TMI Blog2019 (3) TMI 1667X X X X Extracts X X X X X X X X Extracts X X X X ..... . Act, 19961. In the result, the appeal is allowed. - ITA No. 63/Ind/2017 - - - Dated:- 15-3-2019 - SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Appellant : Shri V.J. Boricha, Sr. DR For The Respondent : Shri Sudheer Padliya, CA ORDER PER KUL BHARAT, J.M: This is an appeal filed by the Revenue against the order of Commissioner of Income Tax(Appeals)-II Indore dated 03/10/2016 pertaining to assessment year 2012-13. The revenue has raised following grounds of appeal: 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was justified in allowing the society benefits of the exemption u/s 10(23C)(vi) of Income Tax Act when such claim of exemption u/s 10(23C)(vi) of the Act was neither made in the return of income nor before the assessing officer. Such claim is not allowable as per the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. vs. CIT reported in 284 ITR 323 Hon'ble Supreme Court [2006]. 2. Whether on the facts and in the circumstances of the case, the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proval was granted vide CCIT order dated 06.11.2007 vide No F. No. CCIT/IND/Tech/10(23C) (vi)/15/07-081 which has become perpetual in view of the amendment made in section 10(23C) by the Finance Act 2008. Since there was no income in the case of the assessee after applying the provisions of section 11 of the Act, at the time of submitting the return of income, therefore, question of claiming any exemption u/s 10(23(C) does not arise at the time of submitting the return of income. 2. That the learned A.O. while making the assessment has determined the income of the assessee at a total income of ₹ 17370000/- prior to allow benefits of sections 11 and 10(23C)(via) of the Act, to the assessee for the reasons mentioned in the assessment order. Against which the assessee filed an appeal before Honourable Commissioner of Income Tax Appeals-II Indore who had decided the appeal in favour of the assessee by directing the Ld. A.O. to allow the benefits of section 10(23C}{via) to the assessee for which he has been accorded approval for exemption of income earned by him out of the Educational activities, vide his order dated 14.09.2016. Against which the Department has p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the Ld. A.O. has determined the taxable income in his case on the receipt of the assessment order along with demand notice, which was served upon the assessee after completion of assessment on 18.03.2014. Thus when the assessee came to know about the determination of income as computed by Ld. A.O. before allowing any exemption u/s 10{23C)(via) of the Act, the assessment proceedings were already concluded on 18.03.2014 and the assessee came to know the same on 20.03.2014, by that time there was no scope of claiming any exemption u/s 10{23C)(via) of the Act. However immediately filed an application u/s 154 of the Act and requested him to rectify the order by passing an order u/s 154 by allowing the exemption u/s 10{23C)(via) to the assessee. However, no action on such application of the assessee has been taken by the Ld. A.O. after passing of 4 years. Now we beg to submit before the Honourable Bench as under in connection with directions of the Honourable CIT-A-II Indore in connection with allowing the exemption u/s 10{23C)(via) of the Act irrespective of the facts that the same was neither claimed in the return of income nor before the Ld. A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefits of section 10(23C) (vi) to the assessee which were claimed by him through an application u/s 154 of the Act filed before the Ld. A.O. is as per intention of the Statue to pass on all the benefits to the assessee which are available to him as per the provisions of the Law, whether for which he was ignorant or not after considering the various observations of various Courts in the subject matter as under: ( i) S.R.Koshti V CIT 146 Taxman 335 (Guj) ( ii) CIT V Lucknow Public Education Society 183 Taxman 62 (All) Further after relying on the validity of Circular No 14 dated 11.04.1955 as examined by Honourable Apex Court in the case of CIT V Makendm Mills reported in 234 ITR 56 in which the Honourable Court has examined the applicability of the above Circular in regime of 1961 Act. And it was opined that the said Circular is still inforce even though issued prior to 1961 Act as the Circular has not been withdrawn till date. Further the honorable CIT -A after giving his findings that the provisions of Section 119(1) of the Act requires every officer to follow orders, instructions and direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal has raised that in the given facts of the case Ld CIT-A was not justified in allowing the society benefits of the exemption u/s 10(23C)(via) when it was found by the A.O. that the assessee has contra vended 13th Proviso of Section 10(23C) hence the society cannot be said to be _ existing solely for education purposes. 13th Proviso of section 10(23C) reads as under: Provided also that where the fund or trust or institution or any university or the educational institution or any hospital or other medical institution referred to in sub clause (iv) or sub clause (v) or sub-clause (vi) or subclause (via) does not apply its income during the year of receipt and accumulates it, any payment or credit out of such accumulation to any trust or institution registered under section 12AA or to any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in subclause (iv) or sub-clause(v) or sub-clause(vi) or subclause( via) shall not be treated as application if income to the objects for which such fund or trust or institution or university or educational institution or hospital or other medi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther claimed that since there was no income in the case of the assessee after applying the provisions of section 11 of the Act, at the time of subm1ttmg the return of income, therefore, question of claiming any exemption u/ s 10(23(C) did not arise at the time of submitting the return of income. Thus, it was submitted by the appellant that necessary directions be issued to the Ld. AO to consider the provisions of section 10(23C) of the Act the Act before charging any tax from the appellant trust. 4. I find that the above aspect of the case has been over looked the Ld A.O. mid has computed the income of the appellant trust ignoring the provisions of section 10(23C) of the Act. I find that the appellant has been accorded approval of exemption of income u/s 10(23C) of the Act vide order passed by the Department of Revenue Central Board of Direct Taxes New Delhi vide order dated 3.04.200l. Thereafter the same was renewed from time to time and the last approval was granted vide CCIT order dated 06.11.2007 vide No F. No. CCIT/IND/Tech/10(23C)(vi)/15/07- 08/ which has become perpetual in view of the amendment made in section 10(23C) by the Finance Act 2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing decided issues before your honour in order to decide the appeal accordingly and allowing the claim of the Appellant. In Sushil Kumar Das v. Income-tax. Officer (2011) 11 ITR (Trib) 17 it was observed that the moot question arising out of the appeal is whether the income determined by the Assessing Officer on the basis of the return filed by the assessee can be figure lower than the income returned by the assessee. It is a well settled that the principle for determining the taxable income of the assessee under the Income Tax Act should be within the purview of the law in force. If the taxable income determined by the Assessing Officer is not in accordance with such principle it is open to t he assessee to contend the same before the higher authorities to follow the correct application of law to determine the actual taxable income of tile assessee. An assessee is liable to pay tax only upon the taxable income. The law imposed by the Assessing Officer has to assess the income according to law and determine the the tax payable thereon. In doint; so, the Assessing Officer cannot assess the income of the assessee in em amount which is not taxable as per law though s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng run, benefit the department; for it would inspire confidence in him til at the assesses may be sure of getting a square deal from the department. . Ii ItIWl 19h, therefore, the responsibility of claiming refunds and reliefs rests with the assessee on whom it is imposed by law, officers should: ( a) Draw their attention to aru] refunds or reliefs to which they appear to be clear] entitled but which they have omitted to claim for some reason or the other. ( b) Freely advise them when approached by them as to their rights and liabilities and as to the procedure to the adopted for claiming the refunds and relief 4.9 CBDT through this Circular has prescribed the duties of AOs directing them to assist the assessee in every reasonable way, particularly in the matter of claiming and securing reliefs. It further directs them to take initiative in guiding the taxpayer where proceedings or other particulars before him indicate that some refund or relief is due to him. The effect of the Circular is that the assessing authorities are duty-bound: 1.To bring in the notice of the assessee reliefs and deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given by CBDT are at variance with the provisions of law. The circulars in effect, are as good as law. To quote: Ellcrman Lines I t d . vs. CIT (82 ITR 913), K. P. Varghese vs. ITO (13 l ITR 597), Bank vs. CIT (237 ITR 8S9), CIT vs. Anjurn M. H. Ghaswnla and Spentex ndustries Ltd. vs. CCE (Civil app. No.- l978 of 2007) 4.15 In the light of above discussion let us revisit thc dccision m Goetze (India) Ltd.: Article 265 of the Constitution empowers the Governmenl to levy and collect tax that it can through the authority of law. Circular No. 14 (XI- 35) of 1955 prescT;bes the duties ur t},c assessing authorities with respect to granting legitimate reads deductions available to the assessee . Section 143(3)(ii) of the Act empowers the assessing authorities to grant refund of amount to the assessee post assessment. It leaves little doubt in the mind that the assessing al...1thorities can assess the income at an amount lower than that returned by the assessee- The decisiul1 o! the Supreme Court in Goetze (India) Ltd. relates to the AY 1995-Q6 8.11d the Act did not allow the assessing authorities to grant refund Port assessment. In Universal subscript ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITwst be allowed in entirety in the year in which it is incurred. It further held that there! was no infirmity in the order of the Tribunal. III effect, the court upheld that the legitimate claim of the assessee is to be allouieci even if claimed subsequently without revising the return of income. )) 3.CIT v. Dhampur Sugar ltd. 90 ITR 236 (All.). The Court distinguished between the original return and revised return. It held: There is a distinction between a revised return and a correction of return. If the assessee files some application for correcting a return already filed or making amends therein, it would not mean that he has filed a revised return. It will still retain the character of an original return, but once the reuised return is filed, the original return must be taken to have been withdrawn a tid to have been substituted by a fresh return for the purpose of the assessment 1. Chicago Pneumatics India Ltd. us, DCIT (15 SOT 252) (Mumbai) The Hon'ble Tribunal observed as follows: The situation has compelled us to look into the duties of the assessing authorities rot her than. powers of assessing authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the provisions of law are satisfied. 5. Bharai Starch Industries Ltd. vs.CIT(URO) (ITA No. 1611jK/2003) The assessee had not claimed deduction for interest paid allowaable 36(1){iii) of the Act in its return oh income. tile complete facts rebuttal(f 10 i/l/('ITS, were disclosed in the tax audit report and notes to account/I(s. The allowed the deduction. The assessee in its appeal before the err (A as an additional ground. The additional ground was admitted and favour of the Cassese. In tile appeal before the Hon'bie ITA'T it was held that the decision in tile cu.se of Goetzs India Ltd, (supra) is not applicable to tile case and directed the claim as per law. 6. Thomas Kurian vs. ACIT; 108 TTJ439 439 Cochin) The assessee had not claimed deduction under Section 80HHC. It was allowed by the Tribunal it being the deduction available as it was provided in the Act. 7. Xerox India Ltd. vs. DCIT New Delhi (ITA No. 1580/Del./2010) (URO) Expenses disallowed in the earlier year under section 43B were not claimed on payment in the assessment year by oversight was allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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