DCIT, Udupi V. Sri. Mookambika Temple, Udupi

ITA 637/BANG/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1467 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 25-08-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 12-05-2014
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE C BENCH, BANGALORE BEFORE SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER ITA NO.637(BNG.)/2014 (ASSESSMENT YEAR : 2011-12) THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, UDUPI APPELLANT VS M/S MOOKAMBIKA TEMPLE, KOLLUR, UDUPI-576 220 PAN NO.AABAS4235R RESPONDENT REVENUE BY : SHRI L.V.BHASKAR REDDY, JCIT ASSESSEE BY : SMT. SHEETAL, ADVOCATE DATE OF HEARING : 25-08-201 5 DATE OF PRONOUNCEMENT : 11-09-2015 O R D E R PER SMT ASHA VIJAYARAGHAVAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A), MYSORE DATED 05-03-2014 FOR THE ASSESSMENT YEAR : 2011-12. 2. THE ASSESSEE IS A PUBLIC RELIGIOUS TRUST. FOR THE ASSESSMENT YEAR 2011-12, THE ASSESSEE HAD FILED RETURN OF INCOME ON 19-03-2012 DECLARING THEREIN NIL INCOME AFTER SETTING OFF OF BROUGHT FOR WARD UNABSORBED DEFICITS AND CLAIMED ITS INCOME AS EXEMPT UNDER SECTION 10(2 3C)(V) OF THE ACT,1961. 2 ITA NO.637(B)/2014 3. THE AO DISALLOWED DEPRECIATION CLAIMED AMOUNTIN G TO RS.1,29,44,991/- AS APPLICATION OF INCOME. THE AO ALSO DISALLOWED SET OFF OF BROUGHT FORWARD DEFICIT OF EARLIER YEARS FROM TH E CURRENT YEARS SURPLUS AMOUNTING TO RS.2,88,77,595/-. THE AO ALSO NOTICED FROM THE COMPUTATION ENCLOSED WITH THE RETURN OF INCOME THAT THE ASSESSEE HAS ARRIVED AT NIL INCOME AFTER MAKING AN ACCUMULATION OF RS.66,68,328/- U/S 11(2) OF THE IT ACT. HOWEVER, THE AO HELD THA T THE COPY OF FORM,-10 ENCLOSED WITH THE RETURN IS DATED 15-03-2012 AND T HE RETURN IS FILED ON 19-03-2012 I.E BEYOND THE DUE DATE FOR FILING THE R ETURN OF INCOME U/S 139(1) OF THE IT ACT. THE AO WAS ALSO OF THE OPINI ON THAT FORM-10 WAS FILED IN CONTRAVENTION OF RULE 17 OF THE IT RULES A ND HENCE, THE ASSESSEE IS NOT ELIGIBLE FOR ACCUMULATION OF RS.66,68,328/-U /S 11(2) OF THE IT ACT, 1961 4. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT(A) WITH RESPECT TO DEPRECIATION CLAIMED AMOUNTING TO RS.1,2 9,44,991/-. 5. WE FIND THAT THE BANGALORE BENCH OF THE TRIBUNA L HAS ALREADY DECIDED IN THE CASE OF MANIPAL HOTEL & RESTAURANT M ANAGEMENT COLLEGE TRUST IN ITA NO.1142(B)/2013 DATED 31-10-2014 FOR T HE ASSESSMENT YEAR 2010-11 AND ALSO IN THE CASE OF DR.T.M.A.PAI FOUNDA TION IN ITA 3 ITA NO.637(B)/2014 NO.1140(B)/2013 DATED 21-03-2014. RESPECTFULLY, F OLLOWING THE DECISION OF THE C-ORDINATE BENCH, WE ALLOW THE CLAIM OF DEPR ECIATION CLAIMED BY THE ASSESSEE. 6. WITH REGARD TO THE SECOND ISSUE OF DISALLOWANCE OF SET OFF OF BROUGHT FORWARD DEFICIT OF EARLIER YEARS SURPLUS, T HE ISSUE IS ONCE AGAIN DECIDED BY THIS TRIBUNAL IN THE CASE OF MANIPAL HOT EL & RESTAURANT MANAGEMENT COLLEGE TRUST AND ALSO IN THE CASE OF DR . T.M.A.PAI FOUNDATION IN ITA NO.486 TO 491(BANG)/2009 DATED 16 -02-2010 FOR THE ASSESSMENT YEAR 2001-02 TO 2006-07. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, WE ALLOW THE SET OFF OF UNABSORBED BROUGHT FORWARD THE DEFICIT OF RS.2,88,7 7,595/-. 7. WITH RESPECT TO DISALLOWANCE OF ACCUMULATION MA DE U/S 11(2) IN FORM-10 AMOUNTING TO RS.66,68,328/-. THE LEARNED CO UNSEL FOR THE ASSESSEE RELIED ON THE FOLLOWING CASES IN SUPPORT O F HIS CONTENTION; A) CIT VS V.ANJUMAN MOINIA FAKHARIA 208 ITR 568(RA J.) B) CIT VS MUMTAZ YARUD DOWLA WAQF (1998) 234 ITR 6 / 25 TAXMAN 469(GUJ.) C) ASST. CIT VS STOCK EXCHANGE AHD.(2012) D) CIT VS MAYOUR FOUNDATION(2005) ITR 562(GUJ.) 4 ITA NO.637(B)/2014 8 . THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS V.ANJUMAN MOINIA FAKHARIA 208 ITR 568(RAJ.)(SUPRA) HELD AW FOLLOWS; THE PROVISIONS OF SECTION 11(2) OF THE IT ACT, 19 61 CONTEMPLATE THAT IN ORDER TO AVAIL OF THE BENEFIT T HE TRUSTEE SHOULD GIVE A NOTICE IN WRITING TO THE INCO ME-TAX OFFICER IN THE MATTER PRESCRIBED BY THE RULES SPEC IFYING THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULAT ED AND THE PERIOD FOR WHICH THE INCOME IS TO BE ACCUMU LATED OR SET APART, SUCH PERIOD, HOWEVER, NOT TO EXCEED 1 0 YEARS. RULE 17 OF THE INCOME-TAX RULES, 1962, AS I T STOOD PRIOR TO APRIL, 1, 1971 DID NOT PRESCRIBE ANY TIME LIMIT FOR FILING FORM NO.10, BUT FROM THE ASSESSMENT YEAR 197 1-72, A TIME LIMIT WAS PRESCRIBED. CIRCULAR NO.273, DATE D JUNE 3, 1980 ISSUED BY THE DEPARTMENT STATED THAT THE PO WER WHICH WAS VESTED WITH THE CENTRAL BOARD OF DIRECT T AXES TO CONDONE THE DELAY IN FILING THE APPLICATION HAD BEEN DELEGATED TO THE COMMISSIONER OF INCOME-TAX. HENCE, THE REQUIREMENT AS TO THE TIME-LIMIT IS ONLY DIRECTORY AND NOT MANDATORY. NON-COMPLIANCE WITHIN HE STIPULATED TIM E SHOULD NOT DISENTITLE AN ASSESSEE FROM THE EXEMPTIO N TO WHICH HE IS OTHERWISE ENTITLED. 5 ITA NO.637(B)/2014 HELD, THAT IN THE INSTANT CASE, THE PURPOSE FOR ACCUMULATION WERE THE SAME FOR WHICH THE TRUST HAD BEEN CREATED, VIZ TO HELP THE POOR WIDOWS AND TO GIVE SCHOLARSHIPS TO THE STUDENTS. THE INCOME-TAX OFFIC ER HAD REJECTED THE CLAIM OF THE ASSESSEE ONLY ON THE GROU ND THAT THE NOTICE FOR ACCUMULATION U/S 11(2) WAS BEYOND TI ME THE INCOME-TAX OFFICER HAD NOT DOUBTED THE CORRECTN ESS OF THE RESOLUTION OR THE ACCOUNTS OF THE TRUST. THE T RIBUNAL WAS JUSTIFIED IN UPHOLDING THE ORDER OF THE APPELLA TE ASSISTANT COMMISSIONER DIRECTING THE INCOME-TAX OFF ICER TO ALLOW EXEMPTION IN RESPECT OF ACCUMULATION AS CL AIMED U/S 11(2) OF THE INCOME-TAX ACT, 1961READ WITH RULE -17 OF THE IT RULES, 1962 FOR THE ASSESSMENT YEARS 1974-75 , 1975-76 AND 1976-77. 9. HOWEVER, WE ARE OF THE OPINION THAT THE AO SHOU LD HAVE GIVEN THE ASSESSEE TRUST AN OPPORTUNITY TO ACCUMULATE THE ADD ITIONAL SURPLUS TO THE EXTENT OF RS.66,68,328/- U/S 11(2) OF THE IT ACT, 1 961 FOR SPECIFIC PURPOSES. IN THESE CIRCUMSTANCES, WE SET ASIDE TH E ISSUE TO THE FILE OF THE AO TO AFFORD ONE MORE OPPORTUNITY TO THE ASSESSEE T O PRESENT HIS CASE AND THEREAFTER, DECIDE THE ISSUE IN ACCORDANCE WITH LAW . 6 ITA NO.637(B)/2014 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON THE 11 TH SEPTEMBER, 2015. SD/ - (ABRAHAM P GEORGE) SD/ - (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE: D A T E D : 11-09-2015 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR,ITAT, BANGALORE