TMI Blog2017 (8) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessee also argued that the rent was accrued when this was ordered by the Hon’ble Supreme Court in the year 2002, we find no such issue was raised before the Assessing Officer hence could not be rectified. We find even no such ground was raised before the Ld. CIT(A). Therefore, this issue is not arising out of the order under Section 154 of the Act. Under these facts, this plea of the assessee that the receipts cannot be taxed under the year under appeal is devoid of any merit hence rejected. - Appeal of the Assessee is partly allowed for statistical purpose - ITA No. 254/JP/2016 - - - Dated:- 23-6-2017 - Shri Kul Bharat, JM And Shri Vikram Singh Yadav, AM Assessee by : Shri P.C. Parwal (CA) Revenue by : Shri R.A. Verma (Addl. CIT) ORDER Per Shri Kul Bharat, JM. This Appeal by the Assessee is directed against the order of Ld. CIT(A), Alwar, dated 11.01.2016 pertaining to Assessment Year 2011-12. The Assessee has raised the following grounds of appeal :- 1. The Ld. CIT(A) has erred on facts and in law in holding that the application u/s 154 filed by the assessee against the intimation u/s 143(1)(a) determining the total income at ₹ 1,84 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 1,84,97,570/- and a demand of ₹ 54,03,271/- was raised. 4. Against this intimation, assessee filed an application u/s 154. In these proceedings, assessee filed a detailed reply dated 28/08/2013 explaining how its income is exempt from tax under the Act. However, the AO rejected the claim of the assessee that its income was exempt from tax by holding that the trust failed to file any documentary evidence of having being registered u/s 12A/12AA of the Act. He submitted that the Ld. CIT(A) upheld the order of the AO by holding that no mistake apparent on record in the tax computation or in charging of interest could be brought to his notice. Further, as per Ld. CIT(A) the other issues raised by the appellant were irrelevant and outside the scope of provisions of Section 154. He submitted that, hitherto, the trust had not filed any return of income as the expenditure on maintenance of the temples was more than the rent received from the properties. It had a cumulative deficit of ₹ 9,75,313/- as on 31/03/2010. However, during the year the trust received arrears of rent amounting to ₹ 2,64,24,302/- in respect of its property situated at Mathura given on rent to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order was passed by the AO on 29/10/2013, the appellate proceedings were pending on 01/04/2015 and since the appellate proceedings are only an extension of the assessment proceedings, the registration granted u/s 12AA would also apply to the AY under consideration as held by the Tribunal in the case of Adivasi Meen Bhagwan Jan Sewa Sansthan in ITA nos. 780 781/JP/2015 vide order dated 07/06/2016. He submitted that even otherwise also, the rental income is received for the period 05/07/1976 to 14/01/1992. The Hon ble Supreme Court awarded such rent vide order dated 09/09/2002. Thus, the rental income as accrued to the Trust in AY 2003-04. The same cannot be taxed in AY 2011-12. The reliance is placed on the decision of the Hon ble Supreme Court in the case of CIT vs. Excel Industries Ltd. (2013) 358 ITR 0295 and also judgment of the Hon ble Delhi High Court rendered in the case of CIT vs. Dinesh Kumar Goel 331 ITR 10. He submitted that in this case also the income had accrued to the assessee in the year 2002 when the Supreme Court had awarded the payment to it thereby creating a liability for the other party. He submitted that the income since accrued cannot be tax in the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of section 154 of the IT Act. Thus, I find no infirmity in the order passed by the AO. Therefore, I do not find any merit in the appeal filed by the appellant and hence, the same is dismissed. 6.1 From the above it can be inferred that Ld. CIT(A) was of the view that the issues raised were beyond the scope of the rectification u/s 154 of the Act. As per the assessee when the assessee was entitled for exemption and such exemption is not allowed in computation of total income, such Act is a mistake apparent from the record and can be rectified u/s 154 of the Act. The Hon ble Supreme Court in the case of MEPCO Industries Ltd. Vs. CIT 319 ITR 208 (SC) had occasion to examine. The scope of the section 154 of the Act and following the earlier judgments of Hon ble Supreme court in the case of Dena Metal Powder (P) Ltd. Vs. Commissioner, Trade Tax [2008] 2 sec 439 and Commissioner of Central Excise, Calcutta [2003] 151 ECTM 81 held that under the facts of that case it was not open to AO rectifying his own order. In the case of Dena Metal Powder(P) Ltd. Vs. Commissioner of Trade Tax, it was a rectifiable mistake is a mistake which is obvious and the same must be apparen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso perused the letter dated 12.11.1958 by the Ministry of Home Affairs. It is found that the said letter neither contains any mention of the Income Tax Act 1922 or its provisions relevant to section 4(3)(i). Therefore, it cannot be assumed that the exemption has been granted under the provisions of section 4(3)(i) of Income Tax Act 1922. 6.4 Further, the Ld. Counsel has placed on record, the report of the Law Commission under the Income Tax Act, 1922 the relevant contents are reproduced herein below. From the facts stated above, it will appear that the trust is partly religious and partly charitable. As such, it appears to me that that part of the income of the trust as is applied to religious purpose and also that part which is applied for charitable purposes will be exempts from income-tax u/s 4(3)(i) in the hands of the trust. 6.5 From the facts stated above, will be exempt from income u/s 4(3)(i) in the hands of the assessee. Further the Ld. Law Commission has observed as under:- Reference Finance Ministry s note above. In this connection notes from page 9/ante may please be seen. It appears from the note dated 5.11.1958 by the Member, Income-tax, CBR tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that expressions section 147 and no proceedings under section 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained in section 149 or section 150, be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly; (e) [Subject to the provisions of clause (g) and clause (i) of this sub-section,] section 23A of the repealed Act shall continue to have effect in relation to the assessment of any company or its shareholders for the assessment year ending on the 31st day of March, 1962 or any earlier year, and the provisions of the repealed Act shall apply to all matters arising out of such assessment as fully and effectually as if this Act had not been passed; (f) any proceeding for the imposition of a penalty in respect of any assessment complete before the first day of April, 1962, may be initiated and any such penalty may be imposed as if this Act had not been passed; (g) any proceeding for the imposition of a penalty in respect of any assessment for the year ending on the 31st day of March, 1962, or any earlier yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. From a bare reading of Section 297(2)(k) of the Act is evident that any agreement entered into, appointment made, approval given, recognition granted, direction, instruction, notification, order or rule issued under any provision of the repealed Act, shall, so far it is not inconsistent with the corresponding provisions of this Act, be deemed to have been entered into, made, granted, given or issued under the corresponding provision aforesaid and shall continue in force accordingly. 6.7 In view of the above, the AO was required to examine whether firstly exemption granted under the repealed Act was saved by Section 297 of the Act and secondly, whether it was consistent with the corresponding provisions of Law under the new Act. 6.8 Under these facts, we are of the considered view that by not adverting these issues. The AO has committed mistake apparent from the record and needs fresh consideration. According the AO is directed to decide the issue of availability of exemption afresh. The Assessee also argued that the rent was accrued when this was ordered by the Hon ble Supreme Court in the year 2002, we find no such issue was raised before the Assessing Officer henc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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