KSHATRIYA UNION CLUB, MUMBAI V. IT (E)-II(1), MUMBAI

ITA 4372/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2741 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 20-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAVI TA BUNDAS
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 147; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 4372 /MUM/201 4 : (A.Y : 2006 - 07 ) KSHATRIYA UNION CLUB VANMALI HALL, 70 - D, CHHABILDAS ROAD, DADAR, MUMBAI 400 028. PAN : AAATK0073H (APPELLANT) VS. INCOME TAX (EXEMPTION) - 11(1), MUMBAI (RESPONDENT) ASSESSEE BY : SHRI ANIL SATHE REVENUE BY : MS. SAVITA BUNDAS DATE OF HEARING : 01 /0 9 /2016 DATE OF PRONOUNCEMENT : 23 /0 9 /2016 O R D E R PER SAKTIJIT DEY , JM : THE INSTANT APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30. 4.2014 FOR THE ASSESSMENT YEAR 2006 - 07. THOUGH THE ASSESSEE HAS RAISED MULTIPLE ISSUES IN THE GROUNDS OF APPEAL, BUT THE CORE ISSUE RELATES TO DISALLOWANCE OF ASSESSEES CLAIM OF EXEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. BRIEFLY PUT, THE FACTS ARE THAT ASSESSEE A PUBLIC CHARITABLE TRUST STATED TO BE ESTABLISHED IN THE YEAR 1885 IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT. THE TRUST WAS ALSO GRANTED REGISTRATION U/S 12A OF THE ACT BY DIT(E), MUMBAI VIDE ORDER DATED 16.10.1984. FOR THE 2 KSHATRIYA UNION CLUB ITA NO. 4372/MUM/2014 IMPUGNED ASSESSMENT YEAR, ASSESSEE FILED ITS RETURN OF INCOME ON 27.10.2006 DECLARING NIL INCOME AFTER CLAIMING EXEMPTION U/S 11 OF THE ACT. TH E ASSESSING OFFICER HAVING FOUND THAT THE REGISTRATION GRANTED U/S 12A OF THE ACT WAS WITHDRAWN BY DIT(E) VIDE ORDER DATED 4.3.2011 FROM THE DATE OF REGISTRATION, REOPENED THE ASSESSMENT U/S 147 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY EXEMPTION CLAIMED U/S 11 OF THE ACT SHOULD NOT BE DISALLOWED IN VIEW OF WITHDRAWAL OF REGISTRATION U/S 12A OF THE ACT. THOUGH , ASSESSEE OBJECTED TO THE PROPOSED DISALLOWANCE, HOWEVER, THE ASSESSING OFFICER, REJECTING THE EXPLANATION OF THE ASSESSEE, DISALLOWED ASSESSEES CLAIM OF EXEMPTION U/S 11 OF THE ACT ON THE GROUND THAT REGISTRATION GRANTED U/S 12A OF THE ACT HAVING BEEN WITHDRAWN , ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. ACCORDINGLY, HE COMPLETED THE ASSESSMENT BY TREATING THE RECEIPTS OF ASSESSEE AS INCOME FROM OTHER SOURCES. BEING AGGRIEVED BY SUCH ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE CIT(A). LD. CIT(A) ALSO CONFIRMED THE ASSESSMENT ORDER PASSED BY THE ASSESSING O FFICER ON THE REASONING THAT REGISTRATION GRANTED U/S 12A HAVING BEEN WITHDRAWN, ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. BEING AGGRIEVED, ASSESSEE IS BEFORE US. 3. THE LD. AR SUBMITTED THAT AGAINST THE ORDER OF CANCELLATION OF REGISTRAT ION U/S 12A OF THE ACT, ASSESSEE HAD FILED AN APPEAL BEFORE THE ITAT AND ITAT VIDE ORDER DATED 10.8.2012 IN ITA NO. 2782/MUM/2011 HAD RESTORED THE MATTER BACK TO THE FILE OF DIT(E) TO CONSIDER THE ISSUE AFRESH. IT WAS SUBMITTED THAT LD. DIT(E) ON RE - HEARI NG THE MATTER PURSUANT TO DIRECTIONS OF THE ITAT HAS RESTORED THE REGISTRATION GRANTED 3 KSHATRIYA UNION CLUB ITA NO. 4372/MUM/2014 U/S 12A OF THE ACT VIDE ORDER DATED 19.5.2014. HE, THEREFORE, SUBMITTED THAT SINCE THE REASON ON THE BASIS OF WHICH ASSESSEES CLAIM OF EXEMPTION WAS DE NIED NO LONGER E XISTS, THE MATTER MAY BE REMANDED BACK TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH ASSESSEES CLAIM OF EXEMPTION U/S 11 OF THE ACT. 4. THE LD. DR HAS NOT OPPOSED THE AFORESAID CONTENTION OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE SUBMISSION OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT FROM RECORD THAT THE ONLY REASON ON THE BASIS OF WHICH THE ASSESSING OFFICER DISALLOWED ASSESSEES CLAIM OF EXEMPTION U/S 11 OF THE ACT AND LD. CIT(A) ALSO SUSTAINED SUCH DISALLOWANCE IS THAT REGISTRATION GRANTED U/S 12A OF THE ACT TO THE ASSESSEE HAS BEEN WITHDRAWN. HOWEVER, AS BROUGHT TO OUR NOTICE BY THE LD. AR, THE DIT(E) IN PURSUANCE TO THE DIRECTIONS OF TRIBUNAL CONSIDERED THE ISSUE AFRESH AND VIDE ORD ER DATED 19.5.2014 HAS RESTORED THE REGISTRATION GRANTED U/S 12A OF THE ACT . A S THE AFORESAID DEVELOPMENT WAS NOT EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) , I N OUR CONSIDERED OPINION, THE MATTER HAS TO GO BACK TO THE ASSESSING OFFICER TO CONSIDER THE ASSESSEES CLAIM OF EXEMPTION U/S 11 OF THE ACT AFRESH AS THE REGISTRATION GRANTED U/S 12A OF THE ACT HAS BEEN RESTORED IN THE MEANTIME. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF ASSESSI NG OFFICER FOR DECIDING AFRESH AFTER CONSIDERING ALL FACTS AND MATERIAL ON RECORD AND ONLY AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4 KSHATRIYA UNION CLUB ITA NO. 4372/MUM/2014 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN CO URT ON 2 3 R D SEPTEMBER, 2016. SD/ - SD/ - ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI, DATE : 2 3 R D SEPTEMBER , 2016 * SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI