RAMARPAN EDUCATION SOCIETY,,BHILWARA vs. INCOME TAX OFFICER, EXEMPTION, AJMER

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 497/Jodh/2017 fu/kZkj.k o"kZ@Assessment Year :2014-15 cuke Ramarpan Education Society, Income Tax Officer Vs. 16-17, Heera Panna Market, Pur (Exemptions), Road, Gandhi Nagar, Bhilwara. Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAATP 5709 R vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 862/JP/2018 fu/kZkj.k o"kZ@Assessment Year :2014-15 cuke Ramarpan Education Society, Income Tax Officer Vs. 16-17, Heera Panna Market, Pur (Exemptions), Road, Gandhi Nagar, Bhilwara. Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAATP 5709 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Rahul Parmanandani (CA) jktLo dh vksj ls@ Revenue by : Shri J.C. Kulhari (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 18/09/2018 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 25/09/2018 vkns'k@ ORDER PER: VIJAY PAL RAO, J.M. These two appeals by the assessee are directed against the two separate orders of ld. CIT(A), Ajmer dated 06/09/2017 & 10/05/2018 arising from the order passed U/s 143(3) and Section 154 of the Income Tax Act, 1961 (in short the Act) respectively for the A.Y. 2014-15. The

ITA 497/JU/2017 & 862/JP/2018_ 2 Ramarpan Education Society Vs ITO(E) assessee has raised common grounds in both these appeals and the

grounds raised in the ITA No. 862/JP/2018 arising from the assessment

order passed U/s 143(3) of the Act are reproduced as under:

“1. That the ld. CIT(A) has grossly erred in confirming disallowance of funds of Rs. 84,20,050/- i.e. capital receipts which is quite arbitrary, unjustified, illegal and not based on facts. 2. That on the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in confirming disallowance of claim of depreciation of Rs. 35,69,684/- which is quite arbitrary, unjustified, illegal and not based on facts. 3. That on the facts and in the circumstances of the case, the ld. CIT(A) has confirmed disallowances of claim of investment made in the fixed assets of Rs. 58,67,947/- which is quite arbitrary, unjustified, illegal and not based on facts. 4. That on the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in confirming rejection of claim of accumulate excess application of Rs. 59,97,636/- of earlier years which is quite arbitrary, unjustified, illegal and not based on facts. 5. That the appellate craves leave to add, to amend, modify, rescind, supplement or alter any of the grounds stated herein above, either before or at the time of hearing of this appeal.”

was granted registration U/s 12A of the Act. the assessee filed its return

of income on 20/09/2014 declaring at NIL income after claiming benefit of

Section 11 and 12 of the Act. During the scrutiny assessment passed U/s

143(3) of the Act, the Assessing Officer made disallowances on account of

donations/capital receipt, depreciation on fixed assets, application of

income acquiring the fixed assets and claim of excess application of

ITA 497/JU/2017 & 862/JP/2018_ 3 Ramarpan Education Society Vs ITO(E) income. The assessee instead of filing an appeal before the ld. CIT(A),

preferred rectification petition U/s 154 of the Act, which was dismissed by

the Assessing Officer vide order dated 20/01/2017. Thereafter the

assessee filed an appeal before the ld. CIT(A) against the order passed

U/s 154 of the Act, which was also dismissed by the ld. CIT(A) vide order

dated 06/09/2017 on the ground that the issue raised by the assessee in

the petition U/s 154 of the Act are beyond the purview of the provisions

of rectification of mistakes U/s 154 of the Act. Thereafter the assessee

filed second appeal before the ld. CIT(A) on 27/09/2017 alongwith an

application for condonation of delay. The ld. CIT(A) dismissed the said

appeal of the assessee in limini being barred by limitation vide impugned

order dated 10/05/2018. Thus, the assessee has filed these two appeals

against the impugned orders of the ld. CIT(A).

relevant material on record. As regards the ITA No. 497/Jodh/2017 arising

against the order passed U/s 154 of the Act, we find that the assessee

raised two issues in the petition filed U/s 154 of the Act regarding the

acquisition of capital asset and depreciation. The ld. CIT(A) while deciding

the appeal has held in para 4.2 as under:

“4.2 I have gone through the order, statement of facts, grounds of appeal and written submission carefully. This appeal has been filed against the

ITA 497/JU/2017 & 862/JP/2018_ 4 Ramarpan Education Society Vs ITO(E) order dated 20.01.2017 passed u/s 154. In the application dated 12.01.2016 filed by the appellant before the AO, the appellant had requested for deleting the following disallowances made by the AO while making the assessment u/s 143(3) vide order dated 16.11.2016: “1. Disallowance of both claim of purchase of capital assets and depreciation. 2. Disallowance of acquisition of capital assets. 3. Disallowed depreciation on block of fixed assets. 4. Depreciation of acquisition should be allowed.”

The AO rejected the application of the appellant observing that “the issues raised by the assessee do not come under the purview of the provisions of Section 154. Moreover the issue raised in the application u/s 154 are debatable. Further, there is no prima facie mistake apparent from the record which can be rectified”. I fully agree with the observation of the AO that the issue raised by the appellant in the application filed u/s 154 are debatable in nature. Hence, beyond the purview of the Provisions of Section 154. Therefore, the rejection of application by the AO of the application filed u/s 154 by the appellant is held to be justified and in accordance with the provisions of law. Hence, all the grounds of appeal are dismissed. However, it is clarified that the dismissal of the appeal against the order dated 20.01.2017 passed u/s 154 will not affect the outcome of the appeal, if any, filed by the appellant against the original assessment order dated 16.11.2016.”

Thus, the appeal of the assessee was dismissed by the ld. CIT(A) on the

ground that the issue raised by the assessee in the petition filed U/s 154

of the Act are beyond the scope of Section 154 as there is no prima facie

mistake apparent from the record when the Assessing Officer has decided

these issues and disallowed the claim of the assessee. Accordingly, we do

not find any reason to interfere with the said order dated 06/9/2017 of

ITA 497/JU/2017 & 862/JP/2018_ 5 Ramarpan Education Society Vs ITO(E) the ld. CIT(A) when the issues regarding disallowances of various claims

are subject matter of the assessment passed U/s 143(3) of the Act and a

separate appeal has been filed against the assessment order. Hence, the

appeal filed by the assessee arising from the order passed U/s 154 of the

Act is dismissed.

CIT(A) has not decided the appeal of the assessee on merits but has

dismissed the same by observing in para 3 and 4 as under:

“3.0 The appellant has filed an application dated 10.05.2018 for condonation of delay in filing the appeal stating as under:

“Most respectfully, we submit as under:-

It is, therefore, most respectfully prayed that the delay in filing the appeal may very kindly be condoned and appeal be kindly admitted.”

4.0 It is seen from Form No. 35 that date of service of the order appealed : Against is 25.11.2016. The appeal has been filed on 27.09.2017. Thus, it is clear that the appeal has not been filed within the period specified u/s 249(2). As per Section 249(2), the appeal has to be presented within 30 days of date of service of notice of demand. The appellant has not filed

ITA 497/JU/2017 & 862/JP/2018_ 6 Ramarpan Education Society Vs ITO(E) the appeal within the period specified u/s 249(2). There is an inordinate delay in filing the appeal. I have gone through the application filed by the appellant carefully. I am satisfied that the appellant did not have sufficient cause for not presenting the appeal within the period specified u/s 249(2). Therefore, the appeal is dismissed as not admitted.”

Thus, the ld. CIT(A) declined to condone the delay albeit the assessee has

pointed out that the delay was due to the reason that the assessee in the

mean time filed rectification petition U/s 154 of the Act and also filed an

appeal against the order passed by the Assessing Officer U/s 154 of the

Act. We further note that after the appeal of the assessee against the

order passed by the Assessing Officer U/s 154 of the Act was dismissed

by the ld. CIT(A) vide order dated 06/9/2017 the assessee filed an appeal

against the assessment U/s 143(3) of the Act on 27/09/2017 and

thereafter there was no unreasonable delay in filing the appeal after the

dismissal of the first appeal filed by the assessee. Though, there was a

delay in filing the appeal before the ld. CIT(A), however, when the

assessee has explained cause of delay being the time consumed in the

proceedings U/s 154 of the Act and thereafter the appeal filed before the

ld. CIT(A), which was finally dismissed vide order dated 06/09/2017 then

in our considered opinion, the assessee had made out a good case of

explaining the delay in filing the appeal. When the assessee has raised

the same issue in the appeal filed against the order U/s 154 of the Act,

ITA 497/JU/2017 & 862/JP/2018_ 7 Ramarpan Education Society Vs ITO(E) which was dismissed by the ld. CIT(A) on technical reason that the issue

raised by the assessee in the petition U/s 154 were beyond the scope of

the provisions of Section 154 then the appeal filed by the assessee

against the order passed U/s 143(3) of the Act ought to have been

decided on merits as all the facts were already on record and in the

knowledge of the ld. CIT(A). We find that the reasons for delay in filing

the appeal are manifest from the record of the ld. CIT(A) itself as the

assessee has spent this time in pursuing the alternative remedy U/s 154

of the Act, which was denied by the ld. CIT(A). Therefore, in the facts and

circumstances of the case, the appeal of the assessee filed before the ld.

CIT(A) ought to have been decided on merits instead of dismissing the

appeal on technical ground of delay when the assessee has explained the

reasonable cause of delay. Hence, we satisfy with the cause of delay

explained by the assessee being the time consumed in the proceedings

U/s 154 of the Act. Accordingly, we condone the delay in filing the appeal

before the ld. CIT(A). Since the ld. CIT(A) has not adjudicated the

grounds raised by the assessee on merits, therefore, we set aside the

matter to the record of the ld. CIT(A) for adjudication of the appeal of the

assessee on merits needless to say that the assessee be given an

opportunity of hearing before passing fresh order.

ITA 497/JU/2017 & 862/JP/2018_ 8 Ramarpan Education Society Vs ITO(E) 5. In the result, appeal ITA No. 497/Jodh/2017 is dismissed and appeal ITA No. 862/JP/2018 is allowed for statistical purposes only. Order pronounced in the open court on 25/09/2018.

Sd/- Sd/- ¼foØe flag ;kno½ ¼fot; iky jko½ (VIKRAM SINGH YADAV) (VIJAY PAL RAO) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 25th September, 2018 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Ramarpan Education Society, Bhilwara. 1. izR;FkhZ@ The Respondent- The ITO(E), Ajmer. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 497/JU/2017 & 862/JP/2018) 6. ` vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत