M/s Orissa Cricket Association, Cuttack V. ACIT, Cuttack

ITSSA 28/CTK/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0374 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-10-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 15-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K AJAY KUMAR
• Assessee Lawyers: D DAS
• Keywords: Search and seizure; Charitable institution
• Section: 143(3); 12A; 12AA; 148; 132; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI S.V.MEHROTRA (AM) AND GEORGE MATHAN (JM) I.T.A. NO.189/CTK/2011: ASSESSMENT YEAR: 2007-08 I.T(SS).A. NO.28/CTK/2012: ASSESSMENT YEAR: 2001-02 I.T(SS).A. NO.29/CTK/2012: ASSESSMENT YEAR: 2004-05 I.T(SS).A. NO.30/CTK/2012: ASSESSMENT YEAR: 2005-06 I.T(SS).A. NO.31/CTK/2012: ASSESSMENT YEAR: 2006-07 ORISSA CRICKET ASSOCIATION, BARABATI STADIUM, CUTTACK PA NO.AAAAO 0319 F VS. ACIT, CIRCLE - 2(1), CUTTACK APPELLANT RESPONDENT I.T(SS).A. NO.35/CTK/2012: ASSESSMENT YEAR: 2004-05 I.T(SS).A. NO.36/CTK/2012: ASSESSMENT YEAR: 2005-06 I.T(SS).A. NO.37/CTK/2012: ASSESSMENT YEAR: 2006-07 ACIT, CIRCLE - 2(1), CUTTACK VS. ORISSA CRICKET ASSOCIATION, BARABATI STADIUM, CUTTACK PA NO.AAAAO 0319 F APPELLANT RESPONDENT FOR THE ASSESSEE: SHRI D.DAS FOR THE RESPONDENT: SHRI K.AJAY KUMAR DATE OF HEARING: 16/10/.2014 DATE OF PRONOUNCEMENT: 22 /10/2014 ORDER PER BENCH: IT(SS) A NO.28/CTK/2012 TO IT(SS) A NO.31/CTK/2012 ARE FILED BY THE ASSESSEE AGAINST ORDER DATED 6.1.2012 OF LD CIT(A), CUTTACK FOR THE ASSESSMENT YEARS 2001-02, 2004-05, 2005- 06 & 2006-07, IN THE MATTER OF ASSESSMENT UNDER SEC TION 153C OF THE ACT. 2 ORISSA CRICKET ASSOCIATION, 2. THE CROSS APPEALS ARE FILED BY THE REVENUE VIDE IT( SS)A NO.35 TO 37/CTK/2012 AGAINST SEPARATE ORDERS ALL DATED 6.1.2012 OF LD CIT(A), CUTTACK FOR THE ASSESSMENT YEARS 2004-05, 2005-06 & 2006-07, RESPECTIVELY, IN THE MATTER OF A SSESSMENT UNDER SECTION 153C OF THE ACT.. 3. ITA NO.189/CTK/2011 IS FILED BY THE ASSESSEE AGA INST ORDER DATED 31.1.2011 OF LD CIT(A), CUTTACK FOR ASSESSMENT YEAR 2007-08, IN TH E MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT. 4. NOW WE TAKE UP THE APPEAL IN IT (SS) 28/CTK/2012 FILED BY THE ASSESSEE. 5. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE H AD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS. NIL. THE ASSESSING OFFICER NOT ICED THAT AS PER STATEMENT OF INCOME ENCLOSED WITH THE RETURN EXCESS OF INCOME OVER EXPENDITURE W AS RS.72,13,212/- AND THE ENTIRE INCOME WAS CLAIMED AS EXEMPT U/S.10(23) OF THE I.T.ACT. H E NOTED THAT SUCH EXEMPTION UNDER SECTION 10(23) HAD NOT BEEN GRANTED BY THE PRESCRIBED AUTHO RITY TILL DATE. NOTICE UNDER SECTION 148 WAS ISSUED, IN RESPONSE TO WHICH, ASSESSEE SUBMITTE D THAT THE RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE ACT MAY BE TREATED AS RETURN FILED IN COMPLIANCE TO THE SAID NOTICE. THE AO HAS OBSERVED THAT A SEARCH AND SEIZURE ACTION UN DER SECTION 132 OF THE I.T.ACT, 1961 WAS CONDUCTED IN THE CASE OF SRI ASHIRBAD BEHERA ON 28. 3.2006. SIMULTANEOUS SURVEY OPERATION WAS ALSO CONDUCTED IN CASE OF THE ASSESSEE. A NOTICE U NDER SECTION 153C/153A(A) WAS ISSUED TO THE ASSESSEE, IN RESPONSE TO WHICH, ASSESSEE SUBMITTED THAT THE RETURN FILED UNDER SECTION 139 MAY BE TREATED AS RETURN FILED UNDER SECTION 153C OF TH E ACT. THE ASSESSEES INCOME WAS DETERMINED AT RS72,13,290/-, AGAINST WHICH, ASSESSE E PREFERRED APPEAL BEFORE LD CIT(A) , WHO DISMISSED THE SAME. IN THE CONSEQUENTIAL APPEAL FI LED BY THE ASSESSEE BEFORE THE TRIBUNAL, ITAT, CUTTACK VIDE ITS ORDER DATED 30.11.2009 IN IT (SS) A NO.1 TO 7/CTK/2009 SET ASIDE THE ORDERS OF BOTH THE AUTHORITIES BELOW UNDER APPEAL B EFORE IT AND DIRECTED THE ASSESSING OFFICER TO MAKE DENOVO ASSESSMENTS IN ACCORDANCE WITH LAW RELA TING TO LIMITATION AND AFTER DECISION ON THE ASSESSEE PETITION FOR REGISTRATION UNDER SECTIO N 12A/12AA AS WELL AS THE PETITIONS FOR APPROVAL U/S.10(23)/10(23C) OF THE ACT BY THE COMMI SSIONER OF INCOME TAX. ACCORDINGLY, THE IMPUGNED ASSESSMENT HAS BEEN PASSED. THE AO DETERM INED THE TOTAL INCOME OF THE ASSESSEE AT RS.87,83,317/-, INTER ALIA, OBSERVING THAT ASSES SEE WAS NOT REGISTERED UNDER SECTION 12A/12AA OF THE ACT. HE ALSO OBSERVED THAT THERE W AS NO APPROVAL OF THE CHIEF COMMISSIONER OF INCOME TAX, BHUBANESWAR UNDER SECTION 10(23)/10( 23C) OF THE ACT.. 3 ORISSA CRICKET ASSOCIATION, 6. LD CIT(A) DISMISSED THE ASSESSEES APPEAL. BEIN G AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. THAT THE ORDER PASSED BY THE LEARNED CIT(A), CU TTACK BY CONFIRMING THE ORDER OF THE LEARNED A.O IS HIGHLY ILLEGAL, ARBITRA RY, BAD IN LAW, WITHOUT ANY BASIS, CONTRARY TO FACTS & CONTRARY TO WEIGHT OF EV IDENCE ON RECORD AND THEREFORE IS LIABLE TO BE QUASHED AND/OR ANNULLED. 2. THAT THE LEARNED CIT (A), CUTTACK HAS ERRED IN LAW AND IN FACT BY CONFIRMING THE INITIATION OF THE PROCEEDINGS U/S 153C OF THE I T. ACT BY THE LEARNED A.O WHICH WAS INITIATED WITHOUT ANY SATISFACTION AS MAN DATED UNDER LAW AND THEREFORE IS PER SE WITHOUT ANY JURISDICTION, ILLEGAL, BAD IN LAW & WIT HOUT JURISDICTION AND IS LIABLE TO BE QUASHED AND/OR ANN ULLED. 3. THAT LEARNED CIT(A), CUTTACK HAS ERRED IN LAW AND I N FACT AND ACTED IN THE MOST UNJUSTIFIED MANNER BY DENYING THE EXEMPTION U/ S 11 OF THE I.T. ACT WHEN THE IMPUGNED MATTER OF GRANTING THE REGISTRATION U/ S 12A IS SUBJUDICE BEFORE THIS HON'BLE TRIBUNAL AND THEREFORE THE ORDER PASSED IS ILLEGAL, WITHOUT JURISDICTION AND IS LIABLE TO BE QUASHED AND/OR ANNULLED. 4. THAT LEARNED CIT(A), CUTTACK HAS ERRED IN LAW AND I N FACT AND ACTED IN THE MOST UNJUSTIFIED MANNER BY DENYING THE EXEMPTION U/ S 10(23)/1023(C) OF THE I.T. ACT WHEN THE IMPUGNED MATTER IS PENDING BEFORE THE DIRECTOR GENERAL OF INCOME TAX (EXEMPTION), KOLKATA AND THE SAID DENIAL BY THE LEARNED CIT(A), CUTTACK IS ILLEGAL AND WITHOUT JURISDICTION AND THE REFORE IS LIABLE TO BE QUASHED AND/OR ANNULLED. 5. THAT THE LEARNED CIT(A), CUTTACK HAS ERRED IN LAW A ND IN FACT BY CONFIRMING THE DISALLOWANCE OF EXPENDITURE OF RS. 15,70,025/- MADE BY THE BY THE LEARNED A.O. ON ADHOC BASIS WITHOUT ANY BASIS , CON TRARY TO FACTS & CONTRARY TO WEIGHT OF EVIDENCE ON RECORD AND THEREFORE IS LI ABLE TO BE DELETED. 6. THAT THE LEARNED CIT(A), CUTTACK HAS ERRED IN LAW A ND IN FACT BY CONFIRMING THE DETERMINATION OF EXCESS OF INCOME OVER EXPENDIT URE OF RS. 1,34,93,392/- TO BE TAXED IS CONTRARY TO THE PROVISIONS OF THE AC T AND FOR THAT MATTER THE SAME IS LIABLE TO BE DELETED. 7. AT THE TIME OF HEARING, LD COUNSEL FOR THE ASSES SEE FILED BEFORE US ORDER DATED 27.6.2014 OF THE TRIBUNAL IN ITA NO.232/CTK/2010 IN ASSESSEE S CASE PASSED AGAINST THE ORDER DATED 22.3.2010 OF LD CIT REJECTING APPLICATION OF THE AS SESSEE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. HE SUBMITTED THAT THE MATTER HAS BEEN RES TORED TO THE FILE OF LD CIT AND, THEREFORE, 4 ORISSA CRICKET ASSOCIATION, THESE APPEALS MAY BE RESTORED TO THE FILE OF THE AO TO DECIDE THE ISSUE IN ACCORDANCE WITH THE OUTCOME OF THE ORDER GIVING EFFECT TO THE TRIBUNAL S ORDER DATED 27.6.2014(SUPRA). 8. LD D.R. AGREED TO THE CONTENTION OF LD COUNSEL F OR THE ASSESSEE THAT MATTER MAY BE RESTORED TO THE FILE OF THE AO. 9. HAVING HEARD BOTH THE PARTIES, WE FIND THAT THE TRIBUNAL VIDE ITS ORDER DATED 27.6.2014(SUPRA) IN PARA 5.11 HAS OBSERVED AS UNDER : SINCE THE ASSESSEE HAS STRESSED BY GROUND NO.5 THA T THE CIT HAS USED MATERIAL BEHIND THE BACK OF THE ASSESSEE FOR REJECTING THE R EGISTRATION AND HAS NOT GIVEN HIM PROPER OPPORTUNITY, WE, THEREFORE, WITH OUR ABO VE OBSERVATION SET ASIDE THE ORDER OF CIT AND RESTORE THIS ISSUE TO THE FILE OF CIT WITH THE DIRECTION THAT THE CIT SHALL LOOK INTO THE MATTER OF REGISTRATION OF T HE INSTITUTION AFRESH AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE T O PROVE THAT THE OBJECTS FOR WHICH THE ASSESSEE INSTITUTION IS CREATED ARE GENUI NE AND ARE FOR CHARITABLE PURPOSES. WE MAY CLARIFY THAT WHILE CONSIDERING TH E APPLICATION OF THE ASESSEE FOR REGISTRATION, THE CIT SHOULD NOT APPLY PROVISIO N TO SECTION 2(15) RETROSPECTIVELY. IF HE SO CHOOSES THAT IN VIEW OF T HE PROVISO INSERTED W.E.F. 1.4.2009 THE ACTIVITIES CARRIED ON BY THE ASSESSEE NO MORE REMAINS CHARITABLE AS PER THE AMENDED DEFINITION OF SEC.2(15), HE MAY PAS S AN ORDER U/S.154 RECTIFYING HIS ORDER WITHDRAWING THE REGISTRATION OF THE ASSES SEE IN CASE HE GRANTS REGISTRATION TO THE ASSESSEE W.E.F. 1.4.2009 BY PAS SING A SPEAKING ORDER. 10. SINCE THE ADDITION HAS BEEN MADE ON ACCOUNT OF DENIAL OF REGISTRATION UNDER SECTION 12AA, THEREFORE, WE RESTORE THIS APPEAL TO THE FILE OF THE AO TO DECIDE THE ISSUE IN ACCORDANCE WITH THE OUTCOME OF THE ORDER GIVING EFFECT TO THE TRIBUNALS ORDER DATED 27.6.2014(SUPRA). 11. IN THE RESULT, APPEAL FOR ASSESSMENT YEAR 2001- 02 IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE APPEALS FOR THE ASSESSMENT YEARS 2004-0 5 TO 2006-07, SIMILAR GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE. WE FIND THAT THE ADDIT IONS HAVE BEEN MADE, INTER ALIA, ON THE GROUND THAT REGISTRATION UNDER SECTION 12AA WAS NOT GRANTED TO THE ASSESSEE. THEREFORE, FOR THE REASONS GIVEN IN ASSESSMENT YEAR 2001-02, WE RE STORE ALL THESE APPEALS TO THE FILE OF AO TO DECIDE THE ISSUE IN ACCORDANCE WITH THE OUTCOME OF THE ORDER GIVING EFFECT TO THE TRIBUNALS ORDER DATED 27.6.23014 (SUPRA). THE CROSS APPEALS FILED BY THE DEPARTMENT ARE ALSO RESTORED TO THE FILE OF THE AO. 13. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 5 ORISSA CRICKET ASSOCIATION, 14. IN ITA NO.189/CTK/2011 FOR THE ASSESSMENT YEAR 2007-08, THE ASSESSMENT ORDER HAS BEEN PASSED UNDER SECTION 143(3) OF THE I.T.ACT. T HE ADDITION HAS BEEN MADE, INTER ALIA, ON THE GROUND THAT ASSESSEE WAS NOTGRANTED REGISTRATI ON UNDER SECTION 12AA OF THE ACT. THEREFORE, FOR THE REASONS GIVEN IN IT(SS) A NO.28/ CTK/2012, WE RESTORE THIS APPEAL ALSO TO THE FILE OF AO TO DECIDE THE ADDITIONS AFTER EFFEC T HAS BEEN GIVEN BY LD CIT TO THE TRIBUNALS ORDER (SUPRA). 15. IN THE RESULT, THIS APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER, 2014. SD/- SD/- (GEORGE MATHAN) (S.V.MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, CUTTACK 22 /10/2014 B.K.PARIDA, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: ORISSA CRICKET ASSOCIATION,BARABATI S TADIUM, CUTTACK 2. THE RESPONDENT: ACIT CIRCLE 2(1), CUTTACK 3. THE CIT, CUTTACK 4. THE CIT(A), CUTTACK 5. DR, CUTTACK BENCH 6. GUARD FILE. TRUE COPY// BY ORDER