M/s. Shiksha Samiti, Haryana v. ACIT, Rewari

ITA 4216/DEL/2009 | 2005-2006
Pronouncement Date: 30-03-2010 | Result: Allowed

Appeal Details

RSA Number 421620114 RSA 2009
Assessee PAN AAAJS3132P
Bench Delhi
Appeal Number ITA 4216/DEL/2009
Duration Of Justice 5 month(s) 1 day(s)
Appellant M/s. Shiksha Samiti, Haryana
Respondent ACIT, Rewari
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 30-03-2010
Date Of Final Hearing 30-03-2010
Next Hearing Date 30-03-2010
Assessment Year 2005-2006
Appeal Filed On 29-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 4216/DEL/2009 ASSESSMENT YEAR : 2005-06 M/S. SHIKSHA SAMITI C/O P.K.S.D. DEGREE COLLEGE KANIANA DISTRICT M/GARH. (HARYANA) VS. ACIT CIRCLE REWARI. (APPELLANT) (RESPONDENT) PAN : AAAJS 3132 P APPELLANT BY : SHRI R.S. SINGH AVI CA RESPONDENT BY : SHEI KISHORE B. SR. DR O R D E R PER: C.L. SETHI J.M. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 28.08.2009 PASSED BY THE LD. CIT(A) IN THE MATTER OF AN ASSESSMENT MADE U/S. 143(3) OF THE INCOME TAX ACT 1961 (THE ACT) FOR THE A.Y. 2005-06. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LOWER AUTHORITIES WERE NOT JUSTIFIED IN DISALLOWING EXEMPTIONS U/S. 11(1) OF THE INCOME TAX ACT ON THE ALLEGED GROUND THAT AUDIT REPORT IN FROM NO. 10B WAS NOT FI LED WITH RETURN OF INCOME OR DURING THE COURSE OF ASSES SMENT PROCEEDINGS. 2. THAT THE REQUISITE AUDIT REPORT WAS DULY FILED D URING THE COURSE OF ASSESSMENT PROCEEDINGS AND AS SUCH TH E ASSESSING OFFICER IS UNDER STATUTORY OBLIGATION TO CONSIDER ITA NO. 4216/DEL/2009 PAGE 2 OF 8 THE SAME AND TO ALLOW THE BENEFIT OF SEC. 11(1) OF THE INCOME TAX ACT. 3. THAT THE FINDING OF THE CIT(A) THAT REQUISITE AU DIT REPORT WAS NOT FILED DURING THE ASSESSMENT AND APPE LLATE PROCEEDINGS IS FACTUALLY INCORRECT AND IN DISREGARD TO THE OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSM ENT ORDER AS PER WHICH THE FACT OF FILING OF AUDIT REPO RT DURING ASSESSMENT PROCEEDINGS WAS NOT IN DISPUTE. 4. THAT THE LOWER AUTHORITIES HAVE ERRED IN COMPUTI NG INCOME AT RS. 2 10 530/- WITHOUT APPLYING PROVISION S OF SEC. 11 AND PROVISIONS OF SEC. 37. 5. THAT THE ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACT AND SAME ARE BAD IN LAW. 3. THE ASSESSEE IS A TRUST REGISTERED U/S. 12A OF T HE ACT. THE ASSESSEE CLAIMED ITS INCOME TO BE EXEMPTED U/S. 11(1) OF THE ACT. THE ASSESSEE FILED ITS RETURN OF INCOME ON 18.10.2006 DECLARING TOTAL INCOME AT RS. NIL. IN THE INCOME AND EXPENDITURE ACCOUNT THE ASSESSEE HAD SH OWN NET INCOME OF RS. 2 10 532/- AGAINST THE TOTAL RECEIPTS OF RS. 2 74 4 42/-. IT HAS BEEN STATED BY THE AO THAT IN ORDER TO CLAIM EXEMPTION U/S. 11(1) OF THE ACT THE ASSESSEE SOCIETY WAS REQUIRED TO FURNISH THE NOTICE AS PER P ROVISIONS OF SECTION 11(2) OF THE ACT IN FORM NO. 10 WITHIN THE PRESCRIBED TIM E FOR FURNISHING RETURN OF INCOME U/S. 139 OF THE ACT INTIMATING ABOUT THE AC CUMULATION ITS FUNDS TO BE USED FOR THE OBJECT OF THE TRUST BUT THE ASSESSEE HAS FURNISHED NOTICE U/S. 11(2) OF THE ACT ALONGWITH ITS RETURN OF INCOME FIL ED ON 18.10.2006 AFTER THE EXPIRY OF DUE TIME SPECIFIED U/S. 139(1) O THE ACT. THE AO THEREFORE STATED THAT THE ASSESSEE WAS NOT ENTITLED FOR EXEMPTION U/ S. 11(1) OF THE ACT. THE AO FURTHER STATED THAT AUDIT REPORT IN FORM NO. 10B AS REQUIRED BY THE RULES ITA NO. 4216/DEL/2009 PAGE 3 OF 8 WAS ALSO NOT FILED BY THE ASSESSEE ALONGWITH THE RE TURN OF INCOME FILED ORIGINALLY OR FILED IN PURSUANCE TO THE NOTICE ISSU ED U/S. 148 OF THE ACT. THE AO THEREFORE ISSUED A SHOW CAUSE NOTICE AS TO WHY THE ASSESSEES CLAIM OF DEDUCTION U/S. 11 SHOULD NOT BE DISALLOWED FOR THE REASON THAT AUDIT REPORT IN FORM NO. 10B WAS NOT FILED ALONGWITH THE RETURN OF INCOME. IN REPLY THERE TO THE ASSESSEE SUBMITTED FORM NO. 10B BEFORE THE AO AND CONTENDED THAT THE ASSESSEE COULD NOT ATTACH FORM NO. 10 B WITH RE TURN OF INCOME DUE TO IGNORANCE OF LAW. THIS EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO BY SAYING THAT REPLY OF THE ASSESSEE HAS NO FORC E IN IT AS IGNORANCE OF LAW IS NOT AN EXCUSE AND EVEN OTHERWISE THE ASSESSEE COULD HAVE GET LEGAL OPINION FROM ITS COUNSEL. SINCE IN THE OPINION OF THE AO THE ASSESSEE SOCIETY HAS NOT FULFILLED THE CONDITION OF FILING A UDIT REPORT ALONGWITH RETURN OF INCOME THE AO HOLD THAT THE ASSESSEE SOCIETY IS NOT ENTITLED TO EXEMPTION U/S. 11(1) OF THE ACT. THE AO THEREFORE ASSESSED THE TOTAL INCOME AT RS. 2 10 532/- BY DISALLOWING THE SAME TO BE EXEMPTED U /S. 11(1) OF THE ACT. 4. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LD. CIT(A). 5. BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THAT I N THE LIGHT OF THE VARIOUS DECISIONS RENDERED BY THE COURT FROM TIME T O TIME IT WAS SETTLED THAT CONDITION OF FILING AUDIT REPORT ALONGWITH THE RETU RN OF INCOME IS NOT MANDATORY AS THE OMISSION TO FILE AUDIT REPORT ALON GWITH RETURN OF INCOME ITA NO. 4216/DEL/2009 PAGE 4 OF 8 CAN BE RECTIFIED BY FILING THE REPORT AT A LATER ST AGE BEFORE THE ASSESSMENT IS COMPLETED. THIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE CIT(A) BY OBSERVING THAT THE RATIO OF THE DECISIONS RELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE TO THE ASSESSEES CASE IN AS MUCH AS THE ASSESSEE FAILED TO FILE THE REQUIRED REPORT AT ALL DURING THE ASSESSMENT PR OCEEDINGS NOR THE SAME WAS FURNISHED BEFORE HIM. THE CIT(A) THEREFORE H AD TAKEN A VIEW THAT SINCE AUDIT REPORT WAS NOT FURNISHED AT ALL IN FORM NO. 10B THE AO WAS JUSTIFIED IN DENYING THE EXEMPTION. THE CIT(A) TH EREFORE DISMISSED THE APPEAL FILED BY THE ASSESSEE. 6. HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE CIT(A)S OBSERVATION THAT ASSESSEE HAS NOT FILED REQUIRED AU DIT REPORT AT ALL DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS CONTRARY TO THE FACTS NOTED BY THE AO AND HAS BEEN MADE PURELY ON HIS ASSUMPTIONS AND PRE SUMPTIONS SPECIFICALLY IN VIEW OF THE FACT THAT IN THE ASSESSMENT ORDER THE AO HAS CLEARLY STATED THAT IN REPLY TO THE SHOW CAUSE NOTICE ISSUED BY HI M THE ASSESSEE SOCIETY SUBMITTED FORM NO. 10 B WITH THE EXPLANATION THAT T HE ASSESSEE COULD NOT ATTACH FROM NO. 10 B ALONGWITH THE RETURN OF INCOME DUE TO IGNORANCE OF LAW. IN OTHER WORDS THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT IT IS AN ADMITTED POSITION THAT THE AUDIT REPORT WAS SUBM ITTED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS BUT THE SAME WAS NOT ACCEPTED ITA NO. 4216/DEL/2009 PAGE 5 OF 8 BY THE AO BY OBSERVING THAT IGNORANCE OF LAW IS NO EXCUSE AND EVEN OTHERWISE THE ASSESSEE COULD HAVE GET LEGAL OPINION FROM ITS COUNSEL. HE FURTHER SUBMITTED THAT THE NOTICE AS REQUIRED U/S. 11(2) OF THE ACT WAS ALSO FURNISHED ALONGWITH THE RETURN OF INCOME AND THAT W AS AVAILABLE BEFORE THE AO AT THE TIME WHEN THE ASSESSMENT WAS COMPLETED. HE FURTHER SUBMITTED THAT NOTICE U/S. 11(2) IN FORM NO. 10B OF DATED 25. 08.2005 WAS SENT BY CERTIFICATE OF POSTING AS WOULD BE CLEAR FROM THE R ECEIPT ISSUED BY THE POST OFFICE. HE THEREFORE SUBMITTED THAT THE ASSESSEE HAS COMPLIED WITH THE RELEVANT CONDITIONS OF FILING AUDIT REPORT AS WELL AS FURNISHING NOTES U/S. 11(2) OF THE ACT AND THEREFORE THE ASSESSEES CL AIM OF EXEMPTION U/S. 11 DESERVE TO BE ALLOWED. 8. THE LD. DR ON THE OTHER HAND SUPPORTED THE CIT (A)S ORDER AND SUBMITTED THAT THE CIT(A) HAS GIVEN A FINDING THAT THE AUDIT REPORT WAS NOT SUBMITTED DURING THE ASSESSMENT PROCEEDINGS AND EV EN NOT BEFORE HIM. THE LD. DR THEREFORE SUBMITTED THAT THE CIT(A) WAS JU STIFIED IN CONFIRMING THE AOS ACTION. 9. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE DELIBERAT ED UPON THE RELEVANT POSITION OF LAW CONTAINED IN THAT BEHALF. 10. IT IS BY NOW WELL SETTLED THAT THE CONDITION OF FILING AUDIT REPORT ALONGWITH THE RETURN OF INCOME BY ITSELF IS NOT MAN DATORY BUT DIRECTORY AND ITA NO. 4216/DEL/2009 PAGE 6 OF 8 IT IS SUFFICE THAT IF AUDIT REPORT IS MADE AVAILABL E BEFORE THE ASSESSMENT IS FINALLY COMPLETED. THIS PROPOSITION HAS ALSO BEEN ACCEPTED BY THE CIT(A). HOWEVER THE LD. CIT(A) ON FACTS HAS GIVEN A FIND ING THAT NO SUCH AUDIT REPORT REQUIRED UNDER THE LAW WAS EITHER SUBMITTED BEFORE THE AO NOR BEFORE HIM. ON PERUSAL OF THE ASSESSMENT ORDER WE FIND T HAT THIS FINDING OF THE CIT(A) THAT AUDIT REPORT WAS NOT SUBMITTED BEFORE T HE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS NOT CORRECT IN AS MUCH AS THE AO HAS HIMSELF ADMITTED IN THE ASSESSMENT ORDER THAT AUDIT REPORT IN FORM NO. 10B WAS FILED BEFORE HIM WHICH HE REFUSED TO ENTERTAIN FOR THE R EASON AS TO WHY THE SAME WAS NOT FILED ALONGWITH THE RETURN OF INCOME. IN T HE LIGHT OF THE FACTS OF THE PRESENT CASE WE THEREFORE HOLD THAT THE ASSESSEE HAS SUBMITTED THE REQUIRED AUDIT REPORT DURING THE COURSE OF ASSESSMENT PROCEE DINGS BEFORE THE AO AND THUS THE CONDITION OF FILING OF AUDIT REPORT IN SU PPORT OF CLAIM OF EXEMPTION U/S. 11(1) OF THE ACT STAND SATISFIED. 11. WE NOW COME TO THE ISSUE AS TO WHETHER A NOTICE U/S. 11(2) OF THE ACT IN FORM NO. 10B HAS BEEN SUBMITTED BY THE ASSESSEE OR NOT OR WHETHER CONDITIONS OF SECTION 11(2) ARE SATISFIED. IN THE PRESENT CASE IT IS AN ADMITTED POSITION THAT FORM NO. 10B REQUIRED U/S. 1 1(2) WAS ENCLOSED WITH THE RETURN OF INCOME. HOWEVER THE AO HAS STATED T HAT IT IS UNDATED. BUT THE FACT REMAINS THAT IT WAS FILED ALONGWITH THE RE TURN OF INCOME AND WAS AVAILABLE WITH THE AO AT THE TIME WHEN THE ASSESSME NT WAS COMPLETED. ITA NO. 4216/DEL/2009 PAGE 7 OF 8 SINCE NOTICE REQUIRED U/S. 11(2) WAS FILED ALONGWIT H RETURN OF INCOME AND BEFORE THE ASSESSMENT IS COMPLETED WE ARE OF THE C ONSIDERED VIEW THAT THE ASSESSEE HAS ALSO SATISFIED THE CONDITIONS OF SECTI ON 11(2) OF THE ACT IN FILING NOTICE OF ACCUMULATION OF INCOME. HOWEVER THE AO SHALL BE AT LIBERTY TO VERIFY WHETHER ACCUMULATED AMOUNT WAS USED FOR CHAR ITABLE PURPOSES WITHIN THE TIME LIMIT AS GIVEN IN THE NOTICE OF THE ASSESS EE. THE ASSESSEE SHALL SUBMIT THE NECESSARY DETAILS BEFORE THE AO IN THIS MATTER. WE ORDER ACCORDINGLY. 12. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN THE MANNER AS INDICATED ABOVE. 13. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFTER THE HEARING WAS OVER ON 30 TH MARCH 2010. SD/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER SD/- (C.L. SETHI) JUDICIAL MEMBER DATED: 30 TH MARCH 2010 *NITASHA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. BY ORDER ITA NO. 4216/DEL/2009 PAGE 8 OF 8 DEPUTY REGISTRAR