Orissa Computer Application Centre(OCAC), Bhubaneswar V. ITO, Bhubaneswar

ITA 59/CTK/2010

• Counselvise Citation: 5922114 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 19-10-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 25-02-2010
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: S K JENAS PARIJA ARS
• Keywords: Charitable institution; Principle of natural justice; Assessment record
• Section: 147; 144

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NOS.59,60 AND 61/CTK/2010 (AYS 2000 - 01,2001 - 02 AND 2002 - 03) ITA NOS.82,83 AND 84/CTK/2010 (AYS 2000 - 01,2001 - 02 AND 2002 - 03) OR ISSA COMPUTER APPLICATION CENTRE,(OCAC), PLOT NO.N1/7 - D, ACHARYA VIHAR, BHUBANESWAR 751 013 PAN : AAAAO 0246 R .. APPELLANT - VERSUS - INCOME - TAX OFFICER, WARD 2(1), BHUBANESWAR. .. RESPONDENT INCOME - TAX OFFICER, WARD 2(1), BHUBANESWAR. .. APPELLANT - VERSUS - ORISSA COMPUTER APPLICATION CENTRE,(OCAC), PLOT NO.N1/7 - D, ACHARYA VIHAR, BHUBANESWAR 751 013 PAN : AAAAO 0246 R .. RESPONDENT FOR THE ASSESSEE: SHRI S.K.JENA/S.PARIJA, ARS FOR THE DEPARTMENT: SMT. PARAMITA TRIPATHY, DR DATE OF HEARING : 19.10.2011 DATE OF PRONOUNCEMENT : 09.11.2011 ORDER PER BENCH : ITA NOS.59,60 AND 61/CTK/2010 P REFERRED BY THE ASSESSEE WHEREAS ITA NOS.82,83 AND 84/CTK/2010 PREFERRED BY THE REVENUE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE ASSESSMENT YEARS 2000 - 01,2001 - 02 AND 2002 - 03 AND THEY WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. IN ALL THE APPEALS PREFERRED BY THE ASSESSEE, THERE IS A COMMON GROUND RAISED BY THE ASSESSEE CHALLENGING THE ISSUANCE OF NOTICE U/S.147 AND PASSING THE ORDER U/S.144 OF THE INCOME - TAX ACT,1961 APAR T FROM RAISING OTHER ISSUES ON MERITS. 3. THE DEPARTMENTAL APPEALS HAVE RAISED ISSUES QUESTIONING THE FINDINGS GIVEN BY THE L EARNED CIT(A) THAT GRANT - IN - AID RECEIVED BY THE ASSESSEE FROM THE GOVERNMENT OF ORISSA ARE NOT TAXABLE AND IN PASSING DIRECTION BY THE ITA NOS.59,60 AND 61/CTK/2010 ITA NOS.82,83 AND 84/CTK/2010 (CROSS APPEALS) 2 LEARNED CIT(A) FOR REDUCTION OF EXPENDITURES ON PRO - RATA BASIS WHILE DIRECTING FOR REDUCTION OF GRANT - IN - AID STRAIGHT AWAY FROM THE INCOME. 4 . ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT THE ASSESSEE IS A REGISTERED SOCIETY AND IS D ERIVING INCOME FROM RECEIPT ON ACCOUNT OF PROVIDING TRAINING TO GOVERNMENT EMPLOYEES AND TECHNICAL SUPPORT AND CONSULT ANCY SERVICES TO GOVT. DEPARTMENT AND AGENCIES. THE ASSESSEE HAS NOT FILED ANY RETURN BUT IT HAS FILED APPLICATION IN FORM NO.10A BEFORE THE COMMISSIONER OF INCOME TAX FOR GRANT OF REGISTRATION U/S.12AA OF THE INCOME - TAX ACT,1961. THE LEARNED CIT HAS REJE CTED THE SAID APPLICATION VIDE HIS ORDER DT.21.12.2006 OBSERVING THAT THE SOCIETY IS MAINLY PROVIDING TRAINING TO GOVT. EMPLOYEES. APART FROM THAT, IT ALSO PROVIDES TECHNICAL SUPPORT AND CONSULTANCY SERVICES TO DIFFERENT GOVT. DEPARTMENTS AND GOVT. AGENCIE S AND COLLECTS FEES FOR SUCH ACTIVITIES, THEREFORE, NO CHARITY IS INVOLVED IN THE ACTIVITIES OF THE ASSESSEE. LATER ON THE ASSESSING OFFICER REOPENED THE ASSESSMENTS FOR THE ASSESSMENT YEARS UNDER CONSIDERATION U/S.147 BY ISSUING NOTICES U/S.148. SINCE THE RE WAS NO COMPLIANCE BY THE ASSESSEE, THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SECTION 144 OF THE ACT AND PASSED THE ASSESSMENT ORDERS. THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ASSESSMENT ORDERS PREFERRED FIRST APPEALS BEFORE THE CIT(A) AND THE LEARNED CIT(A) AFTER HEARING THE ASSESSEE AND CONSIDERING THE MATERIAL MADE AVAILABLE IN THE ASSESSMENT RECORD AND HEARING THE SUBMISSIONS OF THE AR OF THE ASSESSEE AND THE OPINION OF THE ASSESSING OFFICER, HAS PASSED THE IMPUGNED ORDERS HOLDING THAT THE ASSESSEE IS NOT A CHARITABLE INSTITUTION AND REQUIRES NO REGISTRATION U/S.12AA OF THE ACT, AS IT IS A GOVERNMENT INSTITUTION ITA NOS.59,60 AND 61/CTK/2010 ITA NOS.82,83 AND 84/CTK/2010 (CROSS APPEALS) 3 RUN FOR IMPARTING TRAINING TO THE GOVERNMENT EMPLOYEES AND IS GETTING GRANT - IN - AID FROM GOVERNMENT FOR CARRYING ON ITS ACTIVITIES. AGGRIEVED WITH THIS ASPECT OF ASSESSMENT OF GRANT - IN - AID RECEIVED BY THE ASSESSEE, THE DEPARTMENT HAS FILED APPEALS BEFORE THE TRIBUNAL, WHEREAS THE ASSESSEE HAS FILED APPEALS HAVING BEEN AGGRIEVED BY THE FINDINGS OF THE LEARNED CIT(A) THAT THE ASSESSEE I S NOT A CHARITABLE INSTITUTION BUT AT THE SAME TIME IT IS IMPARTING TRAINING TO THE GOVT. EMPLOYEES AS WELL AS OTHERS AND RECEIVING GRANT - IN - AID FOR RUNNING ITS INSTITUTION AND THEREBY THE ASSESSEE IS ENTITLED FOR EXEMPTION AS CLAIMED BY THE ASSESSEE AS N OTHING IS TAXABLE IN THE HANDS OF THE ASSESSEE. 5. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED IN THE RESPECTIVE APPEALS AND THEIR LEGAL IMPLICATIONS. 6. SINCE THE ASSESSEE IS AGGRIEVED WITH THE FINDING OF THE LEARNED CIT(A) THAT THE AMOUNTS R ECEIVED BY THE ASSESSEE AS GRANT - IN - AID FROM THE GOVERNMENT ARE TAXABLE IN THE HANDS OF THE ASSESSEE THOUGH IT WAS CATEGORICALLY HELD BY THE LEARNED CIT(A) THAT THE ASSESSEE IS A GOVERNMENT ORGANIZATION AND IS CARRYING ON ITS ACTIVITIES FOR IMPARTING TRAI NING TO GOVT. EMPLOYEES AND OTHERS BY SPENDING THE MONEY GRANTED TO IT BY THE GOVERNMENT AS AID THEREFORE, THE AMOUNTS RECEIVED BY THE ASSESSEE ARE NOT AT ALL TAXABLE IN THE HANDS OF THE ASSESSEE. BUT, AS CAN BE SEEN FROM THE ASSESSMENT ORDERS PASSED BY TH E ASSESSING OFFICER IT IS FOUND THAT THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SECTION 144 OF THE INCOME - TAX ACT,1961 AS THE ASSESSEE HAS NOT RESPONDED TO THE VARIOUS NOTICES ISSUED BY HIM REQUIRING INFORMATION OR ITS APPEARANCE BEFORE HIM. UNDIS PUTEDLY THE ASSESSEE ORIGINALLY FILED APPLICATION BEFORE THE LEARNED CIT FOR GRANT OF REGISTRATION U/S.12AA OF THE INCOME - TAX ACT,1961 AND IT WAS REJECTED AND ITA NOS.59,60 AND 61/CTK/2010 ITA NOS.82,83 AND 84/CTK/2010 (CROSS APPEALS) 4 HENCE, IT IS AGITATING BEFORE THE TRIBUNAL AND THE TRIBUNAL HAS UPHELD THE ORDER OF THE LEARNED C IT IN REJECTING THE REGISTRATION. THEREFORE, THE ASSESSEE HAS AGAIN APPLIED FOR REGISTRATION AND THE LEARNED CIT AT THE RELEVANT TIME CONSIDERING SUCH APPLICATION HAS OBSERVED THAT THE ASSESSEE DOES NOT REQUIRE ANY REGISTRATION BECAUSE IT IS NOT A CHARITAB LE INSTITUTION OR TRUST FALLING WITHIN THE PROVISIONS OF SECTION 12AA. AFTER PASSING OF THIS ORDER ONLY THE DEPARTMENT HAS INVOKED THE PROVISIONS OF SECTION 147 OF THE ACT AGAINST THE ASSESSEE AND ISSUED NOTICE U/S.148 AND STA R TED THE ASSESSMENT PROCEEDING S. SINCE THE ASSESSEE HAS NOT RESPONDED TO VARIOUS NOTICES ISSUED BY THE ASSESSING OFFICER, THE AO INVOKED THE PROVISIONS OF SECTION 144 AND ASSESSMENT ORDERS WERE PASSED. WHILE DISPOSING OF THE APPEALS, THE LEARNED CIT(A) HAS OBSERVED THAT THE ASSESSEE BE ING A GOVERNMENT ORGANIZATION IMPARTING TRAINING TO GOVT. EMPLOYEES AND OTHERS BY RECEIVING GOVERNMENT GRANT - IN - AID IS NOT A CHARITABLE ORGANIZATION OR TRUST BUT HOWEVER, AS THE ASSESSEE HAS RECEIVED GRANT - IN - AID FROM THE GOVERNMENT FOR CARRYING OUT ITS AC TIVITIES THEY ARE TO BE DEALT WITH ACCORDINGLY AS DISCUSSED IN HIS ORDER. AGAINST THAT PORTION OF THE ORDER, THE DEPARTMENT HAS FILED THE APPEALS BEFORE THE TRIBUNAL. SINCE THE GRIEVANCE OF THE ASSESSEE AS WELL AS THE DEPARTMENT ARE BETTER TO BE APPRECIATE D IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER ONLY ON GOING THROUGH THE NECESSARY AND RELEVANT DOCUMENTARY EVIDENCES, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSMENTS ARE JUST TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO ASSESSMENT BY STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE AND PASS NECESSARY CONSEQUENTIAL ORDERS AS PER LAW. WITH THIS DIRECTION, THE ASSESSMENTS OF ALL THE THREE AYS UNDER CONSIDERATION ARE SET ASIDE FOR DE NOVO ASSESSMENT STRICTLY FOLLOWING THE PRINCIPLE S OF NATURAL JUSTICE. THE ASSESSEE IS HEREBY DIRECTED TO COOPERATE ITA NOS.59,60 AND 61/CTK/2010 ITA NOS.82,83 AND 84/CTK/2010 (CROSS APPEALS) 5 WITH THE ASSESSING OFFICER FOR EARLY DISPOSAL OF THE DE NOVO ASSESSMENT BY FURNISHING INFORMATION AND MATERIALS AS WOULD BE REQUIRED BY THE ASSESSING OFFICER IN TIME. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE AS WELL AS THE APPEALS OF THE DEPARTMENT ARE ALLOWED FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 9 TH NOVEMBER, 2011 H.K.PADHEE, SENI OR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: ORISSA COMPUTER APPLICATION CENTRE,(OCAC), PLOT NO.N1/7 - D, ACHARYA VIHAR, BHUBANESWAR 751 013 2. THE RESPONDENT: INCOME - TAX OFFICER, WARD 2(1), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.