Debottor Trust Estate of Rammohan Mullick, Kolkata V. ITO, WD-43(4), KOLKATA, Kolkata

ITA 1402/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9158 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 01-03-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 30-06-2016
• Court: TRIBUNAL
• Department Lawyers: S M TAUHEED
• Assessee Lawyers: B CHAKRABORTY
• Keywords: Tangible material; Validity of assessment
• Section: 12A; 147; 148; 11

Judgement Text

I.T.A. NO. 1402/KOL./2016 ASSESSMENT YEAR: 2005-2006 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 1402/KOL/ 2016 ASSESSMENT YEAR: 2005-2006 DEBOTTOR TRUST ESTATE OF RAMMOHAN MULLICK,......... .................APPELLANT 39, JATINDRA MOHAN AVENUE, KOLKATA-700 005 [PAN: AAATD 5679 A] -VS.- INCOME TAX OFFICER,................................ .....................................RESPONDENT WARD-43(4), KOLKATA, 3, GOVERNMENT PLACE (WEST), GROUND FLOOR, KOLKATA-700 001 APPEARANCES BY: SHRI B. CHAKRABORTY, A.R., FOR THE ASSESSEE SHRI S.M. TAUHEED, JCIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MARCH 01, 2017 DATE OF PRONOUNCING THE ORDER : MARCH 15, 2017 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA DA TED 09.05.2016. 2. IN GROUND NO. 1 RAISED IN THIS APPEAL, THE ASSES SEE HAS RAISED A PRELIMINARY ISSUE RELATING TO THE VALIDITY OF THE A SSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3)/147. 3. THE ASSESSEE IN THE PRESENT CASE IS A TRUST CREA TED UNDER A WILL BY SHRI RAMMOHAN MULLICK FOR THE BENEFIT OF NINE IDOLS /DEITIES, ALL ARE ARTIFICIAL JURIDICAL PERSONS AS PER THE INCOME TAX ACT. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 30.03.2006 I.T.A. NO. 1402/KOL./2016 ASSESSMENT YEAR: 2005-2006 PAGE 2 OF 5 DECLARING TOTAL INCOME AT NIL. INITIALLY THE SAID R ETURN WAS PROCESSED BY THE ASSESSING OFFICER UNDER SECTION 143(1). SUBSEQU ENTLY THE ASSESSMENT, HOWEVER, WAS REOPENED BY HIM UNDER SECTION 147 AND A NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE AFTER RECORD ING THE REASONS. IN RESPONSE TO THE SAID NOTICE, A LETTER DATED 30.02.2 008 WAS FILED BY THE ASSESSEE REQUESTING THE ASSESSING OFFICER TO TREAT THE RETURN FILED ON 30.03.2006 AS THE RETURN FILED IN RESPONSE TO THE N OTICE UNDER SECTION 148. THEREAFTER THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT UNDER SECTION 143(3)/147 VIDE AN ORDER D ATED 30.12.2008, WHEREIN HE HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR EXEMPTION UNDER SECTION 11 OF THE ACT AS THE SAME WAS NOT REGISTERE D UNDER SECTION 12A. HE ALSO HELD THAT THE STATUS OF THE ASSESSEE WAS TH AT OF AN AOP AND THE APPROPRIATION OF INCOME OF AOP TO NINE DEITIES, WHO WERE BENEFICIARIES, WAS NOT POSSIBLE. ACCORDINGLY, THE INCOME RECEIVED BY THE ASSESSEE IN THE FORM OF RENT, INTEREST AND DIVIDEND AGGREGATING TO RS.5,23,400/- WAS BROUGHT TO TAX BY THE ASSESSING OFFICER IN THE ASSE SSMENT COMPLETED UNDER SECTION 143(3)/147. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3)/147, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE VALIDITY OF THE SAID A SSESSMENT AS WELL AS DISPUTING THE ADDITION MADE THEREIN ON MERIT. THE L D. CIT(APPEALS), HOWEVER, DID NOT FIND MERIT IN THE APPEAL FILED BY THE ASSESSEE AND DISMISSED THE SAME. AGGRIEVED BY THE ORDER OF THE L D. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBU NAL. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THE PRELIMINARY ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL CHALLEN GING THE VALIDITY OF ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECT ION 143(3)/147. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE IN TH IS REGARD, A SIMILAR ISSUE CHALLENGING THE VALIDITY OF ASSESSMENT MADE B Y THE ASSESSING OFFICER UNDER SECTION 143(3)/147 ON THE BASIS OF ID ENTICAL REASONS RECORDED WAS RAISED BY THE ASSESSEE IN ITS APPEALS FILED BEFORE THE I.T.A. NO. 1402/KOL./2016 ASSESSMENT YEAR: 2005-2006 PAGE 3 OF 5 TRIBUNAL FOR A.YS. 2001-02 TO 2004-05 AND THE SAME WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE VIDE ITS COMMON APPELLATE ORDER DATED 11.01.2017 PASSED IN ITA NOS. 215 TO 218/KOL/2016. A COPY OF THE SAID ORDER IS ALSO PLACED ON RECORD BEFORE ME AND PERUSA L OF THE SAME SHOWS THAT A SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUN AL IN FAVOUR OF THE ASSESSEE FOR THE FOLLOWING REASONS GIVEN IN PARAGRA PH NO. 7 TO 7.2 OF ITS ORDER AS UNDER:- 7. NOW LET US LOOK INTO THE FACTS PERTAINING TO T HE ASSESSEE COMPANY FOR AY 2001-02 TO EXAMINE THE LEGA L GROUNDS RAISED BY THE ASSESSEE IN THE LIGHT OF REAS ONS TO BELIEVE RECORDED BY THE AO IN HIS ASSESSMENT ORDER WHICH READS AS UNDER:- IT IS SEEN THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S 11 OF THE I.T. ACT, 1961 BUT THE TRUS T IS NOT REGISTERED U/S 12A OF THE I.T. ACT, 1961, TH E INCOME DERIVED FROM THE TRUST IS USED FOR PRIVATE RELIGIOUS PURPOSE WHICH DOES NOT ENSURE FOR THE BENEFIT OF THE PUBLIC. IT IS ALSO SEEN THAT THE ASSESSEE DERIVES INCOME FROM RENT AND INTEREST FROM FD FROM BANKS BUT THE EXPENSE CLAIMED ARE PURELY PERSONAL IN NATURE AND DEDUCTION ARE NOT AS PER SECTION 57 OF THE I.T. ACT IN THE CASE OF INCOME FROM OTHER SOURCES. ON PERUSAL OF THE REASONS TO BELIEVE WE FIND THAT T HE CASE WAS REOPENED UNDER SECTION 147 OF THE ACT ON ACCOUN T OF TWO REASONS. FIRSTLY THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 11 OF THE ACT WITHOUT HAVING REGISTRATION U /S 12A OF THE ACT. SECONDLY ASSESSEE HAS CLAIMED PERSONAL EXP ENSES AGAINST THE INCOME OF OTHER SOURCES WHICH ARE NOT A LLOWABLE UNDER SECTION 57 OF THE ACT. HOWEVER, ON PERUSAL OF INCOME TAX RETURN WE FIND THE FACT IS THAT THE ASSESSEE IS NOT REGISTERED U/S 12A OF THE ACT AND NO EXEMPTION U/S 11 OF THE ACT WAS CLAIMED. SIMILARLY, WE FIND THAT NO EXPENSE AGAINST THE INCOME OF OTHER SOURCES WAS CLAIMED BY THE ASSE SSEE AND CONSEQUENTLY NO QUESTION OF CLAIMING PERSONAL EXPEN SE ARISES, THE FACT AS EMERGED FROM THE RECORDS IS THA T ASSESSEE HAS JUST SHOWN THE TDS DEDUCTED IN THE NAME OF THE ASSESSEE IN ITS RETURN WHICH IS PLACED ON PAGE 60 OF THE PAP ER BOOK WITH SOLE PURPOSE OF CLAIMING THE REFUND OF THE TDS . THE ASSESSEE HAS NOT EVEN SHOWN INCOME CORRESPONDING TO TDS IN THE INCOME TAX RETURN. IN THIS REGARD WE FIND TH AT THE INCOME CORRESPONDING TO TDS WAS DULY SHOWN IN THE H ANDS I.T.A. NO. 1402/KOL./2016 ASSESSMENT YEAR: 2005-2006 PAGE 4 OF 5 OF 9 DEITIES/IDOLS RETURN WHICH ARE PLACED ON PAGES 51 TO 69 OF THE PAPER BOOK. 7.1. THUS IT CLEAR THAT IN THE REASONS RECORDED, TH ERE IS NO LIVE LINK BETWEEN THE REASONS TO BELIEVE AND INCOME ESCAPEMENT ASSESSMENT. WE ARE AWARE THAT THE REASON RECORDED TO REOPEN HAS TO BE SEEN ON A STANDALONE B ASIS WHICH TRIGGERED TO REOPEN THE CASE UNDER SECTION 14 7 OF THE ACT. IN THE LIGHT OF THE ABOVE WE ARE OF THE OPINIO N THAT IT CANNOT BE CONCLUDED THAT AO WAS NOT HAVING SUFFICIE NT INFORMATION AT THE TIME OF INITIATING ACTION U/S 14 7 FOR FORMING REASON FOR ESCAPEMENT OF INCOME. IN THE LIG HT OF THE ABOVE, WE HOLD THAT THERE WAS NO FRESH TANGIBLE MAT ERIAL AVAILABLE FOR THE FOUNDATION ON WHICH THE AO HAS MA DE UP HIS MIND TO REOPEN THE CASE UNDER SECTION 147 OF TH E ACT. ACCORDINGLY WE FIND FORCE IN THE CONTENTION OF THE ID. AR THAT THERE WAS NO SHRED OF EVIDENCE IN THE HANDS OF THE AO WHILE REOPENING THE CASE WHICH CAN BE TERMED AS A N EW TANGIBLE MATERIAL AND LINK TO BASE A REASON TO BELI EVE ESCAPEMENT OF INCOME. THEREFORE, THE ENTIRE REOPENI NG IS VITIATED ON THIS COUNT. IN THE ABSENCE OF THE SAID JURISDICTIONAL FACT RENDERS THE REOPENING 'CORAM NO N JUDICE' AND THE ASSESSMENT 'NULL' IN THE EYES OF LAW, 7.2 WE ALSO FIND THAT THE AO IS UNDER OBLIGATION T O DISPOSE OF THE OBJECTION RAISED BY THE ASSESSEE FOR THE REO PENING OF THE CASE UNDER SECTION 147 OF THE ACT BY WAY OF SPE AKING ORDER IN TERMS OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD V. INCOME TAX OFFICER ( 2003) 259 ITR 19 (SC). BUT WE FIND THAT THE AO FAILED TO PASS A SPEAKING ORDER ON THE OBJECTIONS RAISED BY THE ASSE SSEE TO THE REOPENING OF THE ASSESSMENT. THE AO ASSUMED JURISDICTION IN THE INSTANT CASE ON WRONG ASSUMPTIO N OF FACTS. IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT AO HAS ERRONEOUSLY USURPED JURISDICTION WHICH LAW DOES NOT PERMIT HIM TO DO ON THE REASONS GIVEN ABOVE, SO THE ENTIRE ACTION OF AO IS AB-INITIO VOID AND IS QUASHED. 6. AS THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDER ATION, I.E. A.Y. 2005-06 AS WELL AS ALL THE MATERIAL FACTS RELEVANT THEREOF ARE SIMILAR TO A.YS. 2001-02 TO 2004-05, WE RESPECTFULLY FOLLOW TH E DECISION OF THE DIVISION BENCH OF THIS TRIBUNAL RENDERED FOR A.YS. 2001-02 TO 2004-05 AND CANCEL THE ASSESSMENT MADE BY THE ASSESSING OFF ICER UNDER SECTION I.T.A. NO. 1402/KOL./2016 ASSESSMENT YEAR: 2005-2006 PAGE 5 OF 5 143(3)/147 TREATING THE SAME AS BAD IN LAW. GROUND NO. 1 OF THE ASSESSEES APPEAL IS ACCORDINGLY ALLOWED. 7. KEEPING IN VIEW THE DECISION RENDERED ON GROUND NO. 1, THE ISSUES RAISED IN OTHER GROUNDS OF THIS APPEAL OF THE ASSES SEE HAVE BECOME INFRUCTUOUS AND WE DO NOT CONSIDER IT NECESSARY TO ADJUDICATE UPON THE SAME. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 15, 201 7. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 15 TH DAY OF MARCH, 2017 COPIES TO : (1) DEBOTTOR TRUST ESTATE OF RAMMOHAN MULLICK, 39, JATINDRA MOHAN AVENUE, KOLKATA-700 005 (2) INCOME TAX OFFICER, WARD-43(4), KOLKATA, 3, GOVERNMENT PLACE (WEST), GROUND FLOOR, KOLKATA-700 001 (3) COMMISSIONER OF INCOME TAX(APPEALS)-21, KOLKAT A; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.