CANE DEVELOPMENT COUNCIL MANSOORPUR ,MUZAFFARNAGAR V. ITO, WARD- 2(5), MUZAFFARNAGAR

ITA 4076/DEL/2018

AI Insights

The case involves multiple appeals by the Cane Development Council against the orders of the CIT(A), Muzaffarnagar for various assessment years. The primary contention revolves around the additions and disallowances made by the Assessing Officer, which the assessee argued were unjust, excessive, and not based on any material record. The Tribunal found merit in the assessee's arguments, noting that similar expenses had been allowed in subsequent assessment years and that the receipts of the assessee, being a local authority, were not liable to tax as per previous rulings. The Tribunal set aside the issues for re-examination by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711358 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Other Referred Cases: CIT Vs. M/s N.S. Committee, Hon'ble Allahabad High Court in the case of same assessee
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: ANKIT GUPTA
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER Sl. No ITA/CO No(s) Asst. Year(s) Appeal(s) by Appellant Respondent 1. ITA No. 1783/Del/2012 2007-08 M/s Cane Development Council Vill. & Post Mansoorpur Distt Muzaffarnagar UP 251203 PAN No.AAALC 0282 C The Addl. C.I.T Range – 2 Muzaffar Nagar 2. ITA No. 4076/Del/2018 2015-16 -do- The I.T.O Ward – 2(5) Muzaffar Nagar 3. ITA No. 1885/Del/2012 2007-08 -do- -do- 4. ITA No. 2617/Del/2018 2013-14 -do- - The I.T.O Ward – Exemption Ghaziabad Assessee By : Shri Ankit Gupta, Adv Department By : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing : 24.07.2025 Date of Pronouncement : 24.07.2025 ORDER PER BENCH;- The above captioned four appeals by assessee are directed against the order of ld. CIT(A), Muzaffarnagar for A.Ys 2007-08, 2015-16, 2007- 08 and 2013-14, respectively. Printed from counselvise.com /DEL/2018 Cane Development Council 2 2. Since these four appeals pertain to same assessee and involve common issues, they were heard together and are disposed of by this common order for the sake of convenience and brevity. ITA No. 1783/DEL/2012 [A.Y 2007-08] 3. Grounds raised by the assessee read as under: “1. That, the assessment order passed U/s 143(3) and the addition made are illegal, bad in law and without jurisdiction. The CIT(A) erred in upholding the same. 2. The addition/ disallowances made by the assessing officer are illegal, unjust, and highly excessive and are not based on any material on record by the assessing officer. The total income of the appellant has been wrongly and illegally computed by the assessing officer at Rs.29,93,786.00 as against NIL INCOME. The CIT(A) has erred in upholding the same. 3) That, in view of the facts and circumstances, the assessing officer has erred in law and on facts in making the addition of Rs.6,34,792.00 on account of Surplus of Income over Expenditure, which is highly arbitrary, unjust and against the facts and Printed from counselvise.com /DEL/2018 Cane Development Council 3 circumstances of the case. The Ld. CIT (A) has also confirmed the same. 4) That, in view of the facts and circumstances, the assessing officer has erred in law and on facts in making the addition of Rs.14,29,254.00 disallowance of Santage Charges, which is highly arbitrary, unjust and against the facts and circumstances of the case. The Ld. CIT (A) has also confirmed the same. 5. That, in view of the facts and circumstances, the assessing officer has erred in law and on facts in making the addition of Rs.9,29,740.00 on account of difference between the receipt shown by the assessee and FORM No. 26. The Ld. CIT (A) has also confirmed the same. 6. That, the assessing officer and CIT (A) has failed to appreciate before confirming the addition of Rs.29,93,786.00, that, the said amount is not come under the preview of definition of INCOME U/s 2(24) of the Income Tax Act, 1961 as the assessee appellant is the statutory body of the State Government, for performing the specific work for the development of Cane Agriculture, in the specified area. 7. The additions confirmed and the observations made by CIT (A) are unjust, unlawful and based on mere surmises and conjunctures. The additions made cannot be justified by any material on record. Printed from counselvise.com /DEL/2018 Cane Development Council 4 8. That the explanation given evidence produced, material placed and available on record has not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made. 9. That the interest U/s 234A & 234B has been wrongly and illegally charged as the appellant could not have foreseen the disallowances/additions made and could not have included the same in current income for payment of Advance tax. The interest charged under various sections is also wrongly worked out. 10. That the impugned Assessment Order passed by the Assessing Officer and order passed by CIT(A) are against the principles of natural justice and the same has been passed without affording reasonable and adequate opportunity of being heard. 11. The Appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal. 4. At the very outset, the ld. counsel for the assessee vehemently stated that the additions confirmed by the ld. CIT(A) and the observations made by him are unjust, unlawful and based on mere surmises and conjunctures. The additions made cannot be justified by any material on record. The ld. counsel for the assessee further submitted that the explanation given, evidence produced, material placed and available on record have not been properly considered and Printed from counselvise.com /DEL/2018 Cane Development Council 5 judicially interpreted and the same do not justify the additions/ allowances made. Interest u/s 234A & 234B of the Act has been wrongly and illegally charged as the assessee appellant could not have foreseen the disallowances/additions made and could not have included the same in current income for payment of advance tax and the interest charged under various sections is also wrongly worked out. 5. The ld. counsel for the assessee continued by saying that the impugned Assessment Order passed by the Assessing Officer and order passed by CIT(A) are against the principles of natural justice and the same has been passed without appreciating the true facts of the case and the contemporaneous judicial precedents. 6. The ld. counsel for the assessee argued that in its own case, the Revenue has allowed the impugned expenses for A.Y 2017-18 and 2018- 19. The ld. counsel for the assessee further submitted that the co- ordinate bench of the Tribunal in assessee’s own case for A.Y 2014-15 ITA No. 4356/DEL/2019 dated 03.05.2023 have also held that the assessee is a local authority and its receipts are not liable to tax. Printed from counselvise.com /DEL/2018 Cane Development Council 6 7. The ld. counsel for the assessee drew our attention to the order of the ld. CIT(A) for A.Y 2015-16 in which the first appellate authority had accorded relief while considering the decision of this Tribunal in ITA No. 2813/DEL/2005 in the case of M/s N.S. Committee as well as the Hon'ble Allahabad High Court in ITA No. 759 of 2012 order dated 16.01.2018. 8. The ld. counsel for the assessee further submitted that the principle laid down in the decision of the N.S. Committee [supra] hold true to the facts of the present case. The ld. counsel for the assessee accordingly submitted that the Assessing Officer has made the impugned addition and the ld. CIT(A) has confirmed the same without considering the above aspects of this case. 9. We have heard the rival submissions and have perused the relevant material on record. We find sufficient force in the contentions of the ld. counsel for the assessee. We find that the Assessing Officer has himself allowed the claim of expenses in the subsequent assessment years. Further, the ld. counsel for the assessee drew our attention to the decision of the co-ordinate bench in ITA No. 1541/DEL/2008 in the case of CIT Vs. M/s N.S. Committee and the judgment of the Hon'ble Printed from counselvise.com /DEL/2018 Cane Development Council 7 Allahabad High Court in the case of same assessee in ITA No. 759 of 2012 stating that the matter is covered. 10. We have noted that the ld. DR could not indicate towards any distinguishment of facts in the present case qua those in the orders referred to hereinabove. 11. Accordingly, in the interest of justice and fair play, we are of the considered view that the expenses ought to have been allowed to the assessee. Therefore, in view of the above factual matrix, we direct the Assessing Officer to decide the issues de novo after considering the decisions of the ITAT and the Hon'ble Allahabad High Court [supra] after allowing adequate opportunity of being heard to the assessee in accordance with law. The assessee is also directed to provide necessary information /documents as required by the authorities. 12. As mentioned elsewhere, the facts and circumstances of all the other three appeals under consideration are pari materia same as the facts discussed and decided in A.Y ITA No. 1783/DEL/2012 hereinabove. We, therefore, set aside the issues to the file of the Assessing Officer for re-examination of the same and consideration thereof. All the Printed from counselvise.com /DEL/2018 Cane Development Council 8 grounds in all the years under consideration are allowed for statistical purposes. 13. In the result, appeals of assessees in ITA Nos 1783/DEL/2012, 4076/DEL/2018, 1885/DEL/2012 and 2617/DEL/2018 are allowed for statistical purposes. The order is pronounced in the open court on 24.07.2025. Sd/- Sd/- [ANUBHAV SHARMA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 24TH JULY, 2025. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com /DEL/2018 Cane Development Council 9 Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 3. Date on which the typed draft Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order Printed from counselvise.com "