Morbi Plot Jain Tap Gachh Sangh, Morbi V. Asstt. Commr. of Income Tax(CPC), Banglore

ITA 428/RJT/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3421 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-04-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RATHI
• Keywords: Charitable institution; Benefit of exemption
• Section: 12A; 12AA; 143(1); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICI AL MEMBER [CONDUCTED THROUGH E-COURT AT AH MEDABAD] MORBI PLOT JAIN TAP GACHH SANGH, SANALA ROAD, MORBI-363641 PAN: AAATM2859H (APPELLANT) VS ASSISTANT COMMISSIONER OF INCOME TAX (CPC), BANGALORE (RESPONDENT) REVENUE BY: SHRI S.S. RATHI, SR. D.R. ASSESSEE BY: SHRI VIMAL DESAI, A.R. DATE OF HEARING : 28-04-2021 DATE OF PRONOUNCEMENT : 03-06- 2021 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2014-15 ARISES FRO M THE ORDER OF LD. CIT(A)-3, RAJKOT DATED 20-09-2017, IN PROCEEDINGS U NDER SECTION 143(1) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. THE ORDER U/S. 143(1) IS BAD IN LAW. ITA NO. 428/RJT/2017 ASSESSMENT YEAR 2014-15 I.T.A NO. 428/RJT/2017 A.Y. 2010-14-15 PAGE NO MORBI PLOT JAIN TAP GACHH SANGH VS. ACIT 2 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON FACTS IN WITHDRAWING THE EXEMPTION U/S. 11 OF THE ACT UNILATERALLY IN TH E ABSENCE OF REGISTRATION NUMBER U/S. 12A IN THE RETURN OF INCOME WHILE PROCESSING THE RETURN U/S. 143(1) OF THE ACT. THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THIS ACTION O F THE A.O. 3. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON FACTS IN MAKING THE ADJUSTMENT WHICH IS OUTSIDE THE PURVIEW OF ADJUSTME NTS PROVIDED IN THE PROCESSING U/S. 143(1) OF THE ACT. THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THIS ADJUSTMENT OF THE A.O. 3. ALL THE GROUNDS OF APPEAL NO. 1 TO 3 ARE INTE R-CONNECTED TO THE ISSUE OF WITHDRAWAL OF EXEMPTION U/S. 11 OF THE ACT BECAU SE OF NOT MENTIONING THE DETAILS OF REGISTRATION NO. OF THE TRUST U/S. 12A O N THE RETURN OF INCOME ELECTRONICALLY FILED AND MAKING INVALID ADJUSTMENT WHILE PROCESSING THE RETURN OF INCOME U/S. 143(1) OF THE ACT. THEREFORE , FOR THE SAKE OF CONVENIENCE ALL THESE GROUNDS OF APPEAL ARE ADJUDIC ATED TOGETHER AS FOLLOWS:- 4. THE ASSESSEE FILED RETURN OF INCOME ON 24 TH NOV, 2014 FOR THE ASSESSMENT YEAR 2014-15. THE RETURN FILED WAS PROC ESSED U/S. 143(1) OF THE INCOME TAX ACT BY THE CPC, BANGALORE ON 28 TH FEB, 2016. THE ASSESSEE BEING A RELIGIOUS TRUST CLAIMED THAT EXEMPTION U/S. 11 OF THE ACT SINCE 1977- 78. HOWEVER, VIDE INTIMATION U/S. 143(1), THE ASSE SSING OFFICER HAS NOT ALLOWED THE CLAIM OF EXEMPTION U/S. 11 OF RS. 27,12 ,977/- FOR THE YEAR UNDER CONSIDERATION ON THE GROUND THAT THE ASSESSEE TRUST HAS NOT MENTIONED THE DETAILS OF REGISTRATION NO. OF THE TRUST IN THE RET URN OF INCOME. 5. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. I.T.A NO. 428/RJT/2017 A.Y. 2010-14-15 PAGE NO MORBI PLOT JAIN TAP GACHH SANGH VS. ACIT 3 6. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. COUNSEL HAS BROUGHT TO OUR NOTICE THAT ASSESSEE TRUST HAS FILED WRIT PETITION BEFORE THE HONBLE GUJARAT HIGH COURT AGAINST RAISING DEMAND U /S. 143(1) OF THE ACT ON ACCOUNT OF NOT MENTIONING THE REGISTRATION NO OF TH E TRUST IN THE RETURN OF INCOME FILED BY THE ASSESSEE. THE LD. COUNSEL HAS FURTHER STATED THAT HONBLE JURISDICTIONAL HIGH COURT VIDE CIVIL APPEAL NO. 160 39 OF 2018 DATED 25 TH MARCH, 2021 HAS DISPOSED OFF THE WRIT PETITION OF T HE ASSESSEE TRUST WITH DIRECTION THAT THE DEPARTMENT SHALL LOOK INTO THE E NTIRE RECORD CLOSELY AND ASCERTAIN WHETHER THE TRUST BEING A REGISTERED CHAR ITABLE TRUST HAD BEEN ISSUED THE REGISTRATION CERTIFICATE U/S. 12A OF THE I.T. A CT, 1961. THEREAFTER THE CIT(E) VIDE ORDER DATED 21 ST APRIL, 2021 HAS PROVIDED THE REGISTRATION NO. OF THE TRUST. AFTER REFERRING ALL THESE SUBMISSIONS THE LD. COUNSEL HAS CONTENDED THAT THE CLAIM OF THE ASSESSEE OF EXEMPTION U/S. 11 IS REQUIRED TO BE ALLOWED BY THE ASSESSING OFFICER. ON THE OTHER HAND, LD. DE PARTMENTAL REPRESENTATIVE IS FAIR ENOUGH NOT TO CONTROVERT THE SE UNDISPUTED FACT OF ISSUING THE DIRECTION BY THE HONBLE GUJARAT HIGH C OURT VIDE THE AFORESAID ORDER AND PASSING OF ORDER U/S. 12AA OF THE ACT DAT ED 21 ST APRIL, 2021 BY THE LD. CIT(E) OF PROVIDING REGISTRATION NO. TO THE TRU ST. 7. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS FILED ITS RETURN OF INCOME ELECTRONICALLY FOR A SSESSMENT YEAR 2014-15 AND CLAIMED EXEMPTION OF RS. 27,12,977/- U/S. 11 OF THE I.T. ACT. HOWEVER, THE ASSESSING OFFICER OF CPC, BANGALORE HAS NOT ALLOWED THE CLAIM OF THE EXEMPTION U/S. 11 ON THE GROUND THAT ASSESSEE TRUST HAS NOT MENTIONED THE DETAILS OF REGISTRATION NO. AS EVIDENCE OF REGISTRA TION U/S. 12A ON THE RETURN OF INCOME. BEFORE THE LD. CIT(A) THE ASSESSEE HAS SUB MITTED THAT BECAUSE OF I.T.A NO. 428/RJT/2017 A.Y. 2010-14-15 PAGE NO MORBI PLOT JAIN TAP GACHH SANGH VS. ACIT 4 HAPPENING OF FLOOD IN THE YEAR 1979 THE WHOLE RECOR D INCLUDING THE RECORD PERTAINING TO REGISTRATION U/S. 12A WAS DESTROYED AND IN THIS REGARD HE HAS MADE REQUEST BEFORE ALL CIT(A)S OF RAJKOT FOR MAKIN G AVAILABLE THE INFORMATION OF REGISTRATION NO. ALLOTTED U/S. 12A T O THE ASSESSEE BUT NO ACTION HAS BEEN TAKEN BY THE AUTHORITIES. THE ASSESSEE HA S ALSO ENCLOSED THE COPIES OF ASSESSMENT ORDER AND DEMAND NOTICES FOR THE ASSE SSMENT YEAR 1977-78 TO 1979-80 IN WHICH THE ASSESSING OFFICER HAS ALLOWED EXEMPTION U/S. 11 OF THE ACT. IT IS UNDISPUTED FACT THAT THE ASSESSEE TRUS T HAS BEEN CONTINUOUSLY AVAILING THE BENEFIT OF EXEMPTION U/S. 11 OF THE AC T AS A REGISTERED TRUST TILL THE ASSESSMENT YEAR 2012-13. FROM THE ASSESSMENT Y EAR 2013-14, THE TRUST WAS REQUIRED TO UPLOAD FORM NO. 7 (RETURN OF INCOME ) TO THE WEBSITE OF THE INCOME TAX DEPARTMENT WITH DETAIL OF THE REGISTRATI ON NO. OF THE TRUST. BECAUSE OF LOSS OF RECORD IN THE FLOOD THE ASSESSEE COULD NOT QUOTE THE REGISTRATION NO IN THE RETURN OF INCOME, THEREFORE, THE CLAIM OF EXEMPTION U/S. 11 FOR THE PERIOD 2013-14 AND 2016-17 WAS NOT ALLOW ED BY THE ASSESSING OFFICER. IN THIS REGARD, THE HONBLE HIGH COURT IN THE ORDER DATED 25 TH MARCH, 2021 AS REFERRED ABOVE HAS HELD THAT THE TRU ST COULD NOT BE DENIED THE BENEFIT OF EXEMPTION U/S. 11 OF THE ACT ONLY ON ACC OUNT OF ITS DISABILITY TO PRODUCE THE NECESSARY RECORD WHICH GOT DESTROYED DU RING THE FLOODS OF 1978 AND THE DEPARTMENT SHALL LOOK INTO THE ENTIRE RECOR D CLOSELY AND ASCERTAIN WHETHER TRUST BEING A REGISTERED CHARITABLE TRUST H AD BEEN ISSUED THE REGISTRATION CERTIFICATE U/S. 12A OF THE ACT. IT IS FURTHER NOTICED THAT VIDE ORDER DATED 21 ST APRIL, 2021 AFTER TAKING INTO CONSIDERATION THE DI RECTION OF THE HONBLE GUJARAT HIGH COURT, THE CIT(E) HAS ISSU ED THE REGISTRATION NO. AS PER ORDER U/S. 12AA OF THE I.T. ACT. THE RELEVANT PART OF THE DECISION OF I.T.A NO. 428/RJT/2017 A.Y. 2010-14-15 PAGE NO MORBI PLOT JAIN TAP GACHH SANGH VS. ACIT 5 HONBLE HIGH COURT VIDE SPECIAL CIVIL APPLICATION N O. 16039 OF 2019 DATED 25 TH MARCH, 2021 IS REPRODUCED AS UNDER:- 14 HAVING HEARD THE LEARNED COUNSEL APPEARING FOR THE PARTIES AND HAVING GONE THROUGH THE MATERIALS ON RECORD, WE ARE OF THE VIEW THAT THE DISPUTE BETWEEN THE PARTIES SHOULD HAVE BEEN RESOLVED AMICABLY. WE ARE AT ONE W ITH MR. BHATT, THE LEARNED SENIOR COUNSEL APPEARING FOR THE REVENUE THAT IN THE ABSEN CE OF THE REGISTRATION NUMBER, TO BE MENTIONED IN THE COURSE OF E-FILING OF THE RETURN, THE BENEFIT OF EXEMPTION UNDER SECTION 11 OF THE ACT CANNOT BE GRANTED, BUT, AT THE SAME T IME, WE FIND IT DIFFICULT TO ACCEPT THE STANCE OF THE DEPARTMENT THAT AS THE RECORD IS NOT AVAILABLE WITH THE TRUST AS WELL AS WITH THE DEPARTMENT, IT SHOULD BE PRESUMED THAT AT NO PO INT OF TIME, THE CERTIFICATE OF REGISTRATION UNDER SECTION 12A OF THE ACT WAS GRANT ED. 15 WE TAKE NOTICE OF THE FACT THAT THERE IS CONTEMP ORANEOUS RECORD AVAILABLE WITH THE TRUST, WHICH SHOULD BE LOOKED INTO MINUTELY BY THE DEPARTMENT SO AS TO SATISFY ITSELF THAT THE TRUST HAD BEEN ISSUED A REGISTRATION CERTIFICAT E UNDER SECTION 12A AND HAD BEEN AVAILING THE BENEFIT OF EXEMPTION OVER A PERIOD OF TIME UNDER SECTION 11 OF THE ACT. THE DEPARTMENT IS EXPECTED TO UNDERTAKE SOME HOMEWORK I N THIS REGARD SERIOUSLY. THE TRUST SHOULD NOT BE DENIED THE BENEFIT OF EXEMPTION UNDER SECTION 11 OF THE ACT ONLY ON ACCOUNT OF ITS DISABILITY TO PRODUCE THE NECESSARY RECORDS, WHICH GOT DESTROYED DURING THE FLOODS OF 1978. WE DO NOT FIND ANYTHING DOUBTFUL OR FISHY AS REGARDS THE TRUST. 16 IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW THAT W HATEVER RECORD IS AVAILABLE WITH THE TRUST, AS ON DATE, SHOULD BE PRODUCED BEFORE THE DE PARTMENT AND THE DEPARTMENT SHOULD LOOK INTO THE RECORDS MINUTELY AND ALSO GIVE AN OPP ORTUNITY OF HEARING TO THE TRUST OR ITS LEGAL REPRESENTATIVE AND TAKE AN APPROPRIATE DECISI ON IN ACCORDANCE WITH LAW. 17 WE DISPOSE OF THIS WRIT APPLICATION WITH A DIREC TION THAT THE WRIT APPLICANT - TRUST SHALL PRODUCE THE ENTIRE RECORD AVAILABLE WITH IT A S ON DATE BEFORE THE DEPARTMENT AND THE DEPARTMENT SHALL LOOK INTO THE ENTIRE RECORD CLOSEL Y AND THREADBARE AND ASCERTAIN WHETHER THE TRUST BEING A REGISTERED CHARITABLE TRU ST HAD BEEN ISSUED THE REGISTRATION CERTIFICATE UNDER SECTION 12A OF THE ACT, 1961. A P RACTICAL WAY NEEDS TO BE FOUND OUT IN SUCH TYPE OF LITIGATION. LET THIS ENTIRE EXERCISE B E UNDERTAKEN AT THE EARLIEST AND BE COMPLETED WITHIN A PERIOD OF FOUR WEEKS FROM THE DA TE OF RECEIPT OF THE ORDER BY THE DEPARTMENT. 18 TILL THE APPROPRIATE DECISION IS NOT TAKEN BY TH E DEPARTMENT, PURSUANT TO THE DIRECTIONS ISSUED BY THIS COURT, THE INTERIM ORDER PASSED BY T HIS COURT DATED 30TH SEPTEMBER 2019 SHALL CONTINUE. 19 WE HOPE AND TRUST THAT THE CONTROVERSY IS RESOLV ED BY THE PARTIES AMICABLY AND THE TRUST MAY NOT HAVE TO COME BACK TO THIS COURT. IN THE LIGHT OF THE ABOVE FACT AND FINDINGS, WE RES TORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER TO ALLOW THE CLAIM OF EXE MPTION OF THE ASSESSEE TRUST AFTER VERIFICATION OF THE RECORD AS PER THE D IRECTION OF THE HONBLE HIGH I.T.A NO. 428/RJT/2017 A.Y. 2010-14-15 PAGE NO MORBI PLOT JAIN TAP GACHH SANGH VS. ACIT 6 COURT. THEREFORE, ALL THE GROUNDS OF APPEAL OF TH E ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03-06-2021 SD/- SD/- (MADHUMITA ROY) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 03/06/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT