9911796707
TMI Blog2015 (11) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities that the assessee has violated provisions of section 13 of the Act, the learned Commissioner of Income-tax (Central), Hyderabad has cancelled the registration under section 12AA(3) vide order dated November 6, 2008. This matter was the subject-matter of appeal before the Income-tax Appellate Tribunal and the Income-tax Appellate Tribunal in I. T. A. No. 71/Hyd/2009 dated September 30, 2009 noted that the registration granted under section 12A cannot be cancelled for violation of the provisions of section 13(1)(c) and 13(3) and therefore, section 12AA(3) does not empower the Commissioner of Income-tax to cancel the registration. The order of the Commissioner of Income-tax was accordingly set aside. In the mean time, the Assessing Officer (AO) by his common order in various assessment years has listed out various so called violations of section 13 and in the impugned years also came to the conclusion that registration under section 12 was cancelled, therefore the assessee was not entitled for exemption under section 11 of the Act. He accordingly brought to tax the entire amount claimed as exemption by the assessee in the impugned assessment years. He however, did not q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax (Appeals) in paras 2.9 and 2.10. Considering the assessee's detailed submissions and perusing the orders of the Income-tax Appellate Tribunal and the predecessor Commissioner of Income-tax (Appeals) on the issue, the learned Commissioner of Income-tax (Appeals) did not approve the modification orders by stating as under : "5.1 I have considered the facts on record and the submissions of the authorised representative. A perusal of the assessment order dated December 31, 2008 shows that while the Assessing Officer did discuss both the issues, viz., use of the appellant's vehicles for the personal use of the Chairman and his family and the purchase of property using the appellant's funds in the name of the wife and son of the chairman, the concluding and operative part of the assessment order merely record the cancellation of registration as the reason for denial of exemption under section 11. 5.2 Indeed, this view also finds support in the order of the Commissioner of Income-tax (Appeals) dated November 10, 2009, extracted above where the Commissioner of Income-tax (Appeals) observed that the denial of exemption under section 11 actually emanated from the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly observed that violation of the provisions of section 13 are to be examined by the Assessing Officer while considering the exemption under section 11. He referred to the consequential order passed by the Assessing Officer wherein on the presumption that registration was granted to the assessee, the entire amount was allowed without examining the violations under section 13. Therefore, the Assessing Officer was within his jurisdiction to modify the order to comply with the observations/directions of the Income-tax Appellate Tribunal. It was submitted that since the Assessing Officer has passed the order allowing the exemption without considering the violation of the provisions of section 13, the Assessing Officer was only following the directions of the Income-tax Appellate Tribunal and modified the orders under section 154. He justified the orders of the Assessing Officer. 6. Learned counsel in reply, made two propositions. One that the Assessing Officer was correct in allowing the exemption in the consequential order as registration was restored to the assessee by the order of the Income-tax Appellate Tribunal. He pointed out that the Assessing Officer did not quantify any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeded his powers under section 154 in restoring the order under section 143(3) which was also the subject- matter of appeal before the Commissioner of Income-tax (Appeals) earlier. The powers of rectification under section 154 are restricted and as rightly pointed out by the Commissioner of Income-tax (Appeals), issues which require detailed examination and analysis cannot be undertaken under section 154 of the Act. We are of the opinion that action of the Assessing Officer in restoring the order of the Assessing Officer under section 143(3) which was also the subject-matter of appeal before the Commissioner of Income-tax (Appeals) cannot be done. Moreover, as seen from the original assessment order under section 143(3), one violation which the Assessing Officer alleges is with reference to usage of cars. However, the Assessing Officer has not quantified the extent of amount spent on behalf of the personal usage of the trustees in the order. As seen from the statement also the context in which the statements were given do indicate that the trustee has stated that the cars were utilised for the objects of the society, more particularly for transporting the dignitaries of Medical Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant before the Income-tax Appellate Tribunal. Since the Assessing Officer was bound by the order passed by the Commissioner of Income-tax (Central) cancelling the registration it was but natural that the claim of exemption under section 11 by the appellant was denied by the Assessing Officer. I therefore find no infirmity in the order of the Assessing Officer denying the exemption claimed by the appellant under section 11 of the Income-tax Act at the time of passing the assessment order. As submitted by the appellant the hon'ble Income-tax Appellate Tribunal Hyderabad 'A' Bench has already adjudicated the issue relating to exemption. Since the Assessing Officer is to give effect to the order of the Income-tax Appellate Tribunal no separate finding is required to be given in respect of the claim of exemption. In other words, the first effective ground of appeal is dismissed." 9. In view of the above, if the Revenue has any grievance on the issue, they should have preferred an appeal on the orders of the Commissioner of Income-tax (Appeals), but the Assessing Officer has no powers to restore the original assessment order under section 143(3) in the guise of modifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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