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TMI Blog2021 (8) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... sustainable in the eyes of law. With regard to development receipts, the said issue with regard to developments receipts was not decided by the ld. CIT(A) in the order. CIT(A) has allowed set off of carry forward losses against the development receipts - The issue was not decided on merits as according to the assessee, there was no taxable surplus after set off of carry forward losses - as pointed out before us that in the subsequent assessment order, the same issue was decided in favour of the assessee and the order has been placed on record - The findings regarding development receipts being capital receipts - In this way, this issue has already been decided in favour of the assessee and therefore, there was no question of raising this issue again in impugned rectification order passed by the ld. CIT(A). The income tax authorities have power of rectification u/s 154 but can only be exercised if there is mistake apparent from the record. However, exemption u/s 11 of the Act has already been allowed to the assessee continuously and the ld. CIT(A) has himself allowed the same to the assessee in his earlier orders. Provisions of Section 154 cannot be invoked. At the same ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas these receipts are development receipts. (ii) Addition of ₹ 23,16,700/- (Registration Receipts of ₹ 31,92,000/-, Book Bank receipts of ₹ 2,90,000/- and form Late Receipts Rs.(-) 11,65,300/- as income of the assessee when the same was capital receipts and thus transferred to General Reserves . (iii) Addition of ₹ 1,28,688/- on account of employee's contribution to Employee State Insurance (ESI) u/s 36(1)(va) r.w.s. 2(24)(x) of the Income Tax Act, 1961. Subsequently, feeling aggrieved by the above order, the assessee preferred appeal before the ld. CIT(A) and the ld. CIT(A) after considering the facts and circumstances of the case, deleted all the additions made by the A.O. by allowing exemption U/s 11 of the Act vide order dated 26/05/2017, copy of which is placed at page No. 1 to 9 of the paper book. 5. Aggrieved by the order of the ld. CIT(A), the Revenue has preferred appeal before the ITAT. The ITAT after considering the case, dismissed the appeal filed by the revenue and upheld and sustained the order passed by the ld. CIT(A). Subsequently, the ld. CIT(E) Jaipur has made a reference dated 08/02/2019 requesting for rectification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clearly established from the return of income of the Appellant that it has claimed exemption u/s 11 of the Act by satisfying all the Conditions mentioned herein above. The Ld. AO has nowhere in the impugned assessment order raised any objection as to why exemption u/s 11 of the Act should not be allowed to the Appellant. Thus the impugned assessment order passed by the Learned Assessing Officer revolving only around denial of exemption under Section 10(23C) of the Act which was never claimed by the Appellant its return of income is bad in law, without jurisdiction and deserves to be quashed. As far as the finding of the Ld. AO that the issue relating to Section 10(23C) has been decided by the Hon'ble ITAT, Jaipur Bench Jaipur in the favor of revenue vide ITA No. 1062/JP/ 2011 dated. 15.03.2012 for AY 2008-09 and the assessee has not challenged the said order in higher courts. Hence it is established that the assessee has admitted. That it is not eligible for exemption u/s 10(23C) of the IT Act, 1961t is concerned, it is submitted that the order passed by the Honorable Tribunal in the case of the Appellant for A.Y. 2008-09 deal with the Exemption under Section 11 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year under consideration is not relevant for the facts of the present case as what was never claimed by the Appellant cannot be denied/disallowed. Further, the Appellant has its account audited as required under the Act and a copy of the audited books of accounts are produced before the Learned Assessing Officer. As per section 12Aof the Act, exemption U/s 11 12 is allowed if the assessee is registered u/s 12AA and the same is in force for the concerned assessment year. However, such an exemption is not allowed in case there is a violation of section 13(1) of the Act. In the year under consideration, there is no violation of conditions mentioned in section 13(1) of the Act. The relevant extracts of the said section are reproduced below: 13(1) Nothing contained in section i I or section j2 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof- (c) in the case of a trust for charitable or religious purposes or a Charitable or religious institution, any income thereof--- (i) If such trust or institution has been created or established after the commencement of this Act and under the terms of the trust o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption u/s 11 12 shall not be allowed if the funds of the charitable institution are invested for any period during the year in any form otherwise as prescribed u/s 11(5) of the Act. However, in the year under consideration there is no such violation. Now in the present case, the Ld. AO has passed the impugned assessment order solely relying upon the Hon'ble ITAT order fo1 Assessment Year 2008-09 and 2009-10 considering that the facts of the said years were similar to the facts of the current year. The Ld. AO failed to notice that the Appellant has applied the income from property held under trust as per the provisions of section 11 12 of the Act and the application of the income is verifiable from the return of income filed before the Learned Assessing Officer. Further, it is pertinent to note that the Appellant in the Assessment Year 2008-09 and AY 2009-10 had extended a loan to Shri Aditya Singhal S/o Shri Anand Singhal and Shri Anmol Singh Sandhu. The Ld. AO alleged that the said loans were in violation of section 13(1) r.w.s. 11(5) of the Act as Shri Anand Singhal was a member of the Society, therefore, Shri Aditya Singhal is a person covered u/s 13(3). Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red u/s 12AA of the Act. The department has also filed appeal against the above order and the Hon'ble ITAT has dismissed the appeal of the department. Copy of ITAT order is placed on paper book page no. 15 to 23 and finding is on internal page no. 8 para 6 and revenue appeal was dismissed. Therefore there is no ground to raise this issue again and again and the learned CIT(A) passed a crept order which has already been attained finality by the ITAT vide order dated 30.10.2017. Therefore the learned CIT(A)'s finding deserves to be quashed. With regard to the development receipts. The development receipts issue was not decided by the CIT(A) in the order but he has allowed the set off of carried forward losses against the development receipts of ₹ 5,22,21,300/-. The issue was not decided on merit, because since there were no taxable surplus after setoff of carried forward losses. But the same was decided in favour of the assessee in subsequent assessment years under the same facts and circumstances. Copy of order is placed on paper book page no. 24 to 35. The finding regarding development receipts are capital receipts is on page no. 35 and back that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The copy of the order of the ITAT which is at page No. 15 to 23 of the paper book and the relevant findings ae contained in internal page No. 8, para 6 and consequently, the appeal of the Revenue was dismissed. The ld. CIT(A) while passing the order has categorically held that there is no violation of Section 13(1) and exemption U/s 11 and 12 of the Act is allowed to the assessee which is also registered U/s 12AA of the Act. Therefore, when once this issue has already attained finality by passing of the order by the ITAT dismissing the appeal of the Revenue, therefore, in our view, no obvious mistake of law, if any, cannot be rectified U/s 154 of the Act. Whereas the mistake of fact which is apparent from the record can only be rectified U/s 154 of the Act as has already been held by the Hon ble Supreme Court in the case of Venkatachalam (M.K.) ITO vs Bombay Dying Mfg Co. Ltd. (1958) 34 ITR 143 (SC) and in the present case, the Revenue has failed to pinpoint the mistake of fact which is apparent from the record which needs invocation of the provisions of Section 154 of the Act. Therefore, in our considered view, under the above circumstances, the ld. CIT(A) has wrongly invoked ..... X X X X Extracts X X X X X X X X Extracts X X X X
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