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Income Tax Appellate Tribunal, BANGALORE BENCHES “ A ” BENCH: BANGALORE
Before: SHRI A.K. GARODIA & SHRI PAVAN KUMAR GADALE
O R D E R PER BENCH : These are the appeals filed by the assessee against separate orders of Commissioner of Income Tax (Appeals), Gulbarga passed under Section 143(3) r.w.s. 147 and 264 of the Income Tax Act, 1961 ('the Act'). Since all the appeals have common and identical issues, they are clubbed and heard together and 2 to 1864, 3442 & 3443/Bang/2018 consolidated order is passed. For the sake of convenience, we shall take up ITA No.1860/Bang/2018 and the facts narrated therein.
The assessee has raised the following grounds of appeal and additional grounds of appeal as under:
Additional Grounds of Appeal
At the time of hearing, the learned Authorized Representative has filed petition for condonation of delay in filing the appeal with 1 day delay and the LdDr has no objections and the delay is condoned. Further, The ldAr prayed for the admission of additional grounds of appeal
and the Revenue has no serious objections, accordingly additional grounds of appeal are admitted.
4. The learned Authorized Representative has restricted his arguments on the additional grounds of appeal.
5 to 1864, 3442 & 3443/Bang/2018 5. The Brief facts of the case are, the assessee is a society Registered under Karnataka Societies Act, 1960 and having income from Government Contracts and Hiring of vehicles. The Assessing Officer recorded the reasons for escapement of income has issued Notice under Section 148 of the Act for filing the Return of Income. Whereas, the assessment was concluded under Section 144 r.w.s. 147 of the Act on 22.02.2016. Subsequently, the assessee society filed Revision Petition under Section 264 of the Act before the Prin. CIT, Kalaburgi ,whereas the Prin. Cit vide order under Section 264 of the Act has set aside the assessment to the file of Assessing Officer with direction to pass a fresh assessment order in accordance with law and provide adequate opportunity of hearing to the assessee. The Assessing Officer posted the case for hearing and provided opportunity of hearing to the assessee. The assessee has filed the Return of Income and the AO in the assessment proceedings called for details and finalized the assessment with disallowance of expenditure for non-deduction of TDS applying the provisions of Section 40a(ia) of the Act as per Act. The AO observed that TDS was not deducted on sub-contractors work expenses, consultancy charges, fabrication expenses, labour and vehicle hire charges aggregating to Rs.8,65,14,782/-.Further the Assessing Officer found that the expenditure was debited in respect of Student Welfare Forum Scholarship, Expenditure on Bidar Utsav, Outstanding VAT and return of ACA Fund aggregating to Rs.1,63,38,786/- since the assessee has not 6 to 1864, 3442 & 3443/Bang/2018 established the nature of expenses, the AO applied the provisions of Section 43B of the Act, were the assessee should have paid the amount to Government authorities within due date under Section 139(1) of the Act and Assessed the total income of Rs.10,59,46,438 and passed the order under Section 143(3) r.w.s. 147 and 264 of the Act on 21.12.2017. Aggrieved by the order, the assessee has filed an appeal with the CIT(Appeals). The CIT(Appeals) considering the grounds of appeal and submissions of the assessee and the facts that no Registration 12A of the Act is available with the assessee, relied on the judicial decisions and confirmed the disallowances of AO and dismissed the assessee's appeal. Aggrieved by the order of CIT(Appeals), the assessee has filed an appeal before the Tribunal.
6. At the time of hearing, the learned Authorized Representative submitted that the CIT(Appeals) has erred in dismissing the appeal including the additional grounds of appeal without considering logical and reasonable explanations. The assessee has raised additional grounds of appeal before the Tribunal on the jurisdiction and applicability of provisions of section 40a (ia) of the Act. The learned Authorized Representative submitted that the assessee was granted Registration u/sec12AA vide order dt.9.3.2020 and placed a copy on record. Further supported the submissions with paper book and prayed for allowing the 7 to 1864, 3442 & 3443/Bang/2018 appeal. Contra, the ld. DR objected to the submissions and relied on the CIT (Appeals) order.
We heard the rival contentions and perused the material on record. The learned Authorized Representative has restricted his arguments to the extent of additional grounds of appeals. The contention of the learned Authorized Representative that the CIT(Appeals) has dismissed the grounds of appeal without considering the explanations and the process of obtaining of registration under 12A of the Act. We found that the CIT(Appeals) has not made any observations or findings in respect of additional grounds of appeal, that the provisions of Section 40(a)(ia) of the Act are not applicable to the charitable institutions registered under Karnataka Societies Act, 1960.The learned Authorized Representative demonstrated with the copy of order of Registration under Section 12AA of the Act dt.9.3.2020 and explained that the fact of Registration under Section 12A was not available before the assessing authority or the CIT(Appeals) and prayed for an opportunity to substantiate before the lower authorities. We considering the submissions of the learned Authorized Representative, facts and circumstances, and the Registration under Section 12AA of the Act obtained, find that the CIT (Appeals) order was passed on 19.03.2018 whereas the Registration under Section 12A of the Act was granted on 9.3.2020.Further, in the appellate proceedings before CIT(Appeals),Registration under Section 12AA of the Act was not available 8 to 1864, 3442 & 3443/Bang/2018 to the assessee and learned CIT(Appeals) dealt on disputes and dismissed the appeal. The assessee has filed additional grounds of appeal
,which are to be adjudicated by the appellate authority considering availabilityof Registration U/sec12AA of the Act. Accordingly, to meet the ends of justice, we set aside the order of CIT(Appeals) and restore entire disputed issues and additional grounds of appeal to the file of CIT(Appeals) to adjudicate afresh on merits and pass a speaking order, if the assessee fails on legal issue then the CIT(Appeals) shall adjudicate the disputed issue on merits considering the Registration U/sec12AA of the Act and the assessee should be provided adequate opportunity of hearing and shall co-operate in submitting the information for early disposal and allow the grounds of appeal of assessee for statistical purposes.
8. Similarly, the assessee has filed appeals in ITA Nos. 3442 & 3443/Bang/2018 and ITA no 1861 to 1864/Bang/2018 for A.Ys 2009-10&2011-12 to 2015-16 were the delay in filling the appeals is condoned and the issues are similar and identical. The decision in ITA No.1860/Bang/2018 shall equally apply. Accordingly, we set aside the order of the CIT(Appeals) in these appeals and restore the entire disputed issue to the file of CIT(Appeals) for adjudication on merits with similar directions and allow the grounds of appeals of assessee for statistical purposes.