Sai Trust, Lucknow V. Income Tax Officer, Lucknow

ITA 924/LKW/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4692 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 29-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: HARISH GIDWANI
• Keywords: Capital receipt
• Section: 143(3); 11A; 12A; 12AA; 147; 148; 12; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.924/LKW/2014 ASSESSMENT YEAR:2010-11 INCOME TAX OFFICER, RANGE-1(4), LUCKNOW. VS SAI TRUST, SAHARA SHAHAR, VIPUL KHAND, GOMTI NAGAR, LUCKNOW. PAN:AAKTS0926P (RESPONDENT) (APPELLANT) SHRI J. J. MEHROTRA, C.A. APPELLANT BY SHRI HARISH GIDWANI, D. R. RESPONDENT BY 06/01/2016 DATE OF HEARING 29 /02/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A)-I, LUCKNOW DATED 17/10/2014 FOR THE ASSESSME NT YEAR 2010-11. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AND ON FA CTS AND CIRCUMSTANCES OF THE CASE IN HOLDING THAT THE VOLUN TARY CONTRIBUTIONS RECEIVED BY THE APPELLANT-TRUST WERE TAXABLE AS INCOME OF THE TRUST DURING THE YEAR. 2. THAT THE LD. CIT (A) HAS ERRED IN LAW AND ON FAC TS AND CIRCUMSTANCES OF THE CASE IN NOT APPRECIATING THAT THE PROVISIONS OF SECTION 11 AND 13 WERE NOT APPLICABLE ON THE VOLUNTARY CONTRIBUTIONS RECEIVED BY THE TRUST A S THE SAME WERE IN THE NATURE OF CAPITAL RECEIPTS AND, THEREFORE, THERE WAS NO JUSTIFICATION IN SUBJECTING THE SAME TO TAX. 2 3. THAT WITHOUT PREJUDICE, IN ANY VIEW OF THE MATTE R, THE ID. CIT(A) HAS FAILED TO APPRECIATE THAT THERE WAS NO F AULT ON THE PART OF THE APPELLANT IN FILING OF THE REGISTRA TION APPLICATION UNDER SECTION 11A OF THE INCOME TAX ACT AND ULTIMATELY THE REGISTRATION WAS GRANTED BY THE ID. CIT(A) FOR THE ASSESSMENT YEAR 2011-12 AND, THEREFORE, THE RE WAS DEEMED REGISTRATION ALSO FOR THE ASSESSMENT YEA R 2010-11, THE VOLUNTARY CONTRIBUTIONS OF WHICH HAVE BEEN SUBJECTED TO TAX AS INCOME OF THE YEAR. 4. THAT THE ORDER PASSED BY THE LD. CIT (A) IS WITH OUT PROPER OPPORTUNITY AND BAD IN LAW. 5. THAT THE ORDER PASSED BY THE LD. CIT (A) IS AGAI NST THE MERITS, CIRCUMSTANCES AND LEGAL ASPECTS OF THE CASE . 3. IN ADDITION TO THIS, THE ASSESSEE HAS ALSO RAISE D AN ADDITIONAL GROUND, WHICH READS AS UNDER: THAT THE LEARNED ASSESSING OFFICER HAS ERRED IN LA W AND ON FACTS AND CIRCUMSTANCES OF THE CASE IN REOPENING TH E ASSESSMENT U/S 147/148 OF THE I.T. ACT WHICH RENDER S THE ENTIRE ASSESSMENT VOID AB INITIO AND BAD IN LAW. 4. REGARDING ADDITIONAL GROUND, IT WAS SUBMITTED BY LEARNED A. R. OF THE ASSESSEE THAT A PROVISO HAS BEEN INSERTED AFTER SUB SECTION (2) OF SECTION OF 12A OF THE ACT BY THE FINANCE (NO.2) ACT, 2014 WITH EFFECT FROM 01/10/2014 AS PER WHICH IF THE REGISTRATION HAS BEEN GRANTED T O THE TRUST OR INSTITUTION U/S 12AA THEN THE PROVISIONS OF SECTION 11 & 12 WIL L APPLY IN RESPECT OF INCOME DERIVED FROM TRUST OR INSTITUTION IN ANY ASS ESSMENT YEAR FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSES SING OFFICER AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIV ITIES OF THE TRUST REMAINED THE SAME FOR SUCH ASSESSMENT YEAR. HE FURTHER SUBM ITTED THAT IN THE PRESENT CASE, THE REGISTRATION WAS GRANTED BY LEARN ED CIT U/S 12AA ON 23/08/2011 AS PER COPY OF REGISTRATION CERTIFICATE AVAILABLE ON PAGE NO. 5 OF THE PAPER BOOK. HE ALSO POINTED OUT THAT IT IS NOT ED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE RETURN WAS ORIGINA LLY FILED BY THE ASSESSEE 3 ON 04/02/2011 SHOWING NIL INCOME AFTER CLAIMING THE EXEMPTION U/S 11 OF THE ACT. HE FURTHER SUBMITTED THAT SINCE THE RETUR N OF INCOME WAS FILED BY THE ASSESSEE ON 04/02/2011 AND REGISTRATION U/S 12A A WAS GRANTED BY LEARNED CIT(A) ON 23/08/2011, THE ASSESSMENT FOR TH E PRESENT YEAR WAS PENDING AT THE TIME OF GRANTING REGISTRATION U/S 12 AA OF THE ACT BECAUSE THERE IS A TIME LIMIT OF ISSUE OF NOTICE U/S 143(2) OF SIX MONTHS FROM THE END OF FINANCIAL YEAR FOR WHICH THE RETURN IS FURNISHED . HE SUBMITTED THAT THEREFORE, NOTICE U/S 143(3) COULD HAVE BEEN ISSUED UP TO 30 TH SEPTEMBER, 2011 AND BEFORE THAT, THE REGISTRATION WAS GRANTED BY LEARNED CIT U/S 12AA OF THE ACT AND THEREFORE, ON THE DATE OF GRANTING O F SUCH REGISTRATION U/S 12AA, THE ASSESSMENT PROCEEDINGS FOR THE PRESENT YE AR WERE PENDING AND THEREFORE, THIS PROVISO BELOW SUB SECTION (2) OF SE CTION 12A IS APPLICABLE IN THE PRESENT YEAR IF IT IS HELD THAT THIS PROVISO IS RETROSPECTIVE IN NATURE. IN SUPPORT OF THIS CONTENTION THAT THIS PROVISO TO SEC TION 12AA IS RETROSPECTIVE IN NATURE, RELIANCE WAS PLACED BY HIM ON A JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD . AS REPORTED IN [2009] 319 ITR 306 (SC) AND ALSO ON ANOTHER JUDGMENT OF HO N'BLE APEX COURT RENDERED IN THE CASE OF ALLIED MOTORS (P.) LTD. VS. CIT AS REPORTED IN [1997] 224 ITR 677 (SC). HE FURTHER SUBMITTED THAT SINCE NOTICE U/S 148 WAS ISSUED BY THE ASSESSING OFFICER ON 31/10/2011, THE SAME IS WITHOUT PROPER REASONS IF IT IS HELD THAT THIS PROVISO TO SECTION 12AA IS RETROSPECTIVE IN NATURE THEN THERE IS NO ESCAPEMENT OF INCOME AND AS A RESULT, THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 148 IS NOT VALI D. 4.1 IN REPLY, IT WAS SUBMITTED BY LEARNED D. R. OF THE REVENUE THAT REOPENING WAS MADE BY THE ASSESSING OFFICER BEFORE THE AMENDMENT IN SECTION 12A OF THE ACT AND THEREFORE, THIS AMENDMEN T IN SECTION 12A, WHICH IS MADE BY FINANCE (NO. 2) ACT 2014 WITH EFFECT FRO M 01/10/2014 CANNOT BE MADE APPLICABLE IN THE PRESENT YEAR EVEN IF IT IS H ELD THAT THE SAME IS 4 RETROSPECTIVE IN NATURE BECAUSE NOTICE U/S 148 OF T HE ACT WAS ALREADY ISSUED BY THE ASSESSING OFFICER MUCH BEFORE THAT DATE I.E. 01/10/2014. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AMENDMENT WAS MADE IN SECTION 12A BY FINANCE (NO. 2) ACT, 201 4 WITH EFFECT FROM 01/10/2014 BY WAY OF INSERTION OF A PROVISO BELOW S UB SECTION (2) OF SECTION 12A. FIRST WE REPRODUCE THIS PROVISO, WHICH IS AS UNDER: PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVIS IONS OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY IN COME DERIVED FROM PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YE AR PRECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICE R AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIV ITIES OF SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PRECE DING ASSESSMENT YEAR PROVIDED FURTHER THAT NO ACTION UNDER SECTION 147 S HALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR I NSTITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSM ENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUT ION FOR THE SAID ASSESSMENT YEAR PROVIDED ALSO THAT PROVISIONS CONTAINED IN THE FIRS T AND SECOND PROVISO SHALL NOT APPLY IN CASE OF ANY TRUST OR INS TITUTION WHICH WAS REFUSED REGISTRATION OR THE REGISTRATION GRANTE D TO IT WAS CANCELLED AT ANY TIME UNDER SECTION 12AA. 5.1 AS PER THE THIRD PROVISO REPRODUCED ABOVE, IF T HE REQUEST FOR REGISTRATION WAS REFUSED AT SOME POINT OF TIME, THE N THE FIRST AND SECOND PROVISO ARE NOT APPLICABLE. IN THE PRESENT CASE, TH E PETITION OF THE ASSESSEE FOR REGISTRATION DATED 24.06.2009 WAS REJECTED BY C IT VIDE ORDER DATED 29.01.2010 AND THEREFORE, THE FIRST AND SECOND PROV ISOS ARE NOT APPLICABLE IN THE PRESENT CASE AND ACCORDINGLY, ADDITIONAL GROUND IS REJECTED. 5 5.2 REGARDING THIS CLAIM OF THE ASSESSEE THAT FIRST AND SECOND PROVISOS SHOULD BE CONSIDERED AS RETROSPECTIVE, RELIANCE HAS BEEN PLACED BY LEARNED A. R. OF THE ASSESSEE ON A JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF ALLIED MOTORS (P.) LTD. VS. CIT [1997] 224 ITR 677 (SC) BUT SINCE THESE PROVISOS ARE NOT APPLICABLE BECAUSE OF THE TH IRD PROVISO, NO ADJUDICATION IS CALLED FOR IN THIS REGARD BECAUSE T HE SAME WILL BE OF ACADEMIC INTEREST ONLY. 6. REGARDING MERIT, NO ARGUMENT WAS MADE BY LEARNED AR OF THE ASSESSEE APART FROM ARGUING THE FIRST PROVISO TO SE CTION 12A OF THE I T ACT AND THAT IS NOT APPLICABLE. THIS IS ADMITTED POSITI ON THAT REGISTRATION U/S 12AA WAS GRANTED AFTER WARDS AND VOLUNTARY CONTRIBU TION IN CASE OF TRUST IS AN INCOME U/S 2 (24). HENCE, WE FIND NO INFIRMITY I N THE ORDER OF CIT (A). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED:29/02/2016 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR