9911796707
TMI Blog2024 (5) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant intimation issued u/s 143(1) will automatically merges with the assessment passed u/s 143(3). Therefore, it loses its relevance once the regular assessment is processed and it is only an intimation towards the accuracy of the information submitted by the assessee. Assessee has claimed deduction u/s 11 and failed to file the form 10B along with the ROI. Based on the above observation, the claim of the assessee was denied by the AO in sec. 143(1) proceedings. Therefore, there is no denial of fact that AO can make the above disallowance, however, the validity of the intimation issued u/s 143(1) is limited to mere intimation of correctness and accuracy of the income declared in ROI and its accuracy based on the information submitted along with the ROI. It does not carry the legitimacy of an assessment. When the assessment was processed under regular assessment then it loses its individuality and merges with the regular assessment. We are in agreement with the findings of Ld CIT(A) that the intimation u/s 143(1) merges with the order passed u/s 143(3) of the Act and the appeal against the above intimation becomes infructuous. In our view, he should have stopped with the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IFAUR RAHMAN, AM: 1. This appeal has been filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals)-1, Coimbatore [ Ld. CIT(A) , for short], dated 07/12/2023 for Assessment Year 2018-19. 2. The assessee is a registered society under the Societies Act, 1860, registered on 14/02/1941. The assessee filed application for registration u/s 12A with Commissioner of Income Tax (Exemption), Delhi on 27/03/2019. When the application was pending, the assessee filed return of income for the Asst. Year 2018-19 on 30/03/2019. In the return, the assessee had claimed application of income for charitable purpose for Rs. 6,01,35,500/-. As per the information available on record, the assessee has utilized on Revenue account of Rs. 72,224/- during the previous year and capital account repayment of loan of Rs. 6,00,00,000/-. The AO observed that as per the provisions of the Act, an amount accumulated or set apart for application of charitable or religious purposes or for the stated objects of the trust or institution to the extent, which does not exceed 15 percent of income derived from property held in trust or institution u/s 11(a) or 11(b) are eligible for deduction. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been utilised for construction of new building as we have been advised that the old building is unsafe for operation. III. The DOT, CPC, Bengaluru issued a proposal u/s on 16.08.2019.(Copy of the same is enclosed). IV. The DCIT, CPC issued intimation u/s. 143(1) dated 10.11.2019, wherein he denied the exemption claimed u/s. 11 and disallowed Rs. 6,00,35,500/- as Form No. 10B has not been e-filed in time. The appeal is filed against the denial of exemption claimed u/s 11 and addition of Rs. 6,00,35,500/- V. When the evidence of prior filing of intimation or registration, as the case may be, could not be traced in the appellant's case namely South India Club, we were advised to apply for registration u/s 12A of the Income Tax Act afresh. Thus, the registration application was made on 27.03.2019. While the application is pending the appellant filed ROI for AY 2018-19 on 30.3.2019. Our application was rejected by CIT(E) vide his order dated 30.9.2019. The order of the CIT(E) was appealed and we received favourable decision of Hon'ble ITAT in I.T.A. No: 8338 / Del / 2019 dated 13.08.2020 allowing our appeal and directing the CIT (Exemption) to grant registration u/s 12AA. (Copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1860. The amount received by the Club is exempt from income tax on the principle of mutuality. At the time of filing the return of income for the assessment year 2018-19 the club has not been granted registration/s. 12A. Therefore, at time of filing the return of income report in Form 10B was not filed. Subsequently, the CIT(E) granted registration under section 12AA r.w.s 12A on 05.01.2021. As at the time of grant of registration the Assessment proceedings of the preceding assessment year 2018-19 was pending, we became eligible for the benefit of section 11 and 12 as per second proviso to section 12A(2) which is extracted in para VII above. The only condition prescribed by the second proviso for becoming eligible for the benefit of section 11 and 12 to the pending preceding assessment year was the object and activities of such trust or institution remains the same for such preceding assessment year . We have satisfied this condition. The second proviso did not prescribe any other pre-condition to become eligible for benefit of section 11 and 12.As the statute itself (second proviso) has prescribed the precondition, which we have satisfied, we were under the impression that Form 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 11 in a 143(3) order also. Hence the appellant has to get the delay condoned first and can raise the ground Sec. 12A(2) of Income Tax Act is squarely applicable before the appellate authority in the appeal against the 143(3) order. The order u/s 143(1) is correct and the appeal is dismissed as infructuous. 8. Aggrieved with the above order, the assessee is in appeal before us raising the following grounds of appeal: 1. The order of the Additional/JCIT(A)-1, Coimbatore, for the Assessment year 2018-19 u/s 250 dated 07.12.2023 is against law and facts of the case. 2. The Additional/JCIT(A)-1 erred in dismissing the appeal as infructuous after giving adverse findings on merits of the issues agitated in the appeal against the section 143(1) proceeding and the demand. 3. The Additional/JCIT(A)-1 erred in holding that the section 143(1) proceeding is subsumed in section 143(3) order without giving a specific opportunity of being heard to the appellant on that point of view. 4. After holding that the section 143(1) proceeding is subsumed in section 143(3) order, the Additional/JCIT(A)-1 erred in giving adverse findings on merits of the appellant's claim for exemption u/s 11 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Trust I.T.A. No.104 (ASR) / 2015 dated 11.09.2018. iii) Sri Sri Ramakrishna Samity (156 ITD 646) Kolkotta ITAT. iv) CBDT Circular No. 1/2015 dated 21.01.2015. 12. Without prejudice to the above grounds, the following ground is raised. a. The Additional/JCIT(A) -1 erred in overlooking the fact that the donation received from Shriram Transport Finance Company Limited of Rs. 6,00,00,000/-, a Parton member of the society, cannot be brought to tax on the principle of mutuality which govern the society. In this connection the appellant relies on Supreme Court decision in the case of State of West Bengal Vs Calcutta Club Limited (110 Taxmann.com 47). 13. For these and other grounds that may be adduced before or at the time of hearing the Hon ble ITAT may be pleased to hold that the appellant s income is exempt u/s. 11 and delete the addition. 9. At the time of hearing, the Ld. AR submitted as under: 2. The appellant, The South India Club, (formerly known as The South Indian Association) has been registered on 14.02.1941 as a society under the Societies Registration Act, 1860. The appellant Society was granted Registration u/s 12AA r.w. 12A/254 by the Commissioner of Income Tax (Exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02.2021 b) In this regard, we rely on the following ITAT Decisions which is squarely applicable to our case: 1) Income Tax Appellate Tribunal, Gauhati Bench, Order in I.T.A No. 13/Gty/ 2022 dated 09.06.2023 for the Assessment Year 2018-19. (Page No. 16 to 18 of Paper Book) Considering these facts, we find that the present appeal being against intimation u/s. 143(1) challenging the adjustment made which has already been taken into consideration for the purpose of addition in the assessment completed u/s. 143(3) of the Act, is rendered as infructuous. Accordingly, we dismiss the present appeal as infructuous. 2) Income Tax Appellate Tribunal, Gauhati Bench, Order in I.T.A No. 49/Gty/ 2022 dated 14.06.2023 for the Assessment Year 2018-19 (Page No. 19 to 22 of Paper Book) 3) Income Tax Appellate Tribunal, Indore Bench, Order in I.T.A No. 424 426/ Ind/2022 dated 30.08.2023 for the Assessment Year 2016-17 2017-18 . (Page No. 23 to 29 of Paper Book) The Hon'ble High Court has held that once the assessment u/s 143(3) has been completed then the order passed u/s 143(1)(a) merges with the order passed u/s 143(3) of the Act. Therefore, the order passed u/s 143(1) of the Act ceased to be o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects and activities of the appellant's society during the financial year. Therefore, the benefit of registration granted to appellant is available for the assessment year 2018-19 also. This is a statutory benefit given to appellant to which the appellant society is entitled and which cannot be denied. d) We rely on the following's decisions/CBDT Circular which stated that the exemption is available for the earlier pending assessment years. i) ITAT Raipur Bench's decision in the case of Shivom Vidyapeeth Shikshan Samithi 201 ITD 144 Raipur Tribunal which stated that the exemption is available for earlier pending assessment years. (Page No. 33 to 40 of Paper Book) ii) ITAT Amritsar Sai Wiran Wali Educational Trust I.T.A. No. 104 (ASR) / 2015 dated 11.09.2018. (Page No. 41 to 46 of Paper Book) iii) Sri Sri Ramakrishna Samity (156 ITD 646) Kolkotta ITAT. (Page No. 47 to 58 of Paper Book) iv) Extract of CBDT Circular No. 1/2015 dated 21.01.2015. (Page 59 to 61 of Paper Book) e) Further, the First proviso to section 12A(2) has not prescribed any other precondition to get the benefits of section 11 and 12. This proposition gets strengthened from the fact that the second provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regular assessment is processed and it is only an intimation towards the accuracy of the information submitted by the assessee. In the given case, the assessee has claimed deduction u/s 11 and failed to file the form 10B along with the ROI. Based on the above observation, the claim of the assessee was denied by the AO in sec. 143(1) proceedings. Therefore, there is no denial of fact that AO can make the above disallowance, however, the validity of the intimation issued u/s 143(1) is limited to mere intimation of correctness and accuracy of the income declared in ROI and its accuracy based on the information submitted along with the ROI. It does not carry the legitimacy of an assessment. When the assessment was processed under regular assessment then it loses its individuality and merges with the regular assessment. We are in agreement with the findings of Ld CIT(A) that the intimation u/s 143(1) merges with the order passed u/s 143(3) of the Act and the appeal against the above intimation becomes infructuous. In our view, he should have stopped with the above findings and should not have proceeded to decide the issue on merits, because it is brought to his knowledge that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
