RKKR Shiksha Foundation, Gurgaon V. ITO (Exemptions), Faridabad

ITA 305/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7035 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-11-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 21-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Assessee Lawyers: ANIL KANOIDA
• Keywords: Rectification of order
• Section: 143(3); 12A; 12AA; 12; 154; 11; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO. 305/DEL/2016 A.Y. : 2012-13 RKKR SHIKSHA FOUNDATION, PLOT NO. 71, SECTOR-53, VILLAGE WAZIRABAD GURGAON (AAECR3310B) VS. INCOME TAX OFFICER (EXEMPTIONS), FARIDABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ANIL KANOIDA, CA DEPARTMENT BY : SH. UMESH CHAND DUBEY, SR. DR ORDER PER H.S. SIDHU, JM ASSESSEE HAS FILED THIS APPEAL AGAINST THE IMPUGNE D ORDER DATED 17.11.2015 PASSED BY THE LD. CIT(A), GURGAON ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORD ER PASSED BY THE LD. CIT(A) CONFIRMING THE ADDITION OF RS. 1,58,27,052/- BY THE AO U/S. 143(3) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN DENYIN G EXEMPTIONS U/S. 11 / 12 OF THE INCOME TAX ACT, 1961 ON 2 THE GROUND THAT APPELLANT HAD NOT BEEN GRANTED CERTIFICATE OF REGISTRATION U/S. 12A OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THAT APPELLANT IS ELIGIBLE FOR EXEMPTION U/S. 11/12 OF THE ACT AS TRI BUNAL VIDE ORDER DATED 2.11.2010 DIRECTED THE CIT TO GRAN T CERTIFICATE OF REGISTRATION U/S. 12A OF THE ACT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING INCOME OF RS. 1,58,27,052 THOUGH THE APPELLANT HAD BEEN GIVEN BENEFIT OF SECTION 11/12 FOR AY 2010-11 AND AY 2011 -12 ON THE BASIS OF ITAT ORDER. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER A NY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED ITS RETURN DECLARING NIL INCOME ON 28.9.2012 AND THE SAME WAS PROCESSED. THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, STA TUTORY NOTICES U/S. 143(2) OF THE I.T. ACT, 1961 WAS ISSUED ON 23.9.201 3. LATER THE CASE WAS TRANSFERRED DUE TO CHANGE IN JURISDICTION AND AGAIN NOTICES U/S. 142(1)/129 OF THE ACT ALONGWITH DETAILED QUESTIONNA IRE WERE ISSUED ON 5.12.2014. IN RESPONSE THERETO, ASSEESSEES AR ATTE NDED AND FILED THE INFORMATION/DETAILS FROM TIME TO TIME. THE ASSESSE E COMPANY IS REGISTERED U/S. 25 OF THE COMPANIES ACT, 1956. NO B USINESS ACTIVITIES HAD 3 BEEN CARRIED OUT BY THE ASSESSEE COMPANY DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION . THE ONLY SOURCE OF INCOME IS INTEREST ON FDR. THE ASSESEE IN ITS RETUR N HAD CLAIMED EXEMPTION U/S. 11 OF THE I. T. ACT. ASSESSEE WAS A SKED TO FURNISH CERTIFICATE U/S. 12A FOR THE RELEVANT YEAR. THE ASS ESSEE REPLIED THAT REGISTRATION U/S. 12A WAS NOT GRANTED BY THE LD. CI T, FARIDABAD. AGAINST THE ORDER OF THE LD. CIT, ASSESSEE APPEALED BEFORE THE ITAT, DELHI WHICH VIDE ORDER DATED 31.8.2010 (ITA NO. 758, 759/DEL/20 10) DIRECTED THE CIT TO GRANT REGISTRATION U/S. 12A. AS PER THE ASSESSEE , THE CIT HAS NOT GRANTED REGISTRATION U/S. 12 TILL DATE. THEREFORE, THE AO HAS OBSERVED THAT THE ASSESSEE IS NOT REGISTERED U/S. 12A AND THE ASS ESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S. 11. THUS, EXCESS OF INCOME OVER EXPE NDITURE AMOUNTING TO RS. 1,58,27,052/- (RS. 16042305 215253) WAS TR EATED AS PROFITS FROM BUSINESS AND PROFESSIONAL AND ADDED BACK TO TH E INCOME OF THE ASSESSEE. ACCORDINGLY, THE AO ASSESSED THE INCOME OF THE ASSESSEE AT RS. 1,58,27,050/- VIDE HIS ORDER DATED 16.3.2015 PA SSED U/S. 143(3) OF THE I.T. ACT, 1961. 3. AGAINST THE ASSESSMENT ORDER, THE ASSEESSEE PRE FERRED AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 17.11.2015 HAS DISMISSED THE APPEAL OF THE ASSESSEE BY OBSERVING T HAT THE AO HAS DENIED THE EXEMPTION CLAIMED BY THE ASSESSEE U/S. 11/12 OF THE I.T. ACT ON THE GROUND THAT THE ASSESSEE SOCIETY IS NOT REGISTERED U/S. 12AA OF THE I.T. ACT FOR THE RELEVANT AY. THE ASSESSEE CONTENDED TH AT THE ITAT VIDE ITS ORDER DATED 2.11.2010 HAD HELD THAT THE ASSESSEE IS ELIGIBLE FOR 4 REGISTRATION U/S. 12AA WHICH SHOULD BE GRANTED. IN THIS REGARD, THE ASSESSEE HAS FILED A COPY OF THE ORDER DATED 20.5.2 015 U/S. 12AA PASSED BY THE CIT(E), CHANDIGARH. LD. CIT(A) OBSERVED THAT ON PERUSAL OF THE ORDER OF THE LD. CIT(E) IT REVEALS THAT THE ASSESSE HAS BEEN GRANTED REGISTRATION U/S. 12AA FOR THE AY 2015-16 ONWARDS. AS SUCH THE ASSESSEE IS NOT REGISTERED U/S. 12AA FOR THE YEAR UNDER REFE RENCE. LD. CIT(A) HAS DISCUSSED THIS FACT WITH THE AR OF THE ASSESSEE WHO EXPLAINED THAT THE REGISTRATION U/S. 12AA HAD BEEN WRONGLY GIVEN BY TH E CIT(E) W.E.F AY 2015-16 ALTHOUGH THE DATE OF APPLICATION U/S. 12A W AS 26.6.2009. THE ASSESSEE CONTENDED THAT HE WAS IN FACT ELIGIBLE FOR REGISTRATION U/S. 12AA W.E.F AY 2010-11 AND AS SUCH THE EXEMPTION CLAIMED DURING THE AY 2012-13 MAY BE ALLOWED TO HIM. HOWEVER, LD. CIT(A) HAS OBSERVED THAT THE FACT REMAINS THAT THE ASSESSEE SOCIETY IS NOT R EGISTERED U/S. 12AA FOR THE AY UNDER REFERENCE, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR THE BENEFITS OF THE DEDUCTION U/S. 11/12 OF THE I.T. AC T AND ACCORDINGLY, DISMISSED THE APPEAL OF THE ASSESSEE VIDE HIS ORDER DATED 17.11.2015. 4. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING LD. COUNSEL OF THE ASSESS EE HAS FILED A COPY OF THE ORDER DATED 19.8.2016 PASSED U/S. 154 OF THE I.T. ACT, 1961 BY THE LD. CIT(E), CHANDIGARH WHEREIN THE FOLLOWING ORDER HAS BEEN PASSED:- ORDER U/S. 154 OF THE I.T. ACT, 1961 5 IN CONTINUATION TO ORDER U/S. 12AA DATED 20.5.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH, THE YEAR FROM WHICH THE BENEFIT OF REGISTRATION U/S. 12AA NEEDS TO BE GIVE N INADVERTENTLY WRITTEN AS ASSESSMENT YEAR 2015-16 INSTEAD OF ASSESSMENT YEAR 2009-10 IN THE CASE OF M/S RKKR SHIKSHA FOUNDATION, PLOT NO. 69, SECTOR-53 , VILLAGE WAZIARABAD, GURGAON, PAN NO. AAECR3310B. 2. THE MISTAKE BEING APPARENT FROM RECORD IS RECTIFIED. THE BENEFIT OF REGISTRATION U/S. 12AA NO W MAY BE READ AS FROM ASSESSMENT YEAR 2009-10. 5.1 LD. COUNSEL OF THE ASSESSEE DURING THE HEARING ALSO FILED THE COPY OF THE DECISION DATED 1.9.2016 PASSED IN CWP NO. 17 374 OF 2015 (O&M) OF THE HONBLE PUNJAB & HARYANA HIGH COURT AT CHAND IGARH WHEREIN THE HONBLE HIGH COURT HAS HELD AS UNDER:- LEARNED COUNSEL APPEARING ON BEHALF OF RESPONDENTS NO. 2 AND 3 STATES THAT THE ORDERS UNDER SECTION 15 4 OF THE INCOME TAX ACT, 1961 HAVE BEEN PASSED RECTIFYIN G THE ORDER DATED 20.5.2015 UNDER SECTION 12AA OF ACT . THIS IS COMMUNICATED BY A LETTER DATED 19.8.2016 WHEREIN IT IS STATED THAT INADVERTENTLY THE YEAR FR OM WHICH THE BENEFIT OF REGISTRATION WAS WRITTEN AS ASSESSMENT YEAR 2015-16 INSTEAD OF ASSESSMENT YEAR 2009-10. THE SAME WAS ACCORDINGLY RECTIFIED. A COPY OF THE LETTER TOGETHER WITH THE ENCLOSURE IS T AKEN ON RECORD AS MARKED X. 2. IN VIEW THEREOF THE PETITIONERS GRIEVANCE SO FA R AS, THIS WRIT PETITION IS CONCERNED STANDS REDRESS ED. THE CONSEQUENTIAL EFFECT WOULD HAVE TO BE GIVEN IN ACCORDANCE WITH LAW. AN APPEAL IS PENDING BEFORE TH E CIT (APPEALS) AND BEFORE ITAT. THE ORDER OF RECTIFI CATION SHALL BE CONSIDERED BY THE CIT(A) AND THE TRIBUNAL WHILE DISPOSING OF THE APPEALS. WE WOULD REQUEST THE EXPEDITIOUSLY DISPOSAL OF THE APPEALS. THE PETITION ER 6 SHALL BE ENTITLED TO APPEAR BEFORE THE CIT(A) AND T HE TRIBUNAL TO INVITE THEIR ATTENTION TO A COPY OF THI S ORDER. 3. DISPOSED OF. 5.3 IN VIEW OF THE ABOVE, LD. COUNSEL OF THE ASSESS EE HAS REQUESTED THAT KEEPING IN VIEW OF THE RECTIFICATION ORDER PA SSED U/S., 154 DATED 19.8.2016 PASSED BY THE LD. CIT(E) AND THE DECISION DATED 1.9.2016 OF THE HONBLE HIGH COURT OF PUNJAB AND HARYANA AT CHA NDIGARH, THE APPEAL OF THE ASSESEE MAY BE ALLOWED AND ORDERS OF THE LOW ER AUTHORITIES MAY BE SET ASIDE. 6. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS ESPECIALLY THE RECTIFICATION ORDER DATED 19.8.2016 AND DECISIO N DATED 1.9.2016 OF THE HONBLE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH . WE FIND THAT THE ADDITION OF RS. 1,58,27,052/- IS CONFIRMED BY THE LD. CIT(A) SOLELY ON THE GROUND THAT THE ASSESSEE HAD NOT BEEN GRANTED C ERTIFICATE OF REGISTRATION U/S. 12A OF THE I.T. ACT, 1961. WE FIN D THAT LD. CIT(E) VIDE HIS ORDER DATED 19.8.2016 PASSED U/S. 154 OF THE AC T HAS RECTIFIED THE MISTAKE BY STATING THAT THE BENEFIT OF REGISTRATIO N U/S. 12AA NOW MAY BE READ AS FROM ASSESSMENT YEAR 2009-10. HENCE, THE ASSESSEE IS ELIGIBLE EXEMPTION U/S. 11 OF THE ACT FROM THE ASSESSMENT YE AR 2009-10. WE ALSO FIND THAT HONBLE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH VIDE ITS DECISION DATED 1.9.2016 HAS ALSO ORDERED THAT THE O RDER OF RECTIFICATION 7 SHALL BE CONSIDERED BY THE CIT(A) AND TRIBUNAL WHIL E DISPOSING OF THE APPEAL. 7.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND KEEPING IN VIEW OF THE ORDERS OF THE LD. CIT(E) AND THE DECISION OF THE HONBLE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH, AS AFORESAID, THE ASSESSEE IS ELIGIBLE FOR REGISTRATION U/S. 12AA IN THE PRESENT ASSESSMENT YEAR I.E. AY 2012-13, AS A RESULT THEREOF, ALSO ELIGIBLE FOR EX EMPTION CLAIMED DURING THE AY 2012-13. ACCORDINGLY, THE ADDITION IN DISPU TE IS NOT SUSTAINABLE IN THE EYES OF LAW. HENCE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DELETE THE ADDITION IN DISPUTE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/01/2017 . SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 04/01/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES