TMI Blog2015 (8) TMI 1436X X X X Extracts X X X X X X X X Extracts X X X X ..... : K.C. Devdas For Respondents: Ramakrishna Bandi ORDER P. Madhavi Devi, Member (J) 1. This appeal filed by the assessee is directed against the Order of Ld. CIT(A), Guntur dated 25.02.2014 for the A.Y. 2001-2002. 2. Brief facts of the case are that the assessee is a trust carrying on educational activities. It filed its return of income on 11.10.2004 in Form No. 3A returning 'NIL' income. Since the return was filed out of time, the A.O. treated it as non-est. Subsequently, by issuance of notice under section 148 dated 27.03.2007 the assessment was reopened. During the course of assessment proceedings under section 143(3) read with section 147 of the I.T. Act, the A.O. examined the books of accounts of the assessee and observed that the assessee has collected development fund. The assessee was asked to clarify as to the amount received during the year under consideration and also relationship of donors to the students studying in its college. The assessee filed its reply on 24.12.2007 stating that the development fund was voluntary contribution from the parents of the students. The A.O. however, did not accept the assessee's contention and by follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al vide its order dated 05.04.2013 had disposed of the above appeals by holding that the jurisdiction of the assessee lies with the A.O. at Kurnool and not the DDIT (Exemptions), Hyderabad. A copy of the said order is filed before us. 4. The learned D.R., on the other hand, supported the orders of the authorities below. 5. Having regard to the rival contentions and the material on record, we find that the assessee had filed the return of income in the O/o. ACIT, Kurnool as is evident from page No. 99 of the paper book filed before us. The return of income was filed on 11.10.2004 as per the acknowledgment of the department on the said copy of the return. The notice under section 148 is dated 27.03.2007 and the copy of the said notice is also placed at page No. 80 of the paper book. A perusal of the said notice reveals that it has been issued by the DDIT (Exemptions), Hyderabad. As seen from the Order of the Tribunal, the DDIT (Exemptions) has issued notices for reopening of the assessment for the A.Ys. 2002-2003 and 2003-2004 also on 27.03.2007. The notice under section 148 for the A.Y. 2002-2003 and 2003-2004 have been challenged by the assessee before this Tribunal and this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the assessee by JCIT, Kurnool u/s. 272A(2)(e) of the Act for A.Ys. 1997-98, 1998-99, 1999-2000, 2000-01 and 2001-02. Against this penalty order the assessee went in appeal before the Tribunal in ITA Nos. 1 to 5/Hyd/2007. The Tribunal vide its order dated 11th February, 2010 confirmed levy of penalty by Joint CIT, Kurnool for filing belated returns and given categorical finding that the Addl. CIT, Kurnool has the jurisdiction over the assessee. Being so, jurisdiction of Kurnool Range is upheld by the Tribunal. 5. The learned DR submitted that registered office of the assessee is situated at Hyderabad. Being so, the department is having jurisdiction over the assessee. The assessee has filed voluntary returns before the JCIT, Kurnool Range for A.Ys. 1997-98 to 2003-04 at Kurnool. The returns are belatedly filed. As such it was treated as non-est returns. The penalty was attracted for filing belated returns at Kurnool from the assessee's side. The proceedings initiated by the Kurnool Range u/s. 148 dated 9.12.2004 were also closed as not applicable and no order in pursuance of the reopening was passed. Being so, the Department cannot find fault for reopening the assessee& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion over the assessee as per section 124(5) which reads as follows: Notwithstanding anything contained in this section or in any direction or order issued u/s. 120 every assessing officer shall have all the powers conferred by or under this act on an assessing officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120. 6.5. The main trustee resides at Kurnool, there is an engineering college at Kurnool run by the Trust and all the material accounts relating to the activities of the trust were found at the office in Kurnool. The assessee despite several opportunities given during penalty proceedings did not raise any objection regarding jurisdiction. In view of the above, JCIT, Kurnool held that the assessee is assessable at Kurnool in view of section 124(5) and he had jurisdiction over the assessee. Thus the exercise of jurisdictional authority over the assessee by JCIT Kurnool is justified. 6.6. Under pre 1988 sec. 124(5) a person was entitled to call a question and dispute the jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years under appeal. The assessee replied vide letter 17.12.2004 to treat the return of income already filed as filed in response to notice u/s. 148. The assessee did not file regular return in time and no such return as envisaged in clause (a) are filed. As per clause (b) he should have raised objection within the time allowed by notice dated 9.12.2004 u/s. 148 i.e. before 19.12.2004 which the assessee did not do. 7.1 Section 124(3) is clear in its emphasis on time allowed as per notice u/s. 148 or 142(1) are under first proviso to section 144 whichever is earlier. 7.2. It can be seen that clause (a) lays emphasis on one month of service of notice or completion of assessment, clause (b) is categorical on the time allowed under notice u/s. 142(1) or 148 or 144. It may further be noted that there is no mention of notice u/s. 143(2) under clause (b). It clearly indicates that there is a possibility that the assessment proceedings may not continue and the assessing officer is entitled to close assessment proceedings by dropping the same and hence the mention of completion of assessment is not there in clause (b) as against its mention in clause (a). The comma used after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption u/s. 11 of the Act and non-obtaining of approval u/s. 10(23C)(vi) is not fatal in view of the decision of co-ordinate Bench in the case of St. Theresa Convent Society in ITA No. 844/Hyd/2008 and also in the case of ADIT (Exemptions) vs. Rajasthani Siksha Samithi (23 SOT 124) (Hyd) wherein held that institutions falling u/s. 10(23C)(vi) are eligible for exemption u/s. 11 also. Merely because section 10(23C)(vi) of the Act provides for exemption of the income of an educational institution it does not follow that such institution cannot avail exemption u/s. 11 subject to fulfillment of the conditions laid down. Being so, when the reasons recorded do not survive reopening of assessment is bad in law. For this purpose we place reliance on the judgment Supreme Court in Ganga Saran and Sons (P) Ltd. vs. ITO Ors. (130 ITR 1), CIT v. Jet Airways (331 ITR 236)(Bom), Ranbaxy Laboratories vs. CIT (336 ITR 136) (Del) and CIT vs. ICICI Bank Ltd.,. Bombay (349 ITR 482) (Bom.). Accordingly, we quash the reopening of assessment. 6. Since the facts and circumstances before us are also similar and the assessment year before us is A.Y. 2001-2002, i.e., the year in between the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
