Income Tax Appellate Tribunal - Ahmedabad
Nagardas M. Shah vs Income-Tax Officer. on 22 January, 1990
Equivalent citations: [1990]33ITD351(AHD)
ORDER
Per Shri M. A. A. Khan, Judicial Member - Under a trust deed dated 23-3-1978, the appellant-trust had come into existence as a public charitable trust It was duly registration as such with the asstt. Charity Commissioner, Rajkot under the provisions of Bombay Public Trusts Act, 1950.
2. While filing its return of income on 27-6-1986 for the accounting period ending 31-3-1984, relevant to the A. Y. 1984-85, the appellant claimed deductions under sections 11, 12 & 13 of the I. T. Act, 1961 (the Act). The ITO did not allow such deductions on the ground that appellants application for registration under section 12A (9) of the Act, was still pending decision by the authority concerned and not registration had been accorded to it. The ITO further rejected another claim of the appellant for treating the donation of Rs. 1,39,861 towards corpus of the trust. The ITO treated the said donation as appellants income in the absence of confirmations from the donors. Aggrieved against the assessment so made by the ITO the appellant approached the CIT (A) in appeal.
3. In appeal the appellant challenged the assessment order, as passed by the ITO, mainly on two grounds. In the first place it was stated that the assessment order, having been passed beyond the prescribed period of limitation, was bad in law. In the second place the treatment meted out to the donation amount of Rs. 1,39,861 was seriously disputed. The learned CIT (S) found no force in either of the two grounds, mentioned above, and dismissed appellants appeal. Hence this appeal.
4. Mr. M. P. Sharda, C. A no doubt argued the appeal on the legal issue of limitations well as on merit of the case itself. But after having heard the learned representatives of both the sides we have been left in no doubt that the assessment in the present case had definitely been made after the expiry of the prescribed period of limitation and therefore, the same was required to be annulled. Being of that view we would confine our discussion to the issue of limitation only.
5. The relevant facts, having a conclusive bearing upon the issue of limitation, are that the assessment year involved is 1984-85 for which limitation accounting period ended on 31-3-1984. The appellant could have filed its return for this assessment year up to 30-6-84 as per provisions of section 139(1) of the Act. But, admittedly, the return was filed on 27-6-1986. Obviously the return filled by the appellant on 27-6-1986 did not fall under section 139(1). It was a return filed under section 139(4) (b) (iii) which permitted the appellant to file its return under that provision up to 31-3-1987.
6. Once the return filed by the appellant is found to have been filed under section 139(4) the provisions of section 153(1) (c) stand attracted, for the purpose of time-limit for completion of the assessment. Clause (c) of sub-section (1) of section 153 provided that where a return has been filed under section 139(4) of 139(5) the assessment shall have to be made within one year from the date of filing the return. Since the return in the instant case was filled under section 139(4) on 27th June, 1986 the assessment could have been made up to 26-6-84. But it was not made by that date as would be clear from the discussion to follow.
7. The assessment order is no doubt dated 25-6-84 suggesting thereby that the assessment was made on that day. But, as rightly pointed out by Mr. Sharda it is not as all a fact. The assessment order has definitely been anti-dated with a view to save the assessment being hit by the express provisions of section 153(1) (c) of the Act. ITOs own conduct speaks of volumes in support of such conclusions.
8. It could not be disputed before us that on 27-7-1987 the ITO had issued the following letter to the appellant :-
"Please refer to the return of income filed for the assessment year 1984-85 on 27-6-1986.
On going through the case records and copy of trust deed filed it is notices that the trust came into existence on 23-3-1978. You are, therefore, requested to please furnish the copies of audited accounting for and from the accounting year ended on 31-3-1979 to 31-3-1983 without any further delay.
The trust has filed an application for registration under section 12A (a) of the Act on 9-7-1986 with they CIT Rajkot. In this connection, you are requested to please let me know whether the trust is registered under section 12A (a) of the Act. If so, copy of such certificate should be furnished to this office.
Your case is fixed for hearing on 3-8-87 at 10.00. A statutory notice under section 143(2) of the Act is enclosed herewith. Please note that date will be allowed as the assessment is time barring one"
9. A study of the above letter clearly discloses that by the time the letter was issued the ITO had not made the assessment in this case. In fact the use of phrases and sentences like "Time barring", "your income-tax assessment for the assessment year 1984-85", "on going through the case records and copy of the trust deed filed" will (sic) be allowed as the assessment is time barring one" leaves one in no doubt that the assessment had no been framed by the time this letter was issued to the appellant on 27-7-1985. This letter required the appellant to appear before the ITO on 3-8-1987 and it was stated at Bar by Mr. Sharda that appearance for and on behalf of the appellant was put in on 3-8-87 and the case was discussed on that day. It is ready surprising that the record of the ITO, as was available with the learned DR. at the time of hearing, did neither contain the order-sheets fixing 3-8-87, nor even the letter and notice under section 143(2), mentioned as enclosure in the letter. The notice, as received by the appellant from the ITO, was also shown to us during the course of arguments.
10. The facts mentioned above lead to the irresistible conclusion that assessment in the instant case was not framed on or before 25-7-1987, the last day for making the assessment. It was certainly made much thereafter The order has simply been anti-dated as having been made on 25-7-1987. The anti-dating of the order does not make the assessment made as valid. The assessment having been made beyond the prescribed time limit, is bad in law and requires to be annulled.
11. Fighting a loosing battle Mr. B. R. Kaushik, the learned Sri DR, vehemently urged that after having made the assessment on 25-7-1987 the ITO appears to have considered it proper to call for certain other relevant informations regarding the filing of application under section 12A (a) of the Act and thus to have issued his letter dated 27-7-87 to the appellant. The learned DR urged that if the facts are read in that manner dated 27-7-87 would not have any adverse effect on the assessment order as made in this case. In this behalf Mr. Kaushik Heavily relied upon the order of the CIT (A). We, however, find not the least force in this argument.
12. We have reproduced above the ITOs letter dated 27-7-87 in extenso We have specifically pointed out at the relevant phrases and sentences in the language of the letter which conclusively establish that the assessment had no been made by the time the letter was issued. The argument of the learned DR and also of the CIT (A) that by issuing the letter on 27-7-87 the ITO simply wanted to seek certain clarifications over the point of registration under section 12A (a) stands negatived by the language of the assessment order the ITO has specifically mentioned that the Trust is not entitled for deductions under sections 11, 12, & 13 of the Act for the reason that it is not registered under section 12A (a) of the Act. The ITO could not have arrived at that conclusion without considering appellants reply in answer to the contents of para 3 of his letter. And, according to Mr. Sharda, that was done on 3-8-87, the date fixed for hearing in the case. The argument of Mr. Kaushik thus does not find favour with us.
13. After having considered the instant case from all possible angles we have been unable to subscribe to the view that the assessment in this case was made on date and was definitely made much thereafter. The assessment was made much beyond the prescribed time-limit and for that reason it was bad in law. It deserves to be annulled.
14. In the result the appeal is allowed and the assessment made in this case is annulled.