Sri Smpath Vinayagar Temple Trust,, Visakhapatnam v. The CIT, Hyderabad

ITA 164/VIZ/2016 | 2008-2009
Pronouncement Date: 29-11-2017 | Result: Dismissed

Appeal Details

RSA Number 16425314 RSA 2016
Assessee PAN AABTS1377B
Bench Visakhapatnam
Appeal Number ITA 164/VIZ/2016
Duration Of Justice 1 year(s) 7 month(s) 23 day(s)
Appellant Sri Smpath Vinayagar Temple Trust,, Visakhapatnam
Respondent The CIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 29-11-2017
Assessment Year 2008-2009
Appeal Filed On 06-04-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM . . . BEFORE SHRI V. DURGA RAO JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH ACCOUNTANT MEMBER . / I . T .A.NO. 1 63 /VIZ/ 201 6 ( / ASSESSMENT YEAR: 20 1 1 - 1 2 ) ./ I.T.A.NO. 164 /VIZ/201 6 ( / ASSESSMENT YEAR:20 08 - 09 ) SRI SAMPATH VINAYAGAR TEMPLE TRUST D.NO.10 - 1 - 33 CBM COMPOUND VISAKHAPATNAM [PAN : A ABTS1377B ] THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI C.V.S.MURTHY AR / RESPONDENT BY : SMT. MADHUVANI DR S HRI M.N.MURTHYNAIK DR / DATE OF HEARING : 2 2 . 1 1 .2017 / DATE OF PRONOUNCEMENT : 29 . 1 1 .2017 / O R D E R P ER BENCH 1. TH E S E APPEAL S ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [ EXEMPTIONS ] [CIT] HYDERABAD VIDE 2 ITA NO . 163 /VIZ/201 6 AND 164/VIZ/206 SRI SAMPATH VINAYAGAR TEMPLE TRUST VISAKHAPATNAM F. NO.CIT( E )/ HYD / 263 / 3/ 201 5 - 1 6 DATED 14 .0 3 .201 6 FOR THE ASSESSMENT YEAR 20 1 1 - 1 2 AND 2008 - 09. SINCE THE ISSUE S INVOLVED IN THE SE APPEALS ARE COMMON THE APPEAL S ARE CLUBBED HEARD TOGETHER AND DISPOSED OF IN COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN THE APPEAL T HE ASSESSEE FILED THE FOLLOWING GROUNDS OF APPEAL : (I) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD IS CONTRARY TO LAW MID FACTS OF THE EASE. (II) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD IS NOT IN ACCORDANCE WITH LAW AS THE ORDER WHICH WAS REVISED BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD WAS ALREADY AN ORDER SUBJECTED TO APPEAL BY THE COMMISSIONER OF I NCO ME TAX (APPEALS) VISAKHAPATNAM.' HENCE THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABA D IS NOT MAINTAINABLE AND MAYKINDLY BE CANCELLED AS VOIDAB - INITIO. - (III) THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD IS ALSO NOT JUSTIFIED IN INVOKING THE PROVISIONS U/S.263 OF THE I.T. ACT AS THE ORDER PASSED BY THE ASSESSING AUTHO RITY IS NOT ERRONEOUS AND NOT PREJUDICIAL TO THE REVENUE - HENCE THE APPELLANT TRUST PRAYS THE HONOURABLE BENCH TO KINDLY CANCEL THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD - (IV) FOR THESE AND OTHER GROUNDS THAT MAYBE URGED AT THE TIME OF APPEAL HEARING THE APPELLANT 'PRAYS THE HON'BLE LT.A.T. VISAKHAPATNAM FOR RELIEF. 3 ITA NO . 163 /VIZ/201 6 AND 164/VIZ/206 SRI SAMPATH VINAYAGAR TEMPLE TRUST VISAKHAPATNAM 3. GROUND NOS. 1 AND 4 ARE GENERAL IN NATURE WHICH DO NOT REQUIRE SPECIFIC ADJUDICATION. 4. GROUND NO.2 IS RELATED TO THE VALIDITY OF ORDER PASSED BY CIT (E) U/S 263 WHEN THE ASSESSMENT ORDER OF THE AO WAS A SUBJECT MATTER OF APPEAL BEFORE THE CIT(A). THE ASSESSE E IS OF THE VIEW THAT THE CIT IS NOT EMPOWERED TO TA K E UP THE CASE FOR REVISION DURIN G THE PENDENCY OF APPEAL BEFORE THE CIT(A). 5. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. NIL AFTER CLAIMING EXEMPTION U/S.11 OF THE I.T.ACT. ON 29.09.2011. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER (AO) FOUND TH AT THE ASSESSEE WA S NOT GRANTED THE REGISTRATION U/S 12A AND HENCE NOT ENTITLED FOR EXEMPTION U/S 11 AND 12 . ACCORDINGLY THE AO HAS TREATED THE ASSESSEE AS AOP AND COMPLETED THE ASSESSMENT FOR THE AY 2011 - 12 ON TOTAL INCOME OF RS. 73 60 760/ - . THE GR OSS R ECEIPTS OF THE ASSESSEE WERE RS.2 07 26 908/ - AND THE AO ALLOWED THE ENTIRE PAYMENTS OF RS.1 33 66 150/ - AS DEDUCTION AND ASSESSED THE BALANCE AS INCOME . 4 ITA NO . 163 /VIZ/201 6 AND 164/VIZ/206 SRI SAMPATH VINAYAGAR TEMPLE TRUST VISAKHAPATNAM 5.1. IN RESPECT OF ASSESSMENT FOR THE AY 2008 - 09 THE ASSESSMENT WAS COMPLETED ON TOTAL INCOME OF RS .46 45 640/ - . THE GROSS RECEIPTS OF THE ASSESSEE WERE RS.1 17 14 097/ - AND THE AO ALLOWED THE ENTIRE PAYMENTS OF RS.70.68.459/ - AND ASSESSED THE BALANCE AMOUNT FOR THE PURPOSE OF INCOME TAX. 6. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE WENT ON APP EAL BEFORE THE CIT (A) AND FILED THE APPEAL. DURING THE PENDENCY OF APPEAL BEFORE THE LD. CIT(A) THE CIT HAS TAKEN UP THE CASE FOR REVISION U/S 263 AND OBSERVED THAT OUT OF THE TOTAL PAYMENT S ALLOWED BY THE AO A SUM OF RS. 75 83 315/ - WAS CAPITAL EXPENDITURE WHICH I S NOT ALLOWABLE FROM THE GROSS RECEIPTS AND ACCORDINGLY FOUND THE ORDER OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE . HENCE THE CIT HAS SET ASIDE THE ASSESSMENT ORDER OF THE AO PASS ED U/S 143 (3) R.W.S. 147 DATED 28.02.2014 AND DIRECTED THE AO TO REDO THE ASSESSMENT AFTER VERIFYING THE DETAILS . 7. AGGRIEVED BY THE ORDER OF THE CIT THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING THE LD.AR ARGUED THAT THE A SSESSMENT IN THIS CASE WAS COMPLETED BY AO U/S 143(3) R.W.S. 147 AND ASSESSED THE 5 ITA NO . 163 /VIZ/201 6 AND 164/VIZ/206 SRI SAMPATH VINAYAGAR TEMPLE TRUST VISAKHAPATNAM TOTAL INCOME AT RS.73 60 760/ - AND THE ASSESSEE FILED APPEAL BEFORE THE CIT (A) AGAINST THE ORDER OF THE AO. SINCE THE APP EAL I S FILED BEFORE THE CIT(A) AND THE SAME WAS PEND ING THE LD.AR WAS OF THE VIEW THAT THE ORDER OF THE AO WAS MERGED WITH THE CIT(A) AND THE CIT IS BEING PARALLEL AUTHORITY NOT EMPOWERED TO TAKE UP THE CASE FOR REVISION U/S 263. HENCE LD.AR VIEWED THAT THE ORDER PASSED BY THE CIT U/S 263 I S NOT MAI NTAINABLE AND REQUIRED TO BE QUASH ED. 8. PER CONTRA LD.DR ARGUED THAT THE CIT(E) IS VESTED WITH THE POWERS UNDER SECTION 263 TO REVISE THE ORDERS PASSED BY THE AO. THE ONLY REQUIREMENT I S THE ORDER PASSED BY THE AO MUST BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE . THERE WAS NO PROVISION IN THE ACT PROHIBITING THE CIT TO EXERCISE POWERS UNDER SECTION 263 WHEN THE APPEAL IS PENDING. THE ISSUES TAKEN UP BY THE CIT FOR REVISION U/S 263 WERE NOT EXAMINED BY THE AO AND HAS NOT MADE ANY ADD ITIONS AND W E RE NOT AGITATED IN APPEAL. THE ASSESSEE HAS FILED APPEAL BEFORE THE CIT(A) WITH REGARD TO GRANTING OF REGISTRATION AND TO ALLOW THE EXEMPTION U/S 11 AND 12 OF THE I.T.ACT. THE ISSUE TAKEN UP BY THE CIT U/S 263 WAS RELATING TO CAPITAL EXPENDITURE CLAIMED BY THE ASSESSEE AS REVENUE EXPENDITURE. BOTH THE ISSUES ARE DIFFERENT AND INDEPENDENT. THEREFORE THE THEORY OF MERGER IS NOT 6 ITA NO . 163 /VIZ/201 6 AND 164/VIZ/206 SRI SAMPATH VINAYAGAR TEMPLE TRUST VISAKHAPATNAM APPLI CABLE FOR THE ISSUES WHICH ARE NOT PENDING IN APPEAL . SINCE THE ISSUES RAISED BY THE CIT U/S 263 ARE NOT IN APPEAL PENDING BEFORE THE CIT(A) LD.DR ARGUED THAT THERE IS NO ERROR IN THE ORDER PASSED BY THE CIT (E) U/S 263 AND NO INTERFERENCE IS CALLED FOR. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) R.W.S. 147 BY AN ORDER DATED 28.02.2014 FOR THE A.Y 2008 - 09 AND FOR THE A.Y.2010 - 11 U/S 143(3). IN THE ORDER S PASSED THE A O HAS DENIED THE EXEMPTION U/S 11 AND 12 FOR ASSESSEES FAILURE TO PRODUCE EVIDENCES GRANTING REGISTRATION U/S 12A OF I.T.ACT. THE ASSESSEE HAD RECEIVED TOTAL RECEIPTS OF RS.2 07 26 908 AND MADE THE PAYMENTS OF RS.1 33 66 150/ - . THE AO HAS ALLOWED THE ENT IRE PAYMENTS WITHOUT EXAMINING THE NATURE OF EXPENDITURE FOR BOTH THE YEARS. THERE WAS NO INDICATION IN THE ASSESSMENT ORDER THAT THE AO HAS VERIFIED THE NATURE OF PAYMENTS. IT WAS ALSO EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT MADE ANY VERIFI CATIONS WITH REGARD TO THE PAYMENTS. T HE ASSESSEE FILED APPEAL BEFORE THE CIT (A) AGITATING THE DENIAL OF EXEMPTION AND REQUESTED THE CIT (A) TO GRANT THE EXEMPTION U/S 11 AND 10(23 BBA). THE CIT DURING THE REVISION PROCEEDINGS FOUND THAT THE ASSESS EE HAD MADE THE PAYMENTS F OR CAPITAL EXPENDITURE AND CLAIMED AS REVENUE EXPENDITURE 7 ITA NO . 163 /VIZ/201 6 AND 164/VIZ/206 SRI SAMPATH VINAYAGAR TEMPLE TRUST VISAKHAPATNAM WHICH IS NOT ALLOWABLE . HENCE THE CIT HAS TAKEN UP THE CASE FOR REVISION AND HELD THAT THE ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ISSUE WITH REGARD TO THE ALLOWABILITY OF CAPITAL EXPENDITURE OUT OF THE REVENUE RECEIPTS WAS NOT EXA MINED BY THE AO AND THE SAME WAS NO T PENDING BEFORE THE CIT(A) . THEREFORE AS PER PROVISIONS OF SECT IO N 263 THE CIT HAS RIGHTLY TAKEN UP THE CASE FOR REVISION U/S 263. THE LD.AR DID NOT BRING ANY JUDGEMENT OR DECISION IN SUPPORT OF HIS ARGUMENT. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT AND THE SAME IS UPHELD. THE ASSESSEES APPEAL ON THIS GROUND IS DISMISSED. 10. GROUND NO.3 IS RELATED TO THE VALIDITY OF INVOKING THE PROVISIONS U/S 263 OF I.T.ACT. THE ASSESSEE IS OF THE VIEW THAT THE ASSESSMENT PASSED BY THE AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE HENCE THE LD. CIT SHOULD NOT HAVE T AKEN UP THE CASE FOR REVISION. 11. ON THE OTHER HAND THE LD.DR RELIED ON THE ORDERS OF THE LD.CIT. 1 2 . WE HAVE H E ARD BOTH THE PARTIES AND PERUSED THE MATERIAL P LACED ON RECORD. AS PER THE ASSESSMENT ORDER FROM THE GROSS RECEIPTS THE ASSESSING 8 ITA NO . 163 /VIZ/201 6 AND 164/VIZ/206 SRI SAMPATH VINAYAGAR TEMPLE TRUST VISAKHAPATNAM OFFICER ALLOWED ENTIRE PAYMENTS AS REVENUE EXPENDITURE . THE AO HAS ALLOWED THE ENTIRE PAYMENTS WITHOUT VERIFYING NATURE OF EXPENDITURE . DURING THE REVISION PROCEEDINGS THE CIT FOUND THAT THE ASSESSEE HAD MADE PAYMENTS FOR CAPITAL EXPENDITURE AND CLAIMED THE SAME AS REVENUE EXPENDITURE WHICH WAS AN ERROR AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD.AR DID NOT PLACE ANY EVIDENCE TO ESTABLISH THAT THE PAYMENT WAS NOT INCURRED FOR CAPITAL PURPOSE. THE ASSESSMENT IS COMPLETED TREATING THE ASSESSEE AS AOP AND TAXABLE ENTITY. THE ASSESSEE IS NOT ENJOYING EXEMPTION U/S 11 & 12. HENCE THE VOLUNTARY CONTRIBUTION RECEIVED BY THE ASSESSEE IS TAXABLE INCOME U/S 2(24)(IIA) AND ONLY THE REVENUE EXPENDITURE IS ALLOWABLE DEDUCTION. IN THE INSTANT CASE THE AO A LLOWED THE ENTIRE PAYMENTS AS REVENUE EXPENDITURE WITHOUT VERIFYING THE NATURE OF EXPENDITURE WHICH INCLUDED THE CAPITAL PAYMENTS. SINCE THE CAPITAL EXPENDITURE IS NOT ALLOWABLE THE ASSESSM ENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE A ND THE CIT HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT AND SET ASIDE THE ORDER OF THE AO. THEREFORE WE DO NOT FIND ANY ERROR IN THE ORDER PASSED BY THE CIT AND THE SAME IS UPHELD. 12. IN THE RESULT APPEAL S OF THE ASSESSEE ARE DISMISSED. 9 ITA NO . 163 /VIZ/201 6 AND 164/VIZ/206 SRI SAMPATH VINAYAGAR TEMPLE TRUST VISAKHAPATNAM THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29 TH NOV 20 17 . SD/ - SD/ - ( . . ) ( . ) ( D.S. SUNDER SINGH ) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL M EMBER /VISAKHAPATNAM /DATED : 29 . 1 1 .2017 L. RAMA SPS / COPY OF THE ORDER FORWARDED TO: - 1. THE A SSESSEE - SRI SAMPATHVINAYAGAR TEMPLE TRUST D.NO.10 - 1 - 33 CBM COMPOUND VISAKHAPATNAM 2 . THE RE VENUE THE CIT (EXEMPTIONS) HYDERABAD 3 . THE ADDL. COMMISSIONER OF INCOME TAX VI JAYAWADA 4. THE ITO(EXEMPTIONS) VISAKHAPATNAM 5 . / DR ITAT VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT VISAKHAPATNAM