Sriram Educational Trust, CHENNAI V. DDIT, CHENNAI

ITA 593/CHNY/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2986 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-04-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 24-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Assessee Lawyers: S SRIDHAR
• Keywords: Charitable institution; Revised return; Capital expenditure; Set aside
• Section: 12A; 148; 2; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.590, 591, 592, 593 & 594/CHNY/2015 ' (' / ASSESSMENT YEARS : 2006-07 TO 2010-11 M/S SRIRAM EDUCATIONAL TRUST, NO.49, ANNA SALAI, CHENNAI - 600 002. PAN : AAATS 2429 R V. THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS)-II, CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI S. BHARATH, CIT 0 . 1$ / DATE OF HEARING : 29.01.2019 2!( . 1$ / DATE OF PRONOUNCEMENT : 04.03.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : ALL THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 17, CHENNAI, DATED 18.02.2015 AND PERTAIN TO ASSESS MENT YEARS 2006-07, 2007-08, 2008-09, 2009-10 AND 2010-11. SI NCE COMMON 2 I.T.A. NOS.590 TO 594/CHNY/15 ISSUE ARISES FOR CONSIDERATION IS IN ALL THESE APPE ALS, WE HEARD THESE APPEALS TOGETHER AND DISPOSING THE SAME BY THIS COM MON ORDER. 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSING OFFICER REOPENED THE ASSESSMENT AFTER THE CANCELLATION OF APPROVAL GRANTED BY THE CHIEF COMMI SSIONER OF INCOME TAX UNDER SECTION 10(23C)(VI) OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT'). ACCORDING TO THE LD. COUNSEL , THE CANCELLATION OF APPROVAL WAS WITHDRAWN RETROSPECTIVELY. THE LD.COU NSEL FURTHER SUBMITTED THAT THE ASSESSEE WAS GRANTED REGISTRATIO N UNDER SECTION 12A OF THE ACT AS CHARITABLE INSTITUTION. THEREFOR E, ACCORDING TO THE LD. COUNSEL, THE CLAIM OF THE ASSESSEE FOR EXEMPTIO N HAS TO BE EXAMINED UNDER SECTION 11 OF THE ACT. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER AS WELL AS THE CIT(A PPEALS) WERE PREDOMINANTLY INFLUENCED BY THE ORDER OF THE CHIEF COMMISSIONER CANCELLING THE APPROVAL GRANTED UNDER SECTION 10(23 C)(VI) OF THE ACT. ON A QUERY FROM THE BENCH WHETHER THE ASSESSE E CLAIMED EXEMPTION UNDER SECTION 11 OF THE ACT AT THE TIME O F FILING OF THE RETURN OF INCOME? THE LD.COUNSEL SUBMITTED THAT IN ITIALLY THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 11 OF THE ACT. SUBSEQUENTLY, A REVISED RETURN WAS FILED CLAIMING E XEMPTION UNDER 3 I.T.A. NOS.590 TO 594/CHNY/15 SECTION 10(23C)(VI) OF THE ACT. SINCE THE CLAIM OF THE EXEMPTION UNDER SECTION 11 OF THE ACT WAS NOT EXAMINED PROPER LY, ACCORDING TO THE LD. COUNSEL, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE LD.COUNSEL FURTHER SUBMITTE D THAT IN CASE THE ISSUE WAS REMITTED BACK TO THE FILE OF THE ASSE SSING OFFICER FOR RECONSIDERATION OF EXEMPTION UNDER SECTION 11 OF TH E ACT, THEN HE WOULD NOT PRESS THE ISSUE WITH REGARD TO REOPENING. 3. ON THE CONTRARY, SHRI S. BHARATH, THE LD. DEPART MENTAL REPRESENTATIVE, SUBMITTED THAT SINCE THE ASSESSEE H AS NOT PRESSED THE ISSUE OF REOPENING, THE GROUND WITH REGARD TO R EOPENING OF ASSESSMENT MAY BE DISMISSED AS NOT PRESSED. 4. COMING TO THE MERIT OF THE CASE, THE LD. D.R. SU BMITTED THAT THE ASSESSING OFFICER IN FACT EXAMINED THE CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT ALTERNATIVELY IN THE ASSESSME NT ORDER. THE CIT(APPEALS) ALSO IN FACT EXAMINED THE ISSUE WITH R EGARD TO EXTENSION OF THE PERIOD OF ACCUMULATION UNDER SECTI ON 11(3A) OF THE ACT. REFERRING TO THE ORDER OF THE CIT(APPEALS), T HE LD. D.R. SUBMITTED THAT IN THE ORIGINAL RETURN, THE ASSESSEE CLAIMED DEDUCTION OF CAPITAL EXPENDITURE. THE REVISED RETURN WAS NOT SCRUTINIZED SINCE THE SAME WAS FILED BEYOND THE STIPULATED TIME. THE REFORE, 4 I.T.A. NOS.590 TO 594/CHNY/15 ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER TR EATED AS IF THE RETURN WAS NOT FILED. IN SUCH A SITUATION, ACCORDI NG TO THE LD. D.R., THE ASSESSEE WAS AWARE OF THE FACT THAT THE CAPITAL EXPENDITURE WAS NOT ALLOWED. EVEN IN THE RETURN FILED IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, ACCORDING TO T HE LD. D.R., THE CLAIM WAS NOT MADE, THEREFORE, IN VIEW OF THE JUDGM ENT OF APEX COURT IN GOETZE (INDIA) LTD. V. CIT (2006) 284 ITR 323, THE ASSESSING OFFICER CANNOT ENTERTAIN SUCH A CLAIM UNL ESS IT IS MADE IN THE RETURN OF INCOME. THEREFORE, EVEN ON MERIT, AC CORDING TO THE LD. D.R., IT MAY NOT BE REQUIRED TO BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE AT THE TIME OF FILING THE RETURN OF INCOME MADE A CLAIM UNDER SECTION 11 OF THE ACT. SUBSEQUE NTLY IT APPEARS THAT THE ASSESSEE FILED A REVISED RETURN CLAIMING E XEMPTION UNDER SECTION 10(23C)(VI) OF THE ACT. THE ASSESSING OFFI CER EXAMINED THE CLAIM UNDER SECTION 10(23C)(VI) OF THE ACT AND REJE CTED THE SAME SINCE THE APPROVAL GRANTED BY THE CHIEF COMMISSIONE R UNDER SECTION 10(23C)(VI) OF THE ACT WAS WITHDRAWN. THE FACT REMAINS THAT 5 I.T.A. NOS.590 TO 594/CHNY/15 THE APPROVAL WAS ALSO GRANTED UNDER SECTION 12A OF THE ACT AS A CHARITABLE INSTITUTION. THEREFORE, AS RIGHTLY SUBM ITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THE CLAIM OF THE ASSES SEE UNDER SECTION 11 OF THE ACT HAS TO BE EXAMINED. 6. A PERUSAL OF THE MATERIAL AVAILABLE ON RECORD PRIMA FACIE APPEARS THAT THE ASSESSEE HAS COLLECTED CAPITATION FEE FOR ADMISSION OF STUDENTS. THESE FACTS WERE NOT EXAMIN ED BY THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS). IN RESPECT OF CAPITAL EXPENDITURE, THE CIT(APPEALS) HAS SIMPLY REJECTED T HE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE SAME WAS NOT CLAIME D IN THE RETURN OF INCOME FILED CONSEQUENT TO THE NOTICE ISSUED UND ER SECTION 148 OF THE ACT. THE APEX COURT ITSELF IN GOETZE (INDIA ) LTD. (SUPRA) FOUND THAT THE POWER OF THE APPELLATE AUTHORITY TO CONSIDER THE ADDITIONAL GROUND IS NOT IMPINGED. THEREFORE, THE CIT(APPEALS) AS WELL AS ITAT BEING THE APPELLATE AUTHORITIES CAN VE RY WELL ENTERTAIN THE CLAIM. MOREOVER, THE APEX COURT ITSELF IN THE CASE OF CIT V. SHELLY PRODUCTS AND ANOTHER (2003) 261 ITR 367 FOUN D THAT THE ASSESSEE CAN ALWAYS BRING TO THE NOTICE OF THE ASSE SSING OFFICER THE MATERIAL NECESSARY FOR COMPLETING THE ASSESSMENT. IN CASE ANY CLAIM WAS NOT MADE OR ANY INCOME WAS WRONGLY INCLUD ED IN THE 6 I.T.A. NOS.590 TO 594/CHNY/15 RETURN OF INCOME, THE SAME CAN ALWAYS BE BROUGHT TO THE NOTICE OF THE ASSESSING AUTHORITY. 7. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. SINCE THE LD.COUNSEL FOR THE ASSESSEE SUB MITTED DURING THE COURSE OF HEARING THAT HE IS NOT PRESSING THE ISSUE REGARDING REOPENING, THE ISSUE OF REOPENING IS REJECTED AS NO T PRESSED. HOWEVER, THE ISSUE RAISED BY THE ASSESSEE ON MERIT AND CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT NEEDS TO BE R ECONSIDERED. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ENTIRE ISSUE RAISED BY THE ASSESSEE ON MERIT, I NCLUDING THE CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT OTHER THAN THE ISSUE OF REOPENING, IS REMITTED BACK TO THE FILE OF THE ASSE SSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER IN TH E LIGHT OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE AND THER EAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 8. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED FOR STATISTICAL PURPOSES. 7 I.T.A. NOS.590 TO 594/CHNY/15 ORDER PRONOUNCED IN THE COURT ON 4 TH MARCH, 2019 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 4 TH MARCH, 2019. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-17, CHENNAI-34 4. DIT (EXEMPTIONS), CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.