2015 (8) TMI 880 - AT - Income Tax

Rectification of mistake - interest income of the assessee should be considered for the purpose of computation u/s 11 of the Act because the assessee is duly registered u/s 12A/12AA of the Act but this aspect of the matter has inadvertently escaped the attention of the Tribunal - Held that - Assessee has given in writing to the Assessing Officer that although the assessee trust is registered u/s 12AA with effect from 03/02/81 but the assessee has claimed exemption u/s 10(23C) and not u/s 11 of the Act. Even after this finding of the A.O. in the assessment order, no such ground was raised by the assessee before CIT(A) that the case of the assessee should be considered for exemption u/s 11 and no such appeal has been filed by the assessee before the Tribunal also because out of these 4 appeals, 3 appeals are filed by the Revenue and although an appeal was filed by the assessee for assessment year 2006-07, no such ground is raised by the assessee in that year also that the case of the assessee should be considered u/s 11 of the Act. Now by way Misc. Applications, the assessee is raising this argument/contention that the case of the assessee should have been considered u/s 11 of the Act. Such a claim cannot be entertained in Misc. Application proceedings because the proceedings u/s 254(2) are in respect of any apparent mistake in the Tribunal order and when no such claim of exemption u/s 11 was raised by the assessee before the Assessing Officer or before CIT(A) or before the Tribunal, it cannot be said to be an apparent mistake in the Tribunal order. Hence, we do not find any merit in any of the Misc. Applications filed by the assessee. - Decided against assessee.

Summary

Issues Involved:
1. Alleged mistake in the Tribunal order regarding the non-consideration of interest income for exemption under Section 11.
2. The applicability of Section 10(23C)(iiiae) and Section 11 for the assessee's income.
3. Procedural propriety of raising new claims in Miscellaneous Applications under Section 254(2).

Detailed Analysis:

1. Alleged Mistake in the Tribunal Order:
The assessee filed four Miscellaneous Applications pointing out an alleged mistake in the combined Tribunal order for assessment years 2005-06, 2006-07, 2008-09, and 2009-10. The primary contention was the omission to adjudicate upon an argument advanced during the hearing, specifically that the interest income should be considered for exemption under Section 11, as the entity is registered under Section 12A/12AA. The Tribunal acknowledged the argument but noted that this aspect had inadvertently escaped its attention.

2. Applicability of Section 10(23C)(iiiae) and Section 11:
The Tribunal had previously held:
- Receipts from the hospital are exempt under Section 10(23C)(iiiae).
- Dividend income is exempt under Section 10(34).
- The assessee is not entitled to the benefit of Section 10(23C)(iiiae) over interest income.

The assessee argued that the interest income should be computed under Section 11 due to its registration under Section 12A/12AA. The Tribunal observed that the Assessing Officer noted the assessee's claim for exemption under Section 10(23C)(iiiae) and not under Section 11, based on a written clarification by the assessee. Thus, the claim of exemption under Section 11 was not considered.

3. Procedural Propriety of Raising New Claims in Miscellaneous Applications:
The Tribunal emphasized that the proceedings under Section 254(2) are meant for rectifying apparent mistakes in the Tribunal order. The Tribunal found that the assessee did not raise the claim of exemption under Section 11 before the Assessing Officer, CIT(A), or in the Tribunal appeals. The Tribunal cited the case of Laxmi Electronic Corporation Ltd. v. CIT, which held that failure to deal with an important contention affecting the merits of an appeal constitutes a mistake apparent from the record. However, the Tribunal concluded that since the claim under Section 11 was never raised in the original proceedings, it could not be entertained in Miscellaneous Application proceedings under Section 254(2).

Conclusion:
The Tribunal dismissed all the Miscellaneous Applications, stating that there was no apparent mistake in the original order. The Tribunal held that the claim for exemption under Section 11 was not raised at any stage of the original proceedings, and thus, it could not be considered as an apparent mistake eligible for rectification under Section 254(2).

Final Order:
All Miscellaneous Applications filed by the assessee were dismissed. The order was pronounced in the open court.