Income Tax Appellate Tribunal - Bangalore
Sri Sharada Lok Kalyan Trust, Gulbarga vs Asst. Commissioner Of Income Tax, ... on 8 September, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC-A" BENCH : BANGALORE
BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER
ITA No.643/Bang/2017
Assessment Year : 2007-08
M/s. Sri Sharada Lok Kalyan Trust,
The Assistant
No. 10-6, S.B. Temple Road,
Commissioner of Income
Brahmapura,
Vs. Tax,
Kalaburagi.
Circle (1),
Bangalore.
PAN: AAGTS 0189Q
APPELLANT RESPONDENT
Appellant by : Shri Shreehari Kutsa, CA
Respondent by : Smt. Padma Meenakshi, JCIT (DR)
Date of hearing : 24.08.2017
Date of Pronouncement : 08.09.2017
ORDER
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the assessee which is directed against the order of ld. CIT(A), Gulbarga dated 27.01.2017 for Assessment Year 2007-08.
2. The grounds raised by the assessee are as under.
"1.The Order of the learned Commissioner of Income-tax Appeals, passed under section 250 of the Act in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case.
2.The Appellant denies himself liable to be assessed at a total income as determined by the learned AO as against the total income to which the Appellant is taxable under the law on the facts and circumstances of the case.
3.The learned Commissioner of Income Tax (Appeals) is not justified in holding that the Appellant failed to adhere to ITA No.643/Bang/2017 Page 2 of 6 the requirements of section 11 of the Act on the facts and circumstances of the case.
4.The authorities below failed to appreciate that no income is chargeable to tax in the hands of the Appellant on the facts and circumstances of the case.
5.Without prejudice to the right to seek waiver with the Hon'ble Chief Commissioner of Income Tax, the Appellant Company denies itself liable to be charged to interest under sections 244A & 234B of the Act which under the facts and circumstances of the case deserves to be cancelled. The calculation of interest under sections 244A & 234B is not in accordance with law as the rate, amount and method for calculatinginterest is not discernible from the order of assessment.
The Appellant wishes to raise certain grounds of appeal for the first time before this Hon'ble Tribunal. It is submitted that these grounds of appeal are purely on legal issues arising out of the order of the learned Assessing Officer and were not raised before the learned Commissioner of Income Tax (Appeals) in the first appeal proceedings. It is submitted that it is absolutely within the discretion of this Hon'ble Tribunal to admit it and within the rights of the Appellant to raise these grounds for the first time before this Hon'ble Tribunal. It is a settled position in law that fresh grounds of appeal can be raised before the Income Tax Appellate Tribunal. It is humbly prayed before this Hon'ble Tribunal that the additional grounds, which are pure questions of law, may kindly be admitted and disposed-off on merits for the advancement of substantial cause of justice. Reliance is placed on the decision of the Hon'ble Apex Court in the case of National Thermal Power Company Limited v. CIT, reported in 229 ITR 383 and on the ratio of the decision of the Hon'ble Karnataka High Court in the case of Gundathur Thimmappa and Sons v. CIT, reported in 70 ITR 70 in support of this prayer.
6.The learned Assessing Officer did not have any reason to believe, but only reason for suspicion and therefore the proceedings u/s 147 of the Act are not sustainable on the facts and circumstances of the case.
7.The learned Assessing Officer failed to obtain sanction of the appropriate authority prescribed under the provisions of section 151 of the Act and accordingly the ITA No.643/Bang/2017 Page 3 of 6 entire proceedings were rendered void-ab-initio on the facts and circumstances 0f the case.
8.The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above.
9.In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity."
3. The assessee has also raised 4 additional grounds of appeal which are as under.
"1.Without prejudice the Appellant is an educational institution entitled toexemption under section 10(23C)(iiiad) of the Act on the facts and circumstances of the case.
2.The gross receipts of the Appellant for the impugned period is less than the limit prescribed under Rule 2BC of the Income Tax Rules of @ 1 crore and therefore the addition impugned is not sustainable in law and consequently no tax is leviable on the facts and circumstances of the case.
3.The Appellant craves leave to add, alter, delete or substitute any of the ground urged above.
4.In the view of the above additional grounds of appeal, the grounds of appeal filed at the time of filing this appeal and such other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that this appeal may be allowed in the interest of justice and equity."
4. Regarding admission of additional grounds, the ld. AR of assessee placed reliance on the judgment of Hon'ble apex court rendered in the case of National Thermal Power Company Limited Vs. CIT as reported in 229 ITR 383 and also on the judgment of Hon'ble Karnataka High Court rendered in the case of Gundathur Thimmappa and Sons Vs. CIT as reported in 70 ITR 70.
5. At this juncture, this was observed by the bench that before admission of additional grounds, it has to be seen as to whether the facts are available on record or not. In reply, it was submitted by ld. AR of assessee that on ITA No.643/Bang/2017 Page 4 of 6 pages 16 to 22 of paper book is copy of Income Tax return acknowledgment along with statement of income and audited accounts and these were available before the AO also and from the income and expenditure account available on page no. 22 of the paper book, it can be seen that the gross income is only Rs. 5,904,305/- and it includes several income from N.V. Degree College, N.V. D.Ed. College, N.V. Polytechnic College, N.V. English Medium HPS etc. and therefore, the relevant facts are very much available on record before the Tribunal and therefore, the additional grounds should be admitted and the matter may be restored back to the file of AO for decision on this issue as to whether the assessee is eligible for exemption u/s. 10(23C)(iiiad) of the IT Act, 1961. As against this, the ld. DR of revenue submitted that the additional grounds should not be admitted because the assessee has not given any specific reason for not raising this issue before the lower authorities and she has placed reliance on judgment of Hon'ble Delhi High Court rendered in case of CIT Vs. Safetag International India (P.) Ltd. as reported in 332 ITR 622 and the Tribunal order rendered in the case of Farrukhabad Investment India Ltd. Vs. ACIT as reported in 34 taxmann.com 220.
6. I have considered the rival submissions. First of all, I examine the applicability of judgment of Hon'ble Delhi High Court cited by the ld. DR of revenue. In this judgment, the issue involved was regarding validity of reopening and it was held by Hon'ble Delhi High Court that the Tribunal in restoring the matter back to the file of AO, has given another opportunity to the assessee to raise objections against the reasons recorded by the AO for reopening of the assessment although the assessee did not ask for the reasons in assessment proceedings. I find that even in this case, Hon'ble High Court after setting aside the order of Tribunal restored the matter to CIT (A) with the direction to supply reasons to the ITA No.643/Bang/2017 Page 5 of 6 assessee for enabling the asssessee to make submission before the ld. CIT(A) based on those reasons and hence, in my considered opinion, this judgment is not helping the case of revenue in the present case. Moreover, I find that in Para no. 4 of assessment order, the AO has noted that it is seen from the audited statement of income that the assessee reported total receipts of Rs. 59,92,204/- including donations amounting to Rs. 27,13,500/-. This observation of the AO in the assessment order shows that income and expenditure account and receipt and payment account were very much available before the AO and the same were duly considered by him. Copy of these are available in the paper book and it is seen from these that various receipts are shown from various colleges and various expenses are also shown on account of various colleges. Copy of trust deed is also available on pages 1 to 15 of paper book and it is seen that one of the objects is to promote the cause of Nutan Vidyalaya Society, Gulbarga and one more object is there for making arrangements for education and / or residence for students. Hence in my considered opinion, the relevant facts are very much available on record from which it can be examined and seen as to whether the assessee is engaged in education activity or not and what is the amount of gross receipts and to decide this aspect that whether the assessee is eligible for exemption u/s. 10(23C)(iiiad) of IT Act, 1961. Hence I admit the additional grounds raised by the assessee. As per the additional grounds raised by the assessee, the issue is whether the assessee is eligible for exemption u/s. 10(23C)(iiiad). Since this issue was not examined by the authorities below, I feel it proper to restore the matter back to the file of the AO for fresh decision on this aspect.
ITA No.643/Bang/2017 Page 6 of 67. In the result, the additional grounds raised by the assessee are allowed. In view of this decision, the other grounds raised by the assessee in appeal do not require any adjudication at this stage.
8. In the result, the appeal filed by the assessee is allowed for statistical purposes in the terms indicated above.
Order pronounced in the open court on the date mentioned on the caption page.
Sd/-
(A.K. GARODIA) Accountant Member Bangalore, Dated, the 08th September, 2017.
/MS/ Copy to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT, Bangalore.
6. Guard file By order Senior Private Secretary, Income Tax Appellate Tribunal, Bangalore.