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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Shri Amarjit Singh & Ms. Madhumita Roy
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT Before: Shri Amarjit Singh, Accountant Member and Ms. Madhumita Roy, Judicial Member
[Conducted through E-Court at Ahmedabad] ITA No. 428/Rjt/2017 Assessment Year 2014-15
Morbi Plot Jain Tap Assistant Commissioner Gachh Sangh, of Income Tax (CPC), Sanala Road, Vs Bangalore Morbi-363641 (Respondent) PAN: AAATM2859H (Appellant)
Revenue by: Shri S.S. Rathi, Sr. D.R. Assessee by: Shri Vimal Desai, A.R. Date of hearing : 28-04-2021 Date of pronouncement : 03-06-2021 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- This assessee’s appeal for A.Y. 2014-15 arises from the order of ld. CIT(A)-3, Rajkot dated 20-09-2017, in proceedings under section 143(1) of the Income Tax Act, 1961; in short “the Act”.
The assessee has raised following grounds of appeal:- “1. The order u/s. 143(1) is bad in law.
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The learned Assessing Officer has erred in law as well as on facts in withdrawing the exemption u/s. 11 of the Act unilaterally in the absence of registration number u/s. 12A in the return of income while processing the return u/s. 143(1) of the Act. The learned CIT(A) has erred in upholding this action of the A.O. 3. The learned Assessing Officer has erred in law as well as on facts in making the adjustment which is outside the purview of adjustments provided in the processing u/s. 143(1) of the Act. The learned CIT(A) has erred in upholding this adjustment of the A.O.”
All the grounds of appeal no. 1 to 3 are inter-connected to the issue of withdrawal of exemption u/s. 11 of the Act because of not mentioning the details of registration no. of the trust u/s. 12A on the return of income electronically filed and making invalid adjustment while processing the return of income u/s. 143(1) of the Act. Therefore, for the sake of convenience all these grounds of appeal are adjudicated together as follows:-
The assessee filed return of income on 24th Nov, 2014 for the 4. assessment year 2014-15. The return filed was processed u/s. 143(1) of the income tax act by the CPC, Bangalore on 28th Feb, 2016. The assessee being a religious trust claimed that exemption u/s. 11 of the Act since 1977- 78. However, vide intimation u/s. 143(1), the Assessing Officer has not allowed the claim of exemption u/s. 11 of Rs. 27,12,977/- for the year under consideration on the ground that the assessee trust has not mentioned the details of registration no. of the trust in the return of income.
Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.
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During the course of appellate proceedings, the ld. counsel has brought to our notice that assessee trust has filed writ petition before the Hon’ble Gujarat High Court against raising demand u/s. 143(1) of the Act on account of not mentioning the registration no of the trust in the return of income filed by the assessee. The ld. counsel has further stated that Hon’ble Jurisdictional High Court vide Civil Appeal no. 16039 of 2018 dated 25th March, 2021 has disposed off the Writ Petition of the assessee trust with direction that the department shall look into the entire record closely and ascertain whether the trust being a registered charitable trust had been issued the registration certificate u/s. 12A of the I.T. Act, 1961. Thereafter the CIT(E) vide order dated 21st April, 2021 has provided the registration no. of the trust. After referring all these submissions the ld. counsel has contended that the claim of the assessee of exemption u/s. 11 is required to be allowed by the Assessing Officer. On the other hand, ld. Departmental Representative is fair enough not to controvert these undisputed fact of issuing the direction by the Hon’ble Gujarat High Court vide the aforesaid order and passing of order u/s. 12AA of the act dated 21st April, 2021 by the ld. CIT(E) of providing registration no. to the trust.
Heard both the sides and perused the material on record. The assessee has filed its return of income electronically for assessment year 2014-15 and claimed exemption of Rs. 27,12,977/- u/s. 11 of the I.T. Act. However, the Assessing Officer of CPC, Bangalore has not allowed the claim of the exemption u/s. 11 on the ground that assessee trust has not mentioned the details of registration no. as evidence of registration u/s. 12A on the return of income. Before the ld. CIT(A) the assessee has submitted that because of
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happening of flood in the year 1979 the whole record including the record pertaining to registration u/s. 12A was destroyed and in this regard he has made request before all CIT(A)s of Rajkot for making available the information of registration no. allotted u/s. 12A to the assessee but no action has been taken by the authorities. The assessee has also enclosed the copies of assessment order and demand notices for the assessment year 1977-78 to 1979-80 in which the Assessing Officer has allowed exemption u/s. 11 of the Act. It is undisputed fact that the assessee trust has been continuously availing the benefit of exemption u/s. 11 of the act as a registered trust till the assessment year 2012-13. From the assessment year 2013-14, the trust was required to upload form no. 7 (return of income) to the website of the income tax department with detail of the registration no. of the trust. Because of loss of record in the flood the assessee could not quote the registration no in the return of income, therefore, the claim of exemption u/s. 11 for the period 2013-14 and 2016-17 was not allowed by the Assessing Officer. In this regard, the Hon’ble High Court in the order dated 25th March, 2021 as referred above has held that the trust could not be denied the benefit of exemption u/s. 11 of the act only on account of its disability to produce the necessary record which got destroyed during the floods of 1978 and the department shall look into the entire record closely and ascertain whether trust being a registered charitable trust had been issued the registration certificate u/s. 12A of the Act. It is further noticed that vide order dated 21st April, 2021 after taking into consideration the direction of the Hon’ble Gujarat High Court, the CIT(E) has issued the registration no. as per order u/s. 12AA of the I.T. Act. The relevant part of the decision of
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Hon’ble High court vide Special Civil Application no. 16039 of 2019 dated 25th March, 2021 is reproduced as under:- “14 Having heard the learned counsel appearing for the parties and having gone through the materials on record, we are of the view that the dispute between the parties should have been resolved amicably. We are at one with Mr. Bhatt, the learned Senior Counsel appearing for the Revenue that in the absence of the registration number, to be mentioned in the course of E-filing of the return, the benefit of exemption under Section 11 of the Act cannot be granted, but, at the same time, we find it difficult to accept the stance of the department that as the record is not available with the Trust as well as with the department, it should be presumed that at no point of time, the certificate of registration under Section 12A of the Act was granted. 15 We take notice of the fact that there is contemporaneous record available with the Trust, which should be looked into minutely by the department so as to satisfy itself that the Trust had been issued a registration certificate under Section 12A and had been availing the benefit of exemption over a period of time under Section 11 of the Act. The department is expected to undertake some homework in this regard seriously. The Trust should not be denied the benefit of exemption under Section 11 of the Act only on account of its disability to produce the necessary records, which got destroyed during the floods of 1978. We do not find anything doubtful or fishy as regards the Trust. 16 In such circumstances, we are of the view that whatever record is available with the Trust, as on date, should be produced before the department and the department should look into the records minutely and also give an opportunity of hearing to the Trust or its legal representative and take an appropriate decision in accordance with law. 17 We dispose of this writ application with a direction that the writ applicant - Trust shall produce the entire record available with it as on date before the department and the department shall look into the entire record closely and threadbare and ascertain whether the Trust being a registered charitable Trust had been issued the registration certificate under Section 12A of the Act, 1961. A practical way needs to be found out in such type of litigation. Let this entire exercise be undertaken at the earliest and be completed within a period of four weeks from the date of receipt of the order by the department. 18 Till the appropriate decision is not taken by the department, pursuant to the directions issued by this Court, the interim order passed by this Court dated 30th September 2019 shall continue. 19 We hope and trust that the controversy is resolved by the parties amicably and the Trust may not have to come back to this Court.” In the light of the above fact and findings, we restore this issue to the file of Assessing Officer to allow the claim of exemption of the assessee trust after verification of the record as per the direction of the Hon’ble High
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Court. Therefore, all the grounds of appeal of the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 03-06-2021
Sd/- Sd/- (MADHUMITA ROY) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 03/06/2021 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order,
Assistant Registrar, Income Tax Appellate Tribunal, Rajkot