2019 (6) TMI 589 - AT - Income Tax

Rectification u/s 254 - evidences to prove corpus donations - allow benefit of carry forward of loss u/s 72 - mistake apparent on record - HELD THAT - We find that the Tribunal has recorded its categorical finding in light of facts brought out by the lower authorities and also evidences filed by the assessee during the course of hearing to come to the conclusion that the assessee has failed to file necessary evidences to prove that donations are in fact corpus donations which shall not form the income of the trust u/s 11. For the earlier years, the Tribunal has set-aside the issue to the file of the AO to ascertain correct facts on respect of donations received by the assessee but for the years under consideration, the lower authorities have given categorical facts in light of list of donors and evidences filed by the assessee to prove corpus donations and held that the assessee has not filed any evidences to prove that those donations are corpus donations. Even before us, no further evidences have been filed to controvert the findings of fact recorded by the lower authorities. Under those facts, the Tribunal has concurred with the finding of the CIT(A) in so far as the issue of corpus donations are concerned. The facts involved in these years when compare to previous financial year are different, therefore, the Tribunal has decided not to follow the findings recorded by the Tribunal while set-aside the issue to the file of the AO. The facts and errors brought by the assessee in its miscellaneous application in respect of corpus donations is not a mistake apparent on record, which could be rectify u/s 254(2) Carry forward and set off of loss u/s 72 - HELD THAT - This issue has been set-aside to ascertain correct facts in light of provisions of section 72 and 70 of the Act and if conditions prescribed u/s 72 and 70, then the AO is directed to allow the benefit of set off of losses as claimed by the assessee. Therefore, we are of the considered view that there is no error in the order of the Tribunal as pointed out by the assessee which could be rectified u/s 254(2) and hence the argument advanced by the ld. Counsel for the assessee are rejected. Accordingly, miscellaneous applications filed by the assessee for AYs 2005-06 to 2009-10 are dismissed. Denial of exemption u/s 11 - HELD THAT - Tribunal has recorded its findings in light of facts brought out by the lower authorities and evidences filed by the assessee and discussed the issue. We further noted that in para-12, the Tribunal has recorded categorical finding that the assessee could not file any evidences to controvert the findings and facts recorded by the lower authorities and this was confronted to the Ld. AR for the assessee and the Ld. AR has fairly accepted that the violation referred to in section 13(1)(c) were continued in subsequent years. Under those facts, the Tribunal came to the conclusion that assessee is not entitled for exemption u/s 11. Therefore, we are of the considered view that there is no error in the findings of the Tribunal in so far as the issue of denial of exemption u/s 11. Hence, we are of the considered view that there is no merit in the miscellaneous application filed by the assessee for AYs 2012-13 to 2014-15 and hence, the same are dismissed.

Summary

Issues:
1. Rectification of apparent errors in the order passed by ITAT, Mumbai for different Assessment Years.
2. Taxability of corpus donations and denial of exemption u/s 11 of the Income Tax Act.
3. Mistakes apparent from the record in the Tribunal's order and the necessity for rectification under section 254(2) of the Act.

Issue 1: Rectification of Apparent Errors in the ITAT Order
The assessee filed Miscellaneous Applications under section 254(2) of the Income Tax Act, seeking to recall the order passed by the ITAT, Mumbai for various Assessment Years. The applications highlighted factual errors and mistakes apparent from the order, emphasizing the need for rectification. The grounds for rectification included the taxation of corpus donations and denial of exemption under section 11 of the Act. The applicant provided detailed explanations and evidence to support the rectification requests, citing discrepancies between the Tribunal's observations and the actual evidence presented.

Issue 2: Taxability of Corpus Donations and Denial of Exemption u/s 11
The assessee contended that the Tribunal's findings regarding the taxability of corpus donations and denial of exemption under section 11 were based on incorrect observations. The applicant argued that necessary evidence had been submitted, contradicting the Tribunal's assertion that no proof of corpus donations had been provided. Additionally, discrepancies in the treatment of loans and income adjustments were highlighted, with the applicant presenting detailed accounts and evidence to support their claims. The applicant sought rectification of these issues, emphasizing the factual inaccuracies in the Tribunal's order.

Issue 3: Mistakes Apparent from Record and Rectification
During the proceedings, the Assessing Officer (AO) and the Ld. CIT(A) had given specific findings based on the evidence presented by the assessee. The Tribunal considered the facts and errors brought forth by the assessee in the miscellaneous applications but concluded that the discrepancies were not mistakes apparent on record warranting rectification under section 254(2) of the Act. The Tribunal analyzed the evidence, previous decisions, and the specific circumstances of each Assessment Year to determine the validity of the rectification requests. Ultimately, the Tribunal dismissed the miscellaneous applications for all Assessment Years, citing the lack of merit in the rectification claims.

This detailed analysis of the judgment provides insights into the issues raised by the assessee, the Tribunal's considerations, and the final decision regarding the rectification requests.