M/s. City Council of Jetpur, Jetpur V. The Income Tax Officer, Ward-1(1), RAJKOT-GUJARAT

ITA 340/RJT/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2239 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-12-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 20-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA
• Assessee Lawyers: DM RINDANI
• Keywords: Retrospective amendment; Condonation of delay
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER [CONDUCTED THROUGH E COURT AT ITAT, AHMEDABAD] ./ ITA.NO.340 TO 342/RJT/2013 / ASSTT. YEAR: 2001-2002 TO 2003-2004 M/S.CITY COUNCIL OF JETPUR 1 ST FLOOR, GYMKHANA SHOPPING CENTRE, JETPUR. VS ITO, WARD - 1(1) RAJKOT. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI D.M. RINDANI, CA REVENUE BY : DR.M.L. MEENA, DR / DATE OF HEARING : 22/12/2015 / DATE OF PRONOUNCEMENT: 16/03/2016 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT THREE APPEALS ARE DIRECTED AT THE INSTA NCE OF THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD.CIT(A)-I I DATED 17.7.2013 PASSED FOR THE ASSTT.YEAR 2001-02 TO 2003-04. 2. THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUT SET CONTENDED THAT APART FROM CHALLENGING VARIOUS ADDITIONS AND DENIAL OF EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT, THE ASSESSEE HAS RAISED A COMMON GROUND OF APPEAL IN ALL THESE APPEALS, WHEREBY, IT HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN NOT APPRECIATING THAT IN VIE W OF RULE 17B OF THE ITA NO.340 TO 342/RJT/2013 2 INCOME TAX RULES, 1962, UNLESS TRUST WAS REGISTERED UNDER SECTION 12A, THERE WAS NO REQUIREMENT TO FILE REPORT IN FORM NO. 10B. HE POINTED OUT THAT SINCE AUDIT REPORT WAS NOT FILED IN THE PRESCR IBED PROFORMA, THEREFORE, ITS COGNIZANCE WAS NOT TAKEN FOR THE PUR POSE OF DETERMINING THE TAXABLE INCOME OF THE ASSESSEE. NOW, THAT IRRE GULARITY HAS BEEN ELIMINATED BY VIRTUE OF SUBSEQUENT ORDER OF THE TRI BUNAL, THEREFORE, THE ASSESSEE BE PERMITTED TO PLACE THE AUDIT REPORT ON RECORD AND ISSUES BE SET ASIDE TO THE FILE OF THE AO FOR RE-ADJUDICATION . 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. 4. THE BRIEF FACTS EMERGE OUT FROM THE RECORD INCLU DING THE STATEMENT OF FACTS SUBMITTED BY THE ASSESSEE BEFORE THE CIT(A ) ARE THAT THE ASSESSEE-TRUST CAME INTO EXISTENCE ON 1.10.2000. I T HAD NOT APPLIED FOR REGISTRATION UNDER SECTION 12A OF THE INCOME TAX, B ECAUSE, THE OFFICER BEARERS WERE UNAWARE ABOUT THE PROVISIONS OF THE IN COME TAX ACT. THE BASIC OBJECTIVE OF THE TRUST WAS RUNNING OF ELECTRI C CREMATORIUM, CONSTRUCTION OF PRAYER HALL, PROVISION FOR AMBULANC E, DEVELOPMENT GARDENS ETC. THERE ARE MINIMUM 40 MEMBERS IN THE I NSTITUTE. THE ASSESSEE HAS BEEN COLLECTING RS.1,000/- AS A VOLUNT ARY CONTRIBUTION FROM EACH MEMBER AND RS.500/- AS ANNUAL FEE. IT HAS COL LECTED RS.14,500/- AS ANNUAL CONTRIBUTION AND CREDITED TO TRUST FUND ACCO UNT. THE TRUST HAS INCURRED EXPENDITURE OF RS.5.00 LAKHS TOWARDS CONST RUCTION OF ELECTRIC CREMATORIUM AND RS.15 LAKHS FOR THE PRAYER HALL ATT ACHED WITH IT. THIS EXPENDITURE WAS INCURRED IN THE ACCOUNTING YEAR REL EVANT TO THE ASSTT.YEAR 2003-04. THE ASSESSEE HAS APPLIED FOR R EGISTRATION UNDER ITA NO.340 TO 342/RJT/2013 3 SECTION 12A ON 23.10.2003. THIS APPLICATION WAS RE JECTED. APPEAL WAS FILED AGAINST THIS ORDER OF THE LD.COMMISSIONER. T HE APPEAL BEARING ITA NO.543/RJT/2004 WAS ALLOWED BY THE TRIBUNAL VIDE OR DER DATED 27.10.2004. THE TRIBUNAL HAS DIRECTED THE COMMISSI ONER OF INCOME TAX TO GRANT REGISTRATION AFTER CONDONATION OF DELAY IN FILING THE APPLICATION FOR REGISTRATION. THE LD.COMMISSIONER HAS GRANTED REGISTRATION VIDE ORDER DATED 3.2.2005 W.E.F. 1.10.2000. THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON3.11.2003 FOR THE ASSTT.YEAR 2002-3 AND 2003-04 DECLARING NIL INCOME. IN THE ASSTT.YEAR 2001-02, THE RETURN WAS FILED ON 7.12.2004 IN RESPONSE TO NOTICE ISSUED UNDER SECTIO N 148. WHEN THESE RETURNS WERE FILED, THE REGISTRATION UNDER SECTION 12A WAS NOT IN EXISTENCE. IT WAS GRANTED SUBSEQUENTLY. THEREFORE , THE ASSESSEE DID NOT GET ITS ACCOUNTS AUDITED, AS PROVIDED UNDER RULE 17 B OF THE INCOME TAX RULES, 1962 IN FORM NO.10B. THOUGH THE ASSESSEE HAD GOT ITS ACCOUNTS AUDITED, BUT THAT WAS NOT IN THE PROFORMA REQUIRED TO BE DONE IN CONSONANCE WITH RULE APPLICABLE IN THE CASE OF AN I NSTITUTE REGISTERED UNDER SECTION 12AA OF THE INCOME TAX ACT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT IN VIEW OF THE AB OVE SITUATION, ONE MORE OPPORTUNITY BE GRANTED TO THE ASSESSEE TO COMP LY WITH THE PROCEDURE, AND THEREAFTER TAKING COGNIZANCE OF THE AUDIT REPORTS, ITS INCOME BE ASSESSED. 5. ON THE OTHER HAND, THE LD.DR WAS UNABLE TO CONTR OVERT THE CONTENTIONS OF THE LD.COUNSEL FOR THE ASSESSEE. 6. ON DUE CONSIDERATIONS OF THE ABOVE FACTS AND CIR CUMSTANCES, WE ARE OF THE VIEW THAT AS FAR AS OBJECTS OF THE ASSES SEE ARE CONCERNED, THEY ITA NO.340 TO 342/RJT/2013 4 ARE CHARITABLE. IT IS ENJOYING ITS STATUS AS CHARI TABLE, AS PER THE INCOME TAX ACT, BECAUSE, REGISTRATION UNDER SECTION 12AA I S INTACT. THIS REGISTRATION WAS GRANTED TO THE ASSESSEE ON 3.2.200 5 WITH AN RETROSPECTIVE EFFECT I.E. FROM 1.10.2000. BEFORE 3 .2.2005, THE ASSESSEE HAS ALREADY FILED RETURNS FOR EARLIER YEARS WITHOUT THE AUDIT REPORT IN PRESCRIBED FORM. NOW, THE ASSESSEE IS ENJOYING THE REGISTRATION, AND THEREFORE, IT CAN FILE AUDIT REPORT IN THE PRESCRIB ED FORM AND WITH THE HELP OF THAT AUDIT REPORT, ITS ACCOUNTS ARE REQUIRED TO BE EXAMINED. THEREFORE, WE ALLOW THIS GROUND OF APPEAL IN ALL THESE THREE Y EARS. WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES. WE RESTORE ALL THESE ISSUES TO THE FILE OF THE AO AND THE LD.AO SHALL PERMIT THE ASSESSEE T O PLACE ON RECORD FRESH AUDIT REPORT UNDER THE REQUIRED PROFORMA, AND THEREAFTER PASS A FRESH ASSESSMENT ORDERS IN ACCORDANCE WITH LAW. OB SERVATION MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENSE/EXPLANATION OF THE ASSESSE E. 7. IN THE RESULT, ALL THREE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 16 TH MARCH, 2016 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 16/03/2016