TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1522
X X X X Extracts X X X X
X X X X Extracts X X X X
....d on 18.03.2024. Prayed that the Order has been passed arbitrarily without considering the submission & supporting available on record, the addition of Rs. 32,34,12,405/- be deleted. 2. That the Ld. ADDL/JCIT(A) further erred in passing the order without allowing hearing through video conferencing though such prayer was made. Prayer that order has been passed arbitrarily without allowing opportunity to the appellant which is against natural justice. Prayed to delete the addition of Rs. 32,34,12,405/-. 3. That under facts & law, the Ld. ADDL/JCIT(A) erred in rejecting prayer for adjournment made by Appellant as an application u/s 119(2)(b) was filed before Ld. CCIT, Raipur, making prayer is allow time to file revised Return of Income with a view to avoid litigation. Prayed to delete the addition of Rs. 32,34,12,405/-. 4. That under facts & law, the Ld. ADDL/JCIT(A) further erred in not judiciously considering the ground that Appellant was functioning as an agency of Govt. of State of C.G., formed as society by above govt. for receiving grants from Ministry of Agriculture & Farmers Welfare of Govt. of India under scheme of "Rashtr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eyond the facts available on record, therefore, we have no hesitation in admitting the same. Our aforesaid view that where an assessee, had raised, though for the first time, an additional ground of appeal before the Tribunal which involves purely a question of law and requires no further verification of facts, then, the same merits admission finds support from the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). BRIEF BACKGROUND: - A). The assessee society is an agency formed by the State Government of Chhattisgarh on 11.06.2001 for the purpose of implementing the amounts received from the Department of Animal Husbandry, Dairying and Fisheries under the Ministry of Agriculture and Farmers Welfare of Government of India under the scheme "Rashtriya Gokul Mission". The assessee society is controlled and managed by the State Government of Chhattisgarh, to implement in the state of Chhattisgarh the National Project for Cattle and Buffalo viz. Breeding (NPCBB) viz. "Rashtriya Gokul Mission" and other schemes, which has its objects, viz. (i) to enhance productivity of bovines and increasing milk productio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the field. D). The Ld. AR further states that Government of India through the Department of Animal Husbandry and Dairying, New Delhi which is under the Ministry of Agriculture and Farmers Welfare, remits funds to various states. In the State of Chhattisgarh, the assessee society is an agency for onward distribution of the funds for the purpose of "Rashtriya Gokul Mission" and other schemes in the state. The funds received by the assessee society are to be utilized for multiple purposes therein stipulated, as under: "1) Establishment of MAITRI (Multipurpose Artificial Insemination Technicians in Rural India) Centres 2) Training of MAITRI Workers 3) Equipments 4) Refresher training to private AI workers/ existing MAITRIs 5) Strengthening existing AI (Artificial Insemination) Centres 6) Refresher training of other existing AI workers 7) Strengthening existing AI network 8) Monitoring of AI programme 9) Identification of AI born calves (ear tags) 10) Computerization for implementation of INAPH 11) Managerial grants to SIa and grants linked to activities 12) Managerial grants ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... unserviceable or condemned in accordance with the procedure laid down in GFR shall not be disposed off without obtaining the prior approval of authority which had sanctioned the grant. Also, the Ld. AR submitted that as per the conditions stipulated in the sanction letters the funds received from the Government of India under various schemes have to be returned back to them. FACTS:- 2. The assessee society had filed its return of income for the subject year, i.e AY 2019-20 on 30.11.2020, wherein it had after claiming exemption of Rs. 32,34,12,405/- u/s. 11(1)(d) of the Act, disclosed its income at Rs. Nil. As the assessee society was neither registered nor had applied for registration u/s.12A of the Act, therefore, the A.O/CPC, Bengaluru while processing its return of income u/s. 143(1) of the Act declined its claim for exemption u/s.11(1)(d) of the Act and determined its income at Rs. 32,34,12,405/-. 3. Aggrieved, the assessee society carried the matter in appeal before the CIT(A) but without success. For the sake of clarity, the observations of the CIT(A) are culled out as under: "H] Findings & Decision:- Ground No. 1:- I have gone through the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this office. The Appellant has not furnished any reply regarding the claim of VC as filed before the Ld. CIT (Appeal) earlier. The Appellant has not filed any such prayer before this Office. The Appellant has also submitted that the appeal has been filed on 04.09.2021 and as such it has been filed after 31.03.2020. The Appellant claimed that the instruction of the CBDT to dispose off the appeals filed up to 31.03.2020 is not applicable in this case. But, I find that in the wort:-list, this appeal is mentioned where the date of compliance is within 31.03.2024, The CBDT has passed a communication on 07.03.2024 in F.No. 279/Misc./M-102/2021-ITJ and has circulated the guidelines for priority/out of turn disposal of appeals by the CIIT(A/AU)/AddL.Jt.CIT (Appeals), where it has been mentioned that the cases having Demand above Rs. 1 Crore has to be disposed off on priority. It has also been mentioned that this guideline. Is Issued in reference to the CBDT's Notification dated 29.12.2021 regarding functioning of Appeal. Hence, this appeal has to be disposed off in a priority as it involves Demand of Rs. 10,71,66,125/-, The Appellant has requested to keep the appeal proceeding....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Act, dated 31.03.2021?; (ii). that as to whether or not the AO/CPC Bengaluru was justified in determining the income of the assessee society which is stated to be an implementing agency, i.e a pass-through entity, vide his intimation u/s 143(1) of the Act, dated 31.03.2021 at Rs. 32,34,12,405/-?; and (iii). that as to whether or not the AO/CPC Bengaluru was justified in carrying out adjustments to the returned income of the assesse society without intimating it about the proposed adjustments as required per the mandate of the "1st proviso" and "2nd proviso" of Section 143(1) of the Act?. 7. Shri G.S. Agrawal, Ld. Authorized Representative (for short 'AR') for the assessee society, at the threshold of hearing, submitted that as the assessee society is only an implementing agency formed for channelizing the funds received from the Government of India in accordance with broad guidelines of the scheme of "Rashtriya Gokul Mission", therefore, being a simpliciter pass-through entity the funds so received by it from the Government of India could not have been brought to tax in its hands by treating the same as its "Income". Elaborating on the reasons leading to the filing of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... nature of "capital receipts" which were to be utilized as per the dictates and directions of the Government of India could not have been brought to tax by treating the same as income in its hands. 9. Apart from that, the Ld. AR submitted that the "1st proviso" and "2nd proviso" to Section 143(1) of the Act contemplates that no adjustment shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode. Further, it is provided that response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, then such adjustment shall be made. The Ld. AR submitted that though the assessee society filed its return of income for the subject year on 31.11.2020 and, thereafter, had filed its "ITR-V" on 26.03.2021 but the AO/CPC, Bengaluru had within a time span of 5 days processed the return of income vide intimation issued u/s.143(1) of the Act, dated 31.03.2021 i.e without complying with the statutory mandate of the "1st proviso" and "2nd proviso" of Section 143(1) of the Act. It was, thus, the Ld. AR's claim that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....over the funds or the utilization of the same nor any right to retain the unutilized amounts or the interest accrued on the same, if any, therefore, it is difficult to comprehend as to how the funds so received by it as an implementing agency from the Government of India could be brought within the meaning of "income" as contemplated u/s. 2(24) of the Act. 12. Although, we are conscious of the fact that the claim of the assesse society that as it was a simlicitor implementing agency i.e. a pass-through entity for utilizing the funds received from the Government of India in accordance with broad guidelines of the scheme of "Rashtriya Gokul Mission", therefore, the funds so received by it could not be held as its "income" u/s. 2(24) of the Act, could not have been looked into by the A.O/CPC, Bengaluru while processing its return of income u/s. 143(1) of the Act, but the CIT(Appeals) in order to deduce the correct income of the assesse society was obligated to have considered the aforesaid issue specifically when the same was raised before him. Our aforesaid view is fortified by the judgment of the Hon'ble Apex Court in the case of CIT Vs. Mcmillan & Co.(1958) AIR 207, wherein it w....