JAIN SHIKSHAN SAMITI, Alwar V. ACIT, Alwar

ITA 830/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5653 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 21-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: KRANTI MEHTA
• Section: 12AA; 12; 154; 2; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 830/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SHRI JAIN SHIKSHAN SAMITI, AGRASEN MARG, ALWAR (RAJ.) CUKE VS. A.C.I.T., CIRCLE-2, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAAJS 3515 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI KRANTI MEHTA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13/10/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 28/11/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER DATED 04/07/2016 U/S 154 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) PASSED BY THE LD CIT(A), ALWAR FOR THE A.Y. 201 0-11, WHEREIN THE ASSESSEE HAS RAISED ONLY ONE GROUND OF APPEAL, WHICH IS AS UNDER: 1. THAT THE LD. CIT(A), ALWAR ERRED IN REJECTING TH E APPLICATION OF THE APPELLANT U/S 154 EVEN WHEN UNDE R THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE PROVISIONS OF SECTION 11 THERE WAS MISTAKE IN THE A PPEAL ORDER IN APPEAL NO. 116/2013-14 DATED 15/7/2015 APPARENT ON RECORD AND VERY MUCH COVERED IN THE SCO PE ITA 830/JP/2016_ SHRI JAIN SHIKSHAN SAMITI VS ACIT 2 OF SECTION 154 OF THE IT ACT SINCE ONCE THE DELAY I N FILING FORM NO. 10 WAS CONDONED, ALL SURPLUS INCOME AS PER FORM NO. 10 SHOULD HAVE BEEN ALLOWED TO BE CARRIED FORWARD AND NOT 15% OF THE INCOME. HENCE, THE RECTIFICATION APPLICATION OF THE APPELLANT U/S 154 DESERVES TO BE ACCEPTED. 2. EARLIER, THIS APPEAL OF THE ASSESSEE HAS BEEN DI SMISSED BY THIS BENCH VIDE ORDER DATED 19/01/2017 FOR WANT OF PROSE CUTION. AGAINST THE ORDER PASSED BY THE BENCH, THE ASSESSEE FILED M.A. NO. 56/JP/2017 FOR RECALLING OF THE ORDER DATED 19/01/2017. THE ITAT VID E ORDER DATED 24/7/2017 PASSED IN THE M.A. HAS RECALLED THE ORDER DATED 19/01/2017 AND FIXED THE CASE FOR REGULAR HEARING ON MERIT. 3. THE ASSESSEE TRUST IS RUNNING VARIOUS SCHOOL UNDER THE NAME AND STYLE M/S SHRI JAIN SHIKSHAN SAMITI, ALWAR (RAJ). THE TRUST HAS REGISTERED U/S 12AA OF THE ACT BY THE CIT, ALWAR ON 2 2/10/2008. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 15/10/ 2010 DECLARING NIL INCOME. THE CASE WAS SELECTED FOR SCRUTINY AND THE A SSESSMENT WAS FINALIZED ON 19/3/2013 COMPUTING TOTAL TAXABLE INCO ME OF RS. 23,12,042/-. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO VIDE ORDER DATED 15/07/2015 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECTING THE ITA 830/JP/2016_ SHRI JAIN SHIKSHAN SAMITI VS ACIT 3 ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF ICOME TO THE EXTENT OF 15% AS PER THE PROVISIONS OF THE ACT AFTER CONDONING THE DELAY IN FILING OF FORM NO. 10 AND TH EREFORE, INCOME OF THE ASSESSEE TRUST WOULD BE RECOMPUTED ACCORDINGLY BY THE ASSESSING OFFICER. 5. AGAINST THE ORDER OF THE LD. CIT(A) DATED 15/07/2 015, THE ASSESSEE FILED A RECTIFICATION APPLICATION DATED 07 /6/2016, WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, REJECT ED THE APPLICATION VIDE HIS ORDER DATED 04/7/2016 BY HOLDING AS UNDER: 3. I HAVE GONE THROUGH THE APPLICATION FILED BY TH E APPELLANT AND THE MATERIAL AVAILABLE ON RECORD AND FIND THAT REQU EST MADE BY THE APPELLANT WITH REGARD TO CARRY FORWARD OF INCOM E EXCEEDING 15% OF ITS INCOME TO SUBSEQUENT YEARS, WOULD AMOUNT TO REVIEW OF THE ORDER AND WOULD NOT FALL WITHIN THE AMBIT OF THE SCOPE OF THE PROVISIONS OF THIS SECTION. THE FINDING GIVEN I N THE APPELLATE ORDER IS THAT CARRY FORWARD OF INCOME TO THE EXTENT OF 15% MAY BE ALLOWED TO THE APPELLANT. THUS, I FIND THAT THER E IS NO MISTAKE APPARENT FROM RECORD IN THE APPELLATE ORDER PASSED. HENCE, APPLICATION FOR RECTIFICATION FILED BY THE APPELLAN T IS REJECTED. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. WHI LE PLEADING ON BEHALF OF THE ASSESSEE, THE LD AR HAS SUBMITTED AS UNDER: IN THE ABOVE CONNECTION AND WITH REFERENCE TO THE A PPEAL ORDER DATED 15-07-2015, I RESPECTFULLY BEG TO SUBMIT THAT THERE IS MISTAKE APPARENT ON RECORD IN PARA 4.11 OF CIT (APPEALS) ORDER WHICH READS AS UNDER- ITA 830/JP/2016_ SHRI JAIN SHIKSHAN SAMITI VS ACIT 4 ' AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH IS CASE, 1 FIND THAT AO HAS MERELY REJECTED THE CLAIM OF THE APPELLANT ON THE G ROUND THAT FORM NO. 10 WAS NOT FILED IN TIME AND AFTER PLACING RELIANCE ON THE ABOVE MENTIONED JUDICIAL DECISION, DIRECT THE AO TO ALLOW THE CLAIM OF THE A PPELLANT FOR CARRY FORWARD OF INCOME TO THE EXTENT OF 15% AS PER THE PROVISIONS O F IT ACT AFTER CONDONING THE DELAY IN FILING OF FORM NO. 10. THEREFORE, INCOME O F THE APPELLANT WOULD BE RECOMPUTED ACCORDINGLY.' YOUR HONOR WILL KINDLY OBSERVE THAT THE DIRECTION G IVEN TO THE AO AS ABOVE IS SELF CONTRADICTORY AND CONTRARY TO THE PRO VISIONS OF THE IT ACT BECAUSE ONCE DELAY IN FILING FORM NO. 10 DURING ASS ESSMENT PROCEEDING IS CONDONED BY CIT(A) AND FORM NO. 10 IS TREATED AS VALIDLY FILED DOCUMENT BY HIM, THERE CANNOT BE THE RESTRICTION OF CARRY FORWARD OF INCOME TO THE EXTENT OF 15%. YOU WILL KINDLY APPREC IATE THAT THERE IS NO NECESSITY TO FILE FORM NO. 10 FOR CARRY FORWARD OF INCOME TO THE EXTENT OF 15% IN TERMS OF SECTION 11(1 )(A) WHICH READS AS UN DER- 'INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGI OUS PURPOSES. 11. (1) SUBJECT TO THE PROVISIONS OF SECTION 60 TO 63, THE FOLLOWING INCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME- (A) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST W HOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INC OME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS AC CUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTEN T TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF (FIFTE EN) PER CENT OF THE INCOME FROM SUCH PROPERTY;' EVERY CHARITABLE/RELIGIOUS INSTITUTION IS ENTITLED TO CARRY FORWARD 15% OF ITS INCOME TO SUBSEQUENT YEARS WITHOUT FILING FORM NO.1 0. FORM NO. 10 IS FILED ONLY IF THE INCOME TO BE CARRIED FORWARD TO SUBSEQU ENT YEARS IS MORE THAN 15% OF THE TOTAL RECEIPTS AS LAID DOWN IN EXPLANATION ( 2) BELOW SECTION 11(1) WHICH READS AS UNDER- 'EXPLANATION.FOR THE PURPOSES OF CLAUSES (A) AND ( B ), ITA 830/JP/2016_ SHRI JAIN SHIKSHAN SAMITI VS ACIT 5 (1) IN COMPUTING THE FIFTEEN PER CENT OF THE INCOME WHI CH MAY BE ACCUMULATED OR SET APART, ANY SUCH VOLUNTARY CONTRIBUTIONS AS A RE REFERRED TO IN SECTION 12 SHALL BE DEEMED TO BE PART OF THE INCOME; (2) IF IN THE PREVIOUS YEAR, THE INCOME APPLIED TO CHARITABLE OR RELIGIOUS PURPOSES IN INDIA FALLS SHORT OF EIGHTY-FIVE PER CENT OF THE INCOME DERIVED DURING THAT YEAR FROM PROPERTY HELD UNDER TRUST, OR, AS THE CASE MAY BE, HELD UNDER TRUST IN PART, BY ANY AMOUNT (I) FOR THE REASON THAT THE WHOLE OR ANY PART OF T HE INCOME HAS NOT BEEN RECEIVED DURING THAT YEAR, OR (II) FOR ANY OTHER REASON, THEN (A) IN THE CASE REFERRED TO IN SUB-CLAUSE (I), SO MUCH OF THE INCOME APPLIED TO SUCH PURPOSES IN INDIA DURING THE PREVIOUS YEAR IN WHICH THE INCOME IS RECEIVED OR DURING THE PREVIOUS YEAR IMMEDIATELY FOLLOWING A S DOES NOT EXCEED THE SAID AMOUNT, AND (B) IN THE CASE REFERRED TO IN SUB-CLAUSE (II), SO MUCH OF THE INCOME APPLIED TO SUCH PURPOSES IN INDIA DURING THE PREVIOUS YEAR IMM EDIATELY FOLLOWING THE PREVIOUS YEAR IN WHICH THE INCOME WAS DERIVED AS DO ES NOT EXCEED THE SAID AMOUNT, MAY, AT THE OPTION OF THE PERSON IN RECEIPT OF THE INCOME BE DEEMED TO BE INCOME APPLIED TO SUCH PURPOSES DURING THE PREVI OUS YEAR IN WHICH THE INCOME WAS DERIVED; AND THE INCOME SO DEEMED TO HAV E BEEN APPLIED SHALL NOT BE TAKEN INTO ACCOUNT IN CALCULATING THE AMOUNT OF INCOME APPLIED TO SUCH PURPOSES, IN THE CASE REFERRED TO IN SUB-CLAUSE (I) , DURING THE PREVIOUS YEAR IN WHICH THE INCOME IS RECEIVED OR DURING THE PREVIOUS YEAR IMMEDIATELY FOLLOWING, AS THE CASE MAY BE, AND, IN THE CASE REFERRED TO IN SUB-CLAUSE (II), DURING THE PREVIOUS YEAR IMMEDIATELY FOLLOWING THE PREVIOUS YE AR IN WHICH THE INCOME WAS DERIVED.' THIS WAS A MISTAKE APPARENT FROM RECORD RECTIFIABLE U/S 154 OF IT ACT, YET THE CIT(A) REJECTED THE RECTIFICATION APPLICATION THAT RECTIFICATION WOULD AMOUNT TO REVIEW OF THE ORDER AND WOULD NOT FALL WITHIN THE A MBIT OF SCOPE OF SECTION 154. IT IS HUMBLY SUBMITTED THAT OVERLOOKING OF STATUTOR Y PROVISION IS VERY MUCH A MISTAKE APPARENT FROM RECORD RECTIFIABLE U/S 154 OF IT ACT AND WOULD NEVER BE CALLED AS REVIEW. RATHER, IT IS DUTY OF ALL INCOME TAX AUTHORITIES TO APPLY CORRECT STATUTORY PROVISION. ITA 830/JP/2016_ SHRI JAIN SHIKSHAN SAMITI VS ACIT 6 ONCE FORM NO. 10 IS TREATED AS VALIDLY FILED AS MEN TIONED IN THE APPEAL ORDER, ALL SURPLUS INCOME AS PER FORM 10 IS TO BE C ARRIED FORWARD AND NOT 15% OF THE INCOME, OTHERWISE THE PURPOSE OF FILING FORM 10 WILL BE DEFEATED. SINCE THIS IS A MISTAKE QUITE APPARENT ON RECORD, I REQUEST YOUR HONOR TO KINDLY ISSUE DIRECTION TO CARRY FORWARD THE INCOME AS PER FORM NO. 10 AND OBLIGE. 7. ON THE OTHER HAND, THE LD SR. DR HAS RELIED ON T HE ORDERS OF THE AUTHORITIES BELOW. 8. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE LD . CIT(A) IN HIS ORDER HAS GIVEN A FINDING, WHICH IS AS UNDER: ' AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH IS CASE, 1 FIND THAT AO HAS MERELY REJECTED THE CLAIM OF THE A PPELLANT ON THE GROUND THAT FORM NO. 10 WAS NOT FILED IN TIME A ND AFTER PLACING RELIANCE ON THE ABOVE MENTIONED JUDICIAL DE CISION, DIRECT THE AO TO ALLOW THE CLAIM OF THE APPELLANT FOR CARR Y FORWARD OF INCOME TO THE EXTENT OF 15% AS PER THE PROVISIONS O F IT ACT AFTER CONDONING THE DELAY IN FILING OF FORM NO. 10. THERE FORE, INCOME OF THE APPELLANT WOULD BE RECOMPUTED ACCORDINGLY.' THUS, THE LD. CIT(A) HAS CONDONED THE DELAY IN FILING THE FORM NO. 10. SECTION 11(2) OF THE ACT PROVIDES THAT WHERE EIGHTY-FIVE PER CENT OF THE INCOME REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OF S UB-SECTION (1) READ WITH THE EXPLANATION TO THAT SUB-SECTION IS NOT APPL IED, OR IS NOT DEEMED TO HAVE BEEN APPLIED, TO CHARITABLE OR RELIGIOUS PU RPOSES IN INDIA DURING ITA 830/JP/2016_ SHRI JAIN SHIKSHAN SAMITI VS ACIT 7 THE PREVIOUS YEAR BUT IS ACCUMULATED OR SET APART, EITHER IN WHOLE OR IN PART, FOR APPLICATION TO SUCH PURPOSES IN INDIA, SU CH INCOME SO ACCUMULATED OR SET APART SHALL NOT BE INCLUDED IN T HE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOM E, PROVIDED SUCH PERSON FURNISHES A STATEMENT IN THE PRESCRIBED FORM (THE PRESCRIBED FORM IS FORM NO. 10 UNDER RULE 17(2)) AND IN THE P RESCRIBED MANNER TO THE ASSESSING OFFICER, STATING THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH T HE INCOME IS TO BE ACCUMULATED OR SET APART, WHICH SHALL IN NO CASE EXC EED FIVE YEARS. FORM NO. 10 IS TO BE FURNISHED BEFORE EXPIRY OF TIM E ALLOWED UNDER SUB- SECTION (1) OF SECTION 139, FOR FURNISHING THE RETU RN OF INCOME. THE LD. CIT(A) HAS CONDONED THE DELAY IN FILING THE FORM NO. 10, THEREFORE, THE INCOME OF THE ASSESSEE NEEDS TO BE RECOMPUTED AS TH E FORM NO. 10 HAS BEEN FILED IN TIME. THE LD. CIT(A) HAS GIVEN A DIREC TION THAT THE APPELLANTS CLAIM FOR CARRY FORWARD OF INCOME TO THE EXTENT OF 15% IS TO BE ALLOWED. HOWEVER, WITH REGARD TO THE INCOME MORE TH AN 15% FOR WHICH THE ASSESSEE HAS SUBMITTED FORM NO. 10, THE IS SUE REMAINS TO BE DECIDED. THEREFORE, IN THE INTEREST OF JUSTICE AND E QUITY, I FIND IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH AS PER LAW. ITA 830/JP/2016_ SHRI JAIN SHIKSHAN SAMITI VS ACIT 8 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 28/11/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 TH NOVEMBER, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI JAIN SHIKSHAN SAMITI, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE A.C.I.T., CIRCLE-2, ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 830/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR