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2015 (8) TMI 880 - ITAT LUCKNOW

2015 (8) TMI 880 - ITAT LUCKNOW - TMI - 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 e .....

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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 Of .....

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M. All these four Misc. Applications are filed by the assessee pointing out certain alleged mistake in the combined Tribunal order for assessment year 2005-06, 2006-07, 2008-09 and 2009-10. 2. All these Misc. Applications are identical and therefore, we reproduce the Misc. Application No. 48/Lkw/2015, for the sake of ready reference: The aforementioned are appeals by the Revenue and Assessee for several assessment years. There are three appeals filed by the Revenue and the remaining one appeal i .....

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bove appeals, the following mistake has crept in the order of the Hon ble ITAT. Particulars of Mistake Sought to be Rectified: Omission to adjudicate upon an argument of the assessee, as advanced during the course of hearing of the appeal and adjudication of appeals based on incorrect appreciation of facts. The facts of the present case are as under: 1. That the assessee is an entity duly registered under Section 12AA/12A and also runs a Hospital at Jaunpur, Uttar Pradesh. A liaison office is ma .....

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its Receipts and Payments (towards application of income for charitable purposes) under section 12A/12AA and the entitlement was never relinquished / surrendered. 6. With the introduction of Section 10(23C)(iiiae), vide Finance Act (No. 2) of 1998 w. E.f. 1-04-1999, an option was given to the income tax assessee s, in receipt of ANY INCOME from Hospital to claim the benefit of exemption from taxation, under this Section, subject to fulfillment of the conditions, prescribed. 7. The Hon ble Tribun .....

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under Section 12A/12AA. This aspect of the matter has inadvertently escaped the attention of the Hon ble Tribunal. 9. The Hon ble Tribunal has observed as under it is noted by the Assessing Officer that although the assessee trust is registered u/s 12AA with effect from 03/02/82 but in the year under consideration, the assessee claimed exemption u/s lO(23C)(iiiae) and not u/s 11 as it was clarified in writing by the assessee. On this basis, the Assessing Officer held that claim of exemption u/s .....

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s of the case. 11. The assessee could only perform his activities/objects as a Trust, out of money received by it from Dividend and Bank Interest, as the other sources of income are inadequate to meet its obligations. This is apparent from a perusal of the Income & Expenditure Account of the assessee, as was demonstrated during the course of hearing of the appeals. Hence the money received from Bank Interest and Dividend has been applied for charitable purposes, entitling the same for comput .....

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g Officer. 14. It is settled position of law, that there cannot be any Estopple against Law and hence the present rectification proceedings. Pleadings A) In the aforesaid facts and in the circumstances of the case, described supra, it is humbly prayed that the argument of the assessee, that the quantum of money applied by the assessee for the attainment of its philanthropic objects, for the purposes of Section 12A/12AA, be computed in the manner prescribed under Section 11, has inadvertently esc .....

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nal High Court in the case of Lax mi Electronic Corporation Ltd. v. CIT |1991| 188 ITR 398, held that if the Tribunal fails or omits to deal with an important contention affecting the maintainability/merits of an appeal, it must be deemed to be a mistake apparent from the record which can be rectified by the Tribunal by its subsequent order. E) It is settled position of Law, that there cannot be any Estopple against Law and hence the nonconsideration of the argument of the assessee, deserved to .....

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s and circumstances of the case, it is humbly requested that Your Honour be pleased to recall the above Order and hear the appeal of the assessee/department on this issue. Most respectfully submitted. 3. During the course of hearing of the Misc. Applications, same contentions were raised by Learned A. R. of the assessee as are contained in the Misc. Applications. Reliance was placed on a judgment of Hon ble Apex Court in the case of Dunlop India Ltd. vs. Union of India and Ors as reported in 197 .....

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in the impugned Tribunal order is that it was submitted by Learned A. R. of the assessee in course of hearing of the appeals that the 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. In this regard, we feel it proper to reproduce Para 4 of the Tribunal order as under: 4. We have considered the r .....

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from running a hospital in Jaunpur. Thereafter, he has noted that section 10(23C)(iiiae) is applicable in case of income of a hospital and not on the entire income of the trust. Thereafter, the Assessing Officer has reproduced the income and expenditure account of the assessee on page No. 3 of the assessment order. As per the same, we find that the assessee has reported income from hospital at ₹ 3.42 lacs but the assessee has reported bank interest at ₹ 14.35 lacs and income from in .....

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umbai Liaison office as per which the credit of income side is ₹ 9.12 lacs consisting of bank interest, dividend income and profit on redemption of Mutual Fund and against this, various expenses are debited by the assessee including salary to administrative staff, printing and stationery, postage and telegram, telephone expenses, travelling expenses and financial aid to poor and indigents patients at ₹ 7,470/-. The Assessing Officer has allowed all other expenses except donation of & .....

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persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, if the aggregate annual receipts of such hospital or institution do not exceed the amount of annual receipts as may be prescribed. 4.1 From the above provisions, it is seen that any income received by any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for th .....

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use (iiiae) of section 10(23C) of the Act. 5.1 We find that it is noted by the Tribunal that in Para 4 of the assessment order that it is noted by the Assessing Officer that although the assessee trust is registered u/s 12AA with effect from 03/02/82 but in the year under consideration, the assessee claimed exemption u/s 10(23C)(iiiae) and not u/s 11 as it was clarified in writing by the assessee. On this basis, the Assessing Officer held that claim of exemption u/s 11 cannot be considered. Even .....

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