The Assistant Commissioner of Income Tax (Exemptions) Circle- 1, Mangalore V. M/s Shree Devi Education Trust , Mangalore

ITA 317/BANG/2018

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5532 (ITAT-BANGALORE)
• Duration Of Justice: 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 02-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALAKRISHNAN N
• Assessee Lawyers: V SRINIVASAN
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 317 / BANG/201 8 ASSESSMENT YEAR : 2014 - 15 THE ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTIONS), CIRCLE 1, MANGALURU. M/S. SHREE DEVI EDUCATION TRUST, MAIN TOWER, BALLAL BAGH, MANGALURU 575 001. PAN: AABTS4707R APPELLANT RESPONDENT APPELLANT BY : SHRI BALAKRISHNAN N. ADDL. CIT (DR) RESPONDENT BY : SHRI V. SRINIVASAN, ADVOCATE DATE OF HEARING : 2 8 .0 2 .2018 DATE OF PRONOUNCEMENT : 28 .0 2 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE WHICH IS DIRECT ED AGAINST THE ORDER OF LD. CIT(A), MANGALURU DATED 24.11.2017 FOR ASSESSMENT Y EAR 2014-15. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE CIT(A) IS OPPOSED TO FACTS AND CIRCUMSTANCES OF THE CASE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) IS RIGHT IN LAW IN CONSIDERING THE CLAIM OF ADVANCE PAID TOWARDS PURCHASE OF PROPERTY WHICH IS A FRESH CLAIM MADE BE FORE THE CIT(A) ONLY AND MADE BEFORE THE AO DURING THE ASSESSMENT P ROCEEDINGS? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) IS RIGHT IN LAW IN CONSIDERING THE FRESH CLAIM OF T HE ASSESSE MADE BEFORE THE CIT(A) DURING THE APPELLATE PROCEEDINGS WITHOUT GIVING AN OPPORTUNITY TO AO TO GIVE HIS OPINION REGARDING THE FRESH CLAIM MADE. 4. WHETHER THE CIT(A) IS RIGHT IN LAW IN CONSIDERIN G THE CLAIM WITHOUT ALLOWING REASONABLE OPPORTUNITY TO THE AO UNDER RUL E 46A(3)(A) TO EXAMINE THE EVIDENCE OR DOCUMENTS PRODUCED BY THE A SSESSE BEFORE THE CIT(A) ITA NO. 317/BANG/2018 PAGE 2 OF 3 5. FOR THESE AND SUCH OTHER GROUNDS, IT IS URGED TH AT THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ALL OR ANY OF THE GROUNDS OF APPEAL BEFORE OR AT ANY TIME OF THE HEAR ING OF THE APPEAL 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT THE TAX EFFECT IN THE PRESENT CASE IS BELOW RS. 10 LAKHS AND THEREFOR E, THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE AS PER THE LATEST INSTR UCTIONS OF CBDT WHICH SAYS THAT NO APPEAL SHOULD BE FILED BY REVENUE BEFORE TH E TRIBUNAL IF TAX EFFECT IS BELOW RS. 10 LAKHS EXCLUDING INTEREST LIABILITY. I N SUPPORT OF HIS CONTENTION, HE SUBMITTED A COPY OF INCOME TAX COMPUTATION FORM ISS UED BY THE AO ALONG WITH THE ASSESSMENT ORDER AND POINTED OUT THAT AO HAS CO MPUTED THE TAX AMOUNT AT RS. 9,72,807/- INCLUDING TAX OF RS. 9,44,473/- AND SURCHARGE OF RS. 28,334/- AND THE AMOUNT OF DEMAND INDICATED BY THE AO ON PAGE NO . 2 OF THE ASSESSMENT ORDER OF RS. 13,52,200/- IS INCLUSIVE OF INTEREST U /S. 234A OF RS. 58,368/- AND U/S. 234C OF RS. 3,21,024/- MAKING IT RS. 13,52,199 /- ROUNDED OFF TO RS. 13,52,200/-. IN REPLY, LD. DR OF REVENUE SUBMITTED THAT AS PER THE WORKING PROVIDED BY THE AO REGARDING TAX EFFECT, NOTIONAL T AX EFFECT IN THE PRESENT CASE IS OF RS. 1,24,47,780/- AND HE SUBMITTED A COPY OF THIS WORKING PROVIDED BY THE AO. HE SUBMITTED THAT IN VIEW OF THIS WORKING OF T HE AO REGARDING THE NOTIONAL TAX EFFECT, THE APPEAL OF THE REVENUE SHOULD BE DEC IDED ON MERIT. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND NO MERIT IN THE SUBMISSIONS OF LD. DR OF REVENUE AND IN THE WORKING OF THE AO REGA RDING NOTIONAL TAX EFFECT BECAUSE I FIND THAT THE AO HAS WORKED OUT THE TAXAB LE INCOME IN THE ASSESSMENT ORDER AT RS. 37,14,905/- AFTER CONSIDERI NG THE ACCUMULATION U/S. 11(1)(A) OF THE IT ACT OF RS. 4,54,35,661/- AND ACC UMULATION U/S. 11(2) OF RS. 7,04,22,171/-. IF THE INCOME IS COMPUTED AFTER ALL OWING EXEMPTION U/S. 10(23C) (IIIAD), AS DIRECTED BY CIT (A), THE GROSS INCOME O F THE ASSESSEE WILL GO DOWN AND SIMILARLY THE ACCUMULATION U/S. 11(1) (A) AND 1 1(2) WILL ALSO GO DOWN AND AT THE BEST, THE ASSESSED INCOME WILL BE NIL. GRANTING OF EXEMPTION U/S. 10(23C) (IIIAD) REDUCES THE INCOME OF THE ASSESSEE COMPUTED BY THE AO IN THE ASSESSMENT ORDER AND IT CANNOT ALLOW THE ASSESSEE ANY BENEFIT FOR CARRY FORWARD OF LOSSES EVEN IF THE EXEMPTION AVAILABLE U /S. 10(23C) (IIIAD) IS MORE ITA NO. 317/BANG/2018 PAGE 3 OF 3 THAN THE INCOME COMPUTED BY THE AO IN THE ASSESSMEN T ORDER. IN THE WORKING OF TAX EFFECT BY THE AO, HE HAS CONSIDERED THE AMOU NT OF EXEMPTION GRANTED BY CIT(A) U/S. 10(23C)(IIIAD) AND IN MY CONSIDERED OPI NION THIS WORKING IS NOT VALID BECAUSE IN THE ABSENCE OF ALLOWABILITY OF CARRY FOR WARD OF EXEMPTION U/S 10(23C)(IIIAD), THE TAX EFFECT DEPENDS ON THE AMOUN T OF ASSESSED INCOME AS PER ASSESSMENT ORDER AND THE DEMAND ON THE ASSESSED INCOME IS LESS THAN RS. 10 LACS EXCLUDING INTEREST. HENCE, I FIND FORCE IN THE SUBMISSIONS OF LD. AR OF ASSESSEE THAT SINCE THE TAX IS LIABILITY AS PER THE AO AS PER INCOME TAX COMPUTATION FORM ATTACHED WITH THE ASSESSMENT ORDER IS ONLY RS. 9,72,807/- EXCLUDING INTEREST LIABILITY U/S. 234A, 234B&234C, THE TAX EFFECT IN THE PRESENT CASE CANNOT BE MORE THAN THE TAX LIABILITY WORKED O UT BY THE AO AND HENCE, IN THE PRESENT CASE, TAX EFFECT OF THE RELIEF ALLOWED BY THE CIT(A) IS LESS THAN RS. 10 LAKHS AND THEREFORE, I HOLD THAT IN VIEW OF THE LATEST CBDT INSTRUCTIONS AND LOW TAX EFFECT, THE APPEAL OF THE REVENUE IS NOT MA INTAINABLE AND THE SAME IS DISMISSED ACCORDINGLY. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 28 TH FEBRUARY, 2018. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.