Shree Amreli Gurjar Sagar Gnati Trust., Amreli V. The ACIT-CPC, Banglore

ITA 34/RJT/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8211 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 20-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 234B; 143(1)

Judgement Text

ITA No. 34/RJT/2019 Assessment Year 2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted through E-Court at Ahmedabad) BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No.34/RJT/2019 Assessment Year: 2014-15 Shree Amreli Gurjar Sagar Gnati Trust, vs. The A.C.I.T., “Shanti Kunj”” CPC, Bangalore. Opp. Chandan Residency, Chital Road, Amreli [PAN – AACTA 3460 E] (Appellant) (Respondent) Appellant by : Written Submission Respondent by : Shri B.D. Gupta, Ld. Sr. D.R. Date of hearing : 02.08.2022 Date of pronouncement : 12.08.2022 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This appeal is filed by the assessee against the order dated 19.11.2018 passed by CIT(A)-2, Rajkot. 2. Grounds of Appeal: “1. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/-. The determination needs deletion. 2. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- without cogent reason. The determination needs deletion. ITA No. 34/RJT/2019 Assessment Year 2014-15 2 3. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- without describing specific reason. The determination needs deletion. 4. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- without applying specific rates of tax. The determination needs deletion. 5. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- based on presumption and surmises ignoring statutory position. The determination needs deletion. 6. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- without considering the grounds of appeal taken before him and without deciding any of the same giving any notice and giving any opportunity to submit the explanation. The determination needs deletion. 7. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- ignoring principles of natural justice. The determination needs deletion. 8. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- ignoring judicial guidelines. The determination needs deletion. 9. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- without considering past records of the assessee. The determination needs deletion. 10. The Ld. CIT(A) has erred in law and facts in confirming excess Income-tax payable at normal rate of Rs. 92,354/- without considering accepted position by the department in earlier year. The determination needs deletion. 11. Taking into consideration the legal, statutory, factual and administrative aspects, no determination of excess income-tax of Rs. 92,354/- ought to have been made. The same need deletion. ITA No. 34/RJT/2019 Assessment Year 2014-15 3 12. Without prejudice, the intimation made is bad in law and deserves annulment. 13. Without prejudice, no reasonable opportunity has been given by the Ld. CIT(A) at appellate stage. The same needs annulment. 14. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided. The intimation needs annulment. 15. Without prejudice, the determination is framed beyond statutory time limit. The intimation needs annulment. 16. The appellant craves leave to add/alter/amend and/or substitute any or all ground of appeal before the actual hearing takes place.” 3. The assessee filed return of income declaring income of Rs. 3,48,320/- and calculated the tax liability as under: i. Rs. 15,277/- - Income tax at normal rate including surcharge ii. Rs. 6,640/- - Interest u/s 234A, 234B & 234C Rs. 21,920/- - Total The Assessing Officer accepted the above return of income of Rs. 3,48,322/- but calculated the tax liability as under: i. Rs. 1,07,631/- - Income tax at normal rate including surcharge ii. Rs. 51,093/- - Interest u/s 234A, 234B & 234C Rs. 1,58,724/- - Total 4. Being aggrieved by the intimation under Section 143(1) of the Act, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. At the time of hearing none appeared on behalf of the assessee, but the written submissions were filed by the Ld. AR which is taken on record as submissions of the Assessee. Besides this, we are taking note of the submissions of the assesse made before the CIT(A) as well. ITA No. 34/RJT/2019 Assessment Year 2014-15 4 6. The written submissions filed by the Ld. AR are as follows (reproduction of the submissions): “ ................... 2. The assesse furnished return of income mentioning status as any other AOP/BOI and mentioned code no. 8. The Ld. A.O. CPC however change the status to any other AOP / BOI artificial judicial person and thus change the status. Which is not permissible as per details given below. 3. Beside above as per return income of Rs. 3,48,320/-, since the AOP is not liable to tax up to Rs. 2,00,000/- was shown tax due at Rs. 15,277 plus Interest of Rs. 6,640/- totalling to Rs. 21,917. As against this the Ld. A.O. suo-moto change the status without legal authority and required the assessee to make the payment of tax of Rs. 1,58,724/-. 4. As regards change of status as mentioned at para 2 above the assessee humbly submit that the same is not permissible in view of the following decisions: 1. 142 ITR 183 (All.) – J. K. Shrivastava 2. 118 Taxman 234 (Mad.) – Narayan Engineering Works. 3. 173 ITR 407 (Raj.) – Sureshchandra Gupta. 4. 358 ITR 373 (Karn.) – Children’s Education Society 5.1 The Hon. ITAT Calcutta in the case of Radharaman Jew Trust Fund in ITA No. 1632 (Col.) of 2016 dated 12-4-2017 also held that change of status is not permissible u/s 143(1). 5.2 The Hon. ITAT Rajkot in the case of Jalia Sevak Samaj in ITA No. 24/Rjt/2018 dated 13-7-2022 (Copy enclosed) also held that change of status is not permissible u/s 143(1). 6. The assessee also humbly rely on decisions of Hon. Apex Court in the case of the Mavilayi Society Co operative Bank Ltd. U ORS vs. CIT, dated January 12, 2021. Where it is provided that a debatable issues is beyond the scope to be disallow while processing the return u/s. 143(1). In the instant case the law does ITA No. 34/RJT/2019 Assessment Year 2014-15 5 not provide a separate column in the return of income for mentioning the status and since the assesse has claim the status as trust at least the Ld. A.O. ought to have given notice seeking clarification on the issue involve. Thus even without giving notice the basic requirement contain in the Finance Act has remain to be followed. 7. It is therefore submitted that an intimation u/s 143(1) may kindly be cancelled and the Ld. A.O. may be directed to tax the status as per return of income and delete the demand raised. 8. Moreover this is a case of Gurjar sagar gnati trust. This is one of the poor Samaj trying for their bread since long such a poor community who are almost bread to mouth is punished with raising such huge demand of Rs. 1,58,724/- is a blow which can be turned as burned as hot and cold since such an uneducated and poorest Samaj is certainly without their fault since even if such technical error is there this uneducated person do not know if it incurred at a level of filing return of income by their A.R. moreover in all subsequent years no such demand is raised nor intimation nor an opportunity has been given, at least it will be most judicial to restore the matter so that technical error can be solved and poorest Samaj can be helped taking broad view with the Ld. A.O. may consider after verifying the trust deed and other relevant material SD/- D. R. Adhia – A.R..” 7. The Ld. DR relied upon the Intimation u/s 143(1) of the Act and the order of the CIT(A). 8. We have heard Ld. DR and perused the written submissions filed by the Ld. AR along with the material available on record. Since the assesse or Ld. AR did not appear for hearing date despite giving notice, we are proceeding on the basis of the written submissions as well as the submissions mentioned in the order of the CIT(A). It is pertinent to note that Intimation under section 143(1) of the Act shows the status of the assessee as AOP/BOI and the contention of the assessee is that the assessee is trust. But without verifying as well as intimating the assessee about the change of status taken by the department as AOP/BOI, the intimation u/s 143(1) has ITA No. 34/RJT/2019 Assessment Year 2014-15 6 directly mentioned that the Tax payable is Rs. 1,04,496/-. The Ld. AR enclosed the decision of the Rajkot bench of Tribunal in case of Jalia Sevak Samaj (supra), which is identical to the present assessee’s case. The CIT(A) has only considered the aspect of Section 115C of the Act, but has not dealt with the issue of change of status of the Assessee without its intimation by the department. Therefore it will be appropriate to remand back this issue to the file of the Assessing Officer, CPC with the direction to verify the status of the assessee after taking cognizance of the Trust Deed and other relevant material and pass appropriate order. Needless to say, the assesse be given opportunity of hearing by following principles of natural justice. 9. In result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on this 12 th day of August, 2022. Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 12 th day of August, 2022 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Rajkot Bench, Rajkot