Karnataka Housing Board , Bangalore V. Assistant Commissioner of Income Tax (CPC), Bangalore

ITA 696/BANG/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4364 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K R NARAYANA
• Assessee Lawyers: P C KHINCHA
• Keywords: Recovery proceedings; Opportunity of being heard; Revised return; Set aside
• Section: 234B; 12A; 143(1); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR,JUDICIAL MEMBER S.P. NO.69/BANG/2019 (IN ITA NO.696/BANG/2017) & ITA NO. 696/BANG/2017 ASSESSMENT YEAR : 20 1 4 - 1 5 M/S. KARNATAKA HOUSING BOARD, 3 RD AND 4 TH FLOOR, CAUVERY BHAVAN, KG ROAD, BANGALORE 560 009. PAN: AAAJK0398K VS. THE ASSISTANT COMMISSIONER OF INCOME TAX (CPC), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI P.C. KHINCHA, CA REVENUE BY : SHRI K.R. NARAYANA, JCIT (DR) DATE OF HEARING : 22 . 0 3 .201 9 DATE OF PRONOUNCEMENT : 22 . 0 3 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER; IN THIS STAY PETITION, THE ASSESSEE HAS REQUESTED FOR STAY OF OUTSTANDING DISPUTED DEMAND OF RS. 190,65,55,580/- FOR ASSESSMENT YEAR 2014-15. 2. IN COURSE OF HEARING OF THE STAY PETITION, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE AO IS NOT ONLY RAISING DEMAND BUT HAS ALSO ATTACHED ALL THE BANK ACCOUNTS OF THE ASSESSEE. HE ALSO SUBMITTED THAT THE ASSESSEE HAS A VERY GOOD PRIMA FACIE CASE. HE SUBMITTED THAT THE APPEAL OF THE ASSESSEE IS FIXED FOR HEARING ON 29.04.2019. BUT THE APPEAL CAN BE DECIDED NOW ALSO BECAUSE THE MATTER HAS TO GO BACK TO THE FILE OF CIT(A) FOR DECISION ON MERIT. HE SUBMITTED THAT AS PER PARA 8 OF THE IMPUGNED ORDER OF CIT(A), HE HAS NOTED THAT THE ASSESSEE IS ACTUALLY REGISTERED U/S. 12A/12AA BUT STILL HE HAS NOT DECIDED THE ISSUE ON MERIT ABOUT THE ASSESSEES ELIGIBILITY FOR EXEMPTION U/S. 11 AND DISMISSED THE APPEAL OF THE ASSESSEE ON THIS BASIS ALONE THAT THE ASSESSEE HAS FILED INCOMPLETE INFORMATION IN THE RETURN OF INCOME FILED BY THE ASSESSEE. HE POINTED OUT THAT FIRST PAGE OF THE RETURN OF INCOME IS REPRODUCED BY CIT(A) IN PAGE 5 OF HIS ORDER AND IN THE SAME, IT S.P. NO. 69/BANG/2019& ITA NO. 696/BANG/2017 PAGE 2 OF 5 CAN BE SEEN THAT IT WAS WRONGLY STATED BY ASSESSEE THAT THE ASSESSEE IS NOT REGISTERED U/S. 12A/12AA. BUT SINCE THE CIT(A) IS HIMSELF NOTING IN THIS PARA THAT ASSESSEE IS REGISTERED U/S. 12A/12AA, HE SHOULD HAVE EXAMINED AND DECIDED ABOUT THE ASSESSEES CLAIM FOR EXEMPTION U/S. 11 ON MERIT. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN VIEW OF THE FACTS DISCUSSED ABOVE, WE FEEL IT PROPER TO DECIDE THE APPEAL OF THE ASSESSEE. HENCE WE FIRST REPRODUCE THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL. THESE ARE AS UNDER. 1. THE ORDER PASSED BY THE LEARNED CIT(A)-14, BANGALORE IS BAD IN LAW AND LIABLE TO BE QUASHED. 2. DENIAL OF EXEMPTION UNDER SECTION 11 2.1 THE LEARNED ASSISTANT COMMISSIONER, INCOME TAX (CPC) HAS ERRED IN DENYING THE EXEMPTION CLAIMED UNDER SECTION 11 IN INTIMATION PASSED U/S 143(1) OF THE ACT AND THE LEARNED CIT(A)-14, BANGALORE HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED ACIT, CPC, BANGALORE. 2.2 THE LEARNED CIT(A)-14, BANGALORE HAS ERRED IN CONCLUDING THAT (A) THE APPELLANT IS TRYING TO MISLEAD THE AUTHORITIES; (B) THE APPELLANT HAS MADE AN INCORRECT CLAIM OF EXEMPTION U/S 11 OF THE ACT. 2.3 THE LEARNED AO AND HON'BLE CIT (A) HAS ERRED IN NOT APPRECIATING THAT: I) THE APPELLANT IS A NOT-FOR-PROFIT BODY ESTABLISHED WITH THE PRIMARY OBJECTIVE OF PROVIDING AND SATISFYING THE NEED OF HOUSING ACCOMMODATION IN THE STATE OF KARNATAKA AND IS ACCORDINGLY REGISTERED U/S 12A OF THE INCOME TAX ACT AND ELIGIBLE FOR EXEMPTION U/S 11 OF THE INCOME TAX ACT.; II) THE DETAILS OF REGISTRATION UNDER SECTION 12A FOR THE PURPOSE OF CLAIM OF EXEMPTION UNDER SECTION 11 WAS MENTIONED IN THE IT RETURN AND THE STATING OF 'NO' IN PART C OF OTHER DETAILS OF THE INCOME TAX RETURN WAS ONLY AN INADVERTENT OR TECHNICAL MISTAKE; 2.4 WITHOUT PREJUDICE, THE LEARNED CIT(A) HAS ERRED IN NOT PROVIDING THE INFORMATION COLLECTED FROM CPC TO THE APPELLANT REGARDING THE REASONS FOR REJECTION OF EXEMPTION CLAIMED IN INTIMATION PASSED U/S 143(1) AND FURTHER ERRED IN NOT PROVIDING AN OPPORTUNITY TO RECTIFY THE ERRORS OR MISTAKES ON THE BASIS OF WHICH THE EXEMPTION WAS DENIED IN THE INTIMATION PASSED U/S 143(1). THE ORDER PASSED BY THE LEARNED CIT(A) IS THEREFORE BAD IN LAW AND LIABLE TO BE QUASHED. 3. LEVY OF INTEREST UNDER SECTION 234A, 234B AND 234D 3.1 THE LEARNED CIT(A)-14, BANGALORE HAS ERRED IN CONFIRMING THE LEVY OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. ON FACTS AND CIRCUMSTANCES OF THE CASE AND LAW APPLICABLE, INTEREST UNDER SECTION 234B AND 234C IS NOT LEVIABLE. THE APPELLANT DENIES ITS LIABILITY TO PAY S.P. NO. 69/BANG/2019& ITA NO. 696/BANG/2017 PAGE 3 OF 5 INTEREST UNDER SECTION 234B AND 234C. 4. PRAYER 4.1 IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING THE APPELLANT PRAYS THAT THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) -14, BANGALORE BE QUASHED OR IN THE ALTERNATIVE: I) THE INCOME RETURNED BY THE APPELLANT BE ACCEPTED; II) EXEMPTION UNDER SECTION 11 OF THE INCOME-TAX ACT BE ALLOWED; III) INTEREST LEVIED UNDER SECTION 234B BE DELETED; IV) INTEREST LEVIED UNDER SECTION 234C BE DELETED; THE APPELLANT PRAYS ACCORDINGLY. 4. FROM THE ABOVE GROUNDS RAISED BY THE ASSESSEE, IT IS SEEN THAT THIS IS THE BASIC GRIEVANCE OF THE ASSESSEE THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S. 11 OF IT ACT WHICH HAS BEEN REJECTED BY CPC IN THE INTIMATION PASSED U/S. 143(1) OF IT ACT. AS PER THE GROUNDS RAISED BEFORE CIT(A) ALSO, THIS WAS THE GRIEVANCE THAT THE AO I.E. LD. ACIT, CPC HAS ERRED IN DENYING THE EXEMPTION CLAIMED U/S. 11 IN THE INTIMATION PASSED U/S. 143(1) OF IT ACT. NOW WE REPRODUCE PARAS 7 AND 8 OF THE IMPUGNED ORDER OF CIT(A) WHICH ARE AS UNDER. 7. IT WAS ASCERTAINED FROM THE CPC THAT AFTER RECEIVING THE INTIMATION U/S.143(1), THE APPELLANT MOVED RECTIFICATION TWICE U/S.154 BEFORE THE CPC. BUT EACH TIME, THE REGISTRATION NUMBER U/S. 12A/12AA WAS NOT PROVIDED LEADING TO CONTINUATION OF THE DEMAND. 8. IN VIEW OF THE ABOVE FACTS, IT IS CLEAR THAT THE APPELLANT IS TRYING TO MISLEAD THE AUTHORITIES BY CLAIMING THAT 'ALL THE INFORMATION REQUIRED TO BE FURNISHED WERE PROVIDED IN THE IT RETURN.' AS PER THE DATA UPLOADED BY IT AND VERIFIED IN THE ITR-7 IT HAS CLEARLY MADE AN INCORRECT CLAIM OF EXEMPTION U/S.11 AND HAS NOT PROVIDED ALL THE INFORMATION REQUIRED TO BE FURNISHED. IN FACT, INCORRECT INFORMATION HAS BEEN PROVIDED BY MENTIONING 'NO' WHEN IT IS ACTUALLY REGISTERED U/S.12A/12AA. I FIND NO MERIT, THEREFORE, IN THE APPELLANT'S GRIEVANCE. IN FACT, IT CAN BE JUSTLY ACCUSED OF CREATING UNNECESSARY MULTIPLE PROCEEDINGS BEFORE THE IT AUTHORITIES BY MOVING RECTIFICATION APPLICATIONS WHEN IT DELIBERATELY FILED ITS ORIGINAL RETURN WITH INCOMPLETE INFORMATION. 5. FROM THE ABOVE PARAS REPRODUCED FROM THE ORDER OF CIT (A), IT COMES OUT THAT THIS IS ADMITTED POSITION OF FACT THAT ASSESSEE IS IN FACT REGISTERED U/S. 12A/12AA. THIS IS ALSO TRUE THAT IN THE RETURN OF INCOME FILED BY THE ASSESSEE, THE ASSESSEE HAS COMMITTED SOME MISTAKES AND BECAUSE OF THAT, CPC HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S. 11 OF IT ACT. S.P. NO. 69/BANG/2019& ITA NO. 696/BANG/2017 PAGE 4 OF 5 BUT WHEN THE ASSESSEE HAS CARRIED THE MATTER IN APPEAL BEFORE CIT(A), HE SHOULD HAVE DECIDED THE ISSUE ON MERIT. BUT LD. CIT(A) HAS NOT DECIDED ON MERIT AND HE HAS SIMPLY DISMISSED THE APPEAL OF THE ASSESSEE ON THIS BASIS ALONE THAT THE ASSESSEE CAN BE JUSTLY ACCUSED OF CREATING UNNECESSARY MULTIPLE PROCEEDINGS BEFORE THE IT AUTHORITIES BY MOVING RECTIFICATION APPLICATIONS WHEN IT DELIBERATELY FILED ITS ORIGINAL RETURN WITH INCOMPLETE INFORMATION. AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT AS REPORTED IN 284 ITR 323, IT WAS HELD AS UNDER:- 2. THE QUESTION RAISED IN THIS APPEAL RELATES TO WHETHER THE APPELLANT-ASSESSEE COULD MAKE A CLAIM FOR DEDUCTION OTHER THAN BY FILING A REVISED RETURN. THE ASSESSMENT YEAR IN QUESTION WAS 1995-96. THE RETURN WAS FILED ON 30TH NOV., 1995, BY THE APPELLANT FOR THE ASSESSMENT YEAR IN QUESTION. ON 12TH JAN., 1998, THE APPELLANT SOUGHT TO CLAIM A DEDUCTION BY WAY OF A LETTER BEFORE THE AO. THE DEDUCTION WAS DISALLOWED BY THE AO ON THE GROUND THAT THERE WAS NO PROVISION UNDER THE IT ACT TO MAKE AMENDMENT IN THE RETURN OF INCOME BY MODIFYING AN APPLICATION AT THE ASSESSMENT STAGE WITHOUT REVISING THE RETURN. 3. THIS APPELLANTS APPEAL BEFORE THE CIT (A) WAS ALLOWED. HOWEVER, THE ORDER OF THE FURTHER APPEAL OF THE DEPARTMENT BEFORE THE TRIBUNAL WAS ALLOWED. THE APPELLANT HAS APPROACHED THIS COURT AND HAS SUBMITTED THAT THE TRIBUNAL WAS WRONG IN UPHOLDING THE AOS ORDER. HE HAS RELIED UPON THE DECISION OF THIS COURT IN NATIONAL THERMAL POWER CO. LTD. VS. CIT (1999) 157 CTR (SC) 249 : (1998) 229 ITR 383 (SC), TO CONTEND THAT IT WAS OPEN TO THE ASSESSEE TO RAISE THE POINTS OF LAW EVEN BEFORE THE TRIBUNAL. 4. THE DECISION IN QUESTION IS THAT THE POWER OF THE TRIBUNAL UNDER S. 254 OF THE IT ACT, 1961, IS TO ENTERTAIN FOR THE FIRST TIME A POINT OF LAW PROVIDED THE FACT ON THE BASIS OF WHICH THE ISSUE OF LAW CAN BE RAISED BEFORE THE TRIBUNAL. THE DECISION DOES NOT IN ANY WAY RELATE TO THE POWER OF THE AO TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERWISE THAN BY FILING A REVISED RETURN. IN THE CIRCUMSTANCES OF THE CASE, WE DISMISS THE CIVIL APPEAL. HOWEVER, WE MAKE IT CLEAR THAT THE ISSUE IN THIS CASE IS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NOT IMPINGE ON THE POWER OF THE TRIBUNAL UNDER S. 254 OF THE IT ACT, 1961. THERE SHALL BE NO ORDER AS TO COSTS. 6. FROM THE ABOVE PARAS OF THIS JUDGMENT, IT COMES OUT THAT THE AO IS NOT AUTHORISED TO CONSIDER ANY CLAIM MADE WITHOUT FILING REVISED RETURN OF INCOME. BUT THIS JUDGMENT DOES NOT IMPINGE UPON THE POWERS OF THE APPELLATE AUTHORITIES LIKE CIT (A) AND THE TRIBUNAL. HENCE IN OUR CONSIDERED S.P. NO. 69/BANG/2019& ITA NO. 696/BANG/2017 PAGE 5 OF 5 OPINION, LD. CIT (A) SHOULD HAVE DECIDED THE ISSUE ON MERIT AND SINCE HE HAS NOT DONE SO, WE SET ASIDE THE ORDER OF CIT (A) AND RESTORE BACK THE MATTER TO HIS FILE FOR FRESH DECISION ON MERIT I.E. ABOUT THE ELIGIBILITY OF THE ASSESSEE FOR EXEMPTION U/S 11 AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 7. IN VIEW OF THIS DECISION, NO ADJUDICATION ON MERIT IS CALLED FOR AT THE PRESENT STAGE AND THE STAY PETITION OF ASSESSEE HAS BECOME INFRUCTUOUS AND HENCE, WE DISMISS THE SAME AS INFRUCTUOUS. IN THE INTEREST OF JUSTICE, WE ALSO HOLD THAT THE CIT (A) SHOULD DECIDE THE MATTER WITHIN 3 MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. WE ALSO DIRECT THE AO THAT NO COERCIVE MEASURES SHOULD BE UNDERTAKEN FOR RECOVERY OF TAX TILL THE ORDER IS PASSED BY CIT (A) AS DIRECTED AND WE ALSO DIRECT THE AO TO LIFT THE ATTACHMENT OF ASSESSEES ALL BANK ACCOUNTS WITHIN TWO DAYS FROM THE RECEIPT OF THIS ORDER. 8. IN THE RESULT, THE STAY PETITION FILED BY THE ASSESSEE IS DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF HEARING ON CONCLUSION OF THE HEARING. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 22 ND MARCH, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.