CHATRAPATI SHIVAJI MAHARAJ SMARAK SAMITI, MUMBAI V. ITO (E), CIRCLE 1 (2), MUMBAI

ITA 435/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5779 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMA
• Assessee Lawyers: DEVDATTA MAINKAR
• Keywords: Rectification of order; Procedural lapse; Condonation of delay
• Section: 207; 13; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH , JUDICIAL MEMBER ITA N O. 435/MUM./2019 (ASSESSMENT YEAR: 2012 - 1 3 ) CHATRAPATI SHIVAJI MAHARAJ SMARAK SAMITI 26, PRABHOO GHAR HANUMAN CROSS ROAD NO.2, VILE PARLE (EAST) MUMBAI - 400057 . APPELLANT V/S INCOME TAX OFFICER (EXEMPTION), CIRCLE 1(2), ROOM NO.501, 5 TH FLOOR PIRAMAL CHAMBERS LALBAUG, MUMBAI - 400012 . RESPONDENT ASSESSEE BY : SHRI. DEVDATTA MAINKAR REVENUE BY : SHRI. KUMAR PADMAPANI BORA DATE OF HEARING 21/01/2020 DATE OF ORDER - 0 2 /0 3 / 20 20 O R D E R PER: SHAMIM YAHYA THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LD. CIT - A - 1, MUMBAI DATED 29 . 11 .201 8 AND PER TAINS TO ASSESSMENT YEAR 2012 - 13 . 2. THE GROUNDS OF APPEAL ARE AS UNDER: - ITA NO. 435/MUM/2019 CHATRAPATI SHIVAJI MAHARAJ SMARAK SAMITI 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND ALSO IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER INITIATING PROCEEDINGS UNDER SECTION 154 OF THE ACT WITHOUT APPRECIATING THAT WITHDRAWAL OF CLAIM UNDER SECTION 11(2} FOR DELAY IN SUBMISSION OF FORM NO.10 IS NOT A MISTAKE APPARENT FROM RECORDS TO BE RECTIFIED UNDER THE SAID SECTION. THE APPELLANT SUBMITS THAT THE NOTICE UNDER SECTIO N 154 DATED 03.03.2017 IS BAD IN LAW AND ORDER THEREUNDER BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND ALSO IN LAW, THE LEARNED CIT(A)ERRED IN CONFIRMING DISALLOWANCE OF CLAIM OF ACCUMULATION OF INCOME UNDER SECTION 11(2) AMOUNTI NG TO RS.92,56,501/ - DISREGARDING THE FACT THAT DELAY IN SUBMISSION OF FORM NO.10 AND RESOLUTION OF TRUSTEES IS PROCEDURAL LAPSE AND COULD HAVE BEEN CONDONED HAVING REGARD TO THE REASONS STATED IN RESPONSE TO NOTICE UNDER SECTION 154. YOUR APPELLANT RESER VES THE RIGHT TO ADD, TO ALTER OR AMEND ANY OF THE ABOVE GROUNDS, IF NECESSARY. 2. THE BRIEF FACTS OF THE CASE ARE THAT AO HAD COMPLETED THE ASSESSMENT U/S.143(3) ON 18/03/2015 AT INCOME OF RS.20,85,658/ - . THEREAFTER , THE ASSESSING OFFICER ISSUED AN ORDE R U/S.154 . I N THE ORDER U/S.154 H E REJECTED THE CLAIM OF ACCUMULATION OF INCOME AS DEDUCTION U/S.11(2) OF THE IT ACT FOR AN AMOUNT OF RS.92,56,501/ - , ON THE FOLLOWING FINDINGS: - 2. ON VERIFICATION OF CASE RECORD, IT IS OBSERVED THAT FORM NO.10 HAS BEEN SIGNED ON 04.02.2013 AND RESOLUTION OF MANAGING COMMITTEE WAS HELD ON 07.012.2012 (I,E. AFTER THE COMPLETION OF RELEVANT PREVIOUS YEAR) TO ACCUMULATE INCOME OF RS.99,41,280/ - FOR THE EXPANSION OF SPORTS COMPLEX [ ALL DATES ARE AFTER DUE DATE U/S 139(1)]. T HE ASSESSEE TRUST HAD NOT APPLIED FOR CONDONATION OF DELAY TILL DATE OF ASSESSMENT. THEREFORE, THE ACCUMULATION OF INCOME OF RS.99,41,280/ - CLAIMED FOR DEDUCTION U/S 11(2) WHICH WAS RESTRICTED THE SAME TO RS. 92,56,501/ - DURING SCRUTINY ASSESSMENT ITA NO. 435/MUM/2019 CHATRAPATI SHIVAJI MAHARAJ SMARAK SAMITI 3 3. AGAI NST THE ABOVE ORDER, ASSESSEE APPEAL ED BEFORE THE LD. CIT(A). THE ASSESSEE SUBMITTED THAT THERE WAS NO MISTAKE APPARENT FROM RECORD AND HENCE, THE RECTIFICATION U/S.154 WAS BAD IN LAW. THE LD. CIT(A) NOTED THAT ASSESSEE HAS NOT OBJECTED TO THE RECTIFICATIO N U/S.154, HENCE, H E DISMISSED THIS ISSUE RAISED BY THE ASSESSEE. HE HELD AS UNDER: - 6.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ORAL CONTENTIONS AND WRITTEN SUBMISSIONS OF THE ASSESSEE, DISCUSSION OF THE AO IN THE IMPUGNED ORDER AND MATERIAL AVAILABLE O N RECORD. IT IS SEEN FROM THE FACTS OF THE CASE THAT A NOTICE U/S154/155 WAS ISSUED TO THE ASSESSEE AND IN THEIR SUBMISSION TO THE AO DATED 23.03.2017 THEY HAVE SUBMITTED IN WRITING THAT THEY DO NOT HAVE ANY OBJECTION FOR NOTICE U/S 154/155 OF THE ACT. IT IS BASED ON SUCH SUBMISSION OF THE APPELLANT THAT THE AO PASSED ORDER U/S 154 OF THE ACT. THE ASSESSEE NOW SEEKS TO RAISE GRIEVANCE AND CONTEND THAT SUCH NOTICE ISSUED WAS BAD IN LAW. IN REGARD TO SUCH CONTENTION OF THE APPELLANT IT IS STATED IN THE FACTS AND CIRCUMSTANCES OF THE CASE THAT FORM NO. 10 AND THE RESOLUTION OF THE MANAGING COMMITTEE WAS BEYOND THE DUE DATES U/S 139(1), THE AO REALISED THAT DEDUCTION U/S 11(2) SHOULD NOT HAVE BEEN ALLOWED. UNDER THESE CIRCUMSTANCES, HE ISSUED NOTICE U/S 154 OF T HE ACT AND ON THE BASIS OF WRITTEN NO OBJECTION TO THE NOTICE BY THE APPELLANT, HE PASSED ORDER U/S154 OF THE ACT. UNDER THESE FACTS AND CIRCUMSTANCES THE ASSESSEE'S CONTENTION NOW THAT NOTICE U/S 154 IS BAD IN LAW IS NOT FOUND TO BE ACCEPTABLE INCLUDING F OR THE REASON THAT NO SUCH OBJECTION WAS RAISED BEFORE THE AO. 4. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LD. COUNSEL OF THE ASSESSEE CONTENDED THAT ALL THE NECESSARY DOCUMENTS WERE BEFORE THE AO DURING THE BEFORE THE ASSESSING OFFICER. AFTER DUE CONSIDERATION O F THE SAME, ASSESSING OFFICER HAS PASSED AN ORDER BY DUE APPLICATION OF MIND WHEREIN ACCUMULATION OF INCOME ITA NO. 435/MUM/2019 CHATRAPATI SHIVAJI MAHARAJ SMARAK SAMITI 4 WAS ALLOWED. LD. COUNSEL SUBMITTED THAT THIS DISALLOWANCE U/S.154 IS NOT AT ALL A RECTIFICATION OF MISTAKE APPARENT FROM RECORD, HENCE, LD. COUNSEL SUBMITTED THAT LD. CIT(A) ERRED IN HOLDING THE ORDER OF THE ASSESSING OFFICER. 6. PER CONTRA, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 7. UPON CAREFUL CONSIDERATION, WE FIND THAT THE NECESSARY DOCUMENTS WERE ALREADY SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT. THE ASSESSING OFFICER HAS NOT RAKED UP ANY ISSUE OF CONDONATION OF DELAY AND HE HAS PASSED ASSESSMENT ORDE R ALLOWING THE ACCUMULATION OF INCOME. NOW, U/S.154, THE AO SEEKS TO DISALLOW THE AFORESAID ACCUMULATION OF INCOME ON THE GROUND THAT ASSESSEE HAS NOT SUBMITTED ANY CONDONATION OF DELAY. IN OUR CONSIDERED OPINION, THIS IS CLEARLY NOT A MISTAKE APPARENT FRO M RECORD, THAT CAN BE RECTIFIED U/S.154. HENCE, THE ORDER OF THE ASSESSING OFFICER U/S.154 IS NOT SUSTAINABLE. THIS VIEW IS DULY SUPPORTED BY THE FOLLOWING DECISION S REFERRED BY THE LD. COUNSEL OF THE ASSESSEE. SR NO. PARTICUL ARS I. T.S. BALARAM, ITO V. VOLKART BROS. 82 ITR 50 (SUPREME COURT - 1971) 2. COMMISSIONER V. TRUSTEES OF SHRI TECKCHAND CHANDIRAM TRUST. 184 ITR 537 ( BOMBAY - 1990) ITA NO. 435/MUM/2019 CHATRAPATI SHIVAJI MAHARAJ SMARAK SAMITI 5 3. COMMISSIONER OF INCOME TAX - ILL, PUNE VS. SAKAL RELIEF FUND. 81 TAXMANN.COM 396 (BOMBAY - 2017) 4. COMMISSIONER OF INCOME TAX VS. NAGPUR HOTEL ASSOCIATION. 1 14 TAXMAN 255 (SUPREME COURT - 2001) 5. TRUSTEES OF TULSIDAS GOPALJI & CHARITABLE & CHALESHWAR TEMPLE TRUST VS. CIT 207 ITR 368 (BOMBAY - 1994) 8. MOREOVER, THE PREMISE OF THE LD. CIT(A) IN UPHOLDING THE ORDER U/S.154 IS THAT ASSESSEE HAS NOT OBJECTED BEFORE THE AO. THIS REASONING IS NOT AT ALL SUSTAINABLE. THERE IS NO ESTOPPELS AGAINST LAW AND ORDER OF THE AO WHICH IS NOT SUSTAINABLE IN LAW CANNOT B E UPHELD ON THE GROUND THAT ASSESSEE DID NOT OBJECT BEFORE THE AO. THE ABOVE CASE LAWS DULY SUPPORT THE PLEA THAT REVIEW IS NOT POSSIBLE UNDER THE GARB OF RECTIFICATION AND THAT SUBMISSION BEFORE THE AO BEFORE THE ASSESSMENT IS SUFFICIENT COMPL IANCE, IF AO DOES NOT RAISE ANY QUESTION ABOUT CONDONATION. RESPECTFULLY FOLLOWING THE DECISION AS REFERRED ABOVE, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 2 .0 3 .20 20 S D / - S D / - AMARJIT SINGH SHAMIM YAHYA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 0 2 .0 3 .20 20 ITA NO. 435/MUM/2019 CHATRAPATI SHIVAJI MAHARAJ SMARAK SAMITI 6 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE. BY ORDER KARUNA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI