Income Tax Appellate Tribunal - Delhi
Sanathan Dharam Shiksha Samiti, Hisar vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI 'G' BENCH
BEFORE SMT. DIVA SINGH, JM & SHRI A.N. PAHUJA, AM
ITA No.3266 to 3269/Del/2011
AYs: 2005-06 to 2008-09
Income Tax Officer, V/s.M/s Sansthan Dharam Shiksha
W ard-4, Hisar Samiti, Bhagat Singh Road, Hansi,
District Hisar
[PAN : AAAAS 3486 M]
(Appellant) (Respondent)
Assessee by Shri S.K. Jain, AR
Revenue by Smt. S. Mohanty,DR
Date of hearing 21-03-2012
Date of pronouncement 30-03-2012
ORDER
A.N.Pahuja:- These four appeals filed on 17.06.2011 by the Revenue against a common order dated 07-04-2011 of the learned CIT(A)-Rohtak for the AYs 2005- 06 to 2008-09, raise the following grounds:-
I.T.A. nos.3266 & 3268/D/2011[AYs 2005-06 & 2007-08]
1. On the facts and in the circumstances of the case the learned CIT(A) has erred in allowing carry forward of losses/excess application of income for set off in the subsequent years without appreciating the fact that the original return of income filed by the assessee was late.
2. On the facts and in the circumstances of the case the learned CIT(A) has erred in allowing carry forward of losses/excess application of income for set off in the subsequent years without appreciating the fact that no claim was 2 I.T.A. nos.3266 to3269/Del./2011 made in the return originally filed by the assessee.
3. The appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.
I.T.A. nos..3267& 3269/D/2011[AYs 2006-07 & 2008-09]
1. On the facts and in the circumstances of the case, the learned CIT(A) has erred in allowing carry forward losses/excess application of income for set off in the subsequent years without appreciating the fact that no claim was made in the original return of income.
2. The appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.
2. Adverting first to ground nos.1 and 2 in the appeals for the AYs 2005-06 and 2007-08 and ground no.1 in the appeals for the AYs 2006-07 & 2008-09, facts, in brief, as per relevant orders for the AYs 2005-06 to 2008-09 are that returns declaring nil income filed by the assessee, running educational institutions at Hansi, were processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the Act). The assessee enclosed the following computation of income with the original returns for the aforesaid four assessment years before us :
Assessment Income from other Exemption u/s Taxable year sources[In `] 10(23C)(iiiad) income [In `] 2005-06 8,91,014 8,91,014 nil 2006-07 23,78,641 23,78,641 nil 2007-08 Interest+other 2678506 nil receipts= 3202635 Less-expenses 524129 Net=2678506 2008-09 Interest+other 3799367 nil
3 I.T.A. nos.3266 to3269/Del./2011 receipts=13714962 Less-expenses 8229444 Less-capital expenditure-
1686151 Net=37,99367 2.1 Subsequently, the Assessing Officer (A.O. in short) noticed on perusal of records for the AY 2005-06 that the assessee had shown total receipts of ``1,00,80,467/-and profit of ``10,69,852/-. After excluding the depreciation of ``14,23,309/- out of total application of income, net profit of ``24,93,161 i.e. 24.98% of the receipts was worked out. Since the application of the income after excluding depreciation was below the limit prescribed under clause (a) of third proviso to section 10(23C) of the Act while the application of the assessee before the CCIT, Panchkula was rejected vide order dated 23.03.2009 and the assessee claimed excessive relief, the AO, after recording reasons in writing, reopened the assessment u/s 147 of the Act with the issue of a notice u/s 148 of the Act on 21st July, 2009 for the AY2005-06. In response, the assessee filed return declaring nil income on 10.09.2009 and enclosed the following computation of income:
[in `] Gross receipts `92,22,118/-
Revenue expenditure `90,10,615/-
Depreciation as per income
& exp. A/c. `14,23,310/-
Revenue expenses `75,87,305/-
without depreciation.
4 I.T.A. nos.3266 to3269/Del./2011
Capital expenditure `14,74,692/- 1,04,85,307/-
Excessive application of
Income 26,46,580/-
2.2 Since the assessee had been allowed registration u/s 12A(a) of the
Act vide order dated 28th September, 1993 while on a writ petition filed by the assessee against the rejection of their claim for exemption u/s 10(23C)(iiiad) of the Act by the CCIT, the Hon'ble Punjab & Haryana High Court vide their order dated 29th January, 2010 in CWP No.8258/2009 quashed the order of CCIT, the AO accepted the income returned by the assessee in the AY 2005-06.
3. Similarly, in the AY 2006-07 , assessment was initially completed u/s 143(1) of the Act on 30.3.2007 in pursuance to return declaring nil income filed on 30.3.2007. Subsequently, the AO noticed on perusal of records that the assessee had shown total receipts of ``1,23,02,125/-and profit of ``22,87,074/-
.After excluding the depreciation of ``9,41,134/- out of total application of income, net profit of `` 32,28,207 i.e. 26.24% of the receipts was worked out. Since the application of the income after excluding depreciation was below the limit prescribed under clause (a) of third proviso to section 10(23C) of the Act while the application of the assessee before the CCIT, Panchkula was rejected vide order dated 23.03.2009 and the assessee claimed excessive relief, the AO, after recording reasons in writing, reopened the assessment u/s 147 of the Act with the issue of a notice u/s 148 of the Act on 21st July, 2009. In response, the assessee filed return declaring nil income on 10.09.2009 and enclosed the following computation of income:
[in `] Gross receipts `123,02,125/-
Revenue expenditure `100,15,051/-
Depreciation as per income
5 I.T.A. nos.3266 to3269/Del./2011
& exp. A/c. `9,41,134/-
Revenue expenses `90,73,917/-
without depreciation.
Capital expenditure `38,40,614/- 1,38,55,665/-
Excessive application of
Income 33,98,860/-
.
3.1 Since the assessee had been allowed registration u/s 12A(a) of the Act
vide order dated 28th September, 1993 while on a writ petition filed by the assessee against the rejection of their claim for exemption u/s 10(23C)(iiiad) of the Act by the CCIT, the Hon'ble Punjab & Haryana High Court vide their order dated 29th January, 2010 in CWP No.8258/2009 quashed the order of CCIT, the AO accepted the income returned by the assessee in the AY 2006-07 also.
4. In the AY 2007-08 , assessment was initially completed u/s 143(1) of the Act on 21.8.2008 in pursuance to return declaring nil income filed on 31.3.2008.
Subsequently, the AO noticed on perusal of records that the assessee had shown total receipts of ``32,02,634/-and profit of ``26,78,506/- . Thus, net profit of ``26,78,506/- i.e. 83.63% of the receipts was worked out. Since the application of the income was below the limit prescribed under clause (a) of third proviso to section 10(23C) of the Act while the application of the assessee before the CCIT, Panchkula was rejected vide order dated 23.03.2009 and the assessee claimed excessive relief, the AO, after recording reasons in writing, reopened the assessment u/s 147 of the Act with the issue of a notice u/s 148 of the Act on 21st July, 2009. In response, the assessee filed return declaring nil income on 10.09.2009 and enclosed the following computation of income:
6 I.T.A. nos.3266 to3269/Del./2011 [In ` ] Income from other sources Gross receipts 1,13,19,105 Income before application of income 1,13,19,105 Less: 15% set apart or accumulated u/s 11(1)(a) (-) 1697866 Income required to be applied as per section 11(1)(a) 96,21,239 @85% of `11319105 Less application of income Revenue expenditure u/s 11(1)(b ) 86,40,599 Capital expenditure u/s 11(1)(b) 5,08,366 Loss c/f of asstt. year 2005-06 26,46,507 Loss c/f of asstt.year 2006-07 33,98,860 1,51,94,332 Gross total income Nil 4.1 However, the AO rejected claim for set off of excess application of income worked out in the computation of income enclosed with the returns filed in response to notice u/s 148 of the Act for the AYs 2005-06 & 2006-07 and brought to tax an amount of ``4,72,274/-
5. In the assessment for the AY 2008-09, the assessee submitted following computation of income in the return:
[in `] Gross receipts `137,14,962/-
Revenue expenditure `82,29,444/-
Depreciation as per income
& exp. A/c. `7,31,421/-
7 I.T.A. nos.3266 to3269/Del./2011
Revenue expenses `74,98,023/-
without depreciation.
Capital expenditure `16,86,151/-
The assessee did not claim any setoff of excessive application in the preceding years in the aforesaid computation. However, during the course of assessment proceedings such a claim was made. But, the AO brought to tax an amount of ``17,42,1123/- while rejecting the claim for set off of excess application of income worked out in the computation of income enclosed with the returns filed in response to notice u/s 148 of the Act for the AYs 2005-06 & 2006-07 .
6. On appeal, the ld. CIT(A), ignoring the fact that assessments for the AYs 2005-06 to 2007-08 were completed in proceedings u/s 147/148 of the Act, allowed the claim of the assessee in his common order in the following terms:
"5. The above action of the Assessing Officer was contested in multiple grounds of appeal. With regard to the appeals for the assessment years 2005-06 and 2006-07, the appellant is aggrieved against the assessment orders in so much as the Assessing Officer has not worked out the loss/deficit due to excessive application of income depriving the appellant to claim the carry forward and set off in the subsequent years. The AR submitted that this action of the Assessing Officer is appealable in view of the ratios of CIT Vs. Ashoka Engineering Co. 194 ITR 645 (Supreme Court) and Bihar State Electricity Board Vs. CIT, 101 ITR 740 (Patna).
5.1 The AR relied upon the case law of DIT Vs. Raghuvanshi Charitable Trust, (2010)36(1) ITCL 622 (Del) wherein it was held that determination of income u/s 11 to 13 of the Act is a separate code and does not contain such provisions as contained in Chapter VI of the Act regarding losses u/ss 70 to 74 of the Act for the reason that income of a charitable institution has to be computed in a commercial manner as laid out in CIT Vs. Institute of Banking Personnel Selection 264 ITR 110 (Bom). The AR contested in this regard that belated return (only for the 8 I.T.A. nos.3266 to3269/Del./2011 assessment year 2006-07) does not disentitle the appellant to claim the carry forward of loss/excess application of income since the provisions of section 70 to 74 are not applicable in the case of charitable institutions governed by sections 11 to 13 of the Act.
5.2 I have carefully considered the issue and the submissions made by the AR. It is an established legal proposition that sections 11 to 13 of the Act are a separate code for the charitable institutions. In view of the legal position pronounced by Hon'ble Delhi High Court in the case of DIT Vs. Rathuvanshi Charitable Trust (supra), the Assessing Officer is directed to allow carry forward of losses/excess application of income for the assessment years 2005- 06 and 2006-07 for set off in the subsequent years and therefore, the grounds of appeal are allowed.
6. With regard to the appeals for assessment years 2007-08 and 2008-09, the appellant contested the action of the Assessing Officer in not allowing set off of carry forward losses. The AR contested in this regard that it was decided in a host of case laws that excess application of income of earlier years can be claimed as application of income in the subsequent years. The AR relied upon the case laws of DIT Vs. Raghuvanshi Charitable Trust (supra), Govindu Naicker Estate Vs. ADIT and another, 248 ITR 368 (Mad), CIT Vs. Matriseva Trust, 242 ITR 20 (Mad), and Dawat Institute of Dawoodi Bohra Community Vs. Income Tax Officer, 116 TTJ 673 (Mumbai) in this regard.
6.1 I have considered the issue and the submissions made by the AR. The case laws relied upon by the AR are on all fours with the facts of the appellant. With regard to the assessment year 2008- 09, though the set off has not been made in the return of income per se, it was claimed during the assessment proceedings before the Assessing Officer and, therefore, allowable. In view of the above, the Assessing Officer is directed to allow set off of carry forward losses/excess application of income for the assessment years 2007-08 and 2008-09 and, therefore, the grounds of appeal are allowed."
9 I.T.A. nos.3266 to3269/Del./2011
7. The Revenue is now in appeal before us against the aforesaid findings of the ld.CIT(A). The ld. DR while carrying us through the impugned order contended that the original return having been filed beyond the time stipulated u/s 139(1) of the Act, the assessee was not entitled to claim carry forward losses and set up off excessive application of income in subsequent years. In this connection, learned DR relied upon the decision in Koppind Pvt. Ltd. vs. CIT,207 ITR 228(Cal.) and ACIT vs. Dynavision Ltd.,88 ITD 213 (Chennai).
8. On the other hand, the ld. AR on behalf of the assessee while submitting reconciliation of income computed in original return vis-a-vis in the return filed in response to notice u/s 148 of the Act, relied upon decisions in, DIT Vs. Raghuvanshi Charitable Trust,197 Taxman 170; CIT Vs. Mahasabha Gurukul Vidyapeeth Haryana,326 ITR 25 (P&H); Dy. CIT Vs. Lab India Instruments (P) Ltd.,93-ITD-120 (Pune); Vam Organic Chemicals Ltd. Vs. Dy. CIT, (2006) 30-IT Rep-10 (ITAT Delhi) and Dawat Institute of Dawoodi Bohra Community Vs. Income Tax Officer,116-TTJ-(Mumbai)-673.To a query by the Bench, the ld. AR did not reply as to how a benefit, which was never claimed in the original returns, can be claimed by the assessee in proceedings u/s 148 of the Act, especially when the proceedings u/s 147/148 of the Act are for the benefit of the Revenue..
9. We have heard both the parties and gone through the facts of the case. Indisputably, the assessee trust is running schools at Hansi and claimed exemption u/s 10(23C)(iiiad) of the Act. On rejection of their application for exemption u/s 10(23C)(vi) of the Act for the AYs 2005-06 to 2008-09, the assessee approached Hon'ble Punjab & Haryana High Court by way of writ. Hon'ble High Court vide their order dated 29.01.2010 in CWP no.8258 quashed the order dated 23.03.2009 of the CCIT, declining to allow exemption u/s 10(23C) of the Act. The ld. AR explained before us that the effect to the aforesaid order of the Hon'ble High Court is yet to be given by the concerned authorities. However, the issue of exemption u/s 10(23C)(iiiad) of the Act is not before us nor the ld. AR on behalf of the assessee placed before us copy of the aforesaid order 10 I.T.A. nos.3266 to3269/Del./2011 of the CCIT or of the Hon'ble High Court. In any case, the assessee may seek appropriate relief from the concerned authorities in accordance with law.. Meanwhile, since the applicant trust was registered u/s 12A of the Act, they made an alternative claim before the AO for exemption u/s 11 & 12 of the Act in the returns filed u/s 148 of the Act for the AYs 2005-06 to 2007-08 and consequently sought that the loss or excessive application of income be determined and carried forward for set off in subsequent years, the provisions of the Act regarding carry forward and set off of business losses, being not applicable in the case of assessee, claiming exemption u/s 11 & 12 of the Act. We are not disputing the proposition that a trust can be allowed to carry forward deficit of current year and seek set off of the same against income of subsequent years and such an adjustment of deficit of current year against income of subsequent year would amount to application of income of trust for charitable purposes in subsequent year within meaning of section 11(1)(a)of the Act, as held in Raghuvanshi Charitable Trust & Ors(supra). But in the instant case before us , can such determination of loss or excess application of income or its carry forward and set off is possible in proceedings u/s 148 of the Act,needs to be examined, especially when in the original returns filed by the assessee ,no such claim was ever made. In nutshell, the only issue for our consideration is as to whether claim of the assessee for determination, carry forward and set off of excessive application of income in the returns filed in response to notice u/s 148 of the Act for the AYs 2005-06 to 2007-08 ,can be allowed in the assessment for the AYs 2005-06 to 2008-09. Admittedly, in the original returns filed by the assessee for the AYs 2005-06 to 2007-08, no such claim was ever made. It is well settled that proceedings u/s 148 of the Act are for the benefit of the Revenue and not for claiming relief by the assessee, which relief was never claimed in the original returns for the AY 2005-06 & 2006-07. Indisputably, the assessments in the present case for the AYs 2005-06 to 2007-08 were made by the AO in the proceedings under section 147 of the Act initiated by issue of notice under section 148 of the Act. The issue of validity of proceedings u/s 147 of the Act was never raised by the assessee either before the AO/ ld. CIT(A) or even before us.
11 I.T.A. nos.3266 to3269/Del./2011 The question that arises for consideration is whether in such proceedings, initiated for the purpose of assessment of escaped income, the assessee is entitled to claim determination of loss or excessive application of income in the AYs 2005-06 & 2006-07 to enable it to carry forward the same to be set off against the income of subsequent years 2007-08 & 2008-09 to the detriment of the Revenue. The AO made the assessment in proceedings under section 147 of the Act initiated with a view to assessing income which had escaped assessment and having not found any escaped income, accepted the returned income in the AYs 2005-06 & 2006-07. . He, however, did not accept the claim for determination of excessive application of income in these two assessment years, the assessment having been made in proceedings initiated under section 147 of the Act for assessing the escaped income nor accepted the claim of carry forward of the same and set off of the said excessive application in the AYs 2007-08 & 2008-09. However, the ld. CIT(A) accepted the claim of the assessee, ignoring the fact assessments for the AYs 2005-06 to 2007-08 were completed u/s 143(3) read with sec. 147 of the Act. The real controversy, therefore, is about the scope and ambit of the power of the Income-tax Officer in proceedings initiated under section 147 of the Act for assessment of income, which has escaped assessment.
9.1. Section 147 of the Act empowers the AO to assess income which escaped assessment in the relevant assessment year. It is applicable only to a case where the AO has reason to believe that the income of the assessee has escaped assessment. The power under this section can also be exercised in cases where excessive loss or depreciation allowance has been computed. In the instant case, re-assessment proceedings were initiated by the AO for the AYs 2005-06 to 2007-08 by issue of notice under section 148 of the Act because he was satisfied that the income of the assessee for these years had escaped assessment. The assessee never disputed the reasons recoded by the AO or validity of the proceedings initiated u/s 147 of the Act before any of the lower authorities or even before us. In such a case, if at any stage of the proceedings, 12 I.T.A. nos.3266 to3269/Del./2011 the AO finds that income chargeable to tax has not escaped assessment, he is free not to take further action pursuant to the notice under section 148 of the Act and drop the proceedings . He is not bound to conclude the proceedings and make assessment to the detriment of the Revenue. If, pursuant to notice under section 148 of the Act, the assessee submits a loss return, and the AO is satisfied that the income of the assessee during the relevant year was really negative as claimed by the assessee in his return, he is entitled to close the proceedings. He cannot complete the assessment to determine the loss or excessive application of income thereby giving the assessee a right to claim set off of the loss in subsequent years to the detriment of the Revenue . Such an act will be contrary to the object, scope and ambit of section 147 of the Act. Proceedings under section 147 being for the benefit of the revenue and not the assessee, the assessee cannot be permitted to take advantage of the reassessment proceedings and seek relief which, in the absence of the proceedings for assessment of escaped income , he could not have claimed . Income for the purpose of assessment under section 147 of the Act cannot be a negative figure. Similarly, in case of reassessment of income already assessed, , the income cannot be reduced beyond the income originally assessed nor the loss originally determined can be re-determined at a higher figure.
9.2. The object, scope and ambit of section 147 of the Act is now well settled by the decision of the Hon'ble Supreme Court in CIT v Sun Engineering Works P. Ltd, [1992] 198 ITR 297. The Hon'ble Supreme Court also considered the observations in their earlier decision in V. Jaganmohan Rao v CIT/EPT [1970] 75 ITR 373 and made it clear that its earlier judgment in V. Jaganmohan Rao's case cannot be read to imply as laying down that in the reassessment proceedings validly initiated, the assessee can seek reopening of the whole assessment and claim credit in respect of items finally concluded in the original assessment. The assessee cannot claim re-computation of the income or redoing of an assessment and be allowed a claim which he either failed to make or which was 13 I.T.A. nos.3266 to3269/Del./2011 otherwise rejected at the time of original assessment which has since acquired finality. The Supreme Court, therefore, held as under;
"As a result of the aforesaid discussion, we find that, in proceedings under section 147 of the Act, the Income-tax Officer may bring to charge items of income which had escaped assessment other than or in addition to that item or items which have led to the issuance of the notice under section 148 and where reassessment is made under section 147 in respect of income which has escaped tax, the Income-tax Officer's jurisdiction is confined to only such income which has escaped tax or has been underassessed and does not extend to revising, reopening or reconsidering the whole assessment or permitting the assessee to reagitate questions which had been decided in the original assessment proceedings. It is only the underassessment which is set aside and not the entire assessment when reassessment proceedings are initiated. The Income-tax Officer cannot make an order of reassessment inconsistent with the original order of assessment in respect of matters which are not the subject matter of proceedings under section 147. An assessee cannot resist validly initiated reassessment proceedings under this section merely by showing that other income which had been assessed originally was at too high a figure except in cases under section 152(2). The words " such income " in section 147 clearly refer to the income which is chargeable to tax but has " escaped assessment "
and the Income-tax Officer's jurisdiction under the section is confined only to such income which has escaped assessment. It does not extend to reconsidering generally the concluded earlier assessment. Claims which have been disallowed in the original assessment proceeding cannot be permitted to be reagitated on the assessment being reopened for bringing to tax certain income which had escaped assessment because the controversy on reassessment is confined to matters which are relevant only in respect of the income which had not been brought to tax during the course of the original assessment. A matter not agitated in the concluded original assessment proceedings also cannot be permitted to be agitated in the reassessment proceedings unless relatable to the item sought to be taxed as " escaped income ". Indeed, in the reassessment proceedings for bringing to tax items which had escaped assessment, it would be open to an assessee to put forward claims for deduction of any expenditure in respect of that income or the non-taxability of the items at all. Keeping in view the object and purpose of the proceedings under section 147 of the Act which are for the benefit of the Revenue and not an assessee, an assessee cannot be permitted to convert the reassessment proceedings as his appeal or revision, in disguise, and seek relief in respect of items earlier rejected or claim relief in respect of items not claimed in the original assessment proceedings, unless relatable to escaped income ", and reagitate the concluded matters. Even in cases where the claims of the assessee during the course of reassessment proceedings relating to the escaped assessment are accepted, still the allowance of such claims has to be limited to the extent to which they reduce the income to that originally assessed.
14 I.T.A. nos.3266 to3269/Del./2011 The income for purposes of " reassessment " cannot be reduced beyond the income originally assessed.
It would be seen that whereas in the case of Anglo-French Textile Co. Ltd.'s case [1953] 23 ITR 82 (SC), the question as to the rights of an assessee to claim "redoing", "revising" or "recomputing" the entire income during the reassessment proceedings was left open, that question did not come up for consideration in the case of H. R. Sri Ramulu [1977] 39 STC 177 (SC) or H. M. Esufali's case [1973] 90 ITR 271 (SC) or even in V. Jaganmohan Rao's case [1970] 75 ITR 373 (SC). Some of the High Courts, therefore, fell in error in reading those judgments, divorced from the context in which the precise questions came up for consideration in those cases, and to hold that the assessee could " reagitate "
the concluded issues and claim relief in respect of items finally concluded in the original assessment proceedings, during the reassessment proceedings, unconnected with the escapement of income. We cannot, therefore, approve the broad proposition laid down in that regard in Deputy Commissioner of Commercial Taxes v. Indian Refrigeration Industries P. Ltd. [1980] 46 STC 264 (Mad), CIT v. Ramsevak Paul [1977] 110 ITR 527 (Cal), CIT v. Assam Oil Co.
Ltd. [1982] 133 ITR 204 (Cal), CIT v. Standard Motor Products of India Ltd. [1983]142 ITR 877 (Mad), CIT v. Rangnath Bangur [1984] 149 ITR 487 (Raj), State Bank of Hyderabad v. CIT [1988] 171 ITR 232 (AP) and CIT v. Indian Rare Earth Ltd. [1990] 181 ITR 22 (Bom) [FB].
Keeping in view the above principles, we may now turn our attention to the question formulated by the High Court as noticed in the earlier part of the judgment.
The Tribunal rightly found that the loss which the assessee wanted to be set off against the " escaped income " could not be allowed to be so set off because in the original assessment proceedings, no " set off " was claimed or permitted and the original assessment had acquired finality when the appeal against the order of assessment failed before the Appellate Assistant Commissioner and the assessee took no further steps to agitate the issue. The Tribunal was also right in concluding that the items which the assessee wanted to be taken into account in the proceedings under section 147 of the Act were unconnected with the escapement of income. The High Court clearly fell in error in holding otherwise. Since the original assessment had been concluded finally against the assessee, it was not permissible for the assessee in the reassessment proceedings to seek a review/revision of the concluded assessment for the purpose of computation of the escaped income. The High Court clearly fell in error in permitting the assessee to reagitate, in the reassessment proceedings under section 147(a) of the Act, the finally concluded assessment proceedings and to grant to him relief in respect of items not only earlier rejected, but also unconnected with the escapement of income by assuming as if the original assessment had not been concluded or was still open 15 I.T.A. nos.3266 to3269/Del./2011 Therefore, our answer to the question formulated by the High Court and noticed in the earlier part of this judgment is that, in the reassessment proceedings, it is not open to an assessee to seek a review of the concluded item, unconnected with the escapement of income, for the purpose of computation of the escaped income."
9.3 . The aforesaid decision was followed by the Hon'ble Apex Court in Chettinad Corporation Pvt. Ltd. vs. CIT,200 ITR 320(SC). Subsequently, Hon'ble Calcutta High Court in CIT vs. Keshoram Industries,271 ITR 353(Cal.) relying on the aforesaid decision, denied deduction u/s 80G of the Act in the reassessment proceedings, which was not claimed in the original return. It is clear from the above decision of the Hon'ble Supreme Court that proceedings under section 147 of the Act are for the benefit of the Revenue and not of the assessee and the assessee cannot be permitted to convert the reassessment proceedings to his advantage. The assessee cannot claim that assessment should be completed and loss/excessive application of income should be determined to enable him to claim the benefit of carry forward and set off against the income of subsequent years.
9.4. In view of the foregoing, we have no hesitation in vacating the findings of the ld. CIT(A) and restoring the assessment orders of the AO. Therefore, ground nos. 1 & 2 in the appeals for the AY 2005-06 & 2007-08 and ground no.1 in the appeals for the AY 2006-07 & 2008-09 ,are allowed.
10. No other submission or argument was made before us.
11. No additional ground having been raised before us in terms of residuary ground no. 3 in the appeals for the AYs 2005-06 and 2007-08 and ground no.2 in the appeals for the AYs 2006-07 and 2008-09 , accordingly, all these grounds are dismissed.
16 I.T.A. nos.3266 to3269/Del./2011
12. In the result, these four appeals are allowed.
Order pronounced in open Court
Sd/- Sd/-
(DIVA SINGH) (A.N. PAHUJA)
(Judicial Member) (Accountant Member)
Copy of the Order forwarded to:-
1. M/s Sansthan Dharam Shiksha Samiti, Bhagat Singh Road, Hansi, Distt.Hisar.
2. Income Tax Officer, W ard-4, Hisar.
3. CIT concerned
4. CIT(A)- Rohtak
5. DR, ITAT,'G' Bench, New Delhi
6. Guard File.
True copy BY ORDER, Deputy/Asstt.Registrar ITAT, Delhi