CMSN Charitable Trust, Hyd, Hyderabad V. DDIT (Exemptions)-II, Hyd, Hyderabad

ITA 555/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6041 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 07-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 21-04-2016
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Charitable institution
• Section: 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 555/HYD/2016 ASSESSMENT YEAR: 2010-11 CMSN CHARITABLE TRUST, HYDERABAD [PAN: AABTC2150Q] VS DDIT (EXEMPTION)-II, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, AR FOR REVENUE : SHRI A. SITARAMA RAO, DR DATE OF HEARING : 09-11-2016 DATE OF PRONOUNCEMENT : 11-11-2016 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-9, HYDERABAD D ATED 29-02-2016. ASSESSEE HAS RAISED MANY GROUNDS ON TH E ISSUE OF ASSESSMENT COMPLETED, REJECTING THE BENEFIT U/S. 11 & 12 OF THE INCOME TAX ACT [ACT]. IN THE COURSE OF PRESENT APPEAL PROCEEDINGS, ASSESSEE HAS FILED ADDITIONAL GROUNDS ON THE ISSUE OF COMPLETING ASSESSMENT UNDER THE HEAD INCOME FROM BUSINESS AND P ROFESSION WHEN PROVISIONS OF SECTION 11 ARE NOT APPLIED. 2. BRIEFLY STATED, ASSESSEE IS A TRUST AND FILED ITS RETU RN OF INCOME DECLARING INCOME OF RS. 5,688/- AND CLAIMING EXEMPTION U/S. 11 OF THE ACT. ASSESSING OFFICER (AO) HOWEVER, DETERMINED THE I.T.A. NO. 555/HYD/2016 CMSN CHARITABLE TRUST :- 2 -: TOTAL INCOME AT RS. 20,948/- AND DENIED THE BENEFIT U/S. 11 AS ASSESSEE IS NOT REGISTERED U/S. 12AA OF THE ACT. 3. BEFORE THE LD.CIT(A), ASSESSEE CONTENDED THAT IT IS E LIGIBLE FOR BENEFIT OF SECTION 11. HOWEVER, LD.CIT(A) DISMISSED A SSESSEES APPEAL, UPHOLDING THE ACTION OF THE AO AS THERE IS NO R EGISTRATION U/S. 12AA OF THE ACT. 4. LD. COUNSEL WHILE CONCEDING THAT SO FAR REGISTRATION U/S. 12AA HAS NOT BEEN GRANTED AND THE MATTER WAS RESTORED TO THE FILE OF DIT BY THE ITAT IN ITA NO. 1010/HYD/2012 DT. 22-0 2-2013, SUBMITTED THAT AO HAS TO COMPUTE THE INCOME ON COMMERCIA L PRINCIPLES, WHEN ASSESSEES REGISTRATION WAS NOT GRAN TED. IT WAS SUBMITTED THAT THERE IS AN AMOUNT OF RS. 14 LAKS WHICH W AS CONTRIBUTED BY THE TRUSTEES WHICH CANNOT BE TREATED AS IN COME. REFERRING TO THE INCOME AND EXPENDITURE STATEMENT, THE CO UNSEL SUBMITTED THAT THE TOTAL VOLUNTARY CONTRIBUTIONS INCLUDING TH E CONTRIBUTIONS BY THE TRUSTEES WHICH IS CAPITAL AMOUNT WA S ABOUT RS. 1,05,25,000/- AND EXCESS OF INCOME OVER EXPENDI TURE WAS ARRIVED AT RS. 20,948/-. WITH THE ABOVE AMOUNT OF CAP ITAL RECEIPT BEING EXCLUDED ASSESSEE WOULD NOT HAVE ANY INCOME. IT WAS SUBMITTED THAT FOLLOWING THE PRINCIPLES LAID DOWN BY TH E CO- ORDINATE BENCH IN THE CASE OF NIRMAL AGRICULTURAL SOCI ETY VS. ITO [71 ITD 152], WHEN ASSESSEE HAS BEEN DEPRIVED OF BE NEFITS U/S. 11, THE AO COULD ONLY ASSESS NET INCOME OF ASSESSEE AS PE R OTHER PROVISIONS OF THE IT ACT, OTHER THAN THE PROVISIONS OF SECTION 11, 12 & 13 OF THE ACT. I.T.A. NO. 555/HYD/2016 CMSN CHARITABLE TRUST :- 3 -: 5. LD. DR HOWEVER, HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF AO FOR FRESH CONSIDERATION. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS. AS SEEN F ROM THE ORDERS OF THE ITAT, THE ISSUE OF GRANTING REGISTRATION U /S. 12AA SEEMS TO BE PENDING WITH LD.DIT( EXEMPTIONS). IN CASE REGISTRATION WAS GRANTED, THEN, THE INCOME GETS EXEMPTED U/S. 11. IN THE EVENT OF ASSESSEE NOT GETTING THE REGISTRATION, THE INCOME CAN O NLY BE ASSESSED UNDER THE OTHER PROVISIONS OF THE ACT AND NOT UNDER THE SECTION 11 TO 13 APPLICABLE TO A REGISTERED TRUST. S INCE AO HAS NOT EXAMINED THE RECEIPTS AND EXPENDITURE AND HAS NOT CONS IDERED ASSESSING THE TOTAL INCOME AS PER THE OTHER PROVISIONS OF THE ACT, I AM OF THE OPINION THAT AO HAS TO RE-DO THE ASSESSMENT KEE PING IN MIND THE ISSUE OF REGISTRATION AS WELL. IN ORDER TO DO SO, I SET ASIDE THE ORDER OF AO AND CIT(A) ON THIS ISSUE AND RESTORE TH E ASSESSMENT PROCEEDINGS TO THE FILE OF AO FOR FRESH CO NSIDERATION. AO IS ALSO DIRECTED TO KEEP THE PRINCIPLES AS LAID DO WN BY THE CO- ORDINATE BENCH REFERRED SUPRA. ASSESSEE SHOULD BE G IVEN DUE OPPORTUNITY IN THE ASSESSMENT PROCEEDINGS. WITH THESE DIRECTIONS, ASSESSEES GROUNDS ARE CONSIDERED ALLOWED FOR STATISTI CAL PURPOSES. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH NOVEMBER, 2016 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 11 TH NOVEMBER, 2016 TNMM I.T.A. NO. 555/HYD/2016 CMSN CHARITABLE TRUST :- 4 -: COPY TO : 1. CMSN CHARITABLE TRUST, HYDERABAD. C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2. DDIT(EXEMPTIONS)-II, HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-9, HYDERABAD 4. COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERAB AD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.