DCIT, Chandigarh V. M/s Swami Devi Dyal Hi Tech Educational Academy, Panchkula

ITA 485/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95545 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Document seized; Charitable institution; Additional evidence; Reasonable cause; Condonation of delay; Documents seized
• Section: 143(3); 12A; 12AA; 148; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 485/CHD/2015 ASSESSMENT YEAR: 2010-11 THE DCIT, VS M/S SWAMI DEVI DYAL HI TECH CENTRAL CIRCLE-I, EDUCATIONAL ACADEMY, CHANDIGARH. VILLAGE GOLPURA,, BARWALA, PANCHKULA. PAN: AADTS8096B & ITA NO. 484/CHD/2015 ASSESSMENT YEAR: 2010-11 THE DCIT, VS MAHA PRABHU RAM MULK CENTRAL CIRCLE-I, HI-TECH EDUCATIONAL ACADEMY, CHANDIGARH. YOG VIDYA MANDIR, SECTOR 7, PANCHKULA. PAN: AABTM8670M (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI MANJIT SINGH ASSESSEE BY : SHRI ASHOK GOYAL DATE OF HEARING : 03.09.2015 DATE OF PRONOUNCEMENT : 10.09.2015 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY REVENUE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS) GURGAON DATED 27.02.2015 FOR ASSESSMENT YEAR 2010-11. 2 2. ACCORDING TO THE OFFICE OF THE TRIBUNAL, BOTH DEPARTMENTAL APPEALS ARE TIME BARRED BY FOUR DAYS. THE DCIT, CENTRAL CIRCLE, CHANDIGARH (APPELLANT) FILED APPLICATIONS FOR CONDONATION OF DELAY IN BOTH THE A PPEALS. IT IS EXPLAINED THAT FORM NO. 35 WAS CALLED FOR FRO M LD. CIT(APPEALS) (CENTRAL) GURGAON AND DUE TO THIS REAS ON, THERE IS A DELAY OF FOUR DAYS AND REQUESTED THAT DE LAY MAY BE CONDONED. THE LD. COUNSEL FOR THE ASSESSEE D ID NOT OPPOSE REQUEST FOR CONDONATION OF DELAY. 3. CONSIDERING THE EXPLANATION OF THE REVENUE DEPARTMENT AND THAT ASSESSEE HAS NO OBJECTION FOR CONDONATION OF DELAY, WE ARE SATISFIED THAT REVENUE DEPARTMENT WAS PREVENTED BY SUFFICIENT CAUSE IN NOT PREFERRING THE APPEALS WITHIN THE PERIOD OF LIMITAT ION. THE FOUR DAYS DELAY IS JUST NOMINAL, THEREFORE, DE LAY IN FILING BOTH APPEALS ARE CONDONED. 4. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. BOTH THE PARTIES MAINLY ARGUED IN THE CASE OF ASSES SEE M/S SWAMI DEVI DYAL HI TECH EDUCATIONAL ACADEMY IN ITA 485/2015 AND SUBMITTED THAT ISSUE IS SAME IN OT HER APPEAL AND ORDER IN THIS CASE MAY BE FOLLOWED. WE, THEREFORE, PROCEED TO DECIDE ITA 485/2015 AS UNDER. ITA 485/2015 : (M/S SWAMI DEVI DYAL HI TECH EDUCATIONAL ACADEMY) 5. THIS APPEAL BY REVENUE IS FILED ON THE FOLLOWING GROUNDS : 3 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS GRAVELY ERRED IN ALLOWING THE CLAIM OF EXEMPTION U/S 12A DESPITE THE FACT THAT THE ASSESSEE HAD FAILED TO FULFILL THE REQUIREMENTS AS REQUIRED FOR CLAIMING EXEMPTION U/S 11 AND 12 OF TH E IT ACT.' 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF EXEMPTION U/S 12A DESPITE THE FACT THAT THE ASSESSEE HAD TAKEN ITS RECORDS FROM THE INVESTIGATION WING BUT HOWEVER HAD FAILED TO FURNISH THE RETURN OF INCOME BY THE DUE DATE I.E. 30.09.2010 FOR THE A.Y. 2010-11 AND WAS ALSO HAD FAILED TO FILE THE REPORT OF THE AUDITOR ALONG WITH FORM 10CCB WITHIN THE DUE DATE I.E. 30.08.2010 ?' 6. BRIEFLY THE FACTS OF THE CASE ARE THAT IN THIS CASE, NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE ON 29.09.2011 AND IN RESPONSE, A RETURN OF NIL INCOM E WAS FILED ON 30.09.2011. THE EXEMPTION CLAIMED UNDER SECTION 11(1)(A) OF RS. 2,64,86,824/- WAS NOT ALLOW ED ON THE PREMISE THAT THE RETURN OF INCOME WAS NOT FILED AS REQUIRED UNDER SECTION 139(4A) READ WITH SECTION 12 A(B) OF THE INCOME TAX ACT. THE WITHDRAWAL OF EXEMPTION OF REGISTRATION UNDER SECTION 12AA OF THE ACT BY CIT(CENTRAL) W.E.F. 01.04.2007 WAS ALSO STATED AND CONSEQUENTLY THE ASSESSMENT WAS COMPLETED AT THE TO TAL INC OF RS. 2,64,86,824/- ON 28.03.2013 BEING THE EX CESS OF INCOME OVER THE EXPENDITURE. THE ASSESSEE WAS O NE OF THE PERSONS COVERED UNDER SECTION 132(1) OF THE INC OME TAX ACT CONDUCTED ON 15.07.2008. THE ASSESSEE 4 CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND SUBMISSIONS OF THE ASSESSEE HAVE BEEN PRODUCED IN T HE APPELLATE ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLA INED THAT THE ASSESSEE HAS NOT FILED THE RETURN OF INCOM E FOR THE RELEVANT ASSESSMENT YEAR DUE TO NON-AVAILABILIT Y OF THE RECORDS AND DOCUMENTS WHICH WERE SEIZED BY THE INVESTIGATION WING FROM DIFFERENT PREMISES OF THE ASSESSEE, THEREFORE, EXEMPTION UNDER SECTION 11 & 1 2 OF THE ACT WAS ERRONEOUSLY DISALLOWED. WITH REFERENCE TO SECTION 139(4A) OF THE ACT IT WAS SUBMITTED THAT AS SESSEE IS CARRYING ON GENUINE ACTIVITY OF CHARITABLE TRUST APPLYING ALL ITS INCOME FOR THE PURPOSE OF OBJECTS OF THE TRUST AND CASE OF THE ASSESSEE IS COVERED BY DEFINI TION OF CHARITABLE PURPOSES PROVIDED IN SECTION 2(15) OF THE ACT. IT WAS SUBMITTED THAT ORDER PASSED IN SEARCH ASSESS MENT HAS BEEN SET ASIDE BY CHANDIGARH BENCH OF THE ITAT VIDE ORDER DATED 07.11.2014 DUE TO NON-SUBMISSION OF ADDITIONAL EVIDENCES BY LD. CIT(APPEALS) AND DUE TO LACK OF SUFFICIENT OPPORTUNITIES PROVIDED BY THE ASSESSI NG OFFICER. THE ASSESSEE FULFILLED ALL THE CONDITIONS OF SECTION 11 AND 12 OF THE INCOME TAX ACT. SINCE SEA RCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE PRIOR TO ASSESSMENT YEAR UNDER APPEAL AND THE TRIBUNAL VIDE ORDER DATED 07.11.2014 CLEARLY HELD THAT SINCE DOCU MENTS WERE NOT PROVIDED TO THE ASSESSEE TILL THE END OF AUGUT,2010 AND A PROPOSAL FOR SPECIAL AUDIT WAS INI TIATED ONLY TOWARDS END OF 2010, THE ASSESSEE COULD NOT FI LE RETURN UNLESS AND UNTIL COMPLETE DOCUMENTS ARE 5 AVAILABLE. IT WAS, THEREFORE, SUBMITTED THAT THE R EASON FOR DELAY IN FILING OF THE RETURN IS NOT ATTRIBUTAB LE TO THE ASSESSEE. THE ASSESSEE, AFTER OBTAINING THE COMPLE TE DOCUMENTS, IMMEDIATELY FILED RETURN OF INCOME. THE ACCOUNTS WERE ALSO AUDITED AND THEN RETURN OF INCOM E WAS FILED IMMEDIATELY. IT IS, THEREFORE, SUBMITTED THAT CONDITIONS OF SECTION 139(4A) OF THE INCOME TAX ACT DOES NOT APPLY IN THE CASE OF THE ASSESSEE AND FURTHER, IT IS NOT MANDATORY TO FILE AUDIT REPORT WITHIN TIME BECA USE IT COULD BE FILED AT THE ASSESSMENT STAGE AS WELL. IT WAS ALSO SUBMITTED THAT THE ASSESSING OFFICER RELIED UP ON DECISION IN THE CASE OF SPIC EDUCATIONAL FOUNDATION 257 ITR 46 BUT THE RATIO OF THIS DECISION IS DISTINGUIS HABLE FROM THE FACTS OF THE CASE BECAUSE THERE WAS DELAY ON THE PART OF THE DEPTT. IN SUPPLYING THE DOCUMENTS TO TH E ASSESSEE, THEREFORE, RETURN COULD NOT BE FILED FOR SUBSEQUENT YEARS. 7. THE LD. CIT(APPEALS), CONSIDERING THE SUBMISSION S OF THE ASSESSEE, MATERIAL ON RECORD AND IN THE LIGHT O F ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF THE ASSESSE E DATED 07.11.2014 SET ASIDE THE ORDER OF THE ASSESSI NG OFFICER AND ALLOWED THE APPEAL OF ASSESSEE. THE FI NDINGS OF LD. CIT(APPEALS) IN PARA 4.1 TO 5 ARE REPRODUCED AS UNDER : 4.1 I HAVE CONSIDERED THE ASSESSEE'S SUBMISSIONS, THE CITED DECISIONS AS WELL AS THE IMPUGNED ORDER. THE PROVISIONS OF SEC. 139(4A) STIPULATES THAT IF THE TOTA L INCOME OF A CHARITABLE OR RELIGIOUS TRUST AS COMPUTED UNDER T HE IT ACT, WITHOUT GIVING EFFECT TO THE PROVISIONS OF SS. 1 1 AND 12 6 OF THE IT ACT EXCEEDS THE MAXIMUM AMOUNT WHICH IS N OT CHARGEABLE TO INCOME-TAX, IT IS REQUIRED TO FURNISH A R ETURN OF SUCH INCOME OF THE PREVIOUS YEAR IN SIMILAR MANNE R AS ANY OTHER ASSESSEE IS REQUIRED TO FURNISH UNDER S. 1 39(1) OF THE IT ACT. IN OTHER WORDS THE ASSESSEE WAS REQUIR ED TO FILE ITS RETURN OF INCOME ACCORDING TO THE PROVISION S OF SEC 139(4A) OF THE IT ACT. IN THIS BACKDROP, IT IS REQUIR ED TO EXAMINE WHETHER THE ASSESSEE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE FROM FILING THE RETU RN IN TIME. IN THE PRESENT CASE, THERE WAS A SEARCH OPERATIO N CONDUCTED ON THE ASSESSEE (JINDAL GROUP) ON 15.07.20 08 IN THE COURSE OF WHICH SEVERAL MATERIAL DOCUMENTS ALONGWITH THE BOOKS OF ACCOUNTS WERE SEIZED. THE SEARC H ASSESSMENTS PERTAINING TO THE ASSESSMENT YEARS. AY 2 003- 04 TO 2009-10 STANDS DISPOSED BY THE HON'BLE ITAT, CHANDIGARH ON -07.11.2014, WITH A DIRECTION TO THE ASSESSEE TO COOPERATE WITH THE SET ASIDE PROCEEDINGS BEFORE THE AO. A COPY OF THE ORDER HAS BEEN FURNISHE D BY THE ASSESSEE. IT IS THE CONTENTION OF THE ASSESSEE THAT THE DEPARTMENT HAD NOT PROVIDED THE COPIES OF ALL THE SEI ZED DOCUMENTS SOUGHT, DESPITE VARIOUS WRITTEN AND ORAL REQUESTS, AS A CONSEQUENT OF WHICH THE RETURN FOR AY 2009-10 COULD ONLY BE FURNISHED ON 01.04.2011. THAT IT WAS ONLY PURSUANT TO IT THAT THE RETURN FOR AY 2010-1 1 COULD BE FURNISHED WITH THE AUDIT REPORT ON 30.9.201 1 .THE ASSESSEE HAS ALSO CLARIFIED THAT AS THE SPECIAL AUDI T U/S 142(2A) WAS CONDUCTED IN MAY 2011, THE COMPILING OF T HE FIGURES OF THE OPENING BALANCES REQUIRED FOR COMPLET ING THE BOOKS OF ACCOUNT FOR AY 2010-11 HAD TO BE ALSO UNDERTAKE N. THUS IT IS THE CONTENTION OF THE ASSESSEE THAT IT WA S PREVENTED BY SUFFICIENT CAUSE IN NOT FILING THE RET URN ON OR BEFORE THE DUE DATE AND THAT THE RETURN SO FILED ON 30.9.2011 COULD NOT BE SAID TO BE A RETURN FILED IN PURSUANCE OF NOTICE U/S 148. NOW INSOFAR AS THE POSITION OF THE HANDING OVE R OF COPIES OF THE SEIZED DOCUMENTS ARE CONCERNED, TH E HON'BLE ITAT INTER-ALIA HAS CONCLUDED AT PARA 22 ( PAG E 17) THAT ...... 'FURTHER PERUSAL OF THE ORDER SHEET WOULD SH OW THAT THERE IS NO REFERENCE TO RECEIPT OF LETTER FOR SUPP LY OF DOCUMENTS AND NO DETAILS ARE INCORPORATED WHETHER T HE DOCUMENTS WERE REALLY SUPPLIED OR NOT? THEREFORE ONLY ASSUMPTION POSSIBLE IS THAT STATEMENTS OF THE ASSESS EE ARE CORRECT AND COMPLETE DOCUMENTS HAVE NOT BEEN SUPPLI ED TILL THE END OF AUGUST, 2010'. THE HON'BLE ITAT FURTHER 7 OBSERVED IN THE SUBSEQUENT SENTENCES THAT ... AUDIT WAS COMPLETED ON 13.5.2011 RETURN WAS FILED ON 1.4.2011. THEREFORE ONCE THE DOCUMENTS WERE NOT PROVIDED TILL THE END OF AUGUST 2010 AND A PROPOSAL FOR SPECIAL AUDIT WAS INITIATED ONLY TOWARDS END OF 2010, THE ASSESSES CA NNOT FILE THE RETURN UNLESS AND UNTIL COMPLETE DOCUMENTS ARE AVAILABLE. NO DOUBT THESE OBSERVATIONS WOULD PERTAIN TO AY 2009-10, BUT THE RAMIFICATION WOULD BE IN THE CONSEQUENT YEAR TOO, EVEN THOUGH ONE COULD ARGUE TH AT EACH ASSESSMENT YEAR IS INDEPENDENT. IT IS ALSO NOT BORNE OUT FROM THE IMPUGNED ORDER TH AT THE ASSESSEE IS NOT CARRYING ON ITS CHARITABLE BUSINESS AS PER ITS AIMS AND OBJECTIVES. COPY OF ASSESSMENT ORDER U/S 143(3) FOR AY 2012-13 DATED 01.01.2015 HAS BEEN FURNISHED WHEREIN THE CLAIM OF EXEMPTION U/S 12A HAS BEEN ALLOWED, WHILE AY 2011-12 HAS BEEN ACCEPTED U/ S 143(1). THUS CONSIDERING THE ABOVE DISCUSSION, THE DELAY IN FILING THE RETURN WITHIN THE PRESCRIBED TIME LIMIT CAN NOT BE SAID TO HAVE BEEN INTENTIONAL OR DELIBERATE. FURTHE RMORE SINCE THE ENTIRE INCOME WAS APPLIED TOWARDS THE CHA RITABLE ACTIVITIES, NO TAX WAS PAYABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THEREBY THERE WAS NO LOSS OF REV ENUE EITHER. THUS 1 AM OF THE CONSIDERED OPINION THAT THE DELAY IN FILING OF THE RETURN WAS ON ACCOUNT OF PECULIAR CIRCUMSTANCES WHICH CANNOT BE FULLY ATTRIBUTABLE TO TH E ASSESSEE. THE BENEFIT DESERVES TO BE AFFORDED TO THE ASSESSEE, AND ACCORDINGLY THE AO IS DIRECTED TO ALLO W THE CLAIM OF EXEMPTION. 5. IN THE RESULT THE APPEAL OF THE ASSESSE E IS ALLOWED. 8. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. DR RELIED UPON ORDER OF THE ASSES SING OFFICER AND SUBMITTED THAT DUE DATE OF FILING OF RE TURN WAS 30.09.2010 BUT RETURN WAS FILED ONLY ON 30.09.2 011. THE ASSESSEE HAS FILED A LETTER BEFORE ASSESSING OF FICER DATED 13.09.2008 IN WHICH IT WAS ADMITTED THAT SEIZ ED DOCUMENTS HAVE BEEN SUPPLIED TO THE ASSESSEE. ON T HE 8 OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. 9. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSE SSEE. IT IS NOT IN DISPUTE THAT SEARCH WAS CONDUCTED IN T HE CASE OF THE ASSESSEE ON 15.07.2008 AND SEVERAL DOCUMENTS AND BOOKS OF ACCOUNT WERE SEIZED. THE APPEAL OF ASSESSEE FOR EARLIER YEARS FOR 2003-04 TO 2009-10 H AVE BEEN DECIDED BY THE TRIBUNAL VIDE ORDER DATED 07.11 .2014 IN WHICH THE TRIBUNAL FOUND THAT THE SUBMISSION OF THE ASSESSEE WAS CORRECT AND COMPLETE DOCUMENTS HAVE NO T BEEN SUPPLIED TILL THE END OF AUGUST,2010. THE TRIB UNAL ALSO OBSERVED THAT AUDIT WAS COMPLETED ON 13.05.201 1. THE FINDINGS OF THE TRIBUNAL, THEREFORE, CLEARLY PR OVED THAT DELAY IN FILING OF THE RETURN WAS NOT ATTRIBUT ABLE TO THE ASSESSEE BUT DELAY IN FILING OF THE RETURN WAS MERELY ON ACCOUNT OF SEIZED DOCUMENTS SUPPLIED TO THE ASSE SSEE BELATEDLY. EVEN IF ASSESSEE HAS FILED SOME LETTER B EFORE ASSESSING OFFICER, BUT THE SAME WOULD BE SUPERSEDED BY THE FINDINGS OF THE TRIBUNAL GIVEN IN THE CASE OF T HE ASSESSEE VIDE ORDER DATED 07.11.2014. THE LD. CIT(APPEALS) WAS, THEREFORE, JUSTIFIED IN HOLDING T HAT THE DEPARTMENT HAD NOT PROVIDED COPIES OF THE SEIZED DOCUMENTS DESPITE REQUEST MADE BY ASSESSEE DUE TO WHICH, THE RETURN FOR ASSESSMENT YEAR 2009-10 COULD ONLY BE FURNISHED ON 01.04.2011. IT WAS ONLY THERE AFTER, THE RETURN FOR ASSESSMENT YEAR UNDER APPEAL 2010-11 9 COULD BE FURNISHED ALONGWITH THE AUDIT REPORT ON 30.09.2011. THUS, THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE RETURN OF INCOME O N TIME. 10. THE LD. CIT(APPEALS) ALSO FOUND THAT THE ASSESS ING OFFICER IN SUBSEQUENT ASSESSMENT YEAR 2012-13 IN SCRUTINY ASSESSMENT UNDER SECTION 143(3) VIDE ORDER DATED 01.01.2015 ALLOWED THE EXEMPTION TO THE ASSES SEE UNDER SECTION 12AA OF THE ACT AND IN ASSESSMENT YEA R 2011-12, CLAIM OF ASSESSEE HAS BEEN ACCEPTED UNDER SECTION 143(1). THEREFORE, THE FACTS AND CIRCUMSTA NCES ARE SAME WHICH HAVE BEEN CONSIDERED SUBSEQUENTLY AL SO BY THE REVENUE DEPARTMENT AND CLAIM OF EXEMPTION UN DER SECTION 11 & 12 HAVE BEEN ACCEPTED IN SUBSEQUENT YE AR. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF LD. CIT(APPEALS) IN ALLOWING EXEMPTION UNDER SECTION 11 & 12 OF THE INCOME TAX ACT TO THE ASSESSEE. 11. FROM THE TOTALITY OF THE FACTS AND CIRCUMSTANCE S AND MATERIAL ON RECORD, WE DO NOT FIND ANY MERIT IN THI S APPEAL OF THE REVENUE. THE SAME IS ACCORDINGLY, DISMISSED. ITA 484/2015 ( M/S MAHA PRABHU RAM MULK HI-TECH EDUCATIONAL ACADEMY) 12. THE GROUNDS OF APPEAL AND FACTS ARE SAME AS ADMITTED BY BOTH THE PARTIES AS HAVE BEEN CONSIDERE D IN THE CASE OF SWAMI DEVI DYAL HI-TECH EDUCAT IONAL 10 ACADEMY (SUPRA). THEREFORE, FOLLOWING THE ORDER IN THAT CASE, THIS APPEAL OF THE REVENUE IS ALSO DISMISSED. 13. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH SEPTEMBER,2015. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAI NI) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 10 TH SEPTEMBER,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH