Dy. DIT, Bangalore V. Maria Seva Sangha, Bangalore

ITA 735/BANG/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95395 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE A BENCH, BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.735(BNG)/2014 (ASSESSMENT YEAR : 2008-09) THE DEPUTY DIRECTOR OF INCOME-TAX (EXEMPTS.) CIRCLE-17(2) BANGALORE APPELLANT VS MARIA SEVA SANGHA, NO.6, 1 ST FLOOR, ROSE LANE, RICHMOND ROAD, BANGALORE RESPONDENT REVENUE BY : SMT NEERA MALHOTRA, CIT ASSESSEE BY : SHRI SURESH MUTH UKRISHNAN, CA DATE OF HEARING : 03-12-201 5 DATE OF PRONOUNCEMENT : 11-12-2015 O R D E R PER SHRI INTURI RAMA RAO, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), MYSORE DATED 03-12-2013 FOR THE ASSESSMENT YEAR 200 8-09. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APP EAL; 1. WHETHER THE CIT(A) IS RIGHT IN DIRECTING THE AO TO ALLOW ACCUMULATION U/S 11(2) AS REVISED IN VIEW OF THE AD DITION MADE BY THE AO, EVEN THOUGH THE ASSESSEE HAS NOT FURNIS HED ANY REVISED FORM NO.10 SEEKING SUCH REVISED ACCUMULATIO N U/S 11(2) INCORPORATING THE DETAILS OF ACTUAL AMOUNT OF INCOME BEING ACCUMULATED, PURPOSE FOR WHICH IT IS ACCUMULATED ET C. WHICH 2 ITA NO.735(B)/2015 ARE CRUCIAL FOR THE PURPOSE OF ASSESSEES CLAIM OF FURTHER ACCUMULATION AND ALSO NOT OBTAINING THE APPROVAL OF THE DIT(E) CONDONING THE DELAY IN FURNISHING REVISED FORM 10 A S PER THE REQUIREMENTS IN TERMS OF BOARDS CIRCULAR NO.273 DA TED 3.6.1980. 2. WHETHER THE CT(A)S IS CORRECT IN LAW IN HOLDING THAT THE CARRY FORWARD BENEFIT SHALL BE ALLOWED TO THE ASSES SEE, EVEN WHEN THE REGULAR PROVISIONS OF COMPUTATION OF INCOM E AS CONTEMPLATED U/S 14 AND SPECIFIC PROVISIONS OF SEC .15 TO 59 ARE PRESSED INTO ACTION IN THE CASE OF CHARITABLE O R RELIGIOUS TRUST/INSTITUTION. 3. WHETHER THE CIT(A) IS CORRECT IN LAW IN HOLDING THAT THE CARRY FORWARD BENEFIT SHALL BE ALLOWED TO THE ASSES SEE , WHEN THERE IS NO SCOPE FOR COMPUTING LOSS FROM PROPERTY HELD UNDER THE TRUST WHOLLY FOR CHARITABLE AND RELIGIOUS PURPO SES, AS PER PROVISIONS OF SEC.11,12 & 13, ENABLING THE SET OFF AND CARRY FORWARD AND SET OFF AGAINST THE INCOME OF SUBSEQUEN T YEARS AS ENVISAGED U/S 70 TO 79. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRUST FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 16-09-200 8 DISCLOSING THE TOTAL INCOME OF RS.NIL AND CLAIMED A CARRY FORWARD EXCESS APPLICATION OF INCOME OF RS.33,90,176/-. THE ASSESSMENT WAS COMPLETED BY TH E ADIT, BANGALORE U/S 143(3) VIDE ORDER DATED 29-12-2010 AT A TOTAL INCOM E OF RS.2,32,85,208/-. SUBSEQUENTLY, AN APPLICATION WAS MOVED BY THE ASSES SEE TRUST AND THE 3 ITA NO.735(B)/2015 ASSESSMENT ORDER WAS RECTIFIED UNDER THE PROVISIONS OF SEC.154 OF THE IT ACT VIDE ORDER DATED 19-01-2012 AT A TOTAL INCOME OF RS .84,57,671/-. WHILE DOING SO, THE AO ALLOWED THE ACCUMULATION ONLY TO THE EXT ENT OF RS.7,30,00,000/- AS PER THE CLAIM MADE IN THE RETURN OF INCOME, WITHOUT CONSIDERING THE ADDITION MADE IN THE ASSESSMENT FOR THE PURPOSE OF ACCUMULAT ION OF INCOME UNDER THE PROVISIONS OF SEC.11(2) OF THE IT ACT,1961. HOWE VER, THE SAME WAS FOUND TO BE RECTIFIED VIDE RECTIFICATION PROCEEDINGS U/S 154 OF THE IT ACT, 1961 AND THE CLAIM FOR SET OFF OF THE DEFICIT OF RS.3,56,06,553/- INCU RRED DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2007-08 WAS NOT ALLOWED SET OFF AGAINST THE INCOME OF THE CURRENT YEAR. 3. BEING AGGRIEVED AN APPEAL WAS FILED BEFORE THE LEARNED CIT(A) WHO ALLOWED THE GROUNDS OF APPEAL VIDE PARA-7.2 OF HIS ORDER; I FIND THAT THIS IS A COVERED ISSUE IN VARIOUS DECISIONS. IN THE CASE OF SEVA SADAN ORPHANAGE AND TRAINING INSTITUTE, CIT(A)V, ANALYZING VARIOUS CASE S ALSO ALLOWED THIS ISSUE. IN VIEW OF THE SAME, THE AO IS DIRECTED TO ALLOW THE CARRY FORWARD BENEFIT CLAIMED . 4. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 4 ITA NO.735(B)/2015 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND FROM THE RECORD THAT FOR THE ASSESS MENT YEAR 2007-08 THIS TRIBUNAL IN ITA NO.320(B)/2015 VIDE ORDER DATED 16- 10-2015 HAD ALLOWED THE CARRY FORWARD OF RS.3,56,06,553/- EXCESS APPLICATIO N OF INCOME FOR CHARITABLE PURPOSE FOR FUTURE YEARS. THEREFORE, THIS AMOUNT H AS TO BE SET OFF AGAINST THE INCOME OF THE CURRENT YEAR AND WE DO NOT FIND ANY I LLEGALITY IN THE ORDER PASSED BY THE LEARNED CIT(A) HENCE, THE APPEAL OF THE REVE NUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 11 TH DECEMBER, 2015. SD/ - (VIJAYPAL RAO) SD/ - (INTURI RAMARAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE D A T E D : 11-12-2015 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