGLY ALLOW THE APPEAL OF THE ASSESSEE, AND DIRECT THE AO TO TAKE ONLY NET INCOME SHOWN BY THE ASSESSEE FOR TAXATION. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 1 9 T H S EPTEMBER, 201 9 AT RAJKOT . S D / - S D / - (WASEEM AHMED ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER