Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA & SHRI AMARJIT SINGH
Date of Hearing –21/01/2020 Date of Order -02/03/2020
O R D E R PER: SHAMIM YAHYA
This appeal by the assessee is directed against order of Ld. CIT-A- 1, Mumbai dated 29.11.2018 and pertains to assessment year 2012-13.
2. The grounds of appeal are as under:-
Chatrapati Shivaji Maharaj Smarak Samiti “1. On the facts and in the circumstances of the case and also in law, the learned CIT(A) erred in confirming the action of the learned Assessing Officer initiating proceedings under section 154 of the Act without appreciating that withdrawal of claim under section 11(2} for delay in submission of Form No.10 is not a mistake apparent from records to be rectified under the said section. The Appellant submits that the notice under section 154 dated 03.03.2017 is bad in law and order thereunder be quashed.
2. On the facts and in the circumstances of the case and also in law, the learned CIT(A)erred in confirming disallowance of claim of accumulation of income under section 11(2) amounting to Rs.92,56,501/- disregarding the fact that delay in submission of Form No.10 and resolution of Trustees is procedural lapse and could have been condoned having regard to the reasons stated in response to notice under section 154. Your appellant reserves the right to add, to alter or amend any of the above grounds, if necessary.”
The brief facts of the case are that AO had completed the assessment u/s.143(3) on 18/03/2015 at income of Rs.20,85,658/-. Thereafter, the Assessing Officer issued an order u/s.154. In the order u/s.154 he rejected the claim of accumulation of income as deduction u/s.11(2) of the IT Act for an amount of Rs.92,56,501/-, on the following findings:-
2. On verification of case record, it is observed that Form No.10 has been signed on 04.02.2013 and resolution of Managing Committee was held on 07.012.2012 (i,e. after the completion of relevant previous year) to accumulate income of Rs.99,41,280/- for the expansion of sports complex [ all dates are after due date u/s 139(1)]. The assessee trust had not applied for condonation of delay till date of assessment. Therefore, the accumulation of income of Rs.99,41,280/- claimed for deduction u/s 11(2) which was restricted the same to Rs. 92,56,501/- during scrutiny assessment
Chatrapati Shivaji Maharaj Smarak Samiti 3. Against the above order, assessee appealed before the ld. CIT(A). The assessee submitted that there was no mistake apparent from record and hence, the rectification u/s.154 was bad in law. The ld. CIT(A) noted that assessee has not objected to the rectification u/s.154, hence, he dismissed this issue raised by the assessee. He held as under:-
“6.3 I have considered the facts of the case, oral contentions and written submissions of the assessee, discussion of the AO in the impugned order and material available on record. It is seen from the facts of the case that a notice u/s154/155 was issued to the assessee and in their submission to the AO dated 23.03.2017 they have submitted in writing that they do not have any objection for notice u/s 154/155 of the Act. It is based on such submission of the appellant that the AO passed order u/s 154 of the Act. The assessee now seeks to raise grievance and contend that such notice issued was bad in law. In regard to such contention of the appellant it is stated in the facts and circumstances of the case that Form No. 10 and the resolution of the managing committee was beyond the due dates u/s 139(1), the AO realised that deduction u/s 11(2) should not have been allowed. Under these circumstances, he issued notice u/s 154 of the Act and on the basis of written no objection to the notice by the appellant, he passed order u/s154 of the Act. Under these facts and circumstances the assessee's contention now that notice u/s 154 is bad in law is not found to be acceptable including for the reason that no such objection was raised before the AO.”
Against the above order, assessee is in appeal before us.
We have heard both the counsel and perused the records. Ld. Counsel of the assessee contended that all the necessary documents were before the AO during the before the Assessing Officer. After due consideration of the same, Assessing Officer has passed an order by due application of mind wherein accumulation of income
Chatrapati Shivaji Maharaj Smarak Samiti was allowed. Ld. Counsel submitted that this disallowance u/s.154 is not at all a rectification of mistake apparent from record, hence, ld. Counsel submitted that ld. CIT(A) erred in holding the order of the Assessing Officer.
Per contra, ld. DR relied upon orders of the authorities below.
Upon careful consideration, we find that the necessary documents were already submitted before the Assessing Officer during the course of assessment. The Assessing Officer has not raked up any issue of condonation of delay and he has passed assessment order allowing the accumulation of income. Now, u/s.154, the AO seeks to disallow the aforesaid accumulation of income on the ground that assessee has not submitted any condonation of delay. In our considered opinion, this is clearly not a mistake apparent from record, that can be rectified u/s.154. Hence, the order of the Assessing Officer u/s.154 is not sustainable. This view is duly supported by the following decisions referred by the ld. Counsel of the assessee.
Sr Particulars No. I. T.S. Balaram, ITO v. Volkart Bros. 82 ITR 50 (Supreme Court- 1971) 2. Commissioner v. Trustees of Shri Teckchand Chandiram Trust. 184 ITR 537 ( Bombay- 1990)
Chatrapati Shivaji Maharaj Smarak Samiti 3. Commissioner of Income tax-Ill, Pune Vs. Sakal Relief Fund. 81 taxmann.com 396 (Bombay - 2017) 4. Commissioner of Income tax Vs. Nagpur Hotel Association. 1 14 taxman 255 (Supreme Court - 2001) 5. Trustees of Tulsidas Gopalji & Charitable & Chaleshwar Temple Trust vs. CIT 207 ITR 368 (Bombay - 1994)
Moreover, the premise of the ld. CIT(A) in upholding the order u/s.154 is that assessee has not objected before the AO. This reasoning is not at all sustainable. There is no estoppels against law and order of the AO which is not sustainable in law cannot be upheld on the ground that assessee did not object before the AO. The above case laws duly support the plea that review is not possible under the garb of rectification and that submission before the AO before the assessment is sufficient compliance, if AO does not raise any question about condonation. Respectfully following the decision as referred above, we decide the issue in favour of the assessee.
In the result, appeal of the assessee stands allowed.