ITO (E)-1(1), MUMBAI V. CHETANA, MUMBAI

ITA 5713/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56306 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Assessee Lawyers: S S PHADKAR
• Keywords: Charitable institution; Revised return
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT, AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 5713/MUM./2010 (ASSESSMENT YEAR : 2007-08 ) INCOME TAX OFFICER-I(1) R. NO.503, PIRAMAL CHAMBERS 5 TH FLOOR,, PAREL, MUMBAI 400 012 .. APPELLANT V/S CHETANA SURVEY NO.341 GOVERNMENT COLONY BANDRA (E), MUMBAI 400 051 PAN AAATC3012A .... RESPONDENT REVENUE BY : MR. SHANTAM BOSE ASSESSEE BY : MR. S.S. PHADKAR DATE OF HEARING 01.12.2011 DATE OF ORDER 30.12.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE REVENUE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 31 ST MARCH 2010, PASSED BY THE COMMISSIONER (APPEALS)-I, MUMBAI, FOR ASSESSMENT YEAR 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE IS A PUBLIC CHARITABLE TRUST ENGAGED IN EDUCATIONAL ACTIVITY. IT FILED AN APPLIC ATION DATED 23 RD MAY 2007, SEEKING EXEMPTION UNDER SECTION 10(23C)(VI) OF THE INCOME TAX ACT, 1961 CHETANA ITA NO. 3713/MUM./2010 2 (FOR SHORT THE ACT ) FOR ASSESSMENT YEAR 2006-07. THE CHIEF COMMISSION ER OF INCOME TAX, MUMBAI, VIDE ORDER DATED 14 TH MAY 2008, PASSED UNDER SECTION 10(23C)(VI), REJECTED THE APPLICATION FOR E XEMPTION ON THE GROUND THAT THE ASSESSEES GROSS ANNUAL RECEIPTS DID NOT E XCEED ` 1,00,00,000. NO ORDER WAS PASSED BY THE CHIEF COMMISSIONER. THEREAF TER, THE ASSESSEE REQUESTED THE CHIEF COMMISSIONER TO CONSIDER THE AP PLICATION FOR ASSESSMENT YEAR 2007-08. THE CHIEF COMMISSIONER HELD THAT THE APPLICATION WAS NOT FILED WITHIN THE STIPULATED PERIOD AS PER THE XIV PROVISO TO SECTION 10(23C). THE CHIEF COMMISSIONER FURTHER OBSERVED THAT SINCE THE ASSESSEE SATISFIES THE CONDITIONS LAID DOWN IN SUB-CLAUSE-(VI) OF SECTION 10(23C), THE APPLICATION FILED ON 23 RD MAY 2007, IS VALID FOR THE PERIOD BEGINNING WITH A SSESSMENT YEAR 2008-09. THUS, FOR THE PRESENT ASSESSMENT YEAR I.E., 2007-08, THERE IS NO EXEMPTION GRANTED TO THE ASSESSEE UNDER SECTION 10(23C) BY THE CHIEF COMMISSIONER. THE ASSESSEE FILED ITS RETURN OF INCO ME CLAIMING EXEMPTION UNDER SECTION 10(23C). THE ASSESSING OFFICER EXAMIN ED THE ORDER OF THE CHIEF COMMISSIONER AND ISSUED NOTICE TO THE ASSESSE E AS TO WHY THE SURPLUS SHOULD NOT BE BROUGHT TO TAX DURING THE YEAR IN VIE W OF THE FACT THAT THE ASSESSEES INCOME IS NOT EXEMPT UNDER SECTION 10(23 C). THE ASSESSEE, THEREAFTER, CLAIMED EXEMPTION UNDER SECTIONS 11 AND 13 OF THE ACT AND FILED A CERTIFICATE IN FORM NO.10, IN THE COURSE OF ASSES SMENT PROCEEDINGS TO SATISFY THE CONDITIONS OF ACCUMULATION SPECIFIED UN DER SECTION 11(2). THE ASSESSING OFFICER APPLIED THE JUDGMENT OF HON'BLE S UPREME COURT IN GOETZE (INDIA) LTD. V/S CIT, [2006] 284 ITR 0323 (SC), AND REJECTED THE CLAIM OF THE ASSESSEE BY OBSERVING AS FOLLOWS:- THUS, THE ASSESSEE IS NOT ENTITLED TO CHANGE ITS PO SITION AND MAKE A SUBSEQUENT CLAIM BENEFICIAL TO IT WITHOUT REVISING ITS RETURN OF INCOME. FOLLOWING THE ABOVE TWO DECISIONS, I DENY THE CLAIM OF EXEMPTION OF THE ASSESSEE TRUST UNDER SECTION 10(32C) AND 11(2). 3. THE ASSESSEE, BEING AGGRIEVED, CARRIED THE BEFORE T HE FIRST APPELLATE AUTHORITY, WHEREIN THE COMMISSIONER (APPEALS) FOLLO WED THE JUDGMENT OF HON'BLE SUPREME COURT IN CIT V/S NAGPUR HOTEL OWNE RS' ASSOCIATION, [2001] 247 ITR 0201 (SC), AND GRANTED EXEMPTION TO THE ASS ESSEE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOL LOWING GROUNDS:- CHETANA ITA NO. 3713/MUM./2010 3 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN DIRECTING THE ASSESSING OFFICER TO ALLOW EXEMPTION U/S 11(2) OF THE INCOME TAX ACT, 1961 OF RS.77,24,978/- WITHOUT APPRECIATING TH E FACTS OF THE CASE THAT SUCH CLAIM WAS NOT IN EXISTENCE IN THE RETURN OF INCOME ORIGINALLY FILED AND WAS NOT MADE THOUGH REVISED RETURN AS PER THE RATION LAID BY HONBLE SUPREME COURT OF INDIA IN THE CASE OF GO ETZE INDIA LTD VS. CIT, [2006] 284 ITR 323. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW EXEMPTION OF RS.77,24,97 8/- U/S 11(2) OF THE I.T. ACT, 1961 RELYING ON THE HONBLE SUPREME C OURTS DECISION IN THE CASE OF CIT V/S NAGPUR HOTEL OWNERS ASSOCIATION [241 ITR 201] WITHOUT APPRECIATING THE FACTS THAT THE FACTUAL POS ITION IN THE INSTANT CASE AND THAT OF THE CASE BEFORE SUPREME COURT ARE DISTINGUISHABLE . 4. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE, MR. SHANTAM BOSE, REPRESENTING THE REVENUE, SUBMITTED THAT THE ASSESSEE HAS NOT MADE A CLAIM UNDER SECTION 11(2) IN THE RETURN OF INCOME AND, HENCE, THE ASSESSING OFFICER WAS RIGHT IN APPLYING THE JUDGMEN T OF HON'BLE SUPREME COURT IN GOETZE (INDIA) LTD. (SUPRA). HE SUBMITTED THAT THE JUDGMENT OF THE HON'BLE SUPREME COURT IN NAGPUR HOTEL OWNERS ASSOCI ATION (SUPRA) IS DISTINGUISHABLE, AS THAT WAS A CASE WHERE THE ASSES SEE HAD MADE A CLAIM IN THE RETURN OF INCOME ITSELF AND WHAT REMAINED TO BE FILED WAS FORM NO.10 AND WHEREAS IN THE PRESENT CASE, NO RETURN OF INCOM E WAS FILED. HE RELIED ON THE JUDGMENT OF HONBLE KERALA HIGH COURT IN KERALA RURAL EMPLOYMENT AND WELFARE SOCIETY V/S ASSISTANT DIRECTOR OF INCOME-TA X, [2009] 312 ITR 051 (KER.) AND SUBMITTED THAT THE HONBLE COURT HAS CON SIDERED THE IMPLICATION OF RULE-17 AND HELD THAT FORM-10 HAS TO BE FILED WITHI N THE EXPIRY OF TIME ALLOWED UNDER SECTION 139(1). HE FURTHER SUBMITTED THAT SECTION 10(23C) SPEAKS ABOUT SURPLUS AND WHEREAS SECTION 11(2) SPEA KS ABOUT ACCUMULATION AND THE ASSESSEE HAS CHANGED ITS STAND IN THE MID-W AY AND THE SAME SHOULD HAVE NOT BEEN ALLOWED. 5. ON A QUERY FROM THE BENCH, LEARNED DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT THE REVENUE HAS NOT DISPUTED THE FAC T THAT THE ASSESSEE CAN CLAIM DEDUCTION UNDER SECTIONS 11, 12 AND 13 OF THE ACT. CHETANA ITA NO. 3713/MUM./2010 4 6. LEARNED COUNSEL, MR. S.S. PHADKAR, REPRESENTING THE ASSESSEE, RELIED ON THE ORDER OF THE COMMISSIONER (APPEALS) AND ARGU ED THAT THE ASSESSEE HAS MADE ONLY AN ALTERNATIVE CLAIM AND IT IS NOT A FRESH CLAIM. HE SUBMITTED THAT THE ASSESSEE HAS ALWAYS CLAIMED THAT IT IS A C HARITABLE INSTITUTION AND THE REVENUE HAS ACCEPTED THE FACT THAT THE ASSESSEE IS A CHARITABLE ORGANISATION. WHILE SO, THE QUESTION AS TO WHETHER THE EXEMPTION SHOULD BE GRANTED UNDER SECTION 10(23C) OR UNDER SECTIONS 11 TO 13 OF THE ACT, IS A TECHNICAL MATTER AND THE QUESTION OF FILING A REVIS ED RETURN OF INCOME DOES NOT ARISE. ALTERNATIVELY, HE SUBMITTED THAT THE JUD GMENT IN GOETZE INDIA LTD. (SUPRA) REFERS TO THE POWERS OF THE ASSESSING OFFIC ER BUT DOES NOT REFER TO THE POWERS OF THE FIRST APPELLATE AUTHORITY OR THE TRIBUNAL. FOR THIS PROPOSITION, HE RELIED UPON THE DECISION OF MUMBAI G BENCH OF THE TRIBUNAL IN GOPI S. SHIVANI V/S ITO, 133 ITD 172 (MUM.). HE RELIED ON THE ORDER OF THE COMMISSIONER (APPEALS). 7. AFTER HEARING THE RIVAL CONTENTIONS, WE FIND THAT T HERE IS NO DISPUTE ON THE FACT THAT THE ASSESSEE IS A CHARITABLE INSTITUT ION AND THE INCOME OF WHICH IS EXEMPT UNDER SECTION 11 OF THE ACT. DUE TO CERTA IN TECHNICAL REASONS, THE CHIEF COMMISSIONER GRANTED APPROVAL FROM THE ASSESS MENT YEAR 2008-09, BY OBSERVING THAT THE ASSESSEE SATISFIES THE DECISIONS LAID DOWN IN SUB-CLAUSE (IV) OF SECTION 10(23C). THE ASSESSEE FILED ITS RET URN OF INCOME ON 19 TH MARCH 2008, AND THE ORDER UNDER SECTION 10(23C)(IV) WAS P ASSED ON 8 TH MAY 2008, I.E., AFTER FILING OF THE RETURN OF INCOME. AS THE FACT THAT THE ASSESSEE IS A CHARITABLE INSTITUTION, WAS NOT IN DISPUTE. THE ASS ESSEE CLAIMED DEDUCTION UNDER SECTIONS 11 TO 13 OF THE ACT. WHEN A CLAIM IS ALTERNATIVELY UNDER ANOTHER SECTION, WE ARE OF THE OPINION THAT THERE I S NO REQUIREMENT FOR THE ASSESSEE TO FILE REVISED RETURN OF INCOME. 8. COMING TO THE ISSUE OF DELAY IN FILING FORM NO.10, WE FIND THAT THE ISSUE IS COVERED BY THE JUDGMENT OF HON'BLE SUPREME COURT IN NAGPUR HOTEL OWNERS' ASSOCIATION (SUPRA), WHEREIN IT HAS BEEN HE LD THAT THE FORM NO.10 CAN BE FILED DURING THE COURSE OF ASSESSMENT PROCEE DINGS, EVEN IF IT IS NOT FILED WITHIN THE TIME PRESCRIBED UNDER SECTION 11(2 ) R/W RULE-17. EVEN OTHERWISE, THE JUDGMENT OF HON'BLE SUPREME COURT IN GOETZE INDIA LTD. CHETANA ITA NO. 3713/MUM./2010 5 (SUPRA), DOES NOT RESTRICT THE POWERS OF COMMISSION ER (APPEALS) OR THE TRIBUNAL. AS THE FACT THAT THE ASSESSEE IS A CHARIT ABLE INSTITUTION IS ON RECORD AND AS THE NATURE OF INCOME AS WELL AS EXPENDITURE ARE ON RECORD, IN OUR OPINION, THE COMMISSIONER (APPEALS) WAS RIGHT IN EN TERTAINING THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTIONS 11 TO 13 OF THE ACT. CONSEQUENTLY, WE UPHOLD THE ORDER PASSED BY THE COM MISSIONER (APPEALS). THUS, THE GROUND RAISED BY THE REVENUE IS DISMISSED . 9. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.12.2011 SD/- D. MANMOHAN VICE PRESIDENT SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 30.12.2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, C BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI