Gelli Narayana Chetty Trust, Hyd, Hyderabad V. ADIT(Exemptions)-I, Hyd, Hyderabad

ITA 350/HYD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91618 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-05-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 06-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A'(SMC), HYDERABAD BEFORE SHRI D.MANMOHAN, VICE PRESIDENT ITA NO.350/HYD/15 : ASSESSMENT YEAR 2003 - 04 SHRI GELLI NARAYANA CHETTY TRUST, HYDERABAD (PAN AAATG 4429 R ) V/S. DIRECTOR OF INCOME - TAX (EXEMPTION), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI P.MURALI MOHAN RAO RESPONDENT BY : SHRI RAMAKRISHNA BANDI DATE OF HEARING 15 .0 5 .201 5 DATE OF PRONOUNCEMENT 15.05.2015 O R D E R THIS APPEAL BY THE ASSESSEE T R UST IS DIRECTED AGAINST THE O R DER DATED 18.7.2014 PASSED BY THE COMMISSIONER OF INCOME - TAX(APPEALS) IV, HYDERABAD AND IT P ERTAIN S TO ASSESSMENT YEAR 2003 - 04. 2. THE ASSESSEE IS ENGAGED IN CARRYING ON CHARITABLE ACTIVITIES . FOR TH E YE A R UN D ER CON S I DE RATION, THE ASSESSEE ADMITTED NIL INCOME AFTER CLAIMING EXEMPTION UN D ER S .11 OF THE INCOME TAX ACT,1961, AND THE SAM E WAS P R O C ESSED UN D ER S.143(1) OF THE ACT. SUBSEQUENTLY, TH E SAME W A S REOPENED BY IS S UIN G NOTICE UN D ER S .148. IN R E SPON S E TO IT, THE ASSESSEE FILED A REVISED RETURN ON 29.12.2004. IT APPEARS THAT THE ASSESSEE HAS FIL E D FORM NO.10 ALONGWITH THE REVISED RETURN OF I NCOME. 3. TH E CA S E OF THE ASSESSING OFFICER , ON THE O T H E R HAND , WAS THAT THE ASSESSEE T R UST HAS NO T FIL E D FORM NO.10 WITH TH E RETURN OF IN C OM E FILED ON 19.9.2003, AND COPY OF THE R ES OLUTION ITA NO. 350 /HYD/201 5 M/S.GELLI NARAYANA CHETTY TRUST, HYDERABAD 2 WAS ALSO NO T FIL E D WITH THE RETURN OF IN C OM E , AND TH E R E F O R E , IT CANNO T B E SAID THAT THE ASSESSEE T R UST HAS APPLIED 8 5 % OF THE INCOME TOWARDS CHARITABLE ACTIVITIES , IN ORDER TO CLAIM EXEMPTION UN D ER S.11 OF THE ACT. HE A C CO RD INGLY BROUGHT TO TAX A SUM OF RS. 4,62,874. 4. AGGRIEVED, ASSESSEE CONTENDED B E FORE THE CIT(A) THAT THE ASSESSEE HAS ACCUMULATED UNUTILI S ED AMOUNT UNDER S .11 ( 2 ) OF THE INCOME TAX ACT,1961 , AND FILED F ORM 10 ALON G WITH THE R E VISED R E TURN OF INCOME, IN WHICH EVENT, TH E CL A IM O F EX E MPTION SHOULD NO T HAVE BEEN DENIED. THE TO T AL INCOME EARNED IN THIS YEAR WORKED OUT TO RS.5,71,581, WHICH CON S I S TS OF DONATION S AND INTEREST RECEIVED. TH E ASSESSEE APPLIED ONLY A SUM OF R S .22,975 TOW AR DS CHARITABLE PURPO S ES, AND THE BALAN C E WAS ACCUMULATED. 5. IT DESERVES TO BE NOTICED HAT IN TH E IMMEDI A TELY P RECE DING YEAR ALSO, TH E ASSESSING OFFICER REJECTED THE CLAIM OF EX E MPTION ON TH E GROUN D TH AT THE ASSESSEE DI D NOT FILE AUDITOR S REPORT AND FORM 10, ALON G WITH THE ORIGINAL RETURN O F I NCOM E AND WH E N TH E MATTER WAS CON S I D ERED BY THE FIRST APPELL A TE AUTHORITY, THE LEARNED CIT(A) IV OBSERV ED THAT THE ASSESSING OFFICER COULD NO T FURNISH RECORDS AND IN TH E ABSENCE OF RECORDS, IT IS DIFFICULT TO ASCERTAIN AS TO WHETHER THE ASSESSEE HAS FURNISHED FORM NO.10 AND COPY O F THE R ES OLU T ION PASSED AND AUDITORS REPORT ALONGWITH THE REVISED RETURN DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AND THUS CONCLU D ED THAT THE ASSESSEE WOULD B E ENTITLED TO CLAIM E X E MPTION. HOW E VER, FOR THE ASSESSMENT YEAR 2003 - 04, ON THE S AME DATE ANOTHER ORDER WAS PASSED BY CON S ID E RIN G THE ISSUE ON THE SAME TERMS, BUT F R OM PARA 5.2 ONWARD S , THE LEARNED CIT(A) NOTICED THAT THE ASSESSEE ACCUM ULATED AMOUNT OF R S .6,70,927 UNDER S.11(2) OF THE ACT, WHEREAS THE TOTAL INCOME O F TH E ASSESSEE ITA NO. 350 /HYD/201 5 M/S.GELLI NARAYANA CHETTY TRUST, HYDERABAD 3 STANDS AT R S .5,71,586, IN WHICH EVENT THE ACCUMULATION IS MUCH MORE THAN THE INCOME EARNED, WHICH IS NO T P E RMI S SIBLE. 6. THE LEARNED COUNSEL SUBMI T T E D THA T IT IS NOT KNOWN AS TO WHEREF R OM TH E FIGURE OF RS.6,70,927 EME R GED AND NOTED BY TH E ASSESSING OFFICER AS WELL AS THE CIT(A), PARTICULARLY WHEN THE SAME WAS POIN T ED OUT BEFORE THE CIT(A) ; A S MENTIONED IN PARA 5.4 OF THE CIT(A)S ORDER , THE TOTAL IN C OM E O F TH E ASSESSEE AS PER INCOM E AND EXPENDITURE ACCOUNT IS ONLY RS.5,71,586.62 AND NO T RS.6,70,927. I N TH E ABS E N C E OF ANY EVIDENCE TO TH E CON T RARY, THE LEARNED CIT(A) WAS NO T JU S TIFIED IN TAKING A DIAMETRICALLY OPPOSITE VIEW ON TH E SAME SET OF FACTS FOR THE ASSESSMENT YEAR 2003 - 04, HAVING ACCEPTED THE PLEA OF THE ASSESSEE FOR ASSESSMENT YEAR 2002 - 03. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE , ON THE OTHER HAND, SUBMITTED THAT THERE IS A CATEGORICAL FIN D IN G IN THE ORDER PASSED BY TH E CIT(A) THAT THE ACCUMULATION IS MUCH MORE THAN THE INCOME, AND HENCE, IT I S FOR TH E ASSESSEE TO P R OVE THAT FACTUALLY IT IS NO T CORRECT. 8. THE LEARNED COUNSEL , JOINING THE ISSUE , SUBMI T TED THAT PAGES 9 TO 20 OF THE PAPER - BOOK REPRESENT THE PAPERS F I L ED B E FORE THE CIT(A) AND THE FIGURE RS.6,70,927 DOES NOT EMERGE FROM THESE PAPERS, AND AS AN OFFICER OF TH E COU R T, HE SUBMITS THAT THE ASSESSEE HAS NO T FURNISHED SUCH FIGURE AND HENCE, IT IS NOT KNOWN AS TO WH E REFROM THE ASSESSING OFFICER OR CIT(A) HAS T AKEN THAT FIGURE. HE EMPHASIZED THAT THE TOTAL R E C E IPTS ARE R S .5,71,586 IN WHICH EVENT, CONSISTENT WITH THE VIEW TAKEN BY THE CIT(A) IN ASSESSEES OWN CA S E FOR T HE IMM E DI A TELY P RE CEDIN G YEAR, THE ASSESSEE SHOULD HAVE B E EN ALLOWED TO ACCUMULATE THE AMOUNT UN D ER S.11(2) OF THE ACT. ITA NO. 350 /HYD/201 5 M/S.GELLI NARAYANA CHETTY TRUST, HYDERABAD 4 9. I HAVE CAREFULLY CONSID E RED TH E RIVAL SUBMI S SION S AND PERUSED THE RECORD. I HAVE CAREFULLY VERIFIED THE M A T ERIAL PAPERS PLACED BEFORE ME. I HAVE GON E THROUGH THE ORDER PASSED BY THE CIT(A) IN ASSESSEES OWN CA S E FOR ASSESSMENT YEAR 2002 - 03, WH E REIN IN IDENTICAL CIR C UM S TANCES, THE ASSESSEE WAS GIVEN THE B E NEFIT OF DOUBT AND CONCLUDED THAT T H E ASSESSEE I S ENTITLED TO ACCUMULATE THE UNUTILI S ED FUND, SINCE FROM 10 ALONG W ITH T H E AUDITORS REPORT WAS FURNISHED ALONGWITH THE R EVISED RETURN. HAVING REGA R D TO THE CIRCUM S TANCES OF THE CASE, I DEEM IT FAIR AND REASONABLE TO SET ASIDE THE O R DER PASSED BY THE CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIR E CTION TO TH E LEARNED CIT(A) TO RECO N SIDER TH E MATTER IN TH E LIGHT OF TH E VIEW TAKEN IN ASSESSEES OWN CA S E FOR ASSESSMENT YEAR 2002 - 03; IF, BY THE TIME CASE IS RE CONSIDERED BY THE CIT(A), THE TRIBUNAL TAKES ANY VIEW IN ASSESSEES OWN CA S E FOR THE E A RLIER YEAR, THE SAME CAN ALSO BE TAKEN INTO CON S I DE RATION BY TH E LEARNED CIT(A). WITH THESE OBSERVATIONS, THE MATTER IS SET ASIDE TO THE FILE O F THE CIT(A) AND THE LEARNED CIT(A) IS DIRECTED TO RECON S I D ER THE MATTER BY ASSUMING THAT T HE AC C UMULATION IS NO T MORE THAN THE ACTUAL AMOUNT RECEIVED IN THIS YEAR, UNLESS IT IS P R OVED THAT THE ASSESSEE HAS ADMITTED AT ANY STAGE OF THE PROCEEDING WITH REGARD TO ACCUMULATION IN EXCESS O F TH E RECEIPTS. THE LEARNED CIT(A) IS ACCORDINGLY DIRECTED TO REDECIDE THE ISSUE IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTUNITY O F H E ARING TO THE ASSESSEE. 10 IN THE R E SUL T , APPEAL FIL E D BY TH E ASSESSEE I S TR E ATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 350 /HYD/201 5 M/S.GELLI NARAYANA CHETTY TRUST, HYDERABAD 5 AS PRONOUNCED IN THE OPEN COURT AT THE CONCLUSION OF HEARING, APPEAL OF THE ASSESSEE IS DISMISSED. SD/ - ( D.MANMOHAN ) VICE PRESIDENT DT/ - 15 TH MAY, 2015 COPY FORWARDED TO: 1. SHRI GELLI NARAYANA CHETTY TRUST, C/O. M/S.P.MURALI & CO., CHARTERED ACCOUNTANTS, 6 - 3 - 6755/2/3, 1ST FLOOR, SOMAJIGUDA, HYDERABAD - 82 2 . ASSTT . DIRECTOR OF INCOME - TAX(EXEMPTION) HYDERABAD 3. COMMISSIONER OF INCOME - TAX (APPEALS) IV , VIJAYAWADA 4. COMMISSIONER OF INCOME - TAX III, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S