THE GEORGE TELEGRAPH TRAINING INSTITUTE,KOLKATA vs. D.C.I.T., CIRCLE 29(1), KOLKATA

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “बी’’, कोलकाता
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA
Įी राजेश कुमार, लेखा सटèय एवं Įी Ĥदȣप कुमार चौबे, ÛयाǓयक सदèय के सम¢
[Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member]
I.T.A. No. 562 & 563/Kol/2024
Assessment Year: 2011-12 & 2016-17

The George Telegraph Training
Institute

(PAN: AAATT 2945 D)
Vs.
DCIT, Circle-29(1), Kolkata

Appellant /

)
अपीलाथȸ
(

Respondent / Ĥ×यथȸ

Date of Hearing / सुनवाई
कȧ Ǔतͬथ
17.12.2024
Date of Pronouncement/
आदेश उɮघोषणा कȧ Ǔतͬथ
17.01.2025
For the assessee /
Ǔनधा[ǐरती कȧ ओर से
Shri Miraj D Shah, A.R

For the revenue / राजèव
कȧ ओर से
Smt. Monalisa Pal Mukherjee, JCIT, Sr.
DR

ORDER / आदेश

Per Pradip Kumar Choubey, JM:

These are the appeals preferred by the assessee against separate orders of Commissioner of Income Tax (Appeal)-Addl/JCIT(A)-2, Chandigarh (hereinafter referred to as the Ld. CIT(A)] dated 11.01.2024 for AY 2011-12 & 2016-17 respectively

I.T.A. Nos. 562 & 563/Kol/2024
Assessment Years: 2011-12 & 2016-17
The George Telegraph Training Institute wherein the appeals of the assessee have been dismissed on account of delay in filing the appeal i.e. after the expiry of more than six years.
2. Brief facts of the case of the assessee in both the appeals are that the assessee is a private trust and shares of the beneficiary of the trust are determinate and known and the income of the trust is being assessed in the hands of the trustee directly. The trust was assessed u/s 143(3) of the Act for the AY 2011-12. The assessee had filed its return of income for AY 2011-12 by declaring an income of Rs. 48,41,065/- and claimed a refund of Rs. 6,03,049/- for AY 2016-17. The assessee declared an income of Rs.
1,51,98,110/- and claimed a refund of Rs. 21,61,670/-. The said return of income of the assessee was processed by order dated 01.10.2012 and 30.12.2016. In the said intimation, the income was assessed at Rs. 48,41,070/- and the tax demand was Rs.
9,11,010/- including interest u/s 234B and 234C of the Act and for AY 2016-17
intimation the income was assessed at Rs. 1,51,98,110/- and the tax demand was Rs.
32,64,030/- including interest u/s 234B and 234C of the Act.
3. The said order has been challenged by the assessee before the Ld. CIT(A). The Ld. CIT(A) vide its order dated 11.01.2024 in both the assessment year has dismissed the appeal of the assessee thereby holding that the assessee could not be able to satisfy the reason of delay i.e. more than six years though the assessee in its form No. 35 has written that there was no delay.

Being aggrieved and dissatisfied the assessee preferred two appeals before us.
4. The Ld. Counsel for the assessee challenges the impugned order thereby submitting that in fact there was no delay as the appeal had been filed in time as the service of intimation to the assessee was on 15.01.2019. The Ld. Counsel for the assessee submits that the Ld. CIT(A) did wrong by shifting his burden upon the assessee to furnish the evidence regarding service of intimation. The Ld. Counsel submits that he has clearly written in form no. 35 that assessee got notice of demand on 15.01.2019
and earlier to that there was no notice received by the assessee. The Ld. Counsel further on merit submitted that the assessee is a private trust and the shares of the beneficiaries

I.T.A. Nos. 562 & 563/Kol/2024
Assessment Years: 2011-12 & 2016-17
The George Telegraph Training Institute of the Trust are determinate and known. During the year under assessment, the respective beneficiaries had offered their respective shares of income from the Trust in filing the return of income as was consistently done from inception. As per the provisions of the Income Tax Act, 1961, under such circumstance, i.e. when the shares of the beneficiaries of a trust are known and they offered their share of income from the trust directly, the income of the Trust is not again assessable in its hand. While processing the return of the Trust u/s 143(1) of the Act on 01.10.2012 the trust was wrongly assessed for a sum of Rs. 48,41,070/- and a tax demand of Rs. 13,06,321/- was raised despite the fact that the beneficiaries had already offered the income in their hands. The Ld. Counsel had filed list of documents in support of its case. The Ld.
Counsel also brought in the notice of the tribunal regarding CBDT Circular No. 157 [F.
No. 228/8/73-IT(A-II) dated 26.12.1974. The Ld. Counsel submits that beneficiaries have offered the income in their respective hands and thus the trust cannot be taxed with respect to such income and according to him, this position was also accepted in the scrutiny assessment of the Trust for AY 2009-10 and 2012-13. He has placed the order u/s 143(3) of the Act for AY 2009-10 and for AY 2012-13. The prayer of the ld. Counsel is that the matter be restored in the file of AO for correct appreciation of law and for the verification of the fact which the assessee has brought before the Tribunal.
5. Contrary to that, the Ld. D.R supports the impugned order.
6. Upon hearing the submission of the Ld. Counsel of the respective parties, we have perused the order of Ld. CIT(A) and find that the Ld. CIT(A) has dismissed the appeal of the assessee on the ground that the assessee could not be able to furnish the evidence regarding service of intimation u/s 143(1) of the Act on 15.01.2019 though the date of intimation was in fact on 01.10.2012 as also mentioned by the assessee in Form no. 35. We have gone through the Form no.35 and find that on 01.10.2012 the date of order of intimation u/s 143(1) of the Act. There is nothing in the record regarding the date of service of order / notice of demand. The assessee has clearly been written in Form no. 35 that date of service of notice of demand on 15.01.2019 thereafter he filed an appeal, hence, there was no delay. Keeping in view of the above fact, we are in 4

I.T.A. Nos. 562 & 563/Kol/2024
Assessment Years: 2011-12 & 2016-17
The George Telegraph Training Institute conformity with the submissions of the ld. Counsel of the assessee that there was no delay, hence, the order passed by the Ld. CIT(A) on account of delay is hereby set aside.
7. Now coming to the factual position of the case of the assessee. It is the definite case of the assessee is that the assessee is a private trust and during the year under assessment the respective beneficiaries had offered their respective shares of income from the trust in filing the return of income and it was consistently done from inception.
We have gone through the CBDT Circular No. 157 (supra) which deals thus:
15. Hon'ble CBDT has clarified on assessment of trust where share of beneficiaries are unknown. The CBDT's Circular No. 157fF. No. 228/8/73 -IT (A-LY], dated 26.12.1974 for the subject of "Assessment of discretionary trusts under section 164/166 - correct procedure thereof had clarified that the ITO should at the time of raising the initial assessment either of the trust or the beneficiaries adopt a course beneficial to the Revenue and having exercised his option once, it will not be open to him to assess the same income for that assessment year in the hands of the other person (i.e., the beneficiary or the trustee).
1. Attention is invited to Board's Instruction No. 45/78/66/ ITJ(5), dated 24.02.1967 [printed here as Clarification 2] on the subject of assessment made under section 41(2) of the 1922
Act/section 166 of the 1961 Act. In spite of the clear instructions to the effect that neither section 41 which give an option to the department to tax either the representative assessee or the beneficial owner of the income nor the parallel provisions of the 1961 Act contemplated assessment of the same income both in the hands of the trustees and the beneficiaries, instances have come to the notice of the Board of such double assessment.
2. According to the Scheme of the 1961 Act, even as it was under the 1922 Act, the general principle is to charge all income only once. The Board desire to reiterate the earlier instructions in this regard. In order that there is no loss of revenue, the Income-tax Officer should keep this point in view at the time of raising the initial assessment either of the trust or the beneficiaries and adopt a course beneficial to the revenue. Having exercised his option once, it will not be open to the Income-tax Officer to assess the same income for that assessment year in the hands of the other person (i.e., the beneficiary or the trustee).”
16. The subject was earlier clarified by the Board stating the same view in letter F. No.
45/78/66-ITJ(5), dated 24.02.1967 [Clarification 2] are as follows:
1. Recently an interesting case came to the notice of the Board. The assessee was one of the beneficiaries in the Trust. The shares of the beneficiaries were known and determinate. The Income tax Officer raised an assessment on the trustees taxing the income of the trust in their hands at the appropriate rate and to the amount which would have been recoverable in the hands of the beneficiaries. While dealing with the case of one of the beneficiaries of the trust, the income tax officer again included for rate purposes his share in the income of the trust. The reason advanced by him was that the amount of tax leviable should be the same whether the income from the trust is assessed in the hands of the trustees or in the hands of the beneficiaries and if the proportionate income from the trust is not included for rate purposes in the hands of the beneficiary, his income other than the income from the trust would be taxed at a rate lower than that which would have been applicable if the trust income were assessed directly in his hands.

I.T.A. Nos. 562 & 563/Kol/2024
Assessment Years: 2011-12 & 2016-17
The George Telegraph Training Institute

I.T.A. Nos. 562 & 563/Kol/2024
Assessment Years: 2011-12 & 2016-17
The George Telegraph Training Institute ended on 31.03.2011. The assessee had made net profit of Rs. 43,47,480/-. After making necessary adjustment for deprecation and disallowable expenditure, total income was arrived at Rs. 48,41,065/- without offering any tax in view of the fact that such total income was apportioned to the individual shares of beneficiary who offered the same to tax while filing their individual return of income following the provision of Section 161
& 166 of the Act. The assessee has filed a tabular chart of all the beneficiaries which are as follows:

I.T.A. Nos. 562 & 563/Kol/2024
Assessment Years: 2011-12 & 2016-17
The George Telegraph Training Institute d) that the status of the aforesaid assessee, is Association of Persons with definite and determinate share of the beneficiaries i.e. 20% each.
e) that such status was described in all the IT returns read with the deed of trust for all the previous years.
f) that the same was accepted by the IT department all along.
g) that following the same, in all the preceding years, the assessee was assessed for NIL tax and the beneficiaries were taxed on their respective shares.
h) that for the instant AY 2011-12, there is no change in the status of the assessee-trust
& the distribution of surplus among the beneficiaries having definite & determinate share.
i) That the beenficiaries cum trustees had considered the share of trust income while filing their respective returns for the AY 2011-12 and paid due tax thereon.
j) that under such circumstances, the status of the assessee cannot be changed and while processing return u/s 143(1) of the Act, the AO cannot impose tax on the assessee.
k) That when the beneficiaries had paid tax on the trust income, demanding tax again from the trust, amounts to double taxation, which is no permissible under the scheme of income tax.
l) that for the above, the order passed u/s 143(1) of the Act dated 01.10.2012 ultra vires and hence bad in law and should be reversed.
m) That changing the status of an asse, which was consistently followed by the assessee and also accepted by the IT Department, cannot be done while sending intimation u/s 143(1) of the Act.
12. On the above discussion made, we find substance in the argument of the ld.
Counsel of the assessee that the matter of calculation is to be verified by the AO afresh.

I.T.A. Nos. 562 & 563/Kol/2024
Assessment Years: 2011-12 & 2016-17
The George Telegraph Training Institute

Order is pronounced in the open court on January, 2025

(Rajesh Kumar/राजेश कुमार) (Pradip Kumar Choubey /Ĥदȣप कुमार चौबे)
Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय

Dated: January, 2025

SM, Sr. PS

Copy of the order forwarded to: