RAMANAIDU CHARITABLE TRUST,HYDERABAD vs. ITO, (EXEMPTION)-3, HYDERABAD

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ITA 1151/HYD/2018Status: DisposedITAT Hyderabad10 September 2020AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found merit in the Revenue's submission and remitted the matter back to the AO for de novo consideration. The assessee was directed to cooperate with the authorities.

What were the facts?

The assessee, a registered charitable trust, filed a return declaring NIL income. The AO made additions for excess expenditure, donations paid, and corpus donations, determining taxable income. The CIT(A) dismissed the appeal for non-appearance and reliance on a previous ITAT order.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without granting an opportunity to the assessee and without considering the submissions, and whether the corpus donations and applicability of sections 11 and 12 were correctly addressed.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 13(8),Section 2(15),Section 12AA,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A-SMC”, HYDERABAD

Before: SHRI A. MOHAN ALANKAMONY

For Respondent: Smt. Amisha Gupta, DR
Hearing: 10/09/2020Pronounced: 10/09/2020

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “A-SMC”, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER (Through Virtual Hearing) Assessment Year: 2014-15 Ramanaidu Charitable Vs. Income Tax Officer, Trust, Exemptions-3, Hyderabad. Hyderabad. PAN: AAATR 0554 J (Appellant) (Respondent) Assessee by: None Revenue by: Smt. Amisha Gupta, DR Date of hearing: 10/09/2020 Date of pronouncement: 10/09/2020 ORDER PER A. MOHAN ALANKAMONY, AM.:

This appeal is filed by the assessee against the order of the Ld. CIT (A)-9, Hyderabad in appeal No. 10038/ITO (Exe-)-3, Hyd/2016-17, dated 29/03/2018 passed U/s. 143(3) r.w.s 250(6) of the Act for the AY 2014-15.

2.

The assessee has raised 12 grounds in its appeal which are extracted herein below for reference: -

(i) The Ld. CIT (A) has failed to give an opportunity to the appellant to represent its case before him and thus erred in dismissing the appeal.

(ii) The ld. CIT (A) has erred in passing the order without considering the written submissions, narrated in the statement of facts. (iii) The ld. CIT (A) has failed to consider the facts and grounds pertaining to corpus donations, applicability of section 11, 12 non- violation of the provisions of section 13(8), non-applicability of proviso to section 2(15) and the applicability of the circular issued by the CBDT on applicability of the proviso to section 2(15). (iv) The Ld. CIT (A) dismissed the appeal following the decision of the ITAT, Chennai Bench in the case of the appellant’s own case without independently considering the each ground raised by the appellant especially when the order passed by ITAT is factually not correct. (v) The Ld. CIT (A) is wrong in relying on the decision of ITAT Chennai Bench in so far as the provisions of the Trust Act, 1882 which is not relevant to the case of the appellant. (vi) The Ld. CIT (A) erred in not granting exemption to the corpus donations and treating the entire corpus donations received even from outsiders also as income of the Trust which indicate that the facts have not been fully looked in to and appreciated both by him and in the order on which reliance was placed by him. (vii) The ld. CIT (A) erred in stating that the provisions of section 11 and 12 are not applicable to the case of the appellant without bringing out any facts as to how they are not applicable. (viii) The Ld. CIT (A) erred in not holding that the entire income of the Trust is exempt and hence should have held that the income as returned was correct income and there was no necessity to change the same or to make any additions to the same. (ix) Without prejudice to the above grounds the Ld. CIT (A) having held that the income is to be taxed ought to have given directions to the AO to compute the income as per all the provisions of the Act allowing depreciation and set off of excess expenditure of previous years in this year. (x) The appellant prays if there is small delay in filing the appeal may kindly be condoned. (xi) The appellant craves leave to file any additional ground if need before the hearing or at the time of hearing. (xii) The appellant prays that it may be rendered justice after considering the above facts.”

3.

Brief facts of the case are that the assessee is a Trust registered U/s. 12AA of the Act, filed its return of income for the AY 2014-15 on 26/09/2014 declaring NIL income. The case was selected for scrutiny. Subsequently, notice U/s. 143(2) was issued, and the assessment was completed U/s. 143(3) of the Act on 30/12/2016 wherein the Ld. AO made certain additions towards viz., (i) Excess of expenditure over income – Rs. 26,90,797/-; (ii) Donation paid – Rs. 3,43,200/- and (iii) Net corpus donation received – Rs. 61,72,000/-. Accordingly, the Ld. AO determined the total taxable income at MMR (Maximum Marginal Rates) at Rs. 38,24,403/- and raised demand of Rs. 15,71,700/-. On appeal, none appeared before the Ld. CIT (A) to represent the case of the assessee. Therefore, the Ld. CIT (A) based on the material available on record and also following the decision of the ITAT, Chennai Bench in the assessee’s own case dismissed the appeal. Hence, the assessee is in appeal before the Tribunal.

4.

At the time of hearing before me, none appeared on behalf of the assessee. At the outset, Ld. DR submitted that the Ld. CIT (A) has decided the matter following the order of the Chennai Bench of the Tribunal in the assessee’s own case. The Ld. DR further submitted that the Ld. CIT (A) had remitted certain issues in the appeal to the file of the Ld. AO for verification. Hence, he pleaded that the matter may be remitted back to the file of the Ld. AO for fresh consideration.

5.

I have heard the Ld. DR and carefully perused the materials available on record. On going through the order of the ld. CIT (A), I find merit in the contention of the Ld. DR. Therefore, in the interest of justice, I hereby remit the matter back to the file of the Ld. AO for de novo consideration and to pass appropriate Order in accordance with merit and law after affording proper opportunity to the assessee of being heard. The assessee is also directed to promptly co-operate before the ld. Revenue Authorities and if they fail to do so the Ld. Revenue Authorities shall be at liberty to pass appropriate orders in accordance with law and merits based on the materials on record.

6.

In the result, appeal of the assessee is allowed for statistical purposes.

Pronounced in the open Court on the 10th September, 2020.

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