Punjab Amalgamated Fund, Chandigarh V. ITO, (E), Ward, Chandigarh

ITA 664/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2455 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-02-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 07-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT MEHRA CIT
• Assessee Lawyers: PREET KAMAL
• Keywords: Opportunity of being heard; Initiation of penalty proceedings; Condonation of delay; Set aside
• Section: 13; 10(23C); 148; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH .., ! '# #$ %, & '( BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, J M ITA NO. 664 & 665/CHD/2019 ASSESSMENT YEAR : 2011-12 & 2012-13 PUNJAB AMALGAMATED FUND SAINIK BHAWAN, SECTOR-21 D CHANDIGARH THE ITO (E), WARD, SECTOR-17 CHANDIGARH PAN NO: AACTP8782G APPELLANT RESPONDENT !' ASSESSEE BY : MR. PREET KAMAL, CA #!' REVENUE BY : SHRI ROHIT MEHRA, ADDL. CIT $ %! & DATE OF HEARING : 26/02/2020 '()*! & DATE OF PRONOUNCEMENT : 26/02/2020 ')/ ORDER PER N.K. SAINI, VICE PRESIDENT THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE SEPARATE ORDERS EACH DT. 11/02/2019 OF THE LD. CIT(A)-2, CHA NDIGARH. 2. SINCE THE ISSUES INVOLVED ARE COMMON IN THESE AP PEALS WHICH WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CO NSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. THE GROUNDS RAISED IN ITA NO. 664/CHD/2019 FOR T HE A.Y. 2011-12 READ AS UNDER: 1. THAT LD. CIT(A) ERRED IN LAW AND ON FACTS IN CO NFIRMING THE ISSUANCE OF NOTICE U/S 148 OF THE INCOME TAX ACT 1961 BY THE A. O. 2. THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING T HE ACTION OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF INCOME TAX AC T 1961 WHILE THE ASSESSE FUND BEING WHOLLY AND EXCLUSIVELY BEING CONTROLLED BY GO VERNMENT OF PUNJAB. 2 3. THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING T HE ACTION OF AO IN TREATING THE APPELLANT AS TAXABLE WHILE HOLDING THAT IN THE ABSENCE OF EXEMPTION U/S 10(23C)(IV) OF THE INCOME TAX ACT 1961 A SUM OF RS. 11,65,269/- IS TAXABLE IN THE HANDS OF ASSESSE WITHOUT APPRECIATING THE AIMS AN D OBJECTS OF THE FUND BEING WHOLLY AND EXCLUSIVELY CHARITABLE AND NOT FOR EARNING PROFIT. 4. THAT CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE AC TION OF AO IN MAKING ADDITION BY DENYING EXEMPTION U/S 11 & 12 THOUGH EXEMPTION S OR APPROVALS HAVE NEVER BEEN REJECTED EARLIER. 5. THAT C1T(A) IS NOT JUSTIFIED IN UPHOLDING THE AC TION OF AO THAT DENYING EXEMPTION U/S 11 &12 AND IN THE ABSENCE OF EXEMPTION U/S 10(23C)(IV) OF INCOME TAX ACT, 1961 SUM OF RS. 11,6 5,269/- IS TAXABLE IN THE HANDS OF ASSESSE DESPITE THE FACT THAT THE ASSESSE FUND HAD APPLIED FOR APPROVAL OF ID CCIT CHANDIGARH FOR EXEMPTION U/S 10(23C) (IV) OF THE INCOME TAX ACT 1961 ON 21.08.2014 WHICH WAS UNDER PROCESS AND ON 15.11.2018 CONDONATION OF DELAY IN FILING APPLICATION FOR GRANT OF APPR OVAL U/S 10(23C)(IV) HAS BEEN GRANTED BY CBDT AND THEREFORE IT IS TOTALLY ADMINIS TRATIVE DELAY AND NO DELAY ON THE PART OF ASSESSE FUND. 6. THAT CIT(A) HAS WRONGLY GIVEN THE FINDING THAT ' THE ISSUE WHETHER THE ENTITY SHALL ACTUALLY BE GRANTED APPROVAL U/S 10(23C)(IV) BY THE PRESCRIBED AUTHORITY IS STILL IN THE REALM OF UNCERTAINTY . IT IS ALSO THE CASE THAT EVEN ON GRANT OF APPROVAL, THE ASSESSE HAS TO SATISFY CONDITIONS ENVISAGED IN THE PROVISO TO THE SECTION.' THE CIT(A) HAS NOT CONSIDERED THE FACT THAT THE FUND WA S CREATED BY DEPARTMENT OF DEFENCE SERVICES WELFARE FOR THE ADMINISTRATION OF PUNJAB AMALGAMATED FUND FOR THE WELFARE OF EX-SERVICEMAN ON 19.03.1979 THROUGH A NOTIFICATION AND THE ASSESEE FUND HAS ALREADY BEEN GRANTED APPROVED BY L D. CCIT VIDE ORDER DATED 28.03.2015 U/S 10(23C)(IV) OF THE INCOME TAX ACT FR OM A.Y.2014-15. 7. THAT CIT(A) WAS UNJUSTIFIED IN UPHOLDING THE ACT ION OF AO IN INVOKING THE PROVISIONS OF SECTION 271(1 )(C) OF THE INCOME TAX ACT, 1961 WHEREIN THE APPELLANT DISPUTES THE VERY INITIATION OF PENALTY PROCEEDINGS AS ILLEGAL AND PERVERSE. 8. THAT CIT(A) WAS UNJUSTIFIED IN UPHOLDING THE ACT ION OF AO IN CHARGING INTEREST U/S 234A,B AND C OF THE INCOME TAX ACT, 19 61. 9. THE APPELLANT CRAVES LEAVE TO ADD/MODIFY/DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. SIMILAR GROUNDS HAVE BEEN RAISED FOR THE A.Y. 2012- 13 IN ITA NO. 665/CHD/2019 THE ONLY DIFFERENCE IS IN THE AMOUNT INVOLVED. 4. FROM THE AFORESAID GROUNDS IT IS GATHERED THAT T HE MAIN GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENANCE OF THE ADDITION MADE BY THE A.O. IN THE ABSENCE OF EXEMPTION UNDER SECTION 10(23C)(IV) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 3 5. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE APPROVAL NOW, HAD BEEN GRANT ED BY THE LD. CCIT, CHANDIGARH FOR EXEMPTION UNDER SECTION 10(23C)(IV) OF THE ACT, THEREFORE, THIS ISSUE MAY BE SET ASIDE TO THE A.O. FOR FRESH ADJUDI CATION BECAUSE AT THE TIME OF PASSING THE ASSESSMENT ORDER DT. 30/03/2015 THE APP ROVAL APPLICATION FOR GRANTING THE APPROVAL UNDER SECTION 10(23C)(IV) WAS PENDING BEFORE THE LD. CCIT, CHANDIGARH, WHICH NOW HAD BEEN DISPOSED OFF. 6. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR DID NOT OBJECT IF THE MATTER IS RESTORED TO THE FILE OF THE A.O. 7. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AS MENTIONED HEREINABOVE, THESE CASES ARE SET ASIDE TO THE FILE OF THE A.O. TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE A ND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2020) SD/- SD/- #$ % .., (SANJAY GARG ) ( N.K. SAI NI) & '(/ JUDICIAL MEMBER ! / VICE PRESIDENT AG DATE: 26/02/2020 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE