The Assistant Commissinor of Income Tax 2(1), Bhopal V. M/s Swargiya Vanshpati Smriti Shiksha Samiti, Bhopal

ITA 573/IND/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47876 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Keywords: Depreciation; Rectification of order; Charitable institution
• Section: 143(3); 12A; 32; 154; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.573/IND/2010 AY :1994-95 ACIT-2(1), BHOPAL APPELLANT VS SWARGIYA VANSHPATI SMRITI SHIKSHA SAMITI, BHOPAL PAN AADTS 0547 H RESPONDENT APPELLANT BY : SHRI ARUN DEWAN, SR. DR RESPONDENT BY : NONE O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-I, BHOPAL, DATED 7.5.2010 ON THE FOLLOWING G ROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. HOLDING THAT THE ASSESSING OFFICER HAD NO JURISDICTION U/S 154 OF THE ACT TO RECTIFY THE ASSESSMENT AND DISALLOW THE DEPRECIATION ON THE ASSETS OF THE SOCIETY. 2. ANNULLING THE RECTIFICATION ORDER U/S 154 DATED 7.1.2009 STATING THAT IT WAS NOT A VALID ORDER AS THE MISTAKE WAS NOT APPARENT FROM RECORD. 2. DURING HEARING OF THIS APPEAL THE LD SR.DR MERELY RELIED UPON THE DECISION OF THE ASSESSING OFFICER A ND FAIRLY AGREED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN ITA NO 712/IND/2007. NOBODY WAS PRESENT FOR THE ASSESSEE. SINCE THE ISSU E IS COVERED BY THE DECISION OF THE TRIBUNAL, THEREFO RE, WE TEND TO PROCEED TO DISPOSE OFF THIS APPEAL ON THE B ASIS OF MATERIAL AVAILABLE ON RECORD. 3. BRIEF FACTS ARE THAT ASSESSEE IS A SOCIETY REGISTERED U/S 12A OF THE IT ACT AND ALSO UNDER SOCIETIES REGISTRATION ACT. THE ASSESSEE CLAIMED DEDUCTION U/S 11 OF THE ACT WHILE FURNISHING ITS RE TURN ON 27.10.2004, DECLARING NIL INCOME. THE ASSESSEE APPLIED 85% OF THE GROSS RECEIPT TOWARDS ITS OBJECT S AND SHOWED SURPLUS OF RS.20,06,685/- AS PER INCOME & EXPENDITURE ACCOUNT WHICH WAS CLAIMED AS EXEMPTED FROM TAXATION. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 4.12.2006 ON THE TOTAL INCOME AT NIL. THEREAFTER IT WAS FOUND FROM THE INCOME AND EXPENDITURE ACCOUNT THAT DEPRECIATION OF RS.44,81,4 23/- WAS DEBITED. THE LD.AO WAS OF THE VIEW THAT DEPRECIATION CANNOT BE APPLIED FOR THE OBJECTS OF T HE SOCIETY SINCE THE SAME IS A DEDUCTION U/S 32 AND NO T THE ACTUAL EXPENDITURE, THEREFORE, HE ISSUED NOTICE U/S 154 OF THE ACT FOR RECTIFICATION OF THE ORDER. THE LD.CIT(A)BY FOLLOWING THE DECISION OF THE INDORE BE NCH OF THE TRIBUNAL IN THE CASE OF ACIT VS M.P.MADHYAM(ITA NO. 712/IND/2007) THE RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED AT PAGE 3 OF T HE IMPUGNED ORDER ALONGWITH THE DECISION IN CITVS SOCI ETY OF THE SISTERS OF ST.ANNE (146 ITR 28(KAR) AND CIT VS SETH MANILAL RANCHODAS VISHRAM BHAVAN TRUST (198 ITR 595(GUJ) HELD THAT SINCE THE ISSUE IS DEBATABLE ONE, THEREFORE NO RECTIFICATION PROCEEDING CAN BE RESORT ED TO. ADMITTEDLY THE ASSESSMENT ORDER WAS PASSED U/S 143(3) THEREFORE, AT THAT STAGE THERE WAS NO JURISD ICTION U/S 154 TO RECTIFY THE ASSESSMENT ORDER ON THE ISSU E OF DEPRECIATION ESPECIALLY WHEN THE TRIBUNAL HAS ALREA DY DECIDED THAT THE CHARITABLE INSTITUTION/TRUST IS EN TITLED TO DEPRECIATION. EVEN OTHERWISE U/S 154 OF THE ACT MIS TAKE APPARENT ON RECORD WHICH IS OBVIOUS AND PATENT CAN BE RECTIFIED AND NOT SOMETHING, WHICH CAN BE ESTABLISH ED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINION. A DECIS ION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARE NT FROM THE RECORD, CONSEQUENTLY, WE FIND NO INFIRMITY IN THE STAND OF LD.CIT(A). THE SAME IS UPHELD. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED SR.DR AT THE CONCLUSION OF THE HEARING ON 3 0 TH JUNE, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30.6.2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE