Shrijani Agarwal Trust, Kanpur V. ITO, Ward-36(2), Kolkata, Kolkata

ITA 381/KOL/2022

AI Insights

The case involves the Shrijani Agarwal Trust appealing against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi, which upheld the AO's rejection of the Trust's claim for a deduction of Rs. 1,00,000 under Chapter VIA, specifically under section 80C of the Income Tax Act. The AO had rejected the claim on the grounds that the rectification application was not filed within the stipulated four years from the end of the financial year in which the original order was passed. The tribunal noted that the Trust had been assessed as an individual in subsequent years and had been allowed the deduction, which was not contested by the revenue. The main legal contention was whether the rectification petition was filed within the permissible time frame, as the AO's communication rejecting the petition was dated after the four-year period.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127308 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-11-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 28-06-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 154; 80C; 143(1)

Judgement Text

आयकर अपील य अ धकरण, कोलकाता पीठ ‘‘बी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA ी राजेश क ु मार, लेखा सद य एवं ी संजय शमा या यक सद यके सम [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 381/Kol/2022 Assessment Year: 2009-10 Shrijani Agarwal Trust. (PAN: AAHTS 0832 M) Vs. ITO, Ward-36(2), Kolkata Appellant / (अपीलाथ ) Respondent / ( !यथ ) Date of Hearing / स ु नवाई क$ त&थ 29.11.2022 Date of Pronouncement/ आदेश उ)घोषणा क$ त&थ 23.02.2023 For the Appellant/ नधा /रती क$ ओर से Shri Rakesh Jain, FCA For the Respondent/ राज व क$ ओर से Smt. Ranu Biswas, Addl. CITDR ORDER / आदेश Per Rajesh Kumar, AM: This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 05.05.2022 for the AY 2009-10. 2. The only issue challenged by the assessee in the various grounds of appeal is against the order of Ld. CIT(A) upholding the order of AO therein the AO has rejected the claim of the assessee trust of Rs. 1,00,000/- under chapter VIA on the ground that rectification application was not filed within four years from the end of financial year in which the order sought to be amended was passed. 2 I.T.A. No. 381/Kol/2022 Assessment Year: 2009-10 Shrijani Agarwal Trust 3. Facts in brief are that the assessee filed the return of income on 4.3.2010 which was processed u/s 143(1) of the Act raising a demand of Rs. 1,23,191/- by rejecting the claim of assessee of Rs. 1,00,000/- under Chapter VIA u/s 80C of the Act on the ground that the assessee is a trust as mentioned in the PAN and therefore the assessee is not entitled any deduction as such. The assessee moved rectification petition which was rejected by the AO on 26.06.2018 which is reproduced as under for the sake of ready reference: 3 I.T.A. No. 381/Kol/2022 Assessment Year: 2009-10 Shrijani Agarwal Trust 4. The said order was challenged before the Ld. CIT(A) by the assessee trust and the Ld. CIT(A) dismissed the appeal of the assessee by observing and holding as under: “7.5. Ground no. 4,5 and 6 pertain to order passed u/s 154. On examining the purported order u/s 154, it is seen that the appellant is claiming the letter written by ITO, Ward-36(2), Kolkata as rectification order. Actually, the said document is not an order u/s 154 of the I.T. Act, 1961 but an answer to the appellant regarding his application for rectification. In this letter which copied above in para 7.2 is a communication from Ld. AO to the appellant. In this letter, the Ld. A.O has stated that since the status of appellant’s PAN is a trust and deduction under 80C is not applicable to Trust assessees and hence, appellant was not eligible to claim deduction under 80C under Chapter VIA. The AO further communicated that the demand raised in order u/s 143(1) of I.T. Act is genuine and accordingly, the petition for rectification is not tenable at this end. On examination of Section 154(7) it is seen that no amendment u/s 154 can be carried out after expiry of four years from the end of financial year in which the order sought to be amended was passed. In the present case, the order sought to be amended/s 143(1) which is dated 28.03.2011. Hence, four years from the end of the financial year would be ended by 31.03.201. The letter sent by the AO is dated 26.06.2018 and thus, it cannot be by any stretch of imagination an order u/s 154 of I.T. Act, 1961 against which the appellant is in present appeal. As per Section 246- Appealable orders letter sent by the AO dated 26.06.2018 is not an appealable order and hence, the appeal filed by the appellant on a non-appealable letter is an invalid appeal and hence, dismissed. For hearing the case on merits, the order needs to fulfill the basic conditions as laid in the Income Tax Act which hare not fulfilled in the present case and hence, the issue is not discussed on merits.” 5. After hearing the rival contentions and perusing the material on record, we observe that the assessee is a minor beneficiary trust which has to be assessed as individual assessee. We note that in the subsequent year the assessee status have been accepted as an individual and the deduction under Chapter VIA has been allowed to the assessee which is the undisputed position not controverted by the revenue. At the time of hearing, we note that the only ground on which the appeal was dismissed by upholding that the rectification should have been within four years from the end of the financial year in which the order sought to be amended was passed in terms of provisions of Section 154(7) of the Act. The Ld. CIT(A) observed that since the order sought to be amended is an intimation u/s 143(1) of the Act dated 28.03.2011 and four years from the financial year could have expired by 31.03.2015 but the AO sent letterdated 26.06.2018 by rejecting the contentions of the assessee which is not an 4 I.T.A. No. 381/Kol/2022 Assessment Year: 2009-10 Shrijani Agarwal Trust order u/s 154 of the Act. We have perused the facts on record and find that the rectification order passed by the AO which was appealed before the Ld. CIT(A) but the Ld. CIT(A) refused to accept the same as rectification order. We also note that there was no dispute that rectification was not filed within four years from the end of financial year in which the order u/s 143(1) was passed on 28.03.2011. Neither the revenue has denied this fact during the course of hearing. We have also asked revenue to place on record, a rectification petition moved by the assessee in order to ascertain whether the petition was filed in time or not. But the same was not placed before us by citing the reasons that same is not traceable. Under the circumstances, we are inclined to give the benefit of doubt to the assessee by reversing the order of Ld. CIT(A) and consequently the AO is directed to allow the deduction under Chapter VIA. 6. In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 23 rd February, 2023 Sd/- Sd/- (Sonjoy Sarma /संजय शमा ) (Rajesh Kumar/राजेश क ु मार) Judicial Member/ या यक सद य Accountant Member/लेखा सद य Dated: 23 rd February, 2023 SB, Sr. PS 5 I.T.A. No. 381/Kol/2022 Assessment Year: 2009-10 Shrijani Agarwal Trust Copy of the order forwarded to: 1. Appellant- Shrijani Agarwal Trust, 15/63, Rudra House, Civil Lines, Kanpur, Uttar Pradesh-208001. 2. Respondent – ITO, Ward-36(2), Kolkata 3. Ld. CIT(A)-NFAC, Delhi 4. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata