ACIT, Panchkula V. Haryana State Agricultural Marketing Board, Panchkula

MA 160/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6674 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 31-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARISH NAYYAR
• Assessee Lawyers: CHANDER KANTA
• Keywords: Charitable institution; Set aside
• Section: 12AA; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH , ! '# $ % & '# , BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER / MA NO.160/CHD/2018 IN . / ITA NO.230/CHD/2012 / ASSESSMENT YEAR : 2004-05 THE A.C.I.T., PANCHKULA CIRCLE, PANCHKULA. HARYANA STATE AGRICULTURAL MARKETING BOARD, PANCHKULA. ./PAN NO: AAALH0016R ! /ASSESSEE BY : SMT.CHANDERKANTA, SR.DR ! / REVENUE BY : SHRI HARISH NAYYAR, CA ' # $ /DATE OF HEARING : 15.02.2019 %&'( $ /DATE OF PRONOUNCEMENT: 28.02.2019 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: THIS APPLICATION HAS BEEN MOVED BY THE REVENUE SEEKING RECTIFICATION IN THE ORDER PASSED BY THE I. T.A.T. IN ITA NO.230/CHD/2012 DATED 23.3.2018. 2. THE LD. DR POINTED OUT THAT A PATENT MISTAKE HAD OCCURRED IN THE ORDER OF THE I.T.A.T., ALLOWING THE ASSESSEES APPEAL HOLDING THAT IT WAS ENTITLED TO EXEMPTION OF ITS ENTIRE INCOME U/S 11 OF THE ACT HAVING DEMONSTRATED APPLIC ATION OF ITS INCOME TO THE STATUTORILY PRESCRIBED LIMIT OF 8 5% ,WHEN THE FACT OF THE MATTER WAS THAT IN A SUBSEQUENT OR DER, THE ITAT HAD RESTORED BACK TO THE A.O., THE BASIC ISSU E OF MA NO.160/CHD/2018 A.Y.2004-05 2 ELIGIBILITY OF THE ASSESSEES CLAIM TO EXEMPTION U/ S 11 FOR THE IMPUGNED YEAR. 3. TAKING US THROUGH THE SEQUENCE OF EVENTS, THE LD . DR POINTED OUT THAT THE ASSESSEE HAD FILED RETURN OF I NCOME FOR THE IMPUGNED YEAR DECLARING NIL TAXABLE INCOME BY C LAIMING EXEMPTION U/S 11 OF THE ACT, HAVING BEEN REGISTERED AS A CHARITABLE TRUST U/S 12AA OF THE ACT. THAT THE ASSE SSING OFFICER DENIED THE ASSESSEES CLAIM FOR THE REASON THAT THE BOOKS OF ACCOUNTS WERE NOT MAINTAINED AND, THEREFOR E, NOT VERIFIABLE. HE, THEREFORE, COMPLETED THE ASSESSMENT IN THE STATUS OF AOP SUBJECTING THE SURPLUS INCOME TO TA X. THAT THEREAFTER THE MATTER WAS CARRIED IN APPEAL TO THE LD.CIT(A) WHO PARTLY ALLOWED THE ASSESSEES APPEAL HOLDING THA T THE A.O. WAS NOT JUSTIFIED IN DENYING EXEMPTION FOR TH E REASON THAT BOOKS OF ACCOUNTS WERE NOT MAINTAINED, BUT AT THE SAME TIME CONFIRMED ADDITION TO THE EXTENT ASSESSEE WAS UNABLE TO DEMONSTRATE UTILIZATION FOR CHARITABLE PURPOSES TO THE EXTENT OF 85%, AS STIPULATED UNDER THE ACT. THAT BOTH THE ASSESSEE AND REVENUE FILED APPEALS TO THE ITAT, WHO DISMISSE D THE REVENUES APPEAL WHILE IN THE ASSESSEES APPEAL THE M ATTER WAS RESTORED BACK TO THE AO TO VERIFY ASSESSEES CLA IM OF UTILIZATION TO THE EXTENT STIPULATED UNDER THE ACT, VIDE THEIR ORDER DATED 19.8.2008. THAT AGAINST THE ORDER OF TH E ITAT, THE REVENUE FILED APPEAL TO THE HON'BLE HIGH COURT, WHO SET ASIDE THE ORDER OF THE I.T.A.T. REMANDING BACK TO T HE TRIBUNAL FOR VERIFYING THE FACT THAT THE BOOKS OF A CCOUNTS WERE MAINTAINED BY THE ASSESSEE. THAT THEREAFTER TH E APPEAL MA NO.160/CHD/2018 A.Y.2004-05 3 WAS HEARD AFRESH AND THE I.T.A.T. VIDE ITS ORDER DA TED 22.5.2018 REMANDED THE MATTER BACK TO THE ASSESSING OFFICER, DIRECTING HIM TO PASS AN ORDER DE-NOVO WIT H REGARD TO THE GROUND THAT THE BOOKS OF ACCOUNT HAD BEEN DU LY MAINTAINED BY THE ASSESSEE AND FOR VERIFICATION OF THE BOOKS OF ACCOUNTS. THAT IN THE MEANWHILE, AS PER THE DIRE CTIONS OF THE I.T.A.T IN THE FIRST ROUND IN THE ASSESSEES APP EAL, THE MATTER OF UTILIZATION OF INCOME WAS VERIFIED BY TH E A.O. AND ADDITION WAS UPHELD, WHICH MATTER TRAVELLED UP TO T HE I.T.A.T. AGAIN WHO VIDE THEIR ORDER IN ITA NO.230/CHD/2012,DT 23-03-18,I.E THE IMPUGNED ORDER SOUGHT TO BE RECTIFIED, HELD THAT THE ASSESSEE HAD DULY DEMONSTRATED THE APPLICATION OF ITS INCOME UP TO TH E STATUTORILY SPECIFIED LIMIT OF 85% AND HENCE WAS EL IGIBLE TO CLAIM EXEMPTION U/S 11/12 OF THE ACT. 4. THE LD. DR POINTED OUT THAT SINCE THE ASSESSEES ELIGIBILITY TO CLAIM EXEMPTION HAD BEEN RESTORED BA CK TO THE A.O. VIDE THE SUBSEQUENT ORDER OF THE I.T.A.T. IN I TA NO.577/CHD/2008 DATED 225.2018, THE ORDER PASSED IN ITA NO/230/CHD/2012 DATED 23.3.2018 WAS ERRONEOUS SINCE IT WAS PASSED ON THE PREMISES THAT THE ASSESSEE WAS EL IGIBLE FOR THE SAID CLAIM. 5. THE LD. COUNSEL FOR ASSESSEE WAS UNABLE TO CONT ROVERT THE ABOVE FACTS AS POINTED OUT BY THE LD. DR. 6. IN VIEW OF THE ABOVE, WE AGREE THAT THE ORDER P ASSED BY THE I.T.A.T. IN ITA NO..230/CHD/2012 WAS ERRONEOUS SINCE THE ISSUE BEFORE IT REGARDING THE ELIGIBILITY OF TH E ASSESSEE TO MA NO.160/CHD/2018 A.Y.2004-05 4 CLAIM EXEMPTION OF ITS ENTIRE INCOME U/S 11 OF THE ACT ON ACCOUNT OF DEMONSTRATING APPLICATION OF 85% OF ITS INCOME FOR CHARITABLE PURPOSE, WAS AN ISSUE WHICH COULD BE DECIDED ONLY ONCE THE ASSESSEE WAS FOUND TO BE ELIGIBLE FOR EXEMPTION, HAVING MAINTAINED PROPER BOOKS OF ACCOUN T. SINCE THIS ISSUE STOOD RESTORED BACK TO THE A.O., T HE I.T.A.T. COULD NOT HAVE DECIDED THE CLAIM OF THE ASSESSEE ON ACCOUNT OF UTILIZATION OF ITS INCOME AND TO THIS EXTENT WE AGREE THAT THERE WAS A MISTAKE IN THE ORDER OF THE I.T.A.T. WE , THEREFORE, RECALL THE SAME. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS, THEREFORE, ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- $ % & '# (SANJAY GARG) ANNAPURNA GUPTA) /JUDICIAL MEMBER () /ACCOUNTANT MEMBER +$ /DATED: 28 TH FEBRUARY, 2019 * # * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. - / THE RESPONDENT 3. ' . / CIT 4. ' . ( )/ THE CIT(A) 5. +/0 1 , $ 1 , 23405 / DR, ITAT, CHANDIGARH 6. 046# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR