M/s G Pulla Reddy Charitable Trust, Hyderabad V. Dy.Director of Income Tax (Exemptions)-II, Hyderabad

ITA 698/HYD/2014

• Counselvise Citation: 69822514 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-08-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 16-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Keywords: Reopening of assessment; Charitable institution
• Section: 143(3); 142(1); 133A; 147; 148; 144; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A : HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA.NO.698/HYD/2014 ASSESSMENT YEAR 2001-2002 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. PAN AAATG2792F VS. DY. DIRECTOR OF INCOME TAX (EXEMPTIONS)-II, HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. K.C. DEVDAS FOR REVENUE : MR. RAMAKRISHNA BANDI DATE OF HEARING : 1 3 .0 8 .2015 DATE OF PRONOUNCEMENT : 26 .0 8 .2015 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GUNTUR DATED 25.02 .2014 FOR THE A.Y. 2001-2002. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A TRUST CARRYING ON EDUCATIONAL ACTIVITIES. IT FILE D ITS RETURN OF INCOME ON 11.10.2004 IN FORM NO.3A RETURNING NI L INCOME. SINCE THE RETURN WAS FILED OUT OF TIME, THE A.O. TREATED IT AS NON-EST. SUBSEQUENTLY, BY ISSUANCE OF NOTICE UNDER SECTION 148 DATED 27.03.2007 THE ASSESSMENT W AS REOPENED. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS UNDER SECTION 143(3) READ WITH SECTION 147 OF THE I .T. ACT, 2 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. THE A.O. EXAMINED THE BOOKS OF ACCOUNTS OF THE ASSE SSEE AND OBSERVED THAT THE ASSESSEE HAS COLLECTED DEVELO PMENT FUND. THE ASSESSEE WAS ASKED TO CLARIFY AS TO THE A MOUNT RECEIVED DURING THE YEAR UNDER CONSIDERATION AND AL SO RELATIONSHIP OF DONORS TO THE STUDENTS STUDYING IN ITS COLLEGE. THE ASSESSEE FILED ITS REPLY ON 24.12.2007 STATING THAT THE DEVELOPMENT FUND WAS VOLUNTARY CONTRIBUTIO N FROM THE PARENTS OF THE STUDENTS. THE A.O. HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTION AND BY FOLLOWI NG THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F TMA PAI FOUNDATION AND OTHERS VS. STATE OF KARNATAK A AND OTHERS DATED 31.10.2002 AND ALSO CONSIDERING TH E RESTRICTIONS PLACED BY THE A.P. EDUCATIONAL INSTITU TIONS (REGULATION OF ADMISSIONS AND PROHIBITION OF CAPITA TION FEE) ACT, 1983 ON COLLECTION OF CAPITATION FEE, HEL D THAT THE DONATIONS TO BE CAPITATION FEE AND NOT ALLOWABLE AS EXEMPTION UNDER SECTION 11 OF THE I.T. ACT. AGGRIEV ED BY THE SAID ORDER OF THE A.O., THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO CONFIRMED THE ORD ER OF THE A.O. AND THE ASSESSEE IS IN SECOND APPEAL BEFOR E US. 3. BEFORE THE LD. CIT(A), THE ASSESSEE HAD ALSO CHALLENGED THE VALIDITY OF THE REOPENING UNDER SECT ION 147 OF THE I.T. ACT. THE ASSESSEE ALSO PLACED RELIANCE UPON THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR T HE A.YS. 1999-2000 TO 2003-2004 IN SUPPORT OF ITS CONTENTION THAT THE RE-ASSESSMENT IS NOT VALID. THE CIT(A), HOWEVER , CONFIRMED THE VALIDITY OF PROCEEDINGS UNDER SECTION 147 OF THE ACT. AT THE TIME OF HEARING, THE LD. COUNSEL FO R THE 3 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. ASSESSEE SUBMITTED THAT THE ASSESSEE HAD ORIGINALLY FILED ITS RETURN OF INCOME BEFORE THE A.O. KURNOOL AND THEREFORE, THE JURISDICTION ALSO LIES WITH THE A.O. AT KURNOOL. ACCORDING TO THE LD. COUNSEL FOR THE ASSES SEE, THIS FACT IS MORE EVIDENT AS THE A.O., HAS ISSUED P ENALTY NOTICE UNDER SECTION 272A(2E) OF THE ACT AND THE PE NALTY WAS ALSO LEVIED ON THE ASSESSEE FOR THE A.YS. 1999- 2000 TO 2004-2005. HE SUBMITTED THAT THE ASSESSEE HAD CHALLENGED THE LEVY OF PENALTY BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 11 TH FEBRUARY, 2010 CONFIRMED THE LEVY OF PENALTY BY JOINT COMMISSIONER OF INCOME TAX, KURNOOL FOR FILING BELATED RETURNS AND HAS GIVEN CATEGORICAL FINDING THAT THE ADDL. CIT, KURNO OL HAD THE JURISDICTION OVER THE ASSESSEE. HE SUBMITTED TH AT THE ASSESSMENTS FOR THE A.YS. 1999-2000 TO 2004-2005 WE RE REOPENED UNDER SECTION 148 OF THE I.T. ACT BY ISSUI NG NOTICES DATED 21.03.2006 AND 27.03.2007 RESPECTIVEL Y AND THESE NOTICES WERE ISSUED BY THE DDIT (EXEMPTIO NS)- II AT HYDERABAD AND FOR THE A.YS. 1999-2000, 2000-2 001, 2002-2003, 2003-2004 AND 2004-2005, THE ASSESSEE HA D CHALLENGED THE REOPENING OF THE ASSESSMENTS IN ITA.NO.433,434/HYD/2008, ITA.NO.1718/HYD/2008, ITA.NO.1582/HYD/2011 AND ITA.NO.437/HYD/2008 RESPECTIVELY. HE SUBMITTED THAT A BENCH OF THIS T RIBUNAL VIDE ITS ORDER DATED 05.04.2013 HAD DISPOSED OF THE ABOVE APPEALS BY HOLDING THAT THE JURISDICTION OF THE ASS ESSEE LIES WITH THE A.O. AT KURNOOL AND NOT THE DDIT (EXEMPTIONS), HYDERABAD. A COPY OF THE SAID ORDER I S FILED BEFORE US. 4 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. 4. THE LEARNED D.R., ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAD F ILED THE RETURN OF INCOME IN THE O/O. ACIT, KURNOOL AS IS EV IDENT FROM PAGE NO. 99 OF THE PAPER BOOK FILED BEFORE US. THE RETURN OF INCOME WAS FILED ON 11.10.2004 AS PER THE ACKNOWLEDGMENT OF THE DEPARTMENT ON THE SAID COPY O F THE RETURN. THE NOTICE UNDER SECTION 148 IS DATED 27.03.2007 AND THE COPY OF THE SAID NOTICE IS ALSO PLACED AT PAGE NO.80 OF THE PAPER BOOK. A PERUSAL OF THE S AID NOTICE REVEALS THAT IT HAS BEEN ISSUED BY THE DDIT (EXEMPTIONS), HYDERABAD. AS SEEN FROM THE ORDER OF THE TRIBUNAL, THE DDIT (EXEMPTIONS) HAS ISSUED NOTICES FOR REOPENING OF THE ASSESSMENT FOR THE A.YS. 2002-2003 AND 2003-2004 ALSO ON 27.03.2007. THE NOTICE UNDER SECT ION 148 FOR THE A.Y. 2002-2003 AND 2003-2004 HAVE BEEN CHALLENGED BY THE ASSESSEE BEFORE THIS TRIBUNAL AND THIS TRIBUNAL VIDE ORDER DATED 05.04.2013 IN ITA.NO.433, 434 & 437/HYD/2008, 1718/HYD/2008 AND 1582/HYD/2011 HAS DEALT WITH THE ISSUE AT LENGTH AND HAS HELD AS UNDER : 2. THE FIRST COMMON ISSUE IN THE FIRST FOUR APPEA LS IN ITA NOS. 433/HYD/2008, 434/HYD/2008, 1718/HYD/2008 AND 1582/HYD/2011 IS WITH REGARD TO REOPENING OF ASSESSMENT. THE ASSESSEE IS A TRUST HAVING ITS REGISTERED OFFICE AT 11-5-432, RED HILLS, HYDERABAD, RUNS EDUCATION INSTITUTIONS AT VARIOUS PLACES IN HYDERABAD. IN THESE FOUR YEARS, ASSESSMENT 5 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. WAS REOPENED AFTER SURVEY CONDUCTED U/S. 133A OF INCOME-TAX ACT, 1961 ON 15.10.2004 AT G. PULLAREDDY ENGINEERING COLLEGE (GPEC), KURNOOL. DURING THE COURSE OF SURVEY IT CAME TO THE KNOWLEDGE OF THE DEPARTMENT THAT THE ASSESSEE HAS NOT FILED RETURNS OF INCOME FOR A.Y. 1997-98 AND ONWARDS. HOWEVER, ON RECORD IT WAS OBSERVED THAT THE ASSESSEE FILED RETURNS OF INCOME AS FOLLOWS: A.Y. 1999-2000 - ON 06.10.2004 A.Y. 2000-2001 - ON 11.10.2004 A.Y. 2002-2003 - ON 11.10.2004 A.Y. 2003-2004 - ON 14.10.2004 3. SUBSEQUENTLY, NOTICE WAS ISSUED U/S. 148 FOR A.YS. 1998-99 TO 2002-03 ON 9.12.2004, SERVED ON THE ASSESSEE ON 9.12.2004 BY ACIT, KURNOOL. IN PURSUANCE OF THE SAID NOTICE, THE ASSESSEE FILED LETTER DATED 17.12.2004 TO TREAT THE RETURNS OF INCOME FILED ON EARLIER OCCASION, AS STATED ABOVE, AS FILED IN RESPONSE TO THE NOTICE U/S. 148. HOWEVER, ANOTHER NOTICE U/S. 148 WAS ISSUED FOR A.YS. 1999-2000 AND 2000- 01 ON 21.3.2006 AND FOR A.YS. 2002- 3 AND 2003-04 ON 27.3.2007. THIS NOTICE U/S. 148 WAS ISSUED BY THE DDIT (EXEMPTIONS)-II AFTER RECORDING THAT INCOME RECEIVED ON BEHALF OF THE G. PULLA REDDY ENGINEERING COLLEGE, KURNOOL AND G. NARAYANAMMA INSTITUTE OF SCIENCE & TECHNOLOGY, HYDERABAD WHICH IS CHARGEABLE TO TAX IN THE ABSENCE OF MANDATORY APPROVAL U/S. 10(23C)(VI), HAS ESCAPED ASSESSMENT AS ITS GROSS RECEIPTS EXCEEDED RS. 1 CRORE. ON REOPENING OF THE ASSESSMENT, THE ASSESSING OFFICER BROUGHT TO TAX DEVELOPMENT FEE COLLECTED BY THE ASSESSEE BY DENYING EXEMPTION U/S. 10(23C)(VI). 4. BEFORE US, THE LEARNED AR SUBMITTED THAT FIRSTLY THERE WAS A NOTICE U/S. 148 OF THE ACT ISSUED BY THE ACIT, KURNOOL FOR A.Y. 1998-99 TO 2002-03 ON 9.12.2004. ASSESSMENTS WERE TERMINATED ON 6 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. 31.3.2006 AND THE DDIT (EXEMPTIONS)-II, HYDERABAD HAS NO JURISDICTION TO ISSUE FURTHER NOTICE U/S. 148 OF THE ACT. FURTHER HE SUBMITTED THAT THERE WAS PENALTY PROCEEDINGS AGAINST THE ASSESSEE BY JCIT, KURNOOL U/S. 272A(2)(E) OF THE ACT FOR A.YS. 1997-98, 1998-99, 1999-2000, 2000-01 AND 2001-02. AGAINST THIS PENALTY ORDER THE ASSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL IN ITA NOS. 1 TO 5/HYD/2007. THE TRIBUNAL VIDE ITS ORDER DATED 11TH FEBRUARY, 2010 CONFIRMED LEVY OF PENALTY BY JOINT CIT, KURNOOL FOR FILING BELATED RETURNS AND GIVEN CATEGORICAL FINDING THAT THE ADDL. CIT, KURNOOL HAS THE JURISDICTION OVER THE ASSESSEE. BEING SO, JURISDICTION OF KURNOOL RANGE IS UPHELD BY THE TRIBUNAL. 5. THE LEARNED DR SUBMITTED THAT REGISTERED OFFICE OF THE ASSESSEE IS SITUATED AT HYDERABAD. BEING SO, THE DEPARTMENT IS HAVING JURISDICTION OVER THE ASSESSEE. THE ASSESSEE HAS FILED VOLUNTARY RETURNS BEFORE THE JCIT, KURNOOL RANGE FOR A.YS. 1997-98 TO 2003-04 AT KURNOOL. THE RETURNS ARE BELATEDLY FILED. AS SUCH IT WAS TREATED AS NON- EST RETURNS. THE PENALTY WAS ATTRACTED FOR FILING BELATED RETURNS AT KURNOOL FROM THE ASSESSEES SIDE. THE PROCEEDINGS INITIATED BY THE KURNOOL RANGE U/S. 148 DATED 9.12.2004 WERE ALSO CLOSED AS NOT APPLICABLE AND NO ORDER IN PURSUANCE OF THE REOPENING WAS PASSED. BEING SO, THE DEPARTMENT CANNOT FIND FAULT FOR REOPENING THE ASSESSEES CASE BY THE DDIT (EXEMPTIONS)-II, HYDERABAD. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE EARLIER ORDER OF THE TRIBUNAL IN ITA NOS. 1 TO 5/HYD/2007 DATED 11TH FEBRUARY, 2010 WHEREIN THE TRIBUNAL CONFIRMED LEVY OF PENALTY U/S. 272A(2)(E) OF THE ACT. FOR CLARITY, WE WILL REPRODUCE THE RELEVANT PARAS OF THAT ORDER HEREIN BELOW: 7 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. '6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO CAREFULLY GONE THROUGH RELEVANT CASE-LAW CITED BY BOTH THE PARTIES. IN THESE CASES, THE ASSESSEE HAD NOT FILED ANY RETURN FROM ASSESSMENT YEAR 1997-98 TO ASSESSMENT YEARS 2003-04. THE ASSESSEE RUNS AN ENGINEERING COLLEGE, VIZ. G. PULLA REDDY ENGINEERING COLLEGE AT KURNOOL. DURING THE COURSE OF TDS INSPECTION DATED 30-9- 2004 ON THE ABOVE COLLEGE, IT CAME TO LIGHT THAT THE ASSESSEE DID NOT FILE RETURN OF INCOME FROM ASSESSMENT YEARS 1997-98 ONWARDS. 6.1 THE ASSESSEE FILED RETURN OF INCOME VOLUNTARILY ON 15.10.2004 FOR ASSESSMENT YEARS 1997-98 TO 2003- 04. THERE WAS NO ISSUE OF ANY NOTICE BY THE ASSESSING OFFICER CALLING FOR RETURNS EVEN 15 DAYS AFTER THE DATE OF TDS INSPECTION. THE ASSESSEE HAS VOLUNTARILY FILED RETURNS OF INCOME. IT IS FACTUALLY INCORRECT ON THE PART OF THE ASSESSEE TO SAY THAT THE RETURNS WERE FILED AT THE BEHEST OF THE DEPARTMENT. THERE IS NO EVIDENCE TO SHOW THAT THE DEPARTMENT INSISTED UPON THE ASSESSEE TO FILE RETURNS OF INCOME. 6.2 THE ASSESSEE AFTER VOLUNTARILY FILING RETURNS AT KURNOOL IN OCTOBER 2004 NEVER RAISED THE QUESTION OF JURISDICTION UP TO 6.1.2005 I.E., AFTER COMPLETION OF PENALTY PROCEEDINGS VIDE ORDER DATED 4.1.2005. THE ISSUE OF JURISDICTION WAS RAISED FOR THE FIRST TIME DURING ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEARS 2003-04 VIDE LETTER DATED 6.1.2005. 6.3. AFTER THE FILING OF RETURNS ON 15.10.2004, THE FOLLOWING PROCEEDINGS WERE INITIATED BY THE DEPARTMENT DURING WHICH NO OBJECTION WAS RAISED BY ASSESSEE UP TO 6.1.2005. A) PENALTY PROCEEDINGS U/S 272(A) INITIATED ON 28.10.2004. 8 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. B) 148 ISSUED ON 9.12.2004 C) 143(2) ISSUED ON 13.12.2004 FOR ASSESSMENT YEARS 2003-04. D) SUMMONS ISSUED ON 13.12.2004 TO APPEAR ON 20.12.2004. E) ON 20.12.2004, THE AR APPEARED BUT DID NOT RAISE THE ISSUE OF JURISDICTION. 6.4. THE ASSESSEE VOLUNTARILY FILED RETURN OF INCOME IN FORM 3A AT KURNOOL AND THE ASSESSING OFFICER HAD THE JURISDICTION OVER THE ASSESSEE AS PER SECTION 124(5) WHICH READS AS FOLLOWS: 'NOTWITHSTANDING ANYTHING CONTAINED IN THIS SECTION OR IN ANY DIRECTION OR ORDER ISSUED U/S 120 EVERY ASSESSING OFFICER SHALL HAVE ALL THE POWERS CONFERRED BY OR UNDER THIS ACT ON AN ASSESSING OFFICER IN RESPECT OF THE INCOME ACCRUING OR ARISING OR RECEIVED WITHIN THE AREA, IF ANY, OVER WHICH HE HAS BEEN VESTED WITH JURISDICTION BY VIRTUE OF THE DIRECTIONS OR ORDERS ISSUED UNDER SUB SECTION (1) OR SUB SECTION (2) OF SECTION 120.' 6.5. THE MAIN TRUSTEE RESIDES AT KURNOOL, THERE IS AN ENGINEERING COLLEGE AT KURNOOL RUN BY THE TRUST AND ALL THE MATERIAL ACCOUNTS RELATING TO THE ACTIVITIES OF THE TRUST WERE FOUND AT THE OFFICE IN KURNOOL. THE ASSESSEE DESPITE SEVERAL OPPORTUNITIES GIVEN DURING PENALTY PROCEEDINGS DID NOT RAISE ANY OBJECTION REGARDING JURISDICTION. IN VIEW OF THE ABOVE, JCIT, KURNOOL HELD THAT THE ASSESSEE IS ASSESSABLE AT KURNOOL IN VIEW OF SECTION 124(5) AND HE HAD JURISDICTION OVER THE ASSESSEE. THUS THE EXERCISE OF JURISDICTIONAL AUTHORITY OVER THE ASSESSEE BY JCIT KURNOOL IS JUSTIFIED. 9 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. 6.6. UNDER PRE 1988 SEC. 124(5) A PERSON WAS ENTITLED TO CALL A QUESTION AND DISPUTE THE JURISDICTION OF ITO. A) IN CASES WHERE HE HAD FURNISHED A RETURN U/S 139(1) OR HIS ASSESSMENT HAD BEEN COMPLETED WITHIN ONE MONTH FROM THE DATE OF FURNISHING OF RETURN OR COMPLETION OF ASSESSMENT WHICHEVER IS EARLIER. B) IN CASE WHERE HE HAD NOT MADE A RETURN U/S 139(1) NOR HIS ASSESSMENT WAS COMPLETED, AND HE HAD BEEN SERVED WITH A NOTICE FOR FURNISHING OF RETURN UNDER THE THEN SECTION 139(2) OR 148 THEN WITHIN THE TIME ALLOWED UNDER SUCH NOTICE. 6.7. UNDER POSTS. 124 OF THE IT ACT 1961: A) WHERE HE HAS MADE A RETURN UNDER SUB SECTION (1) OF SECTION 115WD OR UNDER SUB SECTION (1) OF SECTION 139, AFTER THE EXPIRY OF ONE MONTH FROM THE DATE ON WHICH HE WAS SERVED WITH A NOTICE UNDER SUB SECTION (1) OF SECTION 142 OR SUB SECTION (2) OF SECTION 115WE SUB SECTION (2) OF SECTION 143 OR AFTER THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. B) WHEN HE HAS MADE NO SUCH RETURN, AFTER THE EXPIRY OF THE TIME ALLOWED BY THE NOTICE UNDER SUB SECTION (2) OF SECTION 115WD OR SUB SECTION 1 OF SECTION 142 OR UNDER SUB SECTION 1 OF SECTION 115WH OR UNDER SECTION 148 FOR THE MAKING OF THE RETURN OR BY THE NOTICE UNDER FIRST PROVISO TO SECTION 115WF OR UNDER THE FIRST PROVISO TO SECTION 144 TO SHOW CAUSE WHY THE ASSESSMENT SHOULD NOT BE COMPLETED TO THE BEST OF THE JUDGMENT OF THE ASSESSING OFFICER WHICHEVER IS EARLIER. 6.8. A CAREFUL READING OF SECTION 124(3) AND COMPARISON WITH THE EARLIER PROVISION 10 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. 'CLEARLY SHOWS THAT THE EMPHASIS IS ON THE TIME ALLOWED U/S 148 OR 139(2) OR 142(1). THE SECTION CLEARLY DIVIDES THE ASSESSEE INTO TWO CATEGORIES (I) A PERSON WHO HAS MADE RETURN OF INCOME U/S 139(1) I.E. WHO HAS FILED REGULAR RETURN WITHIN DUE DATE IS COVERED UNDER SUB SECTION (A). (II) THE ABOVE SUB SECTION (B) STARTS WITH WHERE HE HAS MADE NO SUCH RETURN, MEANING NO RETURN AS ENVISAGED UNDER CLAUSE (A) REGULAR RETURN. IN CASE THE ASSESSEE DOES NOT FILE REGULAR RETURN, THE ASSESSEE'S CASE IS COVERED BY NOTICE U/S 142(1) OR 148. THE CLAUSE CLEARLY STATES THAT THE TIME LIMIT IS EXPIRY OF TIME ALLOWED U/S 142(1) OR 148 FOR MAKING RETURN OR UNDER FIRST PROVISO TO SECTION 144 WHICHEVER IS EARLIER. 7. IN THE INSTANT CASE, THE ASSESSEE DID NOT FILE REGULAR RETURN IF U/S 139(1) OF IT ACT OR 139(4A) APPLICABLE FOR TRUSTS. HE FILED RETURNS ON VARIOUS DATES FROM 6.10.2004 TO 11.10.2004 FOR THE YEARS UNDER CONSIDERATION. NOTICE U/S 148 WAS ISSUED ON 9.12.2004 FOR ASSESSMENT YEARS UNDER APPEAL. THE ASSESSEE REPLIED VIDE LETTER 17.12.2004 TO TREAT THE RETURN OF INCOME ALREADY FILED AS FILED IN RESPONSE TO NOTICE U/S 148. THE ASSESSEE DID NOT FILE REGULAR RETURN IN TIME AND NO SUCH RETURN AS ENVISAGED IN CLAUSE (A) ARE FILED. AS PER CLAUSE (B) HE SHOULD HAVE RAISED OBJECTION WITHIN THE TIME ALLOWED BY NOTICE DATED 9.12.2004 U/S 148 I.E. BEFORE 19.12.2004 WHICH THE ASSESSEE DID NOT DO. 7.1 SECTION 124(3) IS CLEAR IN ITS EMPHASIS ON TIME ALLOWED AS PER NOTICE U/S 148 OR 142(1) ARE UNDER FIRST PROVISO TO SECTION 144 WHICHEVER IS EARLIER. 7.2. IT CAN BE SEEN THAT CLAUSE (A) LAYS EMPHASIS ON ONE MONTH OF SERVICE OF NOTICE OR COMPLETION OF ASSESSMENT, CLAUSE (B) IS 11 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. CATEGORICAL ON THE TIME ALLOWED UNDER NOTICE U/S 142(1) OR 148 OR 144. IT MAY FURTHER BE NOTED THAT THERE IS NO MENTION OF NOTICE U/S 143 (2) UNDER CLAUSE (B). IT CLEARLY INDICATES THAT THERE IS A POSSIBILITY THAT THE ASSESSMENT PROCEEDINGS MAY NOT CONTINUE AND THE ASSESSING OFFICER IS ENTITLED TO CLOSE ASSESSMENT PROCEEDINGS BY DROPPING THE SAME AND HENCE THE MENTION OF COMPLETION OF ASSESSMENT IS NOT THERE IN CLAUSE (B) AS AGAINST ITS MENTION IN CLAUSE (A). THE COMMA USED AFTER THE WORDS 'WHERE HE HAS MADE NO SUCH RETURN' IS CRUCIAL AS IT EMPHASIZES ONLY ON THE TIME ALLOWED UNDER ANY OF THE NOTICES MENTIONED THEREAFTER, ONCE IT IS CLEAR THAT THE ASSESSEE HAS NOT MADE RETURNS AS MENTIONED IN CLAUSE (A) OF THE SUB SECTION. 7.3. IN OUR OPINION, THE ASSESSEE IS SQUARELY COVERED UNDER CLAUSE (B) OF 124(3) AS HE HAD NOT FILED RETURN WITHIN TIME ALLOWED U/S 139(1) AS PER PROVISIONS OF SECTION 139(4A). THAT SUB SECTION (2) OF SECTION 124, THE QUESTION OF JURISDICTION SHALL BE DETERMINED BY DGIT/CCIT/CIT OR CBDT AS THE CASE MAY BE. THE ASSESSEE DID NOT APPROACH ANY OF THE ABOVE AUTHORITIES TO RESOLVE HIS PROBLEM OF JURISDICTION.' 7. BEING SO, THE JURISDICTION OF THE ASSESSEE IS VESTED WITH THE JCIT, KURNOOL DURING THE RELEVANT ASSESSMENT YEARS. IT IS ALSO ON RECORD THAT THE ISSUE OF NOTICE U/S. 148 WAS BY THE ACIT, KURNOOL RANGE FOR A.YS. 1999-2000, 2000-01, 2001-02, 2002-03, 2003-04 AND 2004-05. THE ASSESSEE ALSO FILED A LETTER BEFORE THAT AUTHORITY TO TREAT THE RETURNS ALREADY FILED WITH KURNOOL RANGE AS THE RETURNS FILED IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. ON THAT BASIS, THE BELATED RETURNS ARE VALIDATED AND ALSO FOR FILING THE RETURNS BELATEDLY FOR THESE ASSESSMENT YEARS THERE WAS LEVY OF PENALTY U/S. 272A(2)(E) OF THE ACT. THIS LEVY OF 12 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. PENALTY WAS ALSO CONFIRMED BY THE TRIBUNAL. ONCE THE JURISDICTION IS VESTED WITH THE KURNOOL RANGE, THERE CANNOT BE FRAMING OF ASSESSMENT OR ISSUE OF NOTICE U/S. 148 OR FRAMING ASSESSMENT BY ANY OTHER AUTHORITY THAN THE KURNOOL RANGE. THE ARGUMENT MADE BEFORE US BY THE DEPARTMENT IS DEVOID OF MERIT. THERE CANNOT BE ONE AUTHORITY FOR LEVYING OF PENALTY ON ASSESSMENT AT KURNOOL AND ANOTHER AUTHORITY FOR FRAMING ASSESSMENT. BEING SO, ISSUE OF NOTICE U/S. 148 BY THE HYDERABAD RANGE OF THE DEPARTMENT IS NOT CORRECT. AS THE ISSUE OF NOTICE ITSELF IS BAD IN LAW BY THE HYDERABAD RANGE OF THE DEPARTMENT, CONSEQUENT FRAMING OF ASSESSMENT IS BAD IN LAW. BEING SO, WE QUASH THE REOPENING OF ASSESSMENT FOR ALL THE ABOVE FOUR ASSESSMENT YEARS. EVEN OTHERWISE, THE NOTICE U/S. 148 WAS ISSUED ON THE REASON RECORDED THAT APPROVAL UNDER PROVISIONS OF SECTION 10(23C)(VI) WAS MANDATORY AND IT WAS NOT OBTAINED BY THE ASSESSEE THOUGH THE GROSS RECEIPTS EXCEEDED RS. 1 CRORE AND, THEREFORE, INCOME ESCAPED ASSESSMENT. HOWEVER, WE ARE OF THE OPINION THAT THE ASSESSEE COULD CLAIM ALTERNATE DEDUCTION/EXEMPTION U/S. 11 OF THE ACT AND NON-OBTAINING OF APPROVAL U/S. 10(23C)(VI) IS NOT FATAL IN VIEW OF THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF ST. THERESA CONVENT SOCIETY IN ITA NO. 844/HYD/2008 AND ALSO IN THE CASE OF ADIT (EXEMPTIONS) VS. RAJASTHANI SIKSHA SAMITHI (23 SOT 124) (HYD) WHEREIN HELD THAT INSTITUTIONS FALLING U/S. 10(23C)(VI) ARE ELIGIBLE FOR EXEMPTION U/S. 11 ALSO. MERELY BECAUSE SECTION 10(23C)(VI) OF THE ACT PROVIDES FOR EXEMPTION OF THE INCOME OF AN EDUCATIONAL INSTITUTION IT DOES NOT FOLLOW THAT SUCH INSTITUTION CANNOT AVAIL EXEMPTION U/S. 11 SUBJECT TO FULFILLMENT OF THE CONDITIONS LAID DOWN. BEING SO, WHEN THE REASONS RECORDED DO NOT SURVIVE REOPENING OF ASSESSMENT IS BAD IN LAW. FOR THIS PURPOSE WE PLACE RELIANCE ON THE JUDGMENT SUPREME COURT IN GANGA SARAN AND 13 ITA.NO.698/HYD/2014 M/S. G. PULLA REDDY CHARITABLE TRUST, HYDERABAD. SONS (P) LTD. VS. ITO & ORS. (130 ITR 1), CIT V. JET AIRWAYS (331 ITR 236)(BOM), RANBAXY LABORATORIES VS. CIT (336 ITR 136) (DEL) AND CIT VS. ICICI BANK LTD.,. BOMBAY (349 ITR 482) (BOM.). ACCORDINGLY, WE QUASH THE REOPENING OF ASSESSMENT. 6. SINCE THE FACTS AND CIRCUMSTANCES BEFORE US ARE ALSO SIMILAR AND THE ASSESSMENT YEAR BEFORE US IS A.Y. 2001-2002, I.E., THE YEAR IN BETWEEN THE ASSESSMENT YEARS BEFORE THE TRIBUNAL, WE ARE INCLINED TO FOLLOW THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR THE EARLIER AND SUBSEQUENT ASSESSMENT YEARS. IN VIEW OF THE SAME, ASSESSEES APPEAL IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 26.0 8.2015. SD/- SD/- (P.M. JAGTAP) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 26 TH AUGUST, 2015 VBP/- COPY TO : 1. M/S. G. PULLA REDDY CHARITABLE TRUST, 11 - 5 - 42, RED HILLS, HYDERABAD. 2. DDIT (EXEMPTIONS) - II, 2 ND FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3. CIT(A), GUNTUR 4 . DIRECTOR OF I NCOME T AX (EXEMPTIONS) , HYDERABAD. 5 . D.R. ITAT A BENCH, HYDERABAD. 6 . GUARD FILE