Yelchur Venkata Kotiah Chetty Charities, CHENNAI V. JCIT (OSD), CHENNAI

MA 7/CHNY/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4021 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: J PRABAKAR
• Keywords: Rectification of order; Charitable institution; Maximum Marginal Rate
• Section: 12A; 12AA; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ' # . $ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER MISCELLANEOUS PETITION NO.6 & 7/MDS/2016 ( ./ IN I.T.A.NOS.1340 & 1341/MDS/2014 ( / ASSESSMENT YEAR S:2008-09 & 2009-10) M/S. YELCHUR VENKATA KOTIAH CHETTY CHARITIES, 1, AUDIAPPA STREET,GEORGE TOWN, CHENNAI-600 001. VS JOINT COMMISSIONER OF INCOME TAX (OSD) (EXEMPTIONS-)-II CHENNAI. PAN:AAATY0056C (PETITIONER) ( /RESPONDENT) APPLICANT BY : MR. J.PRABAKAR, C.A. /RESPONDENT BY : MR. P.RADHAKRISHNAN, JCIT /DATE OF HEARING : 26 TH FEBRUARY, 2016 /DATE OF PRONOUNCEMENT : 4 TH MARCH, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THESE TWO MISCELLANEOUS PETITIONS ARE FILED BY TH E ASSESSEE PRAYING FOR RECTIFICATION OF MISTAKE BY RE CALLING THE ORDER OF THE TRIBUNAL IN ITA NOS.1340 & 1341/MDS/20 14 DATED 11.09.2015 FOR THE ASSESSMENT YEARS 2008-09 & 2009-10. 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN THE MISCELLANEOUS PETITIONS, THE LEARNED AUTHORIZED REPRESENTATIVE CONCEDED THAT THE ONLY MISTAKES TO B E RECTIFIED ARE AS FOLLOWS:- 2 M.P.NOS.6 & 7/MDS/2016 I) THE TRIBUNAL HAS WRONGLY QUOTED THE SECTION AS 12AA, WHICH DOES NOT APPLY TO THE FACTS OF THE CASE ; INSTEAD THE CORRECT SECTION WOULD BE SECTION 12A OF THE ACT. II) THE TRIBUNAL HAS NOT ADJUDICATED THE CRUCIAL IS SUE WITH RESPECT TO LEVY OF TAX AT MAXIMUM MARGINAL RAT E BEING THE 13 TH & 14 TH GROUNDS RAISED IN BOTH THE APPEALS. 3. BEFORE US THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE WAS REGISTERED AS A T RUST UNDER SECTION 12A OF THE ACT AND NOT UNDER SECTION 12AA O F THE ACT AND THEREFORE, WHEREVER SECTION 12AA IS MENTIONED I N THE ORDER OF THE TRIBUNAL SHOULD BE READ AS SECTION 12A . ON PERUSING THE GROUND NO.3 RAISED BY THE ASSESSEE BEF ORE US, IT IS EVIDENT THAT THE ISSUE IN CONSIDERATION WAS ONLY REGISTRATION OF THE TRUST UNDER SECTION 12AA OF THE ACT. THE REL EVANT GROUND RAISED BY THE ASSESSEE IN BOTH THESE APPEAL S IS REPRODUCED HEREIN BELOW FOR REFERENCE:- 3 M.P.NOS.6 & 7/MDS/2016 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN HOLDING THAT THE APPELLANT TRUST WAS TAXED NOT ONLY FOR FAILURE TO OBTAIN ALLEGED REGISTRATION UNDER SECTION 12AA OF THE ACT BUT ALSO ON ACCOUNT OF ACTIVITIES OF THE TRUST NOT BEING IN CONFORMITY WITH THE OBJECTS OF T HE TRUST AND ALSO THAT THE OBJECTS WAS NOT GENUINE. AFTER THE ABOVE GROUND RAISED IN THE APPEAL THE TR IBUNAL HELD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF SEC TION 11 OF THE ACT BY FOLLOWING THE DECISION OF ITS EARLIER ORDER IN ITA NOS.1902 TO 1904/MDS/2013 DATED 24.02.2014 WHEREIN IT HAS HELD AS FOLLOWS:- 8. WE HAVE HEARD BOTH PARTIES AND GONE THRO UGH THE CASE FILE. AT THE COST OF REPETITION, WE RE-NARRATE THE FACTS. THE ASSESSEE; AN AOP/A CHARITABLE TRUST CAME INTO BEI NG ON 15.4.1954. THERE IS NO QUARREL BETWEEN THE PARTIES ABOUT THE FACTUAL POSITION EMANATING FROM THE RECORD THAT IT HAS BEEN FILING ITS RETURNS IN EVERY ASSESSMENT YEAR AS COMPLIANC E OF THE ACT AS A REGISTERED CHARITABLE TRUST. IN SUPPORT, WE RELY UPON THE PAPER BOOK FILED BY THE ASSESSEE AND THE FACTUAL POSITIO N TAKEN NOTICE OF BY THE TRIBUNAL (SUPRA) WHEREIN IT WAS FOUND THA T IN EARLIER ASSESSMENT YEARS, REGULAR ASSESSMENTS HAD BEEN FR AMED BY THE ASSESSING OFFICER AFTER FINDING THAT THE EXEMPTION CLAIMED AND NIL INCOME AS A RESULT THEREOF WAS IN ORDER. IN THIS REGARD, WE REFER TO ASSESSMENT ORDERS OF ASSESSMENT YEARS 1987 -88, 1988- 89, 1979-80 TO NAME A FEW. THE ISSUE IN HAND OF RE GISTRATION SEEMS TO HAVE CROPPED UP ONLY IN THE IMPUGNED ASSES SMENT YEAR FOR THE FIRST TIME AS THE ASSESSEE HAS FAILED TO P RODUCE ON RECORD THE REGISTRATION CERTIFICATE. THE FACTUAL POSITION REMAINS THAT THE AUTHORITIES BELOW ALSO DO NOT QUOTE ANY EVIDENCE SO AS TO COME TO THE CONCLUSION THAT THE ASSESSEE WAS NOT A REGISTE RED CHARITABLE TRUST U/S 12AA OF THE ACT. FACED WITH THIS SITUAT ION, WE DEEM IT APPROPRIATE TO DRAW AN INFERENCE IN FAVOUR OF THE ASSESSEE THAT THE FACTUAL POSITION WHICH CONTAINED IN ASSESSMENT YEARS 1987-88 AND OTHER ASSESSMENT YEARS STATED HEREINABOVE TREAT ING IT A REGISTERED CHARITABLE TRUST CONTINUES UPTO THE IMPU GNED ASSESSMENT YEAR AS WELL AS THERE IS NO ORDER FORTHC OMING CANCELLING ITS REGISTRATION. BASED ON THIS INFERENC E AND PLACING RELIANCE ON THE ORDER OF THE TRIBUNAL IN THE FIRS T ROUND OF APPEAL, 4 M.P.NOS.6 & 7/MDS/2016 WE HOLD IT TO BE A REGISTERED TRUST. THAT BEING TH E CASE, THE ASSESSEE IS HELD ENTITLED FOR THE BENEFITS U/S 11 OF THE ACT IN ABSENCE OF ANY EVIDENCE TO THE CONTRARY. THE ASSE SSEES APPEAL I.T.A.NO.1902/MDS/2013 IS ALLOWED. 4. FROM THE ABOVE IT IS APPARENT THAT THE TRIBUNAL IN ITS ORDER DATED 11 TH SEPTEMBER, 2015 IN I.T.A NOS. 1340 & 1341/MDS/2014 HAS DRAWN INFERENCE FROM THE ORDER OF THE TRIBUNAL IN ITA NOS.1902 TO 1904/MDS/2013 DATED 24.02.2014 AND HELD THAT THE ASSESSEE IS A REGISTER ED TRUST SINCE ASSESSMENT YEAR 1987-88 ONWARDS AND ACCORDING LY ENTITLED FOR THE BENEFIT OF SECTION 11 OF THE ACT F OR THE RELEVANT ASSESSMENT YEAR ALSO SINCE THERE WAS NOTHING ON REC ORD TO SUGGEST THAT THE REGISTRATION GRANTED IN THE EARLIE R YEAR IS WITHDRAWN. CONSIDERING THESE FACTS, WE FIND MERIT IN THE CONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE BECAUSE REGISTRATION WOULD HAVE BEEN GRANTED TO THE ASSESS EE TRUST ONLY AS PER THE PROVISIONS OF THE ACT PREVAILING AT THAT RELEVANT ASSESSMENT YEAR I.E., ASSESSMENT YEAR 1987-88. TO T HAT EXTENT, BOTH THE MISCELLANEOUS PETITIONS FILED BY T HE ASSESSEE ARE ALLOWED. 5 M.P.NOS.6 & 7/MDS/2016 6. ON THE ISSUE OF LEVY OF TAX AT MAXIMUM MARGINAL RATE BY THE ASSESSING OFFICER, WE DO NOT FIND IT NECESSARY TO ADJUDICATE THE ISSUE BECAUSE WE HAVE ALREADY HELD T HAT THE ASSESSEE TRUST IS A REGISTERED TRUST AS PER THE PRO VISIONS OF THE ACT. HENCE, THERE IS NO MISTAKE APPARENT IN TH E ORDER OF THE TRIBUNAL ON THIS ISSUE THAT REQUIRES TO BE REC TIFIED. 7. IN THIS RESULT, BOTH THE MISCELLANEOUS PETITIONS OF THE ASSESSEE ARE PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH MARCH, 2016 SD/- SD/- ( ' # . $ ) ( . ) (DUVVURU RL REDDY) ( A.MOHA N ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 4 TH MARCH, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .