M/s Rukmini Educational Charitable Trust, Bangalore V. DCIT, Bangalore

ITA 809/BANG/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7141 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-01-2019
• Assessment Year: 2004-2005
• Appeal Filed On: 18-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DILIP JR TO SHRI K V ARVIN D
• Keywords: Search and seizure; Charitable institution
• Section: 143(3)

Judgement Text

ITA.809 TO 812/BANG/2014 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'A', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.809 TO 812/BANG/2014 (ASSESSMENT YEARS : 2004 TO 2007-08) M/S. RUKMINI EDUCATIONAL CHARITABLE TRUST, (FORMERLY BHEEMANENI EDUCATIONAL SYSTEMS TRUST) DIVYASHREE CHAMBERS, WING A, NO.11, O SHAUGNESSY ROAD, BENGALURU 560 025 .. APPELLANT PAN : AABTR1107Q V. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2(2), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. NARENDRA SHARMA, ADVOCATE REVENUE BY : SHRI. DILIP, JR. TO SHRI. K. V. ARVIN D, STANDING COUNSEL HEARD ON : 10.01.2019 PRONOUNCED ON : 11.01.2019 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THESE ARE APPEALS FILED BY THE ASSESSEE TRUST, AGA INST THE COMMON ORDER OF THE CIT (A) VI, BENGALURU, DT.28. 02.1014, FOR THE ASSESSMENT YEARS 2004-05 TO 2007-08. ITA.809 TO 812/BANG/2014 PAGE - 2 02. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL WHICH ARE COMMON TO ALL THE ASSESSMENT YEARS, BUT F OR CHANGE IN THE AMOUNT OF DONATION MENTIONED IN GROUND NO.5 : 03. A SEARCH AND SEIZURE OPERATION U/S.132 OF THE A CT, WAS CONDUCTED AT THE PREMISES OF DIVYASHREE GROUP, ON 0 1.03.2007, WHICH WAS CONTINUED IN THE NEXT FINANCIAL YEAR AND FINALLY THE SEARCH WAS CONCLUDED ON 11.04.2007. DURING THE COU RSE OF SEARCH, SOME DOCUMENTS WERE FILED PERTAINING TO THE ASSESSE E. ON THE BASIS ITA.809 TO 812/BANG/2014 PAGE - 3 OF THE SAME, A NOTICE U/S.153C WAS SERVED ON THE AS SESSEE ON 15.01.2008 FOR AY 2004-05. IN RESPONSE TO THE NOTI CE THE ASSESSEE FILED A LETTER DT.23.10.2008 WHICH IS COMMON FOR AL L THE ASSESSMENT YEARS. THE AO BASED ON THE REPLY SUBMITTED BY THE ASSESSEE, COMPLETED THE ASSESSMENTS RAISING DEMAND FOR ALL TH E YEARS. FEELING AGGRIEVED BY THE ORDERS, THE ASSESSEE FILED APPEAL BEFORE THE CIT (A). 04. GROUND NO.3 BEFORE THE CIT (A), READS AS UNDER : 3. WITHOUT PREJUDICE TO THE ABOVE, THE ORDER OF ASSESSMENT PASSED U/S.153C OF THE I. T. ACT IS FURT HER BAD IN LAW AS REASONS FOR ISSUANCE OF SUCH NOTICE U/S.153C OF THE I. T.ACT HAVE NOT BEEN GIVEN AND THE APPELLANT HAS REA SONS TO BELIEVE THAT THE SAME HAS NOT BEEN RECORDED AND THA T THE MANDATORY CONDITIONS TO ASSUME JURISDICTION IS TO R ECORD REASONS AND IN THE ABSENCE OF THE SAME, THE ASSESSM ENT IS BAD IN LAW AND LIABLE TO BE CANCELLED. HOWEVER, THE CIT (A) VIDE COMMON ORDER HAS DISMISSE D ALL THE APPEALS FILED BY THE ASSESSEE. HENCE THE ASSESSEE IS IN APPEALS BEFORE US. 05. AT THE OUTSET THE ASSESSEE HAS SUBMITTED THAT T HE CIT (A) HAD NOT ADJUDICATED GROUND NO.3 AND HAD DISPOSED THE AP PEALS WITHOUT DECIDING THE GROUNDS. THE LD. AR DREW OUR ATTENTIO N TO PARA 6 OF THE COMMON ORDER PASSED BY THE CIT (A), WHICH IS TO THE FOLLOWING EFFECT : 6. ASSUMPTION OF JURISDICTION U/S 153C R.W.S. 143(3 ) OF I T ACT. THE APPELLANT HAS RAISED AN ISSUE THAT THE ASSUMPTI ON OF JURISDICTION U/S 143(3) R.W.S. 153C IS BAD IN LAW A S IT HAD REASONS TO BELIEVE THAT NO REASONS WERE RECORDED AS THE SAME WAS NOT MADE AVAILABLE TO HIM. THE ASSESSING OFFICE R HAS CLEARLY BROUGHT ON RECORD THAT FOLLOWING DOCUMENTS WERE ITA.809 TO 812/BANG/2014 PAGE - 4 FOUND AND SEIZED. (I) A/ VS M/1 6 (NEW FOLDER/EN TER/ VSM/MISC.A. 1) AS N/S RUKMINI EDUCATIONAL CHARITABLE TRUST. (II) A/VSM116 (MISC.A/BEST-LNVEST/XL/SHEET-1) WHEN THE NAME OF THE TRUST WAS N/S BHEEMANENI EDUCATIONA/ SYSTEMS TRUST' ALSO, THE APPELLANT HAS NOT BROUGHT ON RECORD ANYTH ING TO SHOW THAT IT HAD ASKED FOR THE REASONS RECORDED AND THAT THESE WERE GIVEN TO IT. NO FURTHER ARGUMENT HAS BEE N RAISED. FROM THE ABOVE, I FIND THAT THE PROCEEDINGS INITIAT ED IN THE CASE OF THE APPELLANT U/S 153C R.W.S. 143(3) AR E IN ORDER AND ARE UPHELD. 06. PER CONTRA, THE LD. DR HAD SUBMITTED THAT THERE IS NO BASIS FOR ALLEGING THAT THE REASONS WERE NOT RECORDED BY THE AO OF THE SEARCHED PERSON AT THE TIME OF ISSUING NOTICE U/S.1 53C OF THE ACT, AND THEREFORE THE CONTENTION OF THE ASSESSEE IS WIT HOUT ANY MERIT. HOWEVER IN THE ALTERNATIVE IT WAS SUBMITTED THAT T HE REVENUE HAS NO OBJECTION IF THE MATTER IS REMANDED BACK TO THE CIT (A) FOR THE PURPOSE OF RECORDING THE FINDING IN THIS REGARD, AF TER VERIFYING THE RECORDS. 07. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN RESPECT OF ASSESSMENT YEARS 2004-05 TO 2006-07, AS EMANATING FROM THE RECORD, THAT THE ASSESSEE DURING THE FIRST APPELLATE PROCEEDINGS HAD RAISED AN ISSUE OF NON-RECORDING OF REASONS BY THE AO OF THE SEARCHED PERSON AND THEREFORE, WE ARE OF THE OPINION THAT IT WAS NECESSARY FOR THE CIT (A) TO RECORD A FINDIN G WITH RESPECT TO EXISTENCE OF THE REASONS RECORDED BY THE AO OF THE SEARCHED PERSON THEREBY RECORDING THAT SOME INCRIMINATING MATERIAL WERE FOUND PERTAINING TO THE ASSESSEE AND THEREFORE HENCE PROC EEDING U/S.153C ITA.809 TO 812/BANG/2014 PAGE - 5 ARE TO BE INITIATED . ACCORDINGLY THESE APPEALS AR E REQUIRED TO BE SENT TO THE ALLOWED AND REMANDED BACK TO THE FILE O F CIT(A). EVEN ASSUMING THAT THE AO OF THE SEARCHED PERSON AS WELL AS THAT OF THE ASSESSEE ARE THE SAME, AND THEN ALSO THE REASONS AR E TO BE RECORDED BY THE AO IN HIS CAPACITY AS THE AO OF THE SEARCHED PERSON, IN THE FILE OF THE SEARCHED PERSON THEREBY MENTIONING THE REASONS FOR ASSUMING THE JURISDICTION U/S.153C OF THE ACT. IN THE PRESENT CASE, AS THE CIT (A) HAS NOT ADJUDI CATED THIS GROUND, THEREFORE WE DEEM IT APPROPRIATE TO REMIT THE MATTE R TO THE FILE OF THE CIT (A) WITH A DIRECTION TO CALL FOR THE RECORDS FR OM THE AO AND FIND OUT WHETHER THE AO OF THE SEARCHED PERSON HAS RECORDED THE REASONS FOR INITIATION OF PROCEEDINGS U/S.153C OF T HE ACT, OR NOT AND THEREAFTER DECIDED THE ALL THE GROUNDS A FRESH IN A CCORDANCE WITH LAW. WE ARE NOT ADJUDICATING THE OTHER GROUNDS RAI SED HEREIN AS THE GROUND RAISED BY THE ASSESSEE WITH RESPECT TO RECOR DING OF REASONS BY THE AO OF THE SEARCHED PERSON GOES TO THE VERY R OOT OF THE MATTER AND IS A JURISDICTIONAL ISSUE. ACCORDINGLY THE APPEALS FOR AYS.2004-05 TO 2006-07 ARE ALLOWED FOR STATISTICAL PURPOSE. 08. IN RESPECT OF APPEAL OF THE ASSESSEE FOR AY 200 7-08, WE MAY RECORD THAT THE CIT (A) HAD ALSO DECIDED THIS ISSUE ON THE PREMISE THAT FOR THIS ASSESSMENT YEAR THE AO OF THE SEARCHE D PERSON IS ALSO REQUIRED TO RECORD THE REASONS. WE MAY POINT OUT, THE ASSESSMENT YEAR 2007-08, WAS THE YEAR OF SEARCH, HENCE PENDIN G ASSESSMENT SHALL ABATE AND THEREFORE THIS ISSUE WAS NOT REQUIR ED TO BE EXAMINED ITA.809 TO 812/BANG/2014 PAGE - 6 FOR THE PURPOSE OF DECIDING THE ISSUE. AS THE ISSUE OF REASONS RECORDED IN THE SEARCHED PERSON IS NOT RELEVANT, FO R THE YEAR OF SEARCH . HENCE WE DO NOT FIND ANY REASONS FOR SENDI NG THE MATTER BACK TO THE FILE OF THE CIT (A) FOR DETERMINING THI S ISSUE . HOWEVER, WE FIND THAT IN RESPECT OF THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THE PROCEEDINGS BEFORE THE CIT (A), IN PARA 7, THE LD CIT(A) HAD RECORDED AS UNDER : 7. WHETHER THE ASSESSMENT WAS BARRED BY LIMITATION : THE APPELLANT HAS RAISED AN OTHER ISSUE THAT THE A SSESSMENT PASSED U/S.153C OF I T ACT OUGHT TO HAVE BEEN COMPL ETED BY 31.12.2008 AND THE SAME HAVING BEEN COMPLETED ON 29 .12.2009, IS BARRED FROM LIMITATION. I FIND FROM RECORD THAT THE ASSESSING OFFICER HAS BROUGHT ON RECORD THAT THE SEARCH AND SEIZURE OPERATION U/S.13 2 WAS CONCLUDED ON 10.04.2007. ACCORDINGLY, AS PER PROVI SIONS OF SECTION 153B, THE ASSESSMENTS COMPLETED U/S.153C R. W. 143(3) ON 29.12.2009 ARE WITHIN TIME LIMIT ALLOWED UNDER T HE INCOME TAX ACT. THE ISSUE RAISED IS DISMISSED. WE MAY POINT OUT THAT , THE CIT (A) HAS ONLY GIVEN CRYPTIC REASONS AND HAS NOT DEALT WITH THE ISSUE ON MERIT , IN THE LIGHT OF ABOVE THE APPEAL FOR AY 2007-08 IS ALSO SENT BACK TO THE FILE OF CIT (A) WITH A DIRECTION TO DENOVA EXAMINE GROUNDS EXCEPT THE GR OUND OF NON RECORDING OF REASONS , RAISED BEFORE HER IN ACCORDA NCE WITH LAW , WITHOUT BEING INFLUENCED BY OUR OBSERVATIONS MADE H EREINABOVE. ITA.809 TO 812/BANG/2014 PAGE - 7 10. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSE SSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DAY OF JANUARY, 2019. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBE R BENGALURU DATED : 11. 01.2019 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE.