House of Abraham charitable Trust, Kodaikanal v. ITO, Dindigul

ITA 1583/CHNY/2016 | 2004-2005
Pronouncement Date: 28-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 158321714 RSA 2016
Assessee PAN AAATH6569D
Bench Chennai
Appeal Number ITA 1583/CHNY/2016
Duration Of Justice 4 month(s) 29 day(s)
Appellant House of Abraham charitable Trust, Kodaikanal
Respondent ITO, Dindigul
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 28-10-2016
Date Of Final Hearing 10-10-2016
Next Hearing Date 10-10-2016
Assessment Year 2004-2005
Appeal Filed On 30-05-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . ! . '#'$ % !& ' [ BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER ] ./ I.T.A. NO.1583/MDS/ 2016 / ASSESSMENT YEAR : 2004-2005 HOUSE OF ABRAHAM CHARITABLE TRUST KODAIKANAL CHRISTIAN COLLEGE KODAIKANAL. [PAN AAATH 6569D] VS. THE INCOME TAX OFFICER WARD I(1) DINDIGUL. ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI. T. VASUDEVAN ADVOCATE /RESPONDENT BY : SHRI. SASIKUMAR IRS JCI T. / DATE OF HEARING : 10 - 10 - 2016 ! / DATE OF PRONOUNCEMENT : 28 - 10 - 2016 / O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER IN THIS APPEAL FILED BY THE ASSESSEE DEICED AGAI NST AN ORDER DATED 04.03.2016 OF COMMISSIONER OF INCOME TAX (APP EALS)-2 MADURAI IT HAS ALTOGETHER RAISED TWELVE GROUNDS OF WHICH GROUNDS ONE AND TWELVE ARE GENERAL NEEDING NO ADJUDICATION. 2. THROUGH ITS GROUNDS 2 TO 6 ASSESSEE ASSAILS THE RE- OPENING OF ASSESSMENT DONE FOR THE IMPUGNED ASSESSMENT YEAR . ITA NO.1583/MDS/2016 :- 2 -: 3. . FACTS THAT CAN BE GATHERED FROM THE ASSESSMENT ORD ER ARE THAT ASSESSEE HAD FILED A RETURN FOR THE IMPUGNED ASSESSMENT YEAR ON 17.08.2007. THOUGH IT IS NOT SO STATED EXPLICITLY I N THE ASSESSMENT ORDER IT SEEMS THE SAID RETURN WAS PROCESSED U/S.1 43(1) OF THE ACT. ON 27.03.2010 THE ASSESSING OFFICER ISSUED A NOTIC E U/S.148 OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) SEEKING TO R E-OPEN THE ASSESSMENT. ASSESSEE REQUESTED THE ASSESSING OFFIC ER TO TREAT THE RETURN ORIGINALLY FILED BY IT AS ONE FILED IN PURSU ANCE OF THE SAID NOTICE. DURING THE COURSE OF THE RE-ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE BOOKS OF A CCOUNTS BILLS AND VOUCHERS FOR EXPENSES CONFIRMATION FOR LOANS DETA ILS OF CONSTRUCTION EXPENSES ETC. AS PER THE ASSESSING OFFICER ASSESS EE DID NOT PRODUCE THE BOOKS OF ACCOUNTS AND HAD PRODUCED ONLY THE LOA N CREDITORS CONFIRMATION HOSTEL MAINTENANCE DETAILS TRUST ACC OUNT COPY AND SELF MADE VOUCHERS FOR EXPENSES. FURTHER AS PER THE ASS ESSING OFFICER THE TRUST WAS DECLINED REGISTRATION SOUGHT BY IT UNDER SECTION 12AA OF THE ACT BY CIT VIDE HIS ORDER NO.C101/254/CIT-II/2008-0 9 DATED 04.09.2009. THE LD. ASSESSING OFFICER DENIED THE E XEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 11 AND 12 OF THE ACT AND COMPLETED THE RE-ASSESSMENT PROCEEDINGS DISALLOWING THE CLAIM OF CAPITAL EXPENDITURE CHARITABLE EXPENDITURE BUILDING MAINT ENANCE EXPENDITURE HOSTEL MAINTENANCE EXPENDITURE MISCEL LANEOUS ITA NO.1583/MDS/2016 :- 3 -: EXPENDITURE ANNUAL DAY CELEBRATION EXPENDITURE CO ST OF LIBRARY BOOKS AND DEPRECIATION ALLOWANCE. 4. AGGRIEVED ASSESSEE MOVED IN APPEAL BEFORE COMMISSIO NER OF INCOME TAX (APPEALS). AS PER THE ASSESSEE IT HAD PRODUCED BILLS FOR CAPITAL EXPENDITURE CLAIMED. ACCORDING TO IT THEY WERE PREPARED TO PRODUCE SUPPORTING BILLS & VOUCHERS FOR ALL OTHER E XPENSES AS WELL. FURTHER ACCORDING TO IT DEPRECIATION WAS ALLOWABLE SINCE THE ASSETS WERE USED AND ACCOUNTING STANDARDS AS OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA CLEARLY MANDATED CHARGE OF DE PRECATION. ASSESSEE ALSO STATED THAT IT HAD MOVED IN APPEAL AG AINST THE ORDER DATED 04.09.2009 DECLINING SUCH REGISTRATION BEFORE THIS TRIBUNAL. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD A S UNDER AT PARA 7 OF HIS ORDER. I) DURING THE COURSE OF HEARING ALSP THE APPELLANT WAS NOT ABLE TO PRODUCE ANY VOUCHERS FOR THE CAPITAL AND REVENUE EXPENSES CLAIMED. II) THE APPELLANT HAS NOT OBTAINED REGISTRATION UNDER 1 2AA. THEREFORE THE QUESTION OF APPLICATION OF SECTION 1 1 TO 13 DOES NOT ARISE IN THE APPELLANT'S CASE AS DETERMINED BY THE ASSESSING OFFICER. III) THE APPELLANT HAS BEEN TREATED AS.AOP AND THEIR ACT IVITY WILL HAVE TO BE TREATED AS BUSINESS INCOME IV) THE CORPUS AND DONATION CLAIMED WILL HAVE TO BE DISALLOWED ITA NO.1583/MDS/2016 :- 4 -: V) THE ASSESSING OFFICER HAS TO RECOMPUTE THE TOTAL IN COME WITHOUT ALLOWING FOR ANY AMOUNT SPENT ON CAPITAL NATURE AND ALLOW ONLY REVENUE EXPENDITURE TO THE EXTENT IT IS PROVED WITH EVIDENCE AND VOUCHERS. SIN CE THE APPELLANT HAS NOT PRODUCED ANY VOUCHERS EVEN DURING APPEAL THE REVENUE EXPENDITURE DISALLOWED IN THE ASSESSMENT ORDER WILL STAND CONFIRMED. HOWEVER LD. COMMISSIONER OF INCOME TAX (APPEALS) H ELD THAT EVEN WITHOUT A REGISTRATION UNDER SECTION 12AA OF THE A CT ASSESSEE WAS ENTITLED FOR DEPRECIATION ON ASSETS SINCE ASSETS W ERE USED AND SUBJECTED TO WEAR AND TEAR. 6. NOW BEFORE US LD. AUTHORISED REPRESENTATIVE STRONG LY ASSAILING THE REOPENING SUBMITTED THAT ASSESSEE WA S NOT PROVIDED WITH THE REASONS FOR RE-OPENING. ACCORDING TO HIM THE TENOR OF THE ASSESSMENT ORDER DID SHOW THAT NO REASONS WERE RECO RDED. ASSESSEE WAS GRANTED REGISTRATION BY COMMISSIONER OF INCOME TAX PURSUANT TO TRIBUNAL DIRECTION ON 21.02.2011. AS PER THE LD. AU THORISED REPRESENTATIVE BY VIRTUE OF SECOND PROVISO TO SECT ION 12AA(2) OF THE ACT REOPENING CANNOT BE DONE FOR ANY ASSESSMENT YEA R PRECEDING THE YEAR OF REGISTRATION ONLY FOR NON-REGISTRATION. T HUS ACCORDING TO HIM THE RE-OPENING DONE FOR THE IMPUGNED ASSESSMENT YEA R WAS BAD. WHILE CONCEDING THAT VALIDITY OF RE-OPENING WAS NOT QUESTIONED BEFORE THE LOWER AUTHORITIES BY THE ASSESSEE LD. AUTHORIS ED REPRESENTATIVE SUBMITTED THAT IT WAS A PURE QUESTION OF LAW GOING TO THE ROOT OF THE ITA NO.1583/MDS/2016 :- 5 -: JURISDICTION AND COULD BE RAISED ANY POINT OF TIME. AS PER LD. AUTHORISED REPRESENTATIVE THIS TRIBUNAL HAD IN ASSE SSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 AND 2006-07 REMITTED TH E ISSUE REGARDING VALIDITY OF REOPENING TO THE COMMISSIONER OF INCOME TAX (APPEALS) FOR ADJUDICATION ON SIMILAR SET OF FACTS. RELIANCE WAS ALSO PLACED ON A DECISION OF KOLKATA BENCH OF THIS TRIBUNAL IN THE C ASE OF SREE SREE RAMKRISHNA SAMITY VS. DCIT (2015) 64 TAXMANN.COM 33 0. 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT ASSESSEE HAD NOT RAISED ANY QUESTION REGARDING VALI DITY OF REOPENING BEFORE ANY OF THE LOWER AUTHORITY. FURTHER ACCORDI NG TO HIM THE PROVISO RELIED ON BY THE LD. AUTHORISED REPRESENTAT IVE WAS NOT APPLICABLE IN ASSESSEES CASE. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONT ENTIONS. ASSESSEE IS QUESTIONING THE VALIDITY OF RE-OPENING FOR THE IMPUGNED ASSESSMENT YEAR. FIRST PARA OF THE ASSESSMENT ORDE R IS VERY RELEVANT IN THIS REGARD. THE ASSESSEE TRUST HAS BELATEDLY FILED A NIL RET URN FOR THE ASSESSMENT YEAR 2004-2005 ON 17.08.2007. IN TH E ABSENCE OF 12AA REGISTRATION THE TRUST IS NOT ENTIT LED TO ENJOY THE BENEFIT U/S.11 OF THE I.T. ACT. ACCORDIN GLY DEPRECIATION CLAIM OF RS.1571797/- HAVE TO BE DISALLOWED. IN VIEW OF THE ABOVE I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. BASED ON THAT NOTICE U/S.148 WAS ISSUED ON 27.03.2010. THE ASSESSEE FILED A REPLY IN RESPO NSE TO THE NOTICE AND REQUESTED TO TREAT THE RETURN ALR EADY FILED AS IN RESPONSE TO THE NOTICE ISSUED U/S.148. THE ITA NO.1583/MDS/2016 :- 6 -: CASE WAS TAKEN UP FOR SCRUTINY AND THE CASE WAS POSTED FOR HEARING ON 15.04.2010. ASSESSING OFFICER HAS NOT CLEARLY MENTIONED HOW THE INITIAL ASSESSMENT WAS COMPLETED. IT ALSO INDICATE THAT REASONS REOPE NING WAS RECORDED IN THE ASSESSMENT ORDER FOR FIRST TIME SINCE THE AS SESSING OFFICER HAS USED THE TERM HAVE AND NOT HAD. FURTHER FO R AY 2006-07 THE INCOME TAX OFFICER (EXEMPTIONS) MADURAI HAD CLEARLY INDICATED THAT NO REASONS WERE RECORDED FOR THAT YEAR BEFORE ISSUING NOTICE U/S.147 OF THE ACT WHICH IS CLEAR FROM PARA 8 OF THE ORDER DA TED 24.08.2016 OF THIS TRIBUNAL IN ASSESSEES APPEAL FOR A.Y. 2003-04 AND A.Y. 2006-2007 IN ITA 2045 AND 2046/MDS/2014 WHERE ALSO THE REOPE NING OF ASSESSMENT WAS ASSAILED. SAID PARA IS REPRODUCED H EREUNDER:- 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. ADMITTEDLY THESE ASSESSMENTS WERE REOPE NED U/S.147 OF THE ACT. RECORDING OF REASONS IS PRIME I MPORTANT BEFORE ISSUING NOTICE U/S.148 OF THE ACT WHICH WAS NOT DONE BY THE AO. THE ASSESSEE FILED A COPY OF LETTER DATE D 2.11.2015 FOR THE AY 2006-07 ISSUED BY THE ITO(EXEMPTIONS) M ADURAI STATING THAT THERE IS NO REASONS RECORDED BEFORE IS SUING NOTICE U/S.148 OF THE ACT WHICH READS AS FOLLOWS : TO SENIOR AUTHORISED REPRESENTATIVE A BENCH INCOME TAX APPELLATE TRIBUNAL II FLOOR BBLOCK BESANT NAGAR CHENNAI 600 090 . SIR SUB: ASSESSEE APPEAL BEFORE ITAT IN THE CASE OF M/S. HOUSE OF ABRAHAM ITA NO.1583/MDS/2016 :- 7 -: CHARTIABLE TRUST KODAIKANAL A.Y. 2006- 07 SUBMISSION OF DETAILS REG REF: LETTER IN ITAT NO.2046/2014-A.Y.2006- 07 DT. 09.09.2015 PLEASE REFER TO THE ABOVE. IT IS SEEN FROM THE RECORD THERE IS NO REASON RECOR DWD IN THE ORDER SHEET FOR ISSUING OF NOTICE U/S.148 BY THE AS SESSING OFFICER. HOWEVER DURING THE ASSESSMENT PROCEEDINGS THE ASSE SSING OFFICER HAS MENTIONED THAT THE TRUST IS NOT GRANTED U/S.12A FOR THE ASSESSMENT YEAR 2006- 07 VIDE COMMISSIONER OF INCOM E TAX-II C.NO.101/254/CITII/2008-09 DT. 04.09.2009. THE ASSE SSING OFFICER HAS TREATED THE INCOME IN AOP STATUS AND P ASSED THE ASSESSMENT ORDER ACCORDINGLY. I AM FURNISHING HEREWITH THE COPIES OF ORDER SHEET NOTING IN THE ABOVE CASE FOR THE ASSESSMENT YEAR 2006-07 CONTAINI NG SIX PAGES. YOURS FAITHFULLY SD/- (P.RAVEENDRAN) INCOME-TAX OFFICER (EXEMPTIONS) MADURAI. THE TRIBUNAL HAD SET ASIDE THE ISSUE REGARDING VALI DITY OF RE-OPENING FOR AY 2006-2007 AS WELL AS 2003-2004 THOUGH IN TH E LATTER YEAR THERE WAS NO ADMISSION BY ITO (EXEMPTION) SIMILAR TO THE ONE GIVEN BY HIM FOR AY 2006-2007. RELEVANT PARA 8.1 OF THE ABOVE OR DER OF THE TRIBUNAL IS REPRODUCED HEREUNDER:- 8.1 NO SUCH LETTER WAS FILED FOR THE A.Y. 2004-05 . IN OUR OPINION SINCE THIS ISSUE IS RAISED BEFORE US FOR T HE FIRST TIME ALL MATERIALS RELATING TO REOPENING OF ASSESSMENT I S REQUIRED TO BE EXAMINED BY THE AUTHORITIES CONCERNED. HENCE IT IS APPROPRIATE TO REMIT THE ISSUE OF REOPENING TO THE FILE OF THE CIT(APPEALS) FOR FRESH CONSIDERATION AS HE HAS NO OCCASION TO EXAMINE THE MATERIALS. ACCORDINGLY THIS ISSUE I S REMITTED BACK TO THE FILE OF THE CIT(APPEALS) FOR HIS ADJUDI CATION. SINCE WE HAVE NOT DEALT WITH THE LEGAL ISSUE AT T HIS STAGE WE REFRAIN FROM GOING TO THE OTHER GROUNDS RAISED B Y THE ASSESSEE. ITA NO.1583/MDS/2016 :- 8 -: 9. THE FACT SITUATION FOR IMPUGNED ASSESSMENT YEAR IS SIMILAR TO THAT FOR ASSESSMENT YEAR 2003-04. CONSIDERING THE ABOVE RULING OF THE CO- ORDINATE BENCH AND ALSO THE JUDGMENT OF HONBLE AP EX COURT IN THE CASE OF NTPC VS. CIT (229 ITR 383 ) WE ARE OF THE OPINION THAT THE QUESTION REGARDING VALIDITY OF RE-ASSESSMENT CAN BE RAISED BY THE ASSESSEE EVEN AT APPELLATE STAGE. WE ARE THEREFORE GIVING DIRECTION SIMILAR TO THOSE GIVEN BY THE CO-ORDINATE BENCH AT PARA 8.1 OF ITS ORDER DATED 24.08.2016 FOR A.Y. 2003-04 AND 2006-07 IN ITA NO.2045 & 2046/MDS/2014 REPRODUCED BY US AT PARA EIGHT ABOV E. ALL OTHER ISSUES RAISED BY THE ASSESSEE ARE KEPT OPEN. 10. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY THE 28TH DAY OF OCT OBER 2016 AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED:28TH OCTOBER 2016 KV &' ()*) / COPY TO: 1 . / APPELLANT 3. + ' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF