The ACIT, Circle-4(1)., Visakhapatnam V. Sri The Ancient Pattern Pentecoastal Church, Visakhapatnam

ITA 341/VIZ/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2686 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-10-2010
• Assessment Year: 1992-1993
• Appeal Filed On: 13-07-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T L PETER
• Keywords: Set aside
• Section: 12A; 11

Judgement Text

ITA NOS 99 153 244 245 246 341 ANCIENT PENTA COASTAL C HURCH VIZAG PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NOS.99, 153, 244, 245 & 246/VIZAG/2003 ASSESSMENT YEARS:1993-94 TO 1997-98 DY.COMMISSIONER OF INCOME TAX CIRCLE-4(1) VISAKHAPATNAM VS. THE ANCIENT PATTERN PENTA COASTAL CHURCH, VISAKHAPATNAM (APPELLANT) (RESPONDENT) GIR NO:T-644 ITA NOS.341/VIZAG/2007 ASSESSMENT YEARS:1992-93 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4(1) VISAKHAPATNAM VS. THE ANCIENT PATTERN PENTA COASTAL CHURCH, VISAKHAPATNAM (APPELLANT) (RESPONDENT) GIR NO:T-644 DEPARTMENT BY: SHRI T.L. PETER, DR ASSESSEE BY: WRITTEN SUBMISSION BY SHRI C.V.S. MURTHY, CA ORDER PER BENCH: ALL THE APPEALS OF THE REVENUE ARE DIRECTED AGAINS T THE ORDERS OF LEARNED CIT (A) VISAKHAPATNAM AND THEY RELATE TO THE ASSESS MENT YEARS 1992-93 TO 1997- 98. SINCE THE ISSUE URGED IN ALL THESE APPEALS IS IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER. 2. THE GROUNDS OF APPEAL RAISED IN ALL THESE APPEAL S ARE DIRECTED AGAINST A SINGLE ISSUE, VIZ., WHETHER THE LEARNED CIT(A) IS J USTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEDUCTION OF AMOUNT SPENT BY T HE ASSESSEE AGAINST THE INCOME ASSESSED IN ITS HANDS IN ALL THE YEARS UNDER CONSID ERATION. 3. THE FACTS RELATING TO THE ISSUE ARE SET OUT IN BRIEF. THE ASSESSEE TRUST WAS FORMED ON 09.02.1989. HOWEVER, IT FILED ITS APPLIC ATION WITH LEARNED CIT SEEKING ITA NOS 99 153 244 245 246 341 ANCIENT PENTA COASTAL C HURCH VIZAG PAGE 2 OF 3 REGISTRATION UNDER SECTION 12A OF THE ACT ONLY ON 0 8.07.1997. THE LEARNED CIT GRANTED THE REGISTRATION ONLY WITH EFFECT FROM 01.4 .1997 AND REFUSED TO CONDONE THE DELAY IN FILING THE ABOVE SAID APPLICATION. HE NCE, FOR THE YEARS UNDER CONSIDERATION, THE ASSESSEE DID NOT HAVE REGISTRATI ON UNDER SECTION 12A OF THE ACT. HENCE THE ASSESSING OFFICER COMPLETED THE ASSESSMEN T OF ALL THESE YEARS BY ADOPTING THE GROSS RECEIPTS AS THE TOTAL INCOME OF THE ASSESSEE. THAT IS, THE ASSESSING OFFICER DID NOT ALLOW ANY DEDUCTION AGAIN ST THE GROSS RECEIPTS. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE LEARNED CIT(A) AND RELIED UPON THE DECISION OF HON'BLE ITAT, HYDER ABAD IN THE CASE OF M/S NIRMAL AGRICULTURAL SOCIETY (71 ITD 152, 67 TTJ 127). THE FIRST APPELLATE AUTHORITY ALLOWED THE APPEALS OF THE ASSESSEE PARTLY BY DIREC TING THE ASSESSING OFFICER TO ALLOW DEDUCTION OF AMOUNT SPENT BY THE ASSESSEE OUT OF THE FUNDS RECEIVED FOR SPECIFIC PURPOSES AND WHICH ARE CONTROLLED BY THE D ONOR INSTITUTIONS, I.E. TIED UP PROGRAMS AND ALSO THE AMOUNT SPENT ON THE MAINTENAN CE OF WELFARE PROGRAMS. AGGRIEVED BY THE ORDER OF LEARNED CIT(A), THE REVEN UE HAS FILED THESE APPEALS BEFORE US. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOW EVER, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS FILED THE WRITTE N SUBMISSIONS. WE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE IN THIS REGARD. THE MAIN CONTENTIONS OF THE LEARNED D.R ARE THAT (A) THE ASSESSEE DOES NOT HAVE REGISTRATION UNDER SECTION 12A IN ALL THESE YEARS AND HENCE THE INCOME HAS TO BE ASSESSEE UNDER NORMAL PROVISIONS OF THE ACT SINCE THE PROVISIONS OF SECTION 11 TO 13 SHALL NOT APPLY TO IT. (B) UNDER THE NORMAL PROVISIONS, ONLY THOSE EXPEN SES INCURRED FOR EARNING THE RELEVANT INCOME SHOULD BE ALLOWED. (C) THE DECISION OF HYDERABAD BENCH OF I TAT IN THE CASE OF NIRMAL AGRICULTURAL SOCIETY, (SUPRA) IS DISTINGUISHABLE, I .E. THE ASSESSEE THEREIN SPENT MONEY ON CONSTRUCTION OF BUILDING AND IT DID NOT HA VE ANY LEGAL TITLE OR RIGHT OVER THE LAND OR BUILDING. WHERE AS, IN THE INSTANT CAS E, THE ASSESSEE HEREIN IS THE OWNER OF THE BUILDING CONSTRUCTED BY IT. 5. THE FACT WHICH IS NOT DISPUTED IS THAT THE A SSESSEE DID NOT HAVE REGISTRATION UNDER SECTION 12A OF THE ACT FOR ALL THE YEARS UNDE R CONSIDERATION. HENCE IT IS CLEAR THAT THE ASSESSEE COULD NOT CLAIM EXEMPTION AS PROV IDED FOR UNDER SECTIONS 11 TO 13 OF THE ACT. THE ASSESSING OFFICER ASSESSED THE ENTIRE GROSS RECEIPTS WITHOUT ALLOWING ANY DEDUCTION, WHICH MEANS THAT THE ASSESS ING OFFICER DID NOT VERIFY THE CLAIM OF AMOUNT SPENT. WE NOTICE THAT THE LEARNED CIT(A) HAS SIMPLY ACCEPTED THE ITA NOS 99 153 244 245 246 341 ANCIENT PENTA COASTAL C HURCH VIZAG PAGE 3 OF 3 VERSION OF THE ASSESSEE AND IT IS NOT BORNE OUT OF RECORD WHETHER ANY VERIFICATION OF THE CLAIMS OF EXPENDITURE WAS MADE BY HIM. THE LEARNED D.R ALSO CONTENDS THAT THE DECISION OF HYDERABAD BENCH OF ITAT IN THE CASE OF NIRMAL AGRICULTURAL SOCIETY IS DISTINGUISHABLE AND HIS CONTENTION ALSO NEEDS PROPER EXAMINATION. HENCE WE ARE OF THE VIEW THAT THE ENTIRE ISSUE NEED S TO BE EXAMINED IN THE LIGHT OF THE DECISION RENDERED BY THE HYDERABAD BENCH IN THE CASE OF NIRMAL AGRICULTURAL SOCIETY, (SUPRA). ACCORDINGLY, WE SET ASIDE THE OR DER OF LEARNED CIT(A) IN ALL THESE YEARS AND RESTORE THE MATTER BACK TO THE FILE OF TH E ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE EXPENDITURE CLAIM OF THE A SSESSEE IN THE LIGHT OF THE DECISION OF HYDERABAD BENCH IN THE CASE OF NIRMAL A GRICULTURAL SOCIETY, (SUPRA) AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. 6. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 18-11-2010 COPY TO 1 THE DY.COMMISSIONER OF INCOME TAX CIRCLE - 4(1) VISAKHAPATNAM 2 3 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE - 4(1) VISAKHAPATNAM THE ANCIENT PATTERN PENTA COASTAL CHURCH, 43-5-32 A RAILWAY NEW COLONY, VISAKHAPATNAM 4 5 THE CIT 2 VISAKHAPATNAM THE CIT(A)-II VISAKHAPATNAM 6 THE DR, ITAT, VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM