DCIT (E), New Delhi V. Jamnaalal Bajaj Foundation, New Delhi

ITA 3912/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9278 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 04-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIJAY KUMAR CHADHA SENIOR
• Assessee Lawyers: M A GOHEL
• Keywords: Assessment record; TDS; Set aside
• Section: 80G; 12AA; 139(1); 139(4); 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3912/DEL./2016 (ASSESSMENT YEAR : 2012-13) DCIT (E), CIRCLE 1 (1), VS. JAMNALAL BAJAJ FOUNDAT ION, NEW DELHI. C/O BAJAJ AUTO LIMITED, B-60-61, NARAINA INDUSTRIAL AREA, PHASE II, NEW DELHI 110 028. (PAN : AAATJ0402B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.A. GOHEL, CA REVENUE BY : DR. VIJAY KUMAR CHADHA, SENIOR DR DATE OF HEARING : 12.09.2019 DATE OF ORDER : 04.10.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, DCIT (E), CIRCLE 1 (1), NEW DELHI (HERE INAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 19.04.2016 PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS)-40 (EXEMPTION), NEW DELH I QUA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA T HAT :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, CAN THE PROVISIONS OF EXPLANATION 2(B) OF THE SECTION 11(1) BE IGNORED BECAUSE THE AUTHORITY UNDER RULE 17 WITH REGARD TO PRESCRIBING LIMITATION FOR EXERCISING OPTION U/S 11 (2) HAS NOT ITA NO.3912/DEL./2016 2 BEEN HELD TO BE VALID BY THE HIGH COURT FOR THE REA SON THAT THE TIME LIMIT IN THE MATTER OF GIVING NOTICE WAS NOT W ITHIN THE DELEGATED AUTHORITY UNDER RULE 17 OF THE I.T. RULES , 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT AS PER PROVISIONS OF SECTION 199 OF THE LT. ACT, TDS IS A TAX PAID BY THE RECIPIENT ON INCOME ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE, THEREFORE, ALLOWANCE OF TDS AS APPLICATION OF INCOM E WILL TANTAMOUNT TO ALLOWANCE. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ISSUE AT HAND ARE : ASSESSEE IS A TRUST REGISTERED UNDER SEC TION 12AA OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) AND IS ALSO NOTIFIED U/S 80G OF THE ACT. ASSESSING OFFICER (AO) DISALLOWED AN A MOUNT OF RS.17,55,00,000/- AND ADDED BACK THE SAME TO THE IN COME OF THE ASSESSEE BY REJECTING THE CLAIM OF THE ASSESSEE IN RESPECT OF ACCUMULATION U/S 11 (1) EXPLANATION (2) ON THE GROU ND THAT THE ASSESSEE HAS FAILED IN FILING THE RETURN OF INCOME AND INTIM ATION/APPLICATION FOR ACCUMULATION IN ACCORDANCE WITH SECTION 11 (1) EXPL ANATION (2) OF THE ACT. AO ALSO MADE DISALLOWANCE OF RS.45,22,539/- O N ACCOUNT OF CLAIM OF THE ASSESSEE ON TDS ON THE GROUND THAT ALLOWANCE OF TDS AS APPLICATION OF INCOME WILL AMOUNT TO ALLOWANCE OF T AX AS APPLICATION OF INCOME. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITIONS BY ALLOWING T HE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING THE PRESENT APPEAL. ITA NO.3912/DEL./2016 3 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 5. AT THE VERY OUTSET, LD. AR FOR THE ASSESSEE CONT ENDED THAT BOTH THE ISSUES RAISED IN THIS CASE HAVE ALREADY BEEN SETTLE D IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR AYS 2010-11 AND 2011-12 AND DREW OUR ATTENTION TOWARDS ORDER PASSED BY THE COORDINAT E BENCH OF THE TRIBUNAL IN ITA NO.1246/DEL/2016 FOR AY 2011-12. THE FACTUAL POSITION MOOT OUT BY THE LD. AR FOR THE ASSESSEE HA S NOT BEEN CONTROVERTED BY THE LD. DR FOR THE REVENUE. 6. BARE PERUSAL OF THE ORDER PASSED BY THE COORDINA TE BENCH OF THE TRIBUNAL IN ITA NO.1246/DEL/2016 FOR AY 2011-12 ORDER DATED 22.11.2017, AVAILABLE ON THE FILE, GOES TO PROVE THAT IDENTICAL ISSUE WAS RACKED UP BY THE REVENUE BY CHALLENGING THE ORDER P ASSED BY THE LD. CIT (A) BEFORE THE TRIBUNAL WHICH HAS BEEN DECIDED IN F AVOUR OF THE ASSESSEE BY RETURNING FOLLOWING FINDINGS :- 6.3. THE LD. AR SUBMITTED THAT UNDER SUCH CIRCUMST ANCES OPTION EXERCISED BY ASSESSEE UNDER EXPLANATION TO S ECTION 11 (1) OF THE ACT ALONG WITH BELATED RETURN FILED UNDER SU BSECTION (4) OF SECTION 139 WILL HAVE TO BE HELD TO HAVE BEEN EXERC ISED BEFORE THE EXPIRY OF THE TIME ALLOWED UNDER SUBSECTION (1) OR SUBSECTION (2) OF SECTION 139 AS CONTEMPLATED BY EXPLANATION T O SECTION 11 (1) OF THE ACT. 7. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE DECISIONS RELIED UPON BY LD. AR. 8. ON GOING THROUGH THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NAGPUR HOTEL OWNERS ASSOCIATION (SUP RA), IT IS ITA NO.3912/DEL./2016 4 NECESSARY THAT THE ASSESSING AUTHORITY MUST HAVE IN FORMATION UNDER FORM 10 AT THE TIME HE COMPLETES THE ASSESSME NT AS IN ITS ABSENCE IT IS NOT POSSIBLE FOR THE ASSESSING OFFICE R TO GIVE BENEFIT OF SUCH EXCLUSION. THEREFORE, REQUIREMENT OF THE A CT AS PER RULE 17 WILL HAVE TO BE FULFILLED AT ANY TIME BEFORE THE ASSESSMENT PROCEEDINGS ARE COMPLETED. 9. IN THE FACTS OF THE PRESENT CASE AND AS OBSERVED FROM THE ASSESSMENT RECORDS, ASSESSEE HAD FURNISHED THE DETA ILS UNDER FORM 10 BEFORE THE ASSESSMENT PROCEEDINGS HAD BEEN INITIATED. THEREFORE THE ASSESSING OFFICER HAD THE BENEFIT OF VERIFYING CLAIM OF EXEMPTION DURING THE PENDENCY OF ASSESSMENT. 9.1. ON A CAREFUL READING OF SECTION 139 OF THE ACT , WE ARE OF THE OPINION THAT SUBSECTION (1) AND (4) OF SECTION 139 HAVE TO BE READ TOGETHER AND, ON SUCH A READING, IT IS VERY CL EAR THAT RETURN IS FILED WITHIN THE SPECIFIED PERIOD UNDER SUBSECTI ON (4) HAS TO BE CONSIDERED AS HAVING BEEN MADE WITHIN THE TIME PRES CRIBED IN SUBSECTION (1) OR SUBSECTION (2) OF SECTION 139 OF THE ACT. IN OTHER WORDS IF A RETURN IS FILED WITHIN THE TIME SPECIFIE D UNDER SUBSECTION (4) OF 139 OF THE ACT AND THE ACTION CON TEMPLATED BY EXPLANATION TO SECTION 11 (1) OF THE ACT EXERCISED IN WRITING ALONG WITH SUCH A RETURN FILED UNDER SUBSECTION (4) OF SECTION 139, THE REQUIREMENTS OF EXPLANATION TO SECTION 11 (1) WOULD STAND SATISFIED. 9.2. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY WITH THE FINDINGS OF LD. CIT (A) AND THE SAME IS UP HELD. ACCORDINGLY THE GROUNDS RAISED BY THE REVENUE STAND DISMISSED. 7. SO, FOLLOWING THE DECISION RENDERED BY THE COORD INATE BENCH OF THE TRIBUNAL, WE ARE OF THE CONSIDERED VIEW THAT TH E AO HAS MERELY MADE DISALLOWANCE ON ACCOUNT OF ACCUMULATION U/S 11 (1) EXPLANATION (2) ON THE GROUND THAT THE ASSESSEE HAS FAILED TO F ILE RETURN OF INCOME AND INTIMATION/APPLICATION FOR ACCUMULATION, BUT WHEN I T IS UNDISPUTED FACT THAT THE DELAY OF 17 DAYS IN FILING THE RETURN OF I NCOME FOR THE YEAR UNDER ASSESSMENT WAS NEITHER INTENTIONAL NOR DELIBERATE A ND IN THESE CIRCUMSTANCES, PROVISIONS U/S 139(1) AND (4) ARE TO BE READ CONJOINTLY, MEANING THEREBY, THE RETURN FILED WITHIN SPECIFIED PERIOD UNDER SECTION ITA NO.3912/DEL./2016 5 139(4) IS TO BE TREATED HAVING BEEN FILED WITHIN PR ESCRIBED PERIOD U/S 139(1) AND (2) OF THE ACT. THE AFORESAID ORDER PAS SED BY THE TRIBUNAL HAS BEEN UPHELD BY HONBLE DELHI HIGH COURT IN ITA 492/2018 DATED 25.04.2018. IN VIEW OF THE MATTER, WE ARE OF THE CONSIDERED VIE W THAT THE LD. CIT (A) HAS RIGHTLY AND VALIDLY DELETED THE ADDITIONS MADE BY THE AO ON ACCOUNT OF DISALLOWANCE U/S 11(1) EXPLANATION (2) OF THE ACT. 8. SO FAR AS, QUESTION OF DELETION OF AMOUNT OF RS. 45,22,939/- BY THE LD. CIT (A) MADE BY THE AO ON ACCOUNT OF TDS IS CON CERNED, THIS ISSUE HAS ALREADY BEEN SETTLED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE IN AY 2010-11 BY FOLLOWING THE DECISION RENDERED BY HONBLE JURIS DICTIONAL HIGH COURT IN CASE OF DIT (E) VS. NATIONAL ASSOCIAT ION OF SOFTWARE AND SERVICES COMPANIES (2012) 345 ITR 362. SO, IN VIEW OF THE MATTER, LD. CIT (A) HAS RIGHTLY AND VALIDLY DECIDED THE ISSUE B Y ALLOWING THE DEDUCTION OF TDS AS APPLICATION OF INCOME. SO, WE FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED BY THE LD. CIT (A). 9. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE FIN D NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT (A), HENCE THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 4 TH DAY OF OCTOBER, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 4 TH DAY OF OCTOBER, 2019 TS ITA NO.3912/DEL./2016 6 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)- 40 (EXEMPTION) , NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.