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Income Tax Appellate Tribunal, ‘A(SMC
Before: SHRI N.R.S. GANESAN
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER: All the five appeals of the assessee are directed against the orders passed by the Commissioner of Income Tax (Appeals), Salem dated 24.10.2018 & 29.10.2018 and pertains to the assessment years (AYs) 2010-11 to 2014-15.
for Assessment Year 2010-11:
Shri G.Baskar, the Ld. Counsel for the assessee submitted that the Assessing Officer reopened assessment beyond the statutory period of four years. There is not even whisper in the assessment order that there was negligence on the part of the assessee in disclosing the entire details for the assessment. Therefore, the reopening of the complete assessment beyond the period of four years is not justified.
On the contrary, Shri A.R.V. Sreenivasan, the Ld. Departmental Representative submitted that the assessee has not raised that the issue of limitation in reopening the assessment either before the AO or before the Ld. CIT(A) and he has no records to argue the case.
Having heard the Ld. Counsel for the assessee and the Ld. Departmental Representative, this Tribunal is of the considered opinion that reopening of the assessment beyond the statutory limit of four years goes to the root of the matter, therefore it is not necessary either for the assessee or to the Department to raise the issue before this Tribunal.
Even though there was no necessity for raising this issue of limitation, this Tribunal is expected to record a finding whether the assessment was reopened within the period of limitation. In this case, the assessee has assessment was reopened u/s. 147 of the Act beyond four years. As rightly submitted by the Ld. Counsel for the assesee there was not even a whisper in the assessment order that the assessee failed to disclose the entire details required for completion of the assessment. It is not in dispute that the assessment was reopened beyond four years period.
Therefore, this assessment is barred by limitation under proviso to s.147 of the Act. Therefore, the orders of both the authorities below are set aside and the appeal of the assessee stands allowed.
In the result, the appeal filed by the assessee in for Assessment Year 2010-11 stands allowed.
ITA Nos.79, 80, 81 & 82/Chny/2019 for AYs 2011-12 to 2014-15: 6. In for Assessment year 2011-12 Shri G. Baskar, the Ld. Counsel for the assessee submitted that the assessment was reopened within four years. The return was processed u/s. 143(1) of the Act and there was no order u/s. 143(3) of the Act. Referring to the merit of the case, the Ld. Counsel for the assessee submitted that the assessee is running Kalyana Mandapam. One of the objects of the assessee is to establish and maintain Kalyana Mandapam apart from other objects including establishing and maintenance of cremation ground, donations to the students, recreation etc. On a query from the Bench how running a Kalyana
4 to 82/Chny/2019 Mandapam would be a charitable activity u/s. 2(15) of the Act, the Ld. Counsel for the assessee submitted that the assessee charging very nominal amount from the general public, therefore, it has to be considered as charitable activity. Referring to the issue of depreciation, the Ld. Counsel for the assessee submitted that the assessee is not entitled for depreciation in case exemption was granted u/s. 11 of the Act, if the exemption u/s. 11 of the Act was not granted, the assessee may be entitled for depreciation.
On the contrary, Shri A.R.V. Sreenivasan, the Ld. Departmental Representative submitted that the main object of the assessee’s Trust is running Kalyana Mandapam, which cannot not be construed as charitable activity. Therefore, the assessee is not eligible for exemption u/s. 11 of the Act. Referring to s. 11(6) of the Act, the Ld. Counsel submitted that the Supreme Court held that this provision is prospective in nature therefore, not applicable for earlier assessment years.
Having heard the Ld. Counsel for the assessee and the Ld. Departmental Representative, this Tribunal is of the considered opinion that establishing and running Kalyana Mandapam is not a charitable activity. It is purely a commercial activity. Therefore, the assessee is not entitled for exemption u/s. 11 of the Act. The matter would stand different, in case establishing Kalyana Mandapam is an ancillary object for securing
5 to 82/Chny/2019 funds to carry out charitable activity. In the case on hand, establishing Kalyana Mandapam is one of the main object. Establishing Kalyana Mandapam being one of the main object may not be a charitable activity. Mere registration of u/s. 12A of the Act may not entitle the assessee to claim exemption. At the best, registration u/s. 12A of the Act is only to identify the entity. The assessee apart from registration u/s. 12A of the Act, has to establish that it is engaged in the chartable activity. Since no charitable activity is carried on by the assessee, this Tribunal is of the considered opinion that the assessee is not eligible for exemption u/s. 11 of the Act. Accordingly, the orders of the lower authorities are confirmed and all the appeals of the assessee are dismissed.
In the result, the appeals filed by the assessee in 80, 81 & 82/Chny/2019 for Assessment Years 2011-12 to 2014-15 stand dismissed. However, ITA No.78/Chny/2019 stands allowed. Order pronounced in the open court on 03rd February, 2020 at Chennai (Camp at Coimbatore). Sd/- (एन एन.आर आर.एस एस. . . . गणेशन गणेशन) एन एन आर आर एस एस गणेशन गणेशन (N.R.S. Ganesan) �याियकसद�य �याियकसद�य/Judicial Member �याियकसद�य �याियकसद�य चे�ई/Chennai, �दनांक/Dated, the 03rd February, 2020. EDN, Sr. PS
अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A) 4. आयकर आयु�त/CIT 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF