TRINITY SENIOR CITIZEN CARE, CHENNAI V. DCIT CORPORATE CIRCLE 3(1), CHENNAI

ITA 3324/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8233 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 04-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B. SAGADEVAN
• Keywords: Charitable institution; Revised return
• Section: 154; 143(1); 139(1); 113

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , !' #'$ % ! , & ' BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ' ./ ITA NO. 3324 /CHNY/2018 !( /ASSESSMENT YEAR: 2015-16 TRINITY SENIOR CITIZEN CARE, 27/8-1, DR. GOVINDAN ROAD, ANNAMALAI HOSPITAL, WEST MAMBALAM, CHENNAI 600 040. VS. DY. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-3(1), CHENNAI. [PAN: AAECT 9874C] ( ) /APPELLANT) ( *+) /RESPONDENT) ) , - / APPELLANT BY : SHRI M. KARUNAKARAN, ADVOCATE *+) , - /RESPONDENT BY : SHRI B. SAGADEVAN, JCIT . ! , /& /DATE OF HEARING : 28.03.2019 01( , /& / DATE OF PRONOUNCEMENT : 29.03.2019 2 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -11, CHENNAI (HEREINAFTER CALLED AS CIT(A)) DATED 13.11.2018 F OR THE ASSESSMENT YEAR (AY) 2015-16. 2. THE APPELLANT RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN SUSTAINING THE ORDER OF THE CPC DETERMINING THE INC OME OF THE APPELLANT AT RS. 9,78,608/-. ITA NO.3324/CHNY/2018 (AY: 2015-16) :- 2 -: 2. THE CPC IS NOT CORRECT IN TAXING THE GROSS INCOM E OF THE APPELLANT EVEN THOUGH THE APPELLANT IS NOT REGISTERED AS A CH ARITABLE TRUST UISL2AA OF THE ACT. 3. THE APPELLANTS SUBMIT THAT THE CPC HAVING ASSESS ED THE APPELLANT AS A COMPANY OUGHT TO HAVE ALLOWED THE EXPENSES INC URRED BY THE APPELLANT FOR EARNING THE GROSS RECEIPTS. 4. THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED THE ITR-6 FILED WHEN THE RETURN FILED IN ITR-7 WAS NOT APPLICABLE TO THE APPELLANT COMPANY. 5. THE APPELLANT COMPANY BEING A COMPANY REGISTERED U/S 8 OF THE COMPANIES ACT, 2013 HAS FILED THE RETURN IN ITR-7 A S A CHARITABLE TRUST BUT SINCE IT WAS NOT REGISTERED U/S 12AA, THE EXPENSES CLAIMED AS APPLICATION OF INCOME WAS DENIED. THE APPELLANT SUBMITS THAT EVEN OTHERWISE ONLY THE NET INCOME OF THE APPELLANT COULD BE TAXED AND NOT THE GROSS RECEIPTS AS DONE BY CPC. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT THE MISTAKE COULD NOT BE RECTIFIED U/S 154 ESPECIALLY WHEN THERE IS A CLEAR MISTAKE IN ASSESSING GROSS RE CEIPTS AS INCOME OF THE APPELLANT THOUGH THE APPELLANT HAS FILED THE RETURN IN A WRONG FORM. 7. THE APPELLANTS THEREFORE PRAY THAT THE EXPENSES CLAIMED MAY BE ALLOWED AGAINST THE GROSS RECEIPTS ASSESSED AND ONL Y NET LOSS MAY BE CONSIDERED FOR ASSESSMENT AND RENDER JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS A COMPANY INCORPORATED UNDER THE P ROVISIONS OF S. 8 OF THE COMPANIES ACT, 2013. THE OBJECTS FOR WHIC H THE COMPANY WAS SET UP IS TO TAKE CARE OF SENIOR CITIZENS BY PROVID ING ACCOMMODATION, MEALS AND MEDICAL CARE BY COLLECTING THE NOMINAL FE E AND RUN INSTITUTION AS A NON-PROFIT ORGANIZATION. THE RETURN OF INCOME FOR THE AY 2015-16 WAS FILED USING FORM ITR-7 UNDER THE BELIEF THAT TH E APPELLANT IS ALSO A CHARITABLE TRUST. WHILE PROCESSING THE SAID RETURN OF INCOME CPC HAD NOT ALLOWED APPLICATION OF INCOME AS CLAIMED IN THE RET URN OF INCOME BUT LEVIED TAX ON THE GROSS RECEIPTS. AFTER RECEIPT OF THE INTIMATION U/S. 143(1) ITA NO.3324/CHNY/2018 (AY: 2015-16) :- 3 -: OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), T HE APPELLANT FILED REVISED RETURN IN FORM ITR-6 ON 12.09.2017. HOWEVE R, THE AO HAD NOT TAKEN COGNIZANCE OF RETURN AS IT WAS FILED BEYOND T HE PRESCRIBED TIME. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDER DISMISSED THE APPEAL. BEING AGG RIEVED, THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APP EAL. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE PROVISIONS OF S. 139(1) OF THE ACT REQ UIRES AN ASSESSEE TO FILE RETURN OF INCOME IN THE PRESCRIBED FORM AND VE RIFIED IN THE PRESCRIBED MANNER. WHEN THE RETURN OF INCOME WAS FILED IN THE WRONG FORM ASSESSMENT CANNOT BE MADE, IT WOULD BE INVALID IN L AW AS HELD BY HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT V. GUPTA 113 ITR 473 (ALL.). HOWEVER, IN THE PRESENT CASE, THE AO HAD NOT HELD T HE RETURN OF INCOME INVALID BUT PROCEEDED TO PROCESS THE RETURN OF INCOME AS IF IT IS A RETURN IN FORM ITR NO.6. THEREFORE, THE AO IS DUTY BOUND TO COMPUTE THE PROFITS IN THE COMMERCIAL MANNER AND EXAMINE THE EL IGIBILITY OF THE EXPENDITURE AGAINST THE INCOME EARNED, THE AO HAD F AILED TO DO SO. THEREFORE, WE REMAND THIS ISSUE FOR FRESH ASSESSMEN T IN ACCORDANCE WITH LAW AS IF IT IS A RETURN OF INCOME FILED IN FORM IT R NO.6. ITA NO.3324/CHNY/2018 (AY: 2015-16) :- 4 -: 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH, 2019 IN CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( #'$ % ! ) (INTURI RAMA RAO) & /ACCOUNTANT MEMBER /CHENNAI, 3' /DATED: 29 TH MARCH, 2019 . EDN, SR. P.S 2 , */45 65(/ /COPY TO: 1. ) /APPELLANT 2. *+) /RESPONDENT 3. . 7/ ( )/CIT(A) 4. . 7/ /CIT 5. 5!89 */ /DR 6. 9: ; /GF