SHRI GANAPATI DEVASTHAN TRUST,BARAMATI V. DCIT(EXEMPTION CIRCLE), PUNE, PUNE

ITA 2313/PUN/2024

AI Insights

The case involves Shri Ganapati Devasthan Trust, a trust registered under section 12AA of the Income Tax Act, 1961, which filed an appeal against the order of the Ld. Addl / JCIT(A) rejecting its claim for exemption under section 11(1A) of the Act. The trust had initially declared a nil income in its return but later declared an income of Rs.14,27,898 in response to a notice under section 148 of the Act. The Assessing Officer rejected the trust's claim for exemption under section 11(1A) on procedural grounds, stating that the claim was not made in the original or revised return. The Ld. Addl / JCIT(A) upheld this decision, leading to the trust's appeal to the Tribunal. The Tribunal, referencing decisions from the Supreme Court and the Bombay High Court, found that the appellate authorities have the jurisdiction to entertain new claims and directed the matter back to the Ld. Addl / JCIT(A) for a decision on the merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32571 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Other Referred Cases: Goetze India Ltd. vs. CIT, CIT vs. East India Charitable Trust, Akhara Ghamanda Dass vs. Asst. CIT, CIT vs. Pruthvi Brokers & Shareholders (P) Ltd., Shivram Rakhmaj Bankar vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMBARNATH BHIMRAO KHULE
• Assessee Lawyers: SHARAD A VAZE
• Keywords: Capital asset; Opportunity of being heard; Revised return; Tax effect; Capital Gains; Charitable institution
• Section: 147; 148; 12AA; 207; 11(1A)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.2313/PUN/2024 Assessment Year : 2015-16 Shri Ganapati Devasthan Trust Siddheshwar Galli, Baramati, Maharashtra – 413102 Vs. DCIT (Exemption Circle), Pune PAN: AANTS4193D (Appellant) (Respondent) Assessee by : Shri Sharad A Vaze Department by : Shri Ambarnath Bhimrao Khule (through virtual) Date of hearing : 03-03-2025 Date of pronouncement : 20-03-2025 O R D E R PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the order dated 30.08.2024 of the Ld. Addl / JCIT(A)-2, Noida relating to assessment year 2015- 16. 2. Facts of the case in brief, are that the assessee is a trust registered u/s 12AA of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). It filed its return of income on 24.07.2019 declaring total income at Nil. The case was reopened u/s 147 of the Act on 22.03.2019 recording reasons after obtaining the necessary approval. Accordingly, notice u/s 148 of the Act dated 22.03.2019 was duly served on the assessee. In response to the same, the assessee filed its return of income on 24.07.2019 declaring total income of Rs.14,27,898/-. From the details 2 ITA No.2313/PUN/2024 furnished by the assessee the Assessing Officer noted that out of gross receipt of Rs.28,59,33,370/-, the assessee had accumulated amount of Rs.24 crores u/s 11(2) for which Form 10 has been field on 31.03.2016. 3. During the course of assessment proceedings he noted that the assessee took the plea that since it had invested an amount of Rs.24 crores in FDs for more than six months, the assessee had made investment in capital asset and hence, the assessee should be given benefit of section 11(1A) of the Act to the extent of Rs.24 crores. However, the Assessing Officer rejected the plea on the ground that the assessee had not taken this stand either in the original return or in return filed u/s 148 of the Act. Referring to the decision of the Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT (2006) 284 ITR 323 (SC), he noted that the Hon'ble Supreme Court in the said decision has held that the additional claim cannot be made before the Assessing Officer as there is no provision under the Income Tax Act to make amendment in the return without filing a revised return. He, therefore, rejected the fresh claim made by the assessee without filing the revised return. He further noted that the proceedings u/s 148 of the Act are not for the benefit of the assessee and the assessee cannot make a fresh claim of exemption / deduction during the course of re-assessment proceedings when the said claim was not made in its original return of income. He accordingly rejected the claim of exemption u/s 11(1A) of the Act on the amount of Rs.24 crores being the investment made in the FDs out of the sale of land. The Assessing Officer however, allowed the benefit of accumulation u/s 11(2) on the amount of Rs.24 crores. 3 ITA No.2313/PUN/2024 4. In appeal, the Ld. Addl / JCIT(A) rejected the exemption claimed u/s 11(1A) of the Act by observing as under: “1. Ground 1: Exemption under Section 11(1A) The exemption under Section 11(1A) applies to capital gains reinvested in another capital asset According to CBDT Circular No. 883 and various court rulings, including CIT vs. East India Charitable Trust and Akhara Ghamanda Dass vs. Asst. CIT. investments in fixed deposits exceeding six months are considered as acquiring a new capital asset. However, the AO denied the exemption under Section 11(1A) on procedural grounds, as the claim was not made in the original or revised return. While the appellant's submission is supported by judicial precedents and guidelines with a broader interpretation of Section 11(1A), the procedural requirements for claiming exemptions are clear. The Supreme Court in Goetze India Ltd, vs. CIT established that claims must be explicitly made in the returns filed, and no new claims can be entertained at the reassessment stage unless allowed by the Act. The decision to deny the claim under Section 11(1A) is consistent with this legal precedent, as the appellant failed to make the claim in the initial filings. It is determined that the appellant did not comply with the procedural requirements for claiming the benefit under Section 11(1A). Therefore, this ground of appeal is rejected in accordance with the Supreme Court's ruling in Goetze India Ltd. vs. CIT. It is also important to mention here that the issues raised do not directly impact the tax liability of the appellant. The absence of a direct tax effect negates the need for substantial interference, leading to the rejection of the ground of appeal.” 5. Aggrieved with such order of the Ld. Addl / JCIT(A), the assessee is in appeal before the Tribunal by raising the following grounds: 1. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (A) - NFAC Delhi, is not justified in rejecting the claim of the assessee u/s 11(1A) even if such claim is made before the First Appellate Authority (FAA). The FAA can admit the new claim before him by following the decision of the Jurisdictional Bombay High Court. The AO be directed to allow the deduction u/s 11(1A) instead of u/s 11(2) of the Income Tax Act 1961. The appellant craves leave to add, alter, omit or substitute any of the grounds at the time of hearing of the appeal. 6. The Ld. Counsel for the assessee referring to the decision of the Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT (supra) submitted that the 4 ITA No.2313/PUN/2024 Hon'ble Supreme Court in the said decision has held that the decision was restricted to the powers of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the power of the Appellate Tribunal u/s 254 of the Act. Referring to the decision of the Hon’ble Bombay High Court in the case of CIT vs. Pruthvi Brokers & Shareholders (P) Ltd. (2012) 349 ITR 336 (Bom), he submitted that the Hon’ble Bombay High Court in the said decision has held that in an appeal before the CIT(A) and the Tribunal, an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. 7. Referring to the decision of the Co-ordinate Bench of the Tribunal in the case of Shivram Rakhmaj Bankar vs. DCIT (2020) 207 TTJ (Pune) 771, he submitted that the Tribunal in the said decision has held that as the proceedings in the first appeal are continuation of the assessment proceedings, there can be no impediment on the assessee in making a lawful claim before the CIT(A) for the first time and the CIT(A) accepting the same, if it is otherwise sustainable. He accordingly submitted that the claim of the assessee u/s 11(1A) should be allowed. 5 ITA No.2313/PUN/2024 8. The Ld. DR on the other hand relied on the orders of the Assessing Officer and the Ld. Addl / JCIT(A). 9. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. Addl / JCIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case rejected the claim of exemption u/s 11(1A) of the Act on the amount of Rs.24 crores on the ground that the assessee has neither made this claim in the original return nor claimed the same in the revised return and therefore, in view of the decision of the Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT (supra), the assessee is not entitled to make amendment in the return without filing a revised return. We find the Ld. Addl / JCIT(A) upheld the action of the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. 10. We find the Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT (supra) has held that the said decision was restricted to the powers of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the power of the appellate tribunal u/s 254 of the Act. 11. We further find the Hon’ble Bombay High Court in the case of CIT vs. Pruthvi Brokers & Shareholders (P) Ltd. (supra) has held that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate 6 ITA No.2313/PUN/2024 authorities have the discretion whether or not to permit such additional claims to be raised. 12. In view of the decisions of the Hon'ble Supreme Court and the Hon’ble Bombay High Court cited (supra), we are of the considered opinion that the Ld. Addl / JCIT(A) was not justified in rejecting the claim out rightly by relying on the decision of the Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT (supra). We, therefore, restore the matter to the file of the Ld. Addl / JCIT(A) for adjudication of the issue on merit and as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 13. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 20th March, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 20th March, 2025 GCVSR 7 ITA No.2313/PUN/2024 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘SMC’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 07.03.2025 Sr. PS/PS 2 Draft placed before author 19.03.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "