SRI KRISHNA GEETHASRAMAM,PRODDATUR vs. ITO,EXEMPTIONSWARD, TIRUPATI

This appeal filed by the assessee is directed against the order dated 13.01.2020 of the learned CIT (A)-Kurnool, relating to A.Y.2016-17.

At the outset, it is seen that there is a delay of 845 days in filing of this appeal by the assessee for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay which is due to the prevailing COVID. After considering the contents of the condonation application filed along with the affidavit and keeping in mind the decision of the Hon'ble Supreme Court in suo moto writ petition No.3/2020 wherein the period from 15.4.2020 to ITA 342 of 2022 Sri Krishna Geethasramam 29.5.2022 have been directed to be excluded, the balance delay of 71 days is condoned and the appeal is admitted for adjudication.

Facts of the case, in brief, are that the assessee is a Trust and filed its return of income for the impugned A.Y on 23.1.2018 disclosing Nil income after claiming exemption u/s 11 of the I.T. Act. The case was selected for scrutiny and statutory notices u/s 143(2) was issued and served on the assessee calling for certain information to which the AR of the assessee appeared before the Assessing Officer and filed the requisite details. The Assessing Officer during the course of assessement proceedings noticed that the Trust has claimed exemption u/s 11 of the I.T. Act. On being asked by the Assessing Officer to furnish the details along with copy of registration u/s 12A of the I.T. Act to verify the genuineness of the claim towards exemption u/s 11 of the I.T. Act, the assessee stated that the Trust is not registered u/s 12A of the I.T. Act. According to the Assessing Officer, the registration u/s 12AA of the I.T. Act is a prerequisite for claiming exemption u/s 11. Since the Trust is not registered u/s 12AA of the I.T. Act, the Assessing Officer held that the provisions of section 11 are not applicable. Therefore, the surplus declared by the assessee to the tune of Rs.13,27,090/- was treated as income of the Trust and brought to tax accordingly.

Before the learned CIT (A), the assessee did not file any written submission except filing a copy of registration u/s 12AA of the Act dated 26.7.2014 issued by the learned CIT. In view of the above, the learned CIT upheld the action of the Assessing Officer by observing as under:

Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal by raising the following grounds:

The assessee has also filed the following additional ground:

The learned Counsel for the assessee referring to the following written submission requested the Bench for admission of the additional ground.

Referring to the copy of the order passed by the Commissioner, Endowment Deptt. report Vijayawada, Andhra Pradesh dated 2.8.2017, he submitted that the Institution is run by the Govt. of A.P and therefore, the income of the institution is exempt from tax. He submitted that the above information was available before the Assessing Officer and the learned CIT (A), however, they have not considered and therefore, the addition ground raised

He accordingly submitted that when the facts are already available on record and no new facts are required to be investigated and the additional ground is a legal one, therefore, the additional ground raised by the assessee should be admitted.

The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the learned CIT (A). He submitted that it is an admitted fact that the assessee has not been granted registration u/s 12A of the I.T. Act. Before the learned CIT (A) the assessee did not file any written submission for which the learned CIT (A) decided the appeal on the basis of the material available on record. Therefore, the additional ground raised by the assessee should not be admitted for adjudication.

After hearing both sides and considering the fact that all material facts necessary for adjudication of the additional ground are already available on record and the additional ground raised by the assessee is purely a legal one, the same is admitted for adjudication.

The learned Counsel for the assessee submitted that the Assessee Trust is a part of Vyasasram which was incorporated in the year 1949 and was registered with the Registrar on 25.2.1949 and is having registration u/s 12A of the I.T. Act. Further, the Endowments Deptt., Govt. of A.P has taken over Sri Krishna Geethasramam vide order dated 2.8.2017. He submitted that due to some unavoidable reasons, the matter could not be represented before the learned CIT (A) properly. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case before either of the lower authorities. Page 10 of 14

The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the learned CIT (A).

We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We find the AO in the instant case rejected the claim of deduction u/s 11 on the ground that the assessee trust is not registered u/s 12A of the I.T. Act which is a pre-requisite for claiming exemption u/s 11 of the I.T. Act. We find the learned CIT (A) upheld the actin of the Assessing Officer on the basis of material available on record in the absence of any written submission filed before him. It is the submission of the learned Counsel for the assessee that Sri Krishna Geethasramam is a part of Sri Vyasasramam and the assessee trust has already been taken over by the Govt. of A.P and therefore, the income of the assessee is not liable to tax.

From the various details furnished by the assessee, we find the Asstt. Commissioner (Estates), Endowments Department, Govt. of A.P vide order dated 2.8.2017 has taken over the assessee trust from Sri Vyasasramam, the English translation copy of which reads as under:

We find the assessee before the learned CIT (A) has also taken a specific ground as per Ground of appeal No.3 according to which the assessee trust has been taken over by the Endowments Department, Govt. of A.P. and therefore, the ITA 342 of 2022 Sri Krishna Geethasramam assessee is not liable to tax. However, due to non-submission of any submission before the learned CIT (A), he has dismissed the appeal filed by the assessee. It is the submission of the learned Counsel for the assessee that when the assessee trust has been taken over by the Endowments Department, Govt. of A.P, the income is not at all liable for tax. Since the order of the learned CIT (A) is silent on this issue despite a specific ground taken before him and since the assessee did not file any written submission before the learned CIT (A) for which he has decided the appeal on the basis of material available on record, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the learned CIT (A) with a direction to grant one final opportunity to the assessee to substantiate its case by filing all the requisite details and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee including the additional grounds are accordingly allowed for statistical purposes.

In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 4th August, 2023.