ADIT (E) I(1), MUMBAI v. RASHTRIYA SEVA SAMITI, MUMBAI

ITA 5841/MUM/2011 | 2008-2009
Pronouncement Date: 11-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 584119914 RSA 2011
Assessee PAN AAATR3475J
Bench Mumbai
Appeal Number ITA 5841/MUM/2011
Duration Of Justice 2 year(s) 1 month(s) 23 day(s)
Appellant ADIT (E) I(1), MUMBAI
Respondent RASHTRIYA SEVA SAMITI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 11-10-2013
Date Of Final Hearing 20-06-2013
Next Hearing Date 20-06-2013
Assessment Year 2008-2009
Appeal Filed On 18-08-2011
Judgment Text
INCOME TAX APPELLATE TRIBUNAL MUMBAI - D BENCH. . .. . . .. . !'# !'# !'# !'# ' ' ' ' BEFORE S/SH. I.P. BANSAL JUDICIAL MEMBER & RAJENDRA ACCOUNTANT MEMBER /. ITA NO.5841/MUM/2011 $ $ $ $ % % % % / ASSESSMENT YEAR-2008-09 ADIT (E) I (1) R.NO. 504 PIRAMAL CHAMBERS 5 TH FLOOR PAREL MUMBAI- 400012 VS. RASHTRIYA SEVA SAMITI 11/12 NANA SHANKAR SHETH SMRUTI 380-82 JSS ROAD GIRGAON MUMBAI-400002 PAN:AAATR3475J ( &' / APPELLANT) ( ()&' / RESPONDENT) &' &' &' &' * * * * ' '' ' / APPELLANT BY : SHRI SANJEEV JAIN ()&' + * ' / RESPONDENT BY : SHRI ARATI VISSANJI & MS. CHAMPA L.PUROHIT $ $ $ $ + ++ + / DATE OF HEARING : 08-10-2013 -.% + / DATE OF PRONOUNCEMENT : 11-10-2013 $ $ $ $ 1961 + ++ + 254(1) ' '' ' / / / / '0 '0 '0 '0 ORDER U/S.254(1)OF THE INCOME-TAX ACT 1961(ACT) PER RAJENDRA AM CHALLENGING THE ORDER DATED 02-05-2011 OF THE CIT(A )-I MUMBAI ASSESSING OFFICER (AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS OF THE CASE AND IN LAW THE LD . CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER T O ALLOW THE EXEMPTION U/S. 11 OF THE I.T.ACT 1961 I GNORING THE ELABORATE DISCUSSION OF THE ISSUES AND FACTS. 2. WHETHER ON THE FACTS OF THE CASE AND IN LAW THE LD . CIT(A) ERRED IN STATING THAT OUT OF 91 BEDS ARE RESERVED FOR POOR PEOPLE AND 9 BEDS ARE RESERVED FO R WEAKER SECTIONS & THERE WAS NO VIOLATION OF BOMBAY PUBLIC TRUST ACT BY THE ASSESSEE WHERE IN R EALITY THESE FACTS WERE NOT SUBMITTED AND NOT REVEALED TO THE A.O. DURING THE ASSESSMENT PROCEEDI NGS THROUGH SPECIFIC QUESTIONS HAS PUT TO THE ASSESSEE BY THE A.O. ASKING FOR THE TOTAL NUMBER OF BEDS VIS--VIS THE TOTAL NUMBER OF FREE BEDS AND I TS PERCENTAGE TO THE TOTAL BEDS OF THE HOSPITAL HENCE THE SAME HAS RESULTED IN ADDITIONAL EVIDENCE TAKEN BY CIT(A) FOR WHICH A.O. WAS NOT GIVEN AN REASONABLE OPPORTUNITY. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT( A)-1 MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2 ITA NO.5841/MUM/2011 RASHTRIYA SEVA SAMITI . 2. IN THE CASE UNDER CONSIDERATION ASSESSEE HAD FILED ITS RETURN OF INCOME ON 30.09.2008 DECLARING INCOME AT RS.NIL.AO FINALISED THE ASSESSMENT U/S. 1 43(3) OF THE ACT ON 29.12.2010 DETERMINING THE TOTAL INCOME AT RS.1.29 CRORES.DURING THE ASSESSMEN T PROCEEDINGS AO FOUND THAT ASSESSEE WAS RUNNING AND MAINTAINING A HOSPITAL AND THE SURPLUS RECEIPTS WERE CLAIMED EXEMPT.AO DIRECTED THE ASSESSEE TO SUBMIT THE COMPLETE DETAILS OF FREE BEDS PROVIDED T O THE PATIENTS PERCENTAGE OF FREE BEDS AVAILABLE O UT OF THE TOTAL BEDS OF THE HOSPITAL AND BED KEPT RESE RVED FOR INDIGENT PATIENTS AND OTHER WEAKER SECTION S OF THE SOCIETY. ASSESSEE SUBMITTED ITS REPLY ON 08.12. 2010.AS PER THE AO ASSESSEE HAD RESPONDED TO THE QUERIES RAISED APART FROM THE QUERY ABOUT NUMBER OF FREE BEDS KEPT FOR THE INDIGENT PATIENTS AND WEAKE R SECTIONS AS WELL AS THE DETAILS OF FREE TREATMENT G IVEN BY THE ASSESSEE DURING THE YEAR.AO NOTICED THA T PATIENTS WERE NOT TREATED FREE OF COST THAT ONLY 25 PATIENTS TREATED AT CONCESSIONAL RATES DURING THE WHOLE PERIOD.HE HELD THAT BY NOT MAINTAINING/KEEPIN G 10% OF THE BEDS FOR THE INDIGENT PATIENTS AND PATIENTS FROM OTHER WEAKER SECTIONS OF THE SOCIETY THE ASSESSEE HAD VIOLATED THE NORMS OF BOMBAY PUBLIC TRUST(BPT)ACT THAT IT ALSO WORKED ADVERSELY TO THE OBSERVATIONS MADE BY THE HONBLE BOMBAY HIGH COURT THAT ASSESSEE WAS AVAILING CONCESSIONAL FACILITIES FROM THE GOVERNMENT THAT ASSESSEE WAS NOT ENTITLED TO CLAIM THE BENEFIT OF SECTION 11 EVE N THOUGH IT WAS REGISTERED U/S.12A OF THE ACT.FINAL LY AO DENIED THE BENEFITS OF SECTION 11 TO THE ASSESS EE AND COMPUTED THE INCOME AT RS. 1 29 98 124/-. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY(FAA).AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HE HELD THAT ASSESSEE HAD KEPT 10% OF THE BED RESERVED FOR NEEDY AND POOR PEOPLE THAT 2% OF THE GROSS REVENUE WAS TRANSFERRED TO INDIGENT PATIENTS FUND (IPF) THAT FREE TREATMEN T WAS GIVEN TO THE POOR AND NEEDY PEOPLE THAT OUT OF 91 BEDS 9 BEDS WERE RESERVED FOR POOR PEOPLE AND 9 BEDS FOR WEAKER SECTION THAT ASSESSEE HAD NOT VIOL ATED THE PROVISIONS OF BPT ACT. 3.1. DURING THE COURSE OF HEARING BEFORE US ON 07.10.201 3 IT WAS NOTICED THAT ASSESSEE HAD FILED A PAPER BOOK CONTAINING 12 PAGES.THE PAPER BOOK CONTAINED A CERTIFICATE MENTIONING THAT PAPERS WERE FILED BEFORE THE LOWER AUTHORITIES.IT WAS POINTED OUT TO THE AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE THAT CERTIFICATE WAS NOT AS PER THE PROVISIONS OF R ULE 18(3) OF THE ITAT RULES 1963.ON THE REQUEST OF THE AR MATTER WAS ADJOURNED TO 08.10.2013 FOR FILIN G A PROPER CERTIFICATE.IN THE FRESH CERTIFICATE IT WAS MENTIONED THAT DETAILS OF IPF A/C AND PATIENTS TREA TED FROM THE IPF WERE FILED ONLY BEFORE THE FAA. THUS IT IS CLEAR THAT CERTAIN PAPERS WERE NOT BEFOR E THE AO.BEFORE US DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT FAA HAD ADMITTED ADDITIONAL EVI DENCES WITHOUT GIVING A REASONABLE OPPORTUNITY TO THE AO.AR SUBMITTED THAT DETAILS FILED BEFORE TH E FAA WERE RELATED WITH THE IPF AND NUMBERS OF PATIENTS TREATED FREE OF COST. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT AO HAD GIVEN A CATEGORICAL FINDING THAT PATIENTS WERE NOT TREATED FREE OF COST THAT ONLY 25 PATIENTS WERE TREATED AT THE CONCESSIONAL RATE.HE HAS ALSO MENTIONED THAT DETAIL S OF NUMBER OF BEDS KEPT FREE FOR INDIGENT PATIENTS / WEAKER SECTIONS WERE NOT SUPPLIED.WE FIND THAT FAA HAD GIVEN CERTAIN FINDING ABOUT IPF AND FREE BED RESERVED FOR THE POOR PATIENTS. HIS FINDING IS BASE D ON THE PAPERS SUBMITTED BY THE ASSESSEE DURING TH E COURSE OF APPELLATE PROCEEDINGS.RULE 46A(3) OF THE ITAT RULES CLEARLY MENTIONS THAT FAA CANNOT ADMIT ANY ADDITIONAL EVIDENCE WITHOUT AFFORDING A R EASONABLE OPPORTUNITY TO THE AO.IN THE CASE OF VALI MOHAMMAD AHMEDBHAI HONBLE HIGH COURT OF GUJARAT(1 34ITR214) HAS HELD ENDS OF JUSTICE AND FAIR PLAY DEMAND THAT WHEN AN ASSESSEE PRODUCES ADDITIONAL EVIDENCE IN HIS APPEAL AN OPPORTUNITY IS TO BE GIVEN TO THE ITO TO TEST TH E EVIDENCE OR TO COUNTER THE EFFECT OF THE EVIDENCE BY PRODUCING EVIDENCE IN REBUTTAL OR OTHERWISE. NOTICE OF APPEAL CANNOT BE EQUATED WITH NOTICE OF A FUTURE APPLICATION TO LEAD ADDITIONAL EVIDENCE WHI CH NO ONE COULD HAVE ANTICIPATED OR REASONABLY FORESEE N. ORDINARILY AN APPEAL WOULD BE DECIDED ON THE EVIDENCE RECORDED IN THE COURSE OF THE ASSESSMENT P ROCEEDINGS. THE ITO THEREFORE MAY NOT IN A GIVEN CASE THINK IT NECESSARY TO REMAIN PRESENT AT THE H EARING OF THE APPEAL.RULE 46A(3) OF THE I.T. RULES 1962 MAKES IT CLEAR THAT THE AAC SHOULD NOT TAKE I NTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-R. (1) UNLESS THE ITO IS ALLOWED A REASONABLE OPPORTUNITY TO EXAMINE THE EVIDENCE OR TO CROSS-EXAMINE THE 3 ITA NO.5841/MUM/2011 RASHTRIYA SEVA SAMITI . WITNESS WHOSE EVIDENCE IS TAKEN ON RECORD OR TO PRO DUCE ANY EVIDENCE IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE. HONBLE MADRAS HIGH COURT(327ITR577)HAS ALSO IN THE CASE OF COMMISSIONER OF INCOME -TAX V. SUBBU SHASHANK HELD AS UNDER: A DUTY IS CAST UPON THE ASSESSEE TO PRODUCE ALL EV IDENCE BOTH ORAL AND DOCUMENTARY BEFORE THE ASSESSING OFFICER. WHEN THE ASSESSEE IS NOT ABLE TO PRODUCE THE EVIDENCE OR THE WITNESSES BEFORE THE ASSESSING OFFICER THE COMMISSIONER (APPEALS) HAS T O SATISFY HIMSELF ABOUT THE REASONABLE CAUSE SHOWN BY THE ASSESSEE FOR NOT PRODUCING IT BEFORE THE ASS ESSING OFFICER AND FOR PLACING IT BEFORE THE APPELL ATE AUTHORITY FOR THE FIRST TIME. WHERE THE COMMISSIONE R (APPEALS) WAS CONVINCED ABOUT THE REASONABLE CAUSE HE HAD TO FOLLOW THE PROCEDURE CONTEMPLATED UNDER RULE 46A(3) BY PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EXAMINE THE WITNESSES AS THE CASE MAY BE. . WE ARE AWARE THAT THE POWERS OF THE FAA ARE CO-TERM INUS WITH THAT OF THE AO AND HE CAN ADMIT ADDITIONAL EVIDENCES AT ANY STAGE OF HEARING BEFORE HIM BUT PRINCIPLES OF NATURAL JUSTICE DEMAND THAT DECISION SHOULD NOT BE TAKEN WITHOUT HEARING THE OT HER PARTY.IN THE CASE UNDER CONSIDERATION FAA HAD RELIED UPON THE DOCUMENTS THAT WERE NOT MADE AVAILA BLE TO THE AO.THEREFORE IN THE INTEREST OF JUSTICE WE REMAND BACK THE MATTER TO THE FILE OF THE FAA.HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE AO BEFORE PASSING FRESH ORDER. EFFECTIVE GROUND OF APPEAL FILED B Y THE AO IS ALLOWED IN PART. AS A RESULT APPEAL FILED BY THE AO STANDS PARTLY ALLOWED. 1 2 $1 3 4 0 2 ' !5 + ! 67. ORDER PRONOUNCED IN THE OP EN COURT ON 11 TH OCTOBER 2013. '0 + -.% ' 8 9: 5 9: 5 9: 5 9: 5 11 2013 . + /. SD/- SD/- ( . .. . . .. . / I.P.BANSAL ) ( !'# !'# !'# !'# / RAJENDRA) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI ;$ /DATE: 11.10 .2013 SK '0 '0 '0 '0 + ++ + ( < ( < ( < ( < ='<% ='<% ='<% ='<% / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT(A)/ > ? 4. THE CONCERNED CIT / > ? 5. DR D BENCH ITAT MUMBAI / <@/ ( $ . . . . 6. GUARD FILE/ / A )< ( //TRUE COPY// '0$ / BY ORDER B / 6 ! DY./ASST. REGISTRAR /ITAT MUMBAI