Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B’’BENCH: BANGALORE
Before: SHRI GEORGE GEORGE K., JUDICIAL SHRI B.R. BASKARAN
The assessee has filed this appeal challenging the order dated 22-07-2019 passed by Ld CIT(A) for assessment year 2017-18, wherein he has dismissed the appeal holding that the appeal filed by the assessee is not a valid appeal and it should have been filed by M/s Jain International Residential School.
The Ld A.R submitted that the assessee herein is a trust and it owns & runs an educational institution named “Jain International
IT(IT)A No.1870/Bang/2019 Sri Bhagavan Mahaveer Jain Educational & Cultural Trust, Bangalore
Page 2 of 7 Residential School”. The assessing officer passed an order u/s 201(1) and 201(1A) of the Act for financial year 2016-17 relevant to the assessment order holding that certain payments made by the assessee to overseas entities is in the nature of “Royalty and Fee for Technical Services” and the assessee should have deducted tax at source from those payments. The said payments relate to course fee paid to foreign universities as detailed below:-
Sl.No. Payment made to Purpose Amount of payment made in Rs.
INTNL BACCALAUREATE ORG (SG School Course 1,28,380/- BR) Singapore Fees 2. University of Cambridge Local School Diploma 18,568/- Examination Syndicate, UK Annual Fees 3. INTNL. BACCALAUREATE (SG BR.) School Course 2,35,386/- Singapore Fees 4. INTNL. BACCALAUREATE ORG (SG School Course 43,574/- BR) Singapore fees 5. INTNL BACCALAUREATE ORG (SG School Delegate 2,40,912/- BR), Singapore Fees 6. University of Cambirdge Local School Course 10,658/- examination Syndicate, UK Fees 7. University of Cambirdge Local School Course 12,150/- Examination Syndicate, UK Fees 8. University of Cambridge Local Online Workshop 40,260/- Examination Syndicate, UK Fees 9. INTNL. BACCALAUREATE ORG (SG School Diploma 6,83,981/- BR), Singapore Annual Fees 10. University of School course 1,99,857/- Cambridge Local examination fees Syndicate, UK 11. University of Cambridge local School Course 5,869/- examination Syndicate, UK Fees 12. INTNL. BACCALAUREATE ORG (SG Regular 5,33,579/- BR) Singapore Registration fees 13. University of Cambridge Local Hindi as second 39,697/- examination Syndicate, UK Language Fees Total 21,92,871/-
IT(IT)A No.1870/Bang/2019 Sri Bhagavan Mahaveer Jain Educational & Cultural Trust, Bangalore Accordingly, the AO held the assessee to be assessee in default and further applying the provisions of sec.206AA of the Act, he raised demand of Rs.4,38,574/- @ higher rate of 20% u/s 201(1), interest demand u/s 201(1A) to the tune of Rs.3,07,002/- and surcharge demand of RS.22,367/-. Thus, the aggregate demand raised by the assessee was Rs.7,67,940/-.
It is pertinent to note that the assessing officer raised this demand by mentioning the name of the assessee as under:- “M/s Jain International Residential School c/o Sri Bhagawan Mahaveer Jain Educational and Cultural Trust”
The assessing officer mentioned PAN Number as AABTS1497G in the order and it is the PAN number of Sri Bhagavan Mahaveer Jain Educational & Cultural Trust, i.e., the assessee herein.
The assessee challenged the demand raised by the assessing officer by filing appeal before Ld. CIT(A). The appeal was filed by the assessee-Trust, i.e., Sri Bhagavan Mahaveer Jain Educational & Cultural Trust, which owns & runs M/s. Jain International Residential School. The Ld. CIT(A) dismissed the appeal with the following observations: 11. The order u/s 201(1) and 201(1A) is passed against Jain International Residential School. As per sec. 246 the assessee aggrieved by the order can file an appeal before CIT(A). In the present case Jain International Residential School is the aggrieved party whereas the appeal is filed by Sri Bhagavan Mahaveer Jain Educational & Cultural Trust.
Therefore, I hold that the appeal filed by Sri Bhagavan Mahaveer Jain Educational & Cultural Trust is not a valid appeal and only payer/deductor against which order u/s 201(1) and 201(1A)
IT(IT)A No.1870/Bang/2019 Sri Bhagavan Mahaveer Jain Educational & Cultural Trust, Bangalore
Page 4 of 7 is passed can file the appeal. As a result, the appeal is being dismissed being an invalid appeal.”
The assessee is aggrieved with the decision so rendered by Ld. CIT(A). The Ld. A.R. submitted that M/s. Jain International Residential School is owned and run by the assessee herein, i.e., M/s. Sri Bhagavan Mahaveer Jain Educational & Cultural Trust. Hence, M/s. Jain International Residential School is not a separate taxable entity under the Income Tax Act. She submitted that though the assessing officer has passed the order in the name of M/s. Jain International Residential School, the same would refer to M/s. Sri Bhagavan Mahaveer Jain Educational & Cultural Trust only, since it is the owner of M/s. Jain International Residential School. Accordingly, she submitted that the appeal could only be filed by the assessable entity namely M/s. Sri Bhagavan Mahaveer Jain Educational & Cultural Trust. Accordingly the Ld. A.R. submitted that the appeal was rightly filed by M/s. Sri Bhagavan Mahaveer Jain Educational & Cultural Trust and hence the Ld. CIT(A) was not correct in law in holding that the said appeal is not a valid appeal. Accordingly, the Ld. A.R. prayed that the order passed by Ld. CIT(A) should be set aside and the matter should be restored to the file of Ld. CIT(A) for adjudicating the issues on merit.
The Ld. D.R. on the contrary, supported the order passed by Ld. CIT(A). However, he submitted that he does not have any objection in remitting the issues to the file of Ld. CIT(A) for adjudicating them in accordance with law.
We heard the parties and perused the record. We notice that the assessing officer has made the following observations
IT(IT)A No.1870/Bang/2019 Sri Bhagavan Mahaveer Jain Educational & Cultural Trust, Bangalore
Page 5 of 7 in the first paragraph of the order passed by him u/s 201(1) and 201(1A) of the Act. “1.1 M/s. Jain International Residential School is established by a Trust namely, Sri Bhagawan Mahaveer Jain Educational & Cultural Trust and is an authorized IGCSE and IB School in Bangalore. The school provides programme based on Cambridge International Examination (CIE), International Central Certificate of Education (IGCSE) and The International Baccalaureate (IB). The IGCSE is for the Grade 9 & Grade 10 and IB is for the Grade 11 & Grade 12. The school is accredited to the Board of International Baccalaureate Organization (the “IB”) a Swiss foundation, with its principal registered address at Geneva, Switzerland, Cambridge International Examination (CIE) and International Central Certificate of Education (IGCSE).”
We notice that the assessing officer has made it clear that M/s. Jain International School was established by the assessee herein. The Assessing Officer has passed the order under the PAN number of the assessee herein and status is mentioned as “Trust”, which is again the status of the assessee herein. It is the submission of the Ld. A.R. that M/s. Jain International Residential School is not a separate taxable entity and its accounts were merged with accounts of the assessee herein. It was also submitted that impugned order passed by the assessing officer should be considered as referring to the assessee herein only since M/s. Jain International Residential School does not have separate standing of its own under the Income Tax Act.
We find merit in the submissions made by Ld. A.R. When M/s. Jain International Residential School is owned and run by the assessee herein, then the cause of action relating to M/s. Jain International Residential School shall arise against the assessee only. Accordingly, we are of the view that the Ld. CIT(A) was not right in law in observing that IT(IT)A No.1870/Bang/2019 Sri Bhagavan Mahaveer Jain Educational & Cultural Trust, Bangalore
Page 6 of 7 the assessee herein could not have filed the appeal before him in respect of the impugned order passed by the assessing officer. In view of the above, we set aside the order passed by the Ld. CIT(A). We also hold that the appeal filed by the assessee herein before Ld. CIT(A) is a valid appeal and it is the assessee which could alone file the appeal in respect of demand raised against M/s. Jain International Residential School. Accordingly, we set aside the order passed by Ld CIT(A).
Since the Ld. CIT(A) has not disposed of the appeal on merits, we feel it proper to restore all the issues to the file of the Ld. CIT(A) for adjudicating them on merits, after affording adequate opportunity of being heard to the assessee. We order accordingly.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.