DUSSEHRA COMMITTEE AMRITSAR NORTH, AMRITSAR V. ASSISTANT COMMISIONER OF INCOME TAX, (CPC), BANGLORE

ITA 464/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1313 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 11-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 143(3); 12A; 12AA; 143(1); 147; 12; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV , ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.464/ASR/2017 ASSESSMENT YEAR: 2014-15 DUSSEHRA COMMITTEE AMRITSAR NORTH, OFFICE # 4, 3 RD FLOOR, SRK MALL, KENNEDY AVENUE, MALL ROAD, AMRITSAR-143001. [PAN:AABAD6696D] VS. ASSISTANT COMMISSIONER OF INCOME TAX (CPC), BANGALORE. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SH. CHARAN DAS (DR) DATE OF HEARING: 12.06.2019 DATE OF PRONOUNCEMENT: 14.06.2019 ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORD ER OF LD. CIT(A)-2, AMRITSAR DATED 04.05.2017 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)-2, AMRITSAR HAS ERRED IN CONFIRMING THE ORDER OF CPC, BAN GALORE U/S 143(1) DATED 16.03.2016 IN NOT ALLOWING EXEMPTION U /S 11 OF INCOME TAX ACT, 1961. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S)-2, AMRITSAR HAS ERRED IN NOT ALLOWING THE BENEFIT OF PRO VISIONS OF SECTION 12A AS AMENDED W.E.F. 01.10.2014. ITA NO.464 /ASR/2017 (A.Y.2014-15) DUSSEHRA COMMITTEE AMRITSAR NORTH, AMRITSAR VS. ACI T 2 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S)-2, AMRITSAR HAS FAILED TO APPRECIATE THAT ONLY EXCESS OF INCO ME OVER EXPENDITURE COULD BE BROUGHT TO TAX. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE SOCIETY FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR U/S 139 ON 12.02.2015 CLAIMING EXEMPTION U/S 11 AND 12 OF THE ACT . PRIOR TO THAT, THE ASSESSEE SOCIETY HAD MOVED AN APPLICATION U/S 12AA BEFORE L D. CIT(E), AMRITSAR ON 19.08.2014 SEEKING THE REGISTRATION U/S 12A A OF THE ACT. THE SAID REGISTRATION WAS GRANTED BY THE LD.CIT(E), CHAND IGARH VIDE ORDER DATED 20.02.2015. SUBSEQUENTLY, THE RETURN OF INCOME SO FILE D BY THE ASSESSEE SOCIETY WAS PROCESSED BY THE CPC U/S 143(1) ON 16.03.2016 DENYING EXEMPTION U/S 11 AND 12 OF THE ACT WHEREBY THE ENTIRE GROSS RECEIPTS WERE BROUGHT TO TAX AND DEMAND OF RS. 11,95,960/- WAS RAISE D ON THE ASSESSEE SOCIETY. AGAINST THE SAID INTIMATION CUM DEMAND NOTICE U/S 143(1), THE ASSESSEE MOVED AN APPEAL BEFORE THE LD. CIT(A) AND SUBMI SSIONS WERE MADE DRAWING SUPPORT FROM THE FIRST PROVISO TO SECTION 12AA OF THE ACT. 3. THE LD CIT(A) REFERRING TO FIRST PROVISO TO SECTION 12AA OF THE ACT AGREED THAT AT THE TIME OF GRANT OF REGISTRATION U/S 12AA TO THE ASSESSEE SOCIETY BY THE CIT(E), THE PROCESSING OF THE RETURN OF I NCOME OF ASSESSMENT YEAR 2014-15 WAS PENDING. HOWEVER, IN THE PROCEEDINGS U /S 143(1) OF THE ACT, THE ASSESSING OFFICER COULD MAKE ONLY LIMITED ADJUSTME NTS ENUMERATED IN SECTION 143(1)(A) OF THE ACT BUT WAS NOT EMPOWERED T O EXAMINE THE OBJECTS AND ACTIVITIES OF THE ASSESSEE SOCIETY AS TO WHETHER T HE OBJECTS ARE SAME IN THE RELEVANT EARLIER ASSESSMENT YEAR AND THE ASSE SSMENT YEAR RELEVANT TO THE YEAR OF GRANT OF REGISTRATION AND CO ULD NOT EXAMINE THE BOOKS OF ACCOUNT BILL AND VOUCHERS OF THE APPELLANT, WHICH TH E ASSESSING OFFICER IS EMPOWERED TO DO ONLY IN THE SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT. ACCORDINGLY, THE LD CIT(A) HELD THAT THERE IS NO ERROR IN THE ORDER U/S 143(1) ITA NO.464 /ASR/2017 (A.Y.2014-15) DUSSEHRA COMMITTEE AMRITSAR NORTH, AMRITSAR VS. ACI T 3 DATED 16.03.2016 PASSED BY THE CPC IN CASE OF THE APPEL LANT FOR A.Y 2014- 15 DENYING THE EXEMPTION U/S 11 & 12 OF THE ACT BY TR EATING THE ASSESSEE IN WHOSE CASE WHERE REGISTRATION U/S 12A OF THE ACT HAD BEEN DENIED. AGAINST THE SAID FINDING OF THE LD. CIT(A), THE ASSESSEE IS NOW I N APPEAL BEFORE US. 4. NO ONE APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER, AN ADJOURNMENT APPLICATION WAS FILED BY THE LD.AR STATING THAT HE IS AWAY TO DELHI FOR SOME URGENT WORK, HENCE HE WILL NOT BE ABLE TO ATTEND TO THE SCHEDULED HEARING. PENDING HEARING AFTER TAKING INTO CONSIDERATION. WE F IND THAT IN THE PAST, THE MATTER HAS BEEN ADJOURNED ON NUMBER OF OCCASIONS AND NO USEFUL PURPOSE WOULD BE SERVED BY ADJOURNING MATTER ANY FURTHER. I T WAS ACCORDINGLY DECIDED TO REJECT THE ADJOURNMENT APPLICATION AND DECID E THE MATTER ON MERIT AFTER CONSIDERING THE MATERIAL AVAILABLE ON RECO RD. 5. WE HAVE HEARD THE CONTENTIONS OF THE LD DR AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE RELEVANT PROVISIONS UNDER CONSI DERATION ARE CONTAINED IN SECTION 12A(2) OF THE ACT WHICH READS AS UND ER:- (2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSM ENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUC H APPLICATION IS MADE: PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TRU ST OR INSTITUTION UNDER SECTION 12AA , THEN, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM PRO PERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PRECEDING THE AF ORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRA TION AND THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION REMAI N THE SAME FOR SUCH PRECEDING ASSESSMENT YEAR: ITA NO.464 /ASR/2017 (A.Y.2014-15) DUSSEHRA COMMITTEE AMRITSAR NORTH, AMRITSAR VS. ACI T 4 PROVIDED FURTHER THAT NO ACTION UNDER SECTION 147 SHALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR INSTITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUTION FOR THE SAI D ASSESSMENT YEAR: PROVIDED ALSO THAT PROVISIONS CONTAINED IN THE FIRST AND SECOND PROVISO SHALL NOT APPLY IN CASE OF ANY TRUST OR INSTITUTI ON WHICH WAS REFUSED REGISTRATION OR THE REGISTRATION GRANTED TO IT WAS CANCELLED AT ANY TIME UNDER SECTION 12AA . 6. UNDISPUTEDLY, THE ASSESSEE SOCIETY HAS BEEN GRANTED RE GISTRATION U/S 12AA BY ORDER OF THE LD CIT(E) DATED 20.02.2015 AND AS ON THE SAID DATE OF GRANT OF REGISTRATION U/S 12AA OF THE ACT, THE ASSESSMENT PROCEEDINGS IN RESPECT OF RETURN OF INCOME FILED ON 12.02.2015 FOR A. Y 2014-15 WERE PENDING. THEREFORE, THE FIRST LIMB OF THE SECOND PROVI SO IS SATISFIED IN THE INSTANT CASE. 7. AS REGARDS THE SECOND LIMB WHICH REQUIRES THE OBJECTS A ND ACTIVITIES TO BE THE SAME FOR THE IMPUGNED ASSESSMENT YEAR AND THE ASSE SSMENT YEAR RELEVANT TO THE YEAR OF GRANT OF REGISTRATION, THE L D CIT(A) HAS STATED THAT THE POWERS OF THE AO U/S 143(1) ARE LIMITED AS COMPARED TO SECTION 143(3) AND THE SAID FACTS CANNOT BE EXAMINED. IN THIS REGARD, WE REFER TO SECTION 143(1) WHICH PROVIDES THAT WHERE THE RETURN HAS BEEN F ILED U/S 139, THE RETURN SHALL BE PROCESSED AND TOTAL INCOME OR LOSS AFTER MAKING ADJUSTMENT TOWARDS ANY ARITHMETICAL ERROR OR ANY INCORRECT CLAIM AP PARENT FROM ANY INFORMATION IN THE RETURN. THE TERM INCORRECT CLAIM HAS BEEN DEFINED IN THE EXPLANATION WHICH READS AS UNDER:- EXPLANATION- FOR THE PURPOSES OF THIS SUB-SECTION- ITA NO.464 /ASR/2017 (A.Y.2014-15) DUSSEHRA COMMITTEE AMRITSAR NORTH, AMRITSAR VS. ACI T 5 (A) AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN T HE RETURN SHALL MEAN A CLAIM, ON THE BASIS OF AN ENTRY, IN THE R ETURN,- (I) OF AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER ENTRY OF THE SAME OR SOME OTHER ITEM IN SUCH RETURN; (II) IN RESPECT OF WHICH THE INFORMATION REQUIRED TO BE F URNISHED UNDER THIS ACT TO SUBSTANTIATE SUCH ENTRY HAS NOT BEEN SO FURNISHED; OR (III) IN RESPECT OF A DEDUCTION, WHERE SUCH DEDUCTION EXCEEDS SPECIFIED STATUTORY LIMIT WHICH MAY HAVE BEEN EXPRESSED AS MONETARY AMOUNT OR PERCENTAGE OR RATIO OR FRACTION. 8. THE INCORRECT CLAIM THUS INCLUDES A CLAIM IN RESPECT OF WHICH THE INFORMATION REQUIRED TO BE FURNISHED UNDER THIS ACT T O SUBSTANTIATE SUCH ENTRY HAS NOT BEEN SO FURNISHED. IN THE INSTANT CASE, T HE ASSESSEE HAS CLAIMED EXEMPTION UNDER SECTION 11 AND 12 WHILE FILING THE RETURN AND AT THAT TIME, THE APPLICATION SEEKING REGISTRATION U/S 12 AA WAS ALREADY FILED AND GIVEN THAT REGISTRATION WAS PENDING, THE DETAILS REGAR DING SUCH REGISTRATION WERE APPARENTLY NOT FILED. THEREFORE, SUCH CLAIM WAS MADE ON THE BELIEF THAT THE ASSESSEE SOCIETY SHALL BE GRANTED REGISTRATION AND THE SAID REGISTRATION WILL BE EQUALLY APPLICABLE FOR THE IMPUGNED ASSESSMENT Y EAR IN TERMS OF SECOND PROVISO TO SECTION 12A(2). THEREFORE, THE BASIS O F SUCH CLAIM OF EXEMPTION U/S 11 AND 12 IS GRANT OF REGISTRATION U/S 12 AA WITH A RETROSPECTIVE EFFECT. TO OUR MIND, SUCH BASIS OF CLAIM IS IN CONSONANCE WITH THE SPIRIT AND LANGUAGE OF SECTION 12A WHICH PROVIDES TH AT ONCE REGISTRATION HAS BEEN GRANTED U/S 12AA OF THE ACT, THE SAME WILL B E EQUALLY APPLICABLE TO PENDING ASSESSMENT PROCEEDINGS. 9. NOW, COMING BACK TO THE CONTENTIONS OF THE REVENUE, IF WE WERE TO AGREE WITH THE FINDINGS OF THE LD CIT(A), THE PROVISI ONS OF SECTION 12A READ WITH SECOND PROVISO THERETO WILL BECOME OTIOSE WHERE THERE ARE NO REGULAR ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. TH E COURTS HAVE ITA NO.464 /ASR/2017 (A.Y.2014-15) DUSSEHRA COMMITTEE AMRITSAR NORTH, AMRITSAR VS. ACI T 6 ALSO HELD THAT THE PROVISIONS SHOULD BE READ IN A MANNE R WHERE THE SPIRIT AND INTENT BEHIND SUCH PROVISIONS IS NOT VITIATED. THEREFORE , ON CONJOINT READING OF THE PROVISIONS OF SECTION 143(1) AND 12A(2), WE ARE OF THE CONSIDERED VIEW THAT THE AO IS VERY MUCH EMPOWERED TO TAKE INTO CONSIDERATION THE FACT REGARDING GRANT OF REGISTRATION U/S 12AA SUBSEQUENT TO THE FILING OF RETURN OF INCOME. GIVEN THAT CPC MERELY PROCESSES THE RETURN AND CANNOT CARRY OUT FURTHER VERIFICATION, THE MATTER RELATING TO EXAMINA TION OF THE OBJECTS AND ACTIVITIES IS SET-ASIDE TO THE FILE OF ASSESSING OFFICER T O EXAMINE THE SAME AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE SO CIETY AND WHERE THE SAME IS FOUND TO BE THE SAME, GRANT THE NECESSARY EXEMPTI ON U/S 11 AND 12 AS SO SOUGHT BY THE ASSESSEE SOCIETY IN ITS RETURN OF INCOME. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 .06.2019. SD/- SD/- (N.K.CHOUDHRY) ( VIKRAM SINGH YADAV ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14.06.2019 GANESH KR. PS COPY OF THE ORDER FORWARDED TO: DUSSEHRA COMMITTEE AMRITSAR NORTH OFFICE, AMRITSAR (2) THE ACIT (CPC), BANGALORE. (3) THE CIT(A)-2, AMRITSAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER