Shree Leuva Patidar Vidyottejak Mandal, Visnagar V. The Dy.CIT, Patan Circle, Patan

ITA 903/AHD/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4965 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 15-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice; Additional evidence; TDS; Set aside
• Section: 271(1)(c); 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO.903/AHD/2015 (ASSESSMENT YEAR : 2011-12) SHREE LEUVA PATIDAR VIDYOTTEJAK MANDAL, KANSA ROAD CHAR RASTA, GUNJ BAZAR ROAD, VISNAGAR 384 715. VS. AND DCIT, PATAN CIRCLE, PATAN. ITA NO.717/AHD/2017 (ASSESSMENT YEAR : 2011-12) SHREE LEUVA PATIDAR VIDYOTTEJAK MANDAL, KANSA ROAD CHAR RASTA, GUNJ BAZAR ROAD, VISNAGAR 384 715. [PAN NO. AAATS 8368 K] VS. ITO (EXEMPTION) 2 ND FLOOR, SHRI HARI COMPLEX, ABU ROAD, HIGHWAY PALANPUR. APPELLANT BY : SHRI VIJAY RANJAN & IRA KAPOOR, A.R. RESPONDENT BY : SHRI G. C. DAXINI, SR. D.R. DATE OF HEARING 07/05/2019 DATE OF PRONOUNCEMENT 17/05/2019 O R D E R PER MS. MADHUMITA ROY - JM: BOTH THE CAPTIONED APPEALS FILED BY THE ASSESSEE AR E DIRECTED AGAINST THE SEPARATE ORDERS DATED 09.01.2015 & 02.03.2017 PASSE D BY THE COMMISSIONER OF INCOME TAX (APPEALS)-GANDHINAGAR, AHMEDABAD UNDER SECTION 143(3) AND 271(1)(C) OF THE INCOME TAX ACT, 1961 ARISING OUT OF THE ORDE RS DATED 18.10.2013 & 19.02.2016 RESPECTIVELY FOR THE ASSESS MENT YEAR 2011-12. ITA NO.903/AHD/2015 & ITA NO.717/AHD/2017 SHREE LEUVA PATIDAR VIDYOTTEJAK MANDAL ASST.YEAR 2011-12 - 2 - ITA NO.903/AHD/2015 FOR A.Y. 2011-12: 2. THE ASSESSEE, A PUBLIC CHARITABLE TRUST ENGAGED IN EDUCATION ACTIVITIES, FILED ITS RETURN OF INCOME ON 27.07.2012 DECLARING TOTAL INCOME OF RS.1,63,420/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT ON 28.12.2012. SUBSEQUENTLY, UNDER SCRUTINY NOTICE U/S 143(2) DATE D 07.08.2013 WAS ISSUED. IN RESPONSE WHEREOF THE ASSESSEE BY AND UNDER A FORWAR DING LETTER DATED 04.09.2013 FILED A COPY OF AUDIT REPORT DATED 18.06 .2012 WITH THE COPIES OF VARIOUS TDS STATEMENT ALONG WITH THE ORDER PASSED B Y THE LEARNED CIT, GANDHINAGAR ON APPLICATION FOR GRANT OF APPROVAL FO R RENEWAL U/S 80G(5) OF THE ACT. ON 08.10.2013 AN ADJOURNMENT WAS SOUGHT FOR ON BEHALF OF THE ASSESSEE AND SAME WAS ADJOURNED TILL 17.10.2013. ON 17.10.20 13, THE ACCOUNTANT OF THE ASSESSEE APPEARED AND PRODUCED CASH BOOK, LEDGER, D ONATION RECEIPTS, TRUST DEED ETC. SUBSEQUENTLY, ON 22.10.2013, THE ACCOUNTA NT OF THE ASSESSEE AGAIN APPEARED AND FILED FORM NO.10, DETAILS OF CORPUS FU ND DONATION, COMPUTATION OF TOTAL INCOME, GENERAL FUND DONATIONS. IN THIS PA RTICULAR CASE, THE SAID FORM NO.10 WAS FILED WITH THE SIGNATURE OF THE MAIN TRUS TEE MR. GORDHANDAS C. PATEL WHO ALSO SIGNED IN THE AUDIT REPORT ON 02.08.2011. THE RETURN OF INCOME WAS ALSO SIGNED BY THE SAID TRUSTEE. IT WAS THE CONTENT ION OF THE LEARNED AO THAT THE SAID FORM NO.10 WAS BLANK. THE SCRUTINY PROCEED ING CONTINUED FROM 07.08.2012 TILL PASSING OF THE ASSESSMENT ORDER IN THE MONTH OF OCTOBER, 2013, DURING THE SAID PERIOD OF 17 MONTHS THE CONCRETE OB JECT OF THE TRUST WAS NOT FILED BY THE DULY FILLED UP FORM NO.10. IT WAS ALSO OBSERVED BY THE AO THAT SINCE THE ASSESSEE HAS FILED BLANK FORM NO.10 R.W.R . 17 OF THE INCOME TAX RULE, 1962, IT IS ESTABLISHED TO HAVE FILED AS BLAN K AT ALL BECAUSE OBJECTS ARE NOT AT ALL SPECIFIED, SPELT OUT OR SET OUT IN THE FORM NO.10. NEITHER THE RESOLUTION WAS FILED WITH THE SAID FORM NO.10 FROM THE DATE OF FILING OF THE RETURN U/S 139(4) OF THE ACT TILL THE CONCLUSION OF THE PROCEE DING. SINCE NOTHING HAS BEEN ITA NO.903/AHD/2015 & ITA NO.717/AHD/2017 SHREE LEUVA PATIDAR VIDYOTTEJAK MANDAL ASST.YEAR 2011-12 - 3 - SPECIFIED REGARDING THE OBJECT OF THE TRUST IN THE FORM NO.10 OVER AND AGAIN THE EXEMPTION CLAIMED BY THE ASSESSEE WAS DENIED TO THE TUNE OF RS.17,50,000/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN A PPEAL, THE CONTENTION MADE BY THE LEARNED AR WAS ACCEPTED BY THE LEARNED CIT(A ) AND THE ADDITION WAS UPHELD. HENCE, THE INSTANT APPEAL BEFORE US. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE FORM NO.10 SUBMITTED BY THE ASSESSEE INADVERTENTLY WAS NOT FILLED UP IN THE COLUMN QUALIFYING THE PURPOSE OF THE ACCUMULATED SUFFICIENT FUNDS OF THE TRUSTEE. THOUGH THE SAME DISCREPANCY WAS DETECTED BY THE LEARNED AO DURING T HE COURSE OF ASSESSMENT PROCEEDING, THE SAME WAS NEVER COMMUNICATED TO THE APPELLANT. HAD IT BEEN COMMUNICATED TO THE APPELLANT IN DUE TIME, THE APPE LLANT COULD HAVE FILED DULY FILLED UP FORM NO.10 BEFORE THE LEARNED AO ITSELF. FURTHERMORE, IT WAS POINTED OUT BY THE LEARNED AO IN THE ASSESSMENT ORD ER THAT THE FORM NO.10 FILED BY THE APPELLANT WAS BLANK BUT THE SAID FORM NO.10 WAS NOT BLANK. ONLY SPECIFIC PURPOSE OF THE ACCUMULATION WAS LEFT OUT I NADVERTENTLY AS CONTENDED BY THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE. IT WAS A MISTAKE COMMITTED BY THE COMPUTER OPERATOR WHICH WAS NOT NOTICED BY T HE TRUSTEE AND EVEN BY AUTHORIZED REPRESENTATIVE WHO REPRESENTED THE CASE BEFORE THE REVENUE. THIS PARTICULAR FACT WAS MADE KNOWN TO THE FIRST APPELLA TE AUTHORITY BY WAY OF WRITTEN SUBMISSION BEFORE THE LEARNED CIT(A) ALONG WITH COPY OF THE RESOLUTION DATED 06.08.2011 OF THE MEETING OF THE T RUSTEE HELD AND IT WAS RESOLVED THAT EXCESS INCOME OVER EXPENDITURE WILL B E USED FOR CONSTRUCTION OF TRUST BUILDING IN FIVE YEARS, THE DETAILS OF CONSTR UCTION EXPENDITURE INCURRED IN FINANCIAL YEAR 2011-12 AND THE CERTIFICATE ISSUED B Y THE TRUSTEE FOR EXPENDITURE MADE FOR THE PURPOSE OF BUILDING CONSTRUCTION OUT O F ACCUMULATED FUNDS U/S ITA NO.903/AHD/2015 & ITA NO.717/AHD/2017 SHREE LEUVA PATIDAR VIDYOTTEJAK MANDAL ASST.YEAR 2011-12 - 4 - 11(2) OF THE ACT WAS ALSO FURNISHED. AN APPLICATION , THUS, FOR ACCEPTING THE ADDITIONAL EVIDENCES UNDER RULE 46A OF THE I. T. RU LE, 1962 WAS FILED BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY. IN S UPPORT OF HIS CONTENTION REGARDING ACCEPTANCE OF FORM NO.10, THE ASSESSEE RE LIED UPON THE DIFFERENT JUDGMENTS PASSED BY THE COURT OF LAW. HOWEVER, THE CONTENTION MADE BY THE ASSESSEE WAS NOT ACCEPTED BY THE LEARNED CIT(A) NEI THER THE APPLICATION UNDER RULE 46A. HE THEN UPHELD THE ADDITION MADE BY THE L EARNED AO BASICALLY SOLELY ON THE GROUND THAT THE OBJECT OF THE ACCUMUL ATED FUND WAS NOT SUFFICIENT IN FORM NO.10 SUBMITTED BEFORE THE LEARNED AO. IT IS THE CASE OF THE ASSESSEE THAT SUCH DEFECT WAS SUBSEQUENTLY CURED AND SUBMITTED BEFORE THE LEARNED CIT(A) THOUGH THE SAME WAS NOT TAKEN INTO CONSIDERATION BY THE LEARNED CIT(A) IN ITS PROPER P ROSPECTIVE. SUCH MISTAKE IS CURABLE ONE AND THE SAME OUGHT TO HAVE BEEN ACCEPTE D BY THE LEARNED CIT(A) IN APPEAL WHILE DECIDING THE ISSUE AS ALSO SUBMITTE D BY THE LEARNED AR IN VIEW OF THE BASIC PRINCIPLE OF NATURAL JUSTICE BY OFFERI NG AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE UPON TAKING INTO CONSIDERATIO N THE FILLED UP FORM NO.10. IN THAT VIEW OF THE MATTER, THE LEARNED AR PRAYED F OR QUASHING OF THE ORDER PASSED BY THE AUTHORITIES BELOW. ON THE CONTRARY, L EARNED DR RELIED UPON THE ORDER PASSED BY THE REVENUE. 4. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. IT APPEARS THAT THE SAID FORM NO.10 THOUGH PLACED BEFORE THE LEARNED AO WAS NOT DULY FILLED UP. THOUGH SUCH DEFECT WAS C URABLE IN NATURE THE SAME WAS NOT ACCEPTED BY THE LEARNED CIT(A) IN APPEAL IN SPITE OF HAVING BEEN PLACED UPON RECTIFICATION BEFORE HIM ALONG WITH THE WRITTEN SUBMISSION BY THE ASSESSEE. WE FIND THAT THE ASSESSEE COULD HAVE BEEN GIVEN AN OPPORTUNITY OF ITA NO.903/AHD/2015 & ITA NO.717/AHD/2017 SHREE LEUVA PATIDAR VIDYOTTEJAK MANDAL ASST.YEAR 2011-12 - 5 - BEING HEARD ON THE ADDITIONAL EVIDENCES ON THE BASI S OF THE RECTIFIED FILLED UP FORM NO.10 FOR THE ENDS OF JUSTICE BY THE FIRST APP ELLATE AUTHORITY ITSELF. IN THAT VIEW OF THE MATTER, WE FIND IT FIT AND PROPER IN OR DER TO PREVENT THE MISCARRIAGE OF JUSTICE TO SET ASIDE THE ISSUE TO THE FILE OF TH E LEARNED CIT(A) WITH THE DIRECTION UPON HIM TO TAKE INTO CONSIDERATION THE F ILLED UP FORM NO.10 AS SUBMITTED BY THE ASSESSEE BEFORE HIM AND ALSO THE A DDITIONAL EVIDENCES AND TO PASS ORDERS UPON AFFORDING AN OPPORTUNITY OF HEARIN G TO THE ASSESSEE TAKING INTO CONSIDERATION THE OTHER MATERIALS WHICH THE ASSESSE E MAY CHOOSE TO FILE AT THE TIME OF HEARING OF THE APPEAL BEFORE HIM. THUS, ASS ESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ITA NO.717/AHD/2017 FOR A.Y. 2011-12: 5. SINCE THE QUANTUM APPEAL HAS BEEN ALLOWED BY US IN ITA NO.903/AHD/2015 FOR A.Y. 2011-12, THE PENALTY APPEA L HAS LOST HIS FORCE AS BECAUSE THE VERY BASIS BEING THE QUANTUM ORDER HAS BEEN QUASHED BY US. IN THAT VIEW OF THE MATTER, THE INSTANT PENALTY APPEAL HAS BECOME INFRUCTUOUS AND HENCE DISMISSED AS INFRUCTUOUS. 6. IN THE COMBINED RESULT, ASSESSEES APPEAL IN ITA NO.903/AHD/2015 IS ALLOWED FOR STATISTICAL PURPOSES AND APPEAL IN ITA NO.717/AHD/2017 IS DISMISSED AS INFRUCTUOUS. THIS ORDER PRONOUNCED IN OPEN COURT ON 17 / 05 /201 9 SD/- SD/- ( WASEEM AHMED ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 17/05/2019 ITA NO.903/AHD/2015 & ITA NO.717/AHD/2017 SHREE LEUVA PATIDAR VIDYOTTEJAK MANDAL ASST.YEAR 2011-12 - 6 - PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-GANDHINAGAR, AHMEDABAD. 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 08.05.2019 + 13.05.2019(DICTATIO N PAGES 7) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 09.05.2019 + 14.05.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 15/05/2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER