SARVA SIDDHI RAJA GANAPATHY TRUST, MUMBAI V. DDIT (EXEMPTION) 1(2), MUMBAI

ITA 5159/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7514 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 12-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Keywords: Charitable institution
• Section: 143(3); 12A; 148; 12; 11

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R . C. SHARMA , AM & SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 5159 & 5160 / MUM/ 2016 ( / ASSESSMENT YEAR: 2009 - 10 & 2013 - 14 ) SARVA SIDDHI RAJA GANAPATHY TRUST, BHAJANSAMAJ COMPLEX, 90 FEET ROAD, GARODIA NAGAR, GHATKOPAR(EAST) M UMBAI - 400077 / VS. DDIT (EXEMPTION) 1(2) MUMBAI, PIN - ./ ./ PAN NO. AA JTS 6521 P ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI MEHUL SHAH, AR / RESPONDENTBY : SHRI M. C. OMI NINGSHEN, DR / DATE OF HEARING : 07 .02 .1 8 / DATE OF PRONOUNCEMENT : 1 1.04.18 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE PRESENT TWO APPEAL S HAVE BEEN FILED BY THE ASSESSEE ARE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX 2 I.T.A. NO. 5159& 5160 /MUM/201 6 SARVA SIDDHI RAJA GANAPATHY TRUST (APPEALS) - 1 , MUMBAI, DATED 19.05.16 AND 15.06.16 FOR AY 2009 - 10 AND 2013 - 14 RESPECTIVELY . 2. SINCE THE ISSUES RAISED IN THESE TWO APPEALS ARE IDENTICAL, THEREFORE, FOR THE SAKE OF CONVENIENCE, THESE TWO APPEALS ARE CLUBBED, HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDER. I.T.A. NO. 5159 /MUM/201 6 (AY 2009 - 10 ) 3. FIRST OF ALL WE TAKE UP ASSESSEE S APPEAL IN I.T.A. NO. 5159 /MUM/201 6 (AY 2009 - 10 ) ON THE GROUNDS MENTIONED HEREIN BELOW: - 1. ON THE FACTS, AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, LEARNED COMMISSIONER OF INCOME - TAX (APPEAL) ERRED IN UPHOLDING ACTION OF THE ASSESSING OFFICER IN NOT GRANTING EXEMPTION UNDER SECTIO N 11 OF THE INCOME - TAX ACT 1961 PENDING APPEAL BEFORE HON'BLE ITAT, MUMBAI WITH RESPECT TO REJECTION OF REGISTRATION UNDER SECTION 12A OF THE INCOME - TAX ACT 1961. 2 ON THE FACTS, AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, LEARNED COMMISSIONER OF INCOME - TAX (APPEAL) ERRED IN ENHANCING THE INCOME BY RS. 2603,397 TO ASSESS THE INCOME ON GROSS RECEIPTS OF RS. 3,364,290 HOLDING THAT SINCE THERE WAS NO EFFECTIVE REGISTRATION 3 I.T.A. NO. 5159& 5160 /MUM/201 6 SARVA SIDDHI RAJA GANAPATHY TRUST AVAILABLE TO THE APPELLANT UNDER SECTION 12A, THE APPELLANT DID NOT QUALIFY TO BE ELIGIBLE FOR EXEMPTION UNDER SECTIO N 11 AND NOT ONLY THAT. NO DEDUCTION COULD BE ALLOWED FOR APPLICATION OF MONEY FOR CHARITABLE OBJECTS. 3. YOUR APPELLANT CRAVES LEAVE TO ADD TO, AMEND, ALTER, MODIFY, AND / OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL AT OR BEFORE FINAL DISPOSAL OF APPEAL . 4 . THE B RIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A TRUST REGISTERED WITH CHARITY COMMISSIONER. THE ASSESSEE DID NOT FILE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THEREFORE NOTICES U/S 148 DATED 22.03.12 WAS ISSUED. IN RESPONSE TO THE NOTICE, COPY OF THE RETURN OF INCOME FOR A.Y. 2009 - 10 SHOWING NIL INCOME WAS SENT TH ROUGH RPAD ON 13.07.2012. ASSESSING OFFICER COMPLETED THE ASSESSMENT VIDE ORDER DATED 01.03.2013 U/ - S. 143(3) R.W.S, 147 OF THE I.T. ACT, 1961 AT TAXABLE INCOME OF RS. 7 , 60 , 893/ - . IN THIS CASE, THE ASSESSING OFFICER HAS MENTIONED THAT THE APPLICATION FOR GRANT OF REGISTRATION U/S. 12A WAS REJECTED BY DIRECTOR OF INCOME TAX (EXEMPTION). THEREAFTER, THE ASSESSING 4 I.T.A. NO. 5159& 5160 /MUM/201 6 SARVA SIDDHI RAJA GANAPATHY TRUST OFFICER HAS TAXED THE SURPLUS INCOME OF RS. 6,49,025/ - AFTER ALLOWING DE PRECIATION AND DEDUCTION FOR OTHER EXPENSES CLAIMED IN THE RECEIPT AND EXPENDITURE ACCOUNT. AGGRIE VED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS, IT WAS NOTED BY LD. CIT(A) THAT THE ACTION OF THE AO WAS NOT IN CONSONANCE WITH THE PROVISION OF SECTION 11. THEREFORE, IN VIEW OF THE SUBMISSIONS MADE BY ASSESSEE, THE INCOME OF THE ASSESSEE WAS ENHANCED BY RS. 26,03,397/ - AND ULTIMATELY THE APPEAL FILED BY THE ASSESSEE WAS DISMISSED WITH ENHANCEMENT. NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. 1 & 2 . 5 . THESE GROUND RAISED BY THE ASSESSEE ARE INTER CONNECTED AND INTER RELATED AND RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN UPHOLDING THE ACTION OF AO IN NOT GRANTING EXEMPTION UNDER SECTION 11 OF THE INCOME - TAX ACT 1961 AND I N ENHANCING THE INCOME BY RS . 2 , 603,397 TO ASSESS THE INCOME ON GROSS 5 I.T.A. NO. 5159& 5160 /MUM/201 6 SARVA SIDDHI RAJA GANAPATHY TRUST RECEIPTS OF RS. 3,364,290 / - , T HEREFORE WE THOUGHT IT FIT TO DISPOSE OF THE SAME BY THIS COMMON ORDER. 6 . WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE NOTICE THAT THE LD. CIT(A) WHILE PASSING THE IMPUGNED ORDER HAS CONSIDERED THE ADMISSION MADE BY THE ASSESSEE WHEREIN THE ASSESSEE ADMITTED THAT IN THE ABSENCE OF REGISTRATION U/S 12A OF THE I.T. ACT 196 1, NO AMOUNT APPLIED TOWARDS THE CHARITABLE OR RELIGIOUS PURPOSE DURING THE PREVIOUS YEAR IS ALLOWABLE AS DEDUCTION. NOW BEFORE US, LD. AR HAS RELIED UPON THE ORDER S PASSED BY THE C OORDINATE BENCH OF HONBLE ITAT IN ITAT NO. 7676/MUM/12 DATED 10.11.17 IN ASSESSEES OWN CASE FOR AY 2012 - 13 WHEREIN THE HONBLE ITAT HAS ALREADY REMANDED BACK THE MATTER TO THE FILE OF DIT(EXMP) FOR AFRESH EXAMINATION OF ASSESSEES CLAIM OF REGISTRATION U/S 12A OF THE I.T. ACT. LD. AR ALSO CHALLENGED THE ORDER OF LD. CIT(A) B Y RELYING UPON THE PRINCIPAL LAID DOWN BY HONBLE ITAT IN IDENTICAL CIRCUMSTANCES I N THE CASE OF IT O VRS. M/S SRI BALAJI EDUCATION 6 I.T.A. NO. 5159& 5160 /MUM/201 6 SARVA SIDDHI RAJA GANAPATHY TRUST AND CHARITABLE TRUST IN ITA NO. 789/MDS/2011 WHEREIN IT HAS BEEN HELD BY THE HONBLE ITAT, CHENNAI BENCH B THAT EVEN IF THERE IS NO CASE OF BENEFITS AVAILABLE U/S 11 AND 12 OF THE I.T. ACT, THE INCOME IN THE HANDS OF THE ASSESSE CAN BE COMPUTED ONLY ON THE BASIS OF WELL PRINCIPLES LAID DOWN IN THE ACCOUNTANCY AND TAXATION. THE GROSS COLLECTION CANNOT BE TAXED AS INC OME. CORRESPONDING EXPENDITURE NECESSARY TO CARRY ON THE ACTIVITIES SHOULD BE DEDUCTED. THE NET ALONE CAN BE TAXED AS INCOME. THEREFORE, KEEPING IN VIEW THE ORDERS PASSED BY HONBLE ITAT IN ITA NO. 7676/MUM/12 IN ASSESSEES OWN CASE AND ORDER PASSED IN T HE CASE OF ITO VRS. M/S SRI BALAJI EDUCATION AND CHARITABLE TRUST IN ITA NO. 789/MDS/2011, WE SET ASIDE THE ORDER PASSED BY LD. CIT(A) AND RESTORE THE MATTE R BACK TO THE FILE OF AO TO PASS AFRESH ORDER AFTER CONSIDERING BOTH THE ORDERS AS REFERRED ABOVE AND KEEPING IN VIEW THE DECISION OF DDIT(EXMP), IF ANY . IT IS NEEDLESS HERE TO MENTION THAT BEFORE P ASSING THE ORDER, AO SHALL PROVIDE OPPORTUNITY TO THE ASSESSEE AND THE ASSESSEE SHALL NOT TAKE ADJOURNMENT WITHOUT A VALID REASON. IT IS 7 I.T.A. NO. 5159& 5160 /MUM/201 6 SARVA SIDDHI RAJA GANAPATHY TRUST ALSO MADE CLEAR TH AT ASSESSEE SHALL EXTEND ALL NECESSARY COOPERATION TO THE AO I N EXPEDITIOUS DISPOSAL OF THIS MATTER . BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECISION TO RESTORE THE MATTER BACK TO THE FILE OF AO SHALL IN NO WAY BE CONSTRUED AS HAVING ANY REFLECTION OR EXPRESSION ON THE MERITS OF THE DISPUTE, WHICH SHALL BE ADJUDICATED BY THE AO INDEPENDENTLY IN ACCORDANCE WITH LAW. RESULTANTLY THE SE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. GROUND NO. 3 & 4 7 . THESE GROUNDS ARE GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. ITA NO. 5160/MUM/2016 (AY 2013 - 14 ) 8. NOW WE TAKE UP ASSESSE E S APPEAL IN ITA NO. 5160/MUM/2016 FOR AY 2013 - 14 . SINCE WE HAVE ALREADY DECIDED THE SIMILAR G ROUNDS OF APPEAL IN IT A NO. 5159 /M UM/2016 FOR AY 2009 - 10 AND RESTORE THE MATTER BACK TO THE FILE OF AO . THEREFORE , FOLLOWING OUR OWN DECISION IN ITA NO. 5159 /MUM /16 , WE APPLY THE SAME FINDINGS IN THE PRESENT APPEAL 8 I.T.A. NO. 5159& 5160 /MUM/201 6 SARVA SIDDHI RAJA GANAPATHY TRUST IN ORDER TO MAINTAIN JUDICIAL CONSISTENCY WHICH IS APPLICABLE M UTATIS MUTANDIS IN THE PRESENT CASE. 9. IN THE NET RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH APRIL , 2018 SD/ - SD/ - ( R.C.SHARMA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 11 . 04 .201 8 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI