KSRTC, V. ADIT,

ITA 718/BANG/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8936 (ITAT-BANGALORE)
• Duration Of Justice: 6 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-04-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S ANNAMALAI
• Keywords: Charitable institution; Set aside
• Section: 143(3); 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V VASUDEVAN, VICE PRESIDNET AND SHRI B.R BASKARAN, ACCOUNTANT MEMBER ITA NO.718/BANG/2013 ASSESSMENT YEAR : 2009-10 M/S KARNATAKA STATE ROAD TRANSPORT CORPORATION., SHANTHINAGAR, BANGALORE-560 027. PAN AAACV 6497R. VS. THE ASST. COMMISSIONER OF INCOME-TAX (EXEMPTIONS), CIRCLE-17(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S ANNAMALAI, ADVOCATE RESPONDENT BY : MS. NEERA MALHOTRA, CIT (DR) DATE OF HEARING : 23.09.2019 DATE OF PRONOUNCEMENT : 27.09.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 18/3/2013 PASSED BY LD CIT(A)-V, BANGALORE AND IT R ELATES TO ASST. YEAR 2009-10. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF INCOME OF RS.171.07 CR ORES DETERMINED BY THE AO AS AGAINST NIL INCOME RETURNED BY THE ASSESSEE. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF:- ITA NO.718/BANG/2013 PAGE 2 OF 5 THE ASSESSEE IS A ROAD TRANSPORT CORPORATION AND W AS GRANTED REGISTRATION U/S 12A OF THE ACT AS A CHARIT ABLE INSTITUTION, VIDE ORDER DATED 20/8/1992 PASSED BY CIT(E). ACCOR DINGLY THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION ON 25-09-2009 DECLARING NIL INCOME BY CLAIMING EXEM PTION U/S 11 OF THE ACT. IN THE MEAN TIME, THE DIRECTOR OF INCOM E-TAX (E), VIDE HIS ORDER DATED 21/11/2011, CANCELLED THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT W.E.F ASST. YEAR 2009-1 0, I.E., FROM THE YEAR UNDER CONSIDERATION. HENCE DURING THE COURSE OF ASST. PROCEEDINGS, THE AO REJECTED THE CLAIM FOR EXEMPTIO N U/S 11 OF THE ACT FOR THE FOLLOWING REASONS:- (A) THE ACTIVITIES CARRIED ON BY THE ASSESSEE ARE C OMMERCIAL IN NATURE AND HENCE THE PROVISO TO SEC. 2(15) OF THE A CT WOULD APPLY TO THE ASSESSEE. (B) THE REGISTRATION GRANTED TO THE ASSESSEE U/S 1 2A OF THE ACT HAS BEEN CANCELLED BY THE LD DIT(E) W.E.F. AY 2 009-10. ACCORDINGLY THE AO COMPLETED THE ASSESSMENT BY DETE RMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.171.07 LAKHS, VI DE HIS ORDER DATED 28/12/2011 PASSED U/S 143(3) OF THE ACT. 4. THE ASSESSEE CHALLENGED THE ASST. ORDER BY FIL ING THE APPEAL BEFORE THE LD CIT(A) AND THE FIRST APPELLATE AUTHOR ITY, VIDE HIS ORDER DATED 18-03-2013, DISMISSED THE APPEAL OF THE ASSES SEE. 5. THE ASSESSEE HAD CHALLENGED THE ORDER PASSED BY LD CIT(E) CANCELLING THE REGISTRATION GRANTED U/S 12A OF THE ACT BY FILING APPEAL BEFORE ITAT. THE TRIBUNAL, VIDE ITS ODER DA TED 20/2/2015 PASSED IN ITA NO.74/BANG/2012, SET ASIDE THE ORDER PASSED BY ITA NO.718/BANG/2013 PAGE 3 OF 5 DIT(E) ORDER AND RESTORED THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT. THE ORDER OF TRIBUNAL WAS ALSO CONFIRMED BY THE HONBLE HIGH COURT OF KARNATAKA BY ITS ORDER DA TED 12/2/2016 PASSED IN ITA NO.302 OF 2015. IN EFFECT, THE REGIS TRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT HAS BEEN RESTORED B Y THE ORDERS PASSED BY TRIBUNAL AND HONBLE HIGH COURT. 6. IT MAY BE NOTICED THAT THE ORDER PASSED BY THE A O AS WELL AS LD CIT(A) ARE PRIOR TO THE DATE OF ORDERS OF ITAT A ND HIGH COURT. BOTH THE TAX AUTHORITIES HAVE PASSED THE ORDERS DUR ING THE PERIOD WHEN THE CANCELLATION ORDER PASSED LD DIT(E) WAS IN OPERATION. THERE SHOULD NOT BE ANY DISPUTE THAT THE MANNER OF COMPUTATION OF INCOME FOR CHARITABLE INSTITUTIONS ELIGIBLE FOR EXE MPTION U/S 11 OF THE ACT IS DIFFERENT FROM THE METHOD OF COMPUTATION WHEN SAID EXEMPTION IS NOT AVAILABLE. WE HAVE NOTICED EARLIE R THAT THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT HAS BEEN RESTORED BY THE TRIBUNAL AND HIGH COURT AND HENCE W E ARE OF THE VIEW THAT THE ENTIRE ISSUES CONTESTED BEFORE US REQ UIRE FRESH EXAMINATION AT THE END OF THE AO. 7. THE LD A.R SUBMITTED THAT THE AO HAS ALSO I NVOKED THE PROVISO TO SEC.2(15) OF THE ACT IN OTHER YEARS ALSO AND THE SAME HAS BEEN SET ASIDE BY THE ORDERS PASSED BY THE TRIBUNAL . ACCORDINGLY WE DIRECT THE AO TO DECIDE THIS ISSUE ALSO BY FOLLO WING THE DECISIONS RENDERED BY THE TRIBUNAL IN OTHER YEARS. 8. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF AO FOR FRAMIN G THE ASSESSMENT ITA NO.718/BANG/2013 PAGE 4 OF 5 AFRESH BY RECOGNIZING THE REGISTRATION GRANTED TO T HE ASSESSEE U/S 12A OF THE ACT. AFTER AFFORDING ADEQUATE OPPORTUNI TY OF BEING HEARD, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER, 2019. SD/ - (N.V VASUDEVAN) VICE PRESIDENT SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 27 TH SEPTEMBER, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3 . THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, BANGALORE. ITA NO.718/BANG/2013 PAGE 5 OF 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..