Centre for Human Resource Development Trust, Kottayam V. The CIT, Kottayam

ITA 152/COCH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7246 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-08-2014
• Assessment Year: misc
• Appeal Filed On: 02-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation
• Section: 143(3); 12AA; 147; 263

Judgement Text

1 ITA NO.152/COCH/2014 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 152/COCH/2014 CENTRE FOR HUMAN RESOURCE VS THE COMMISSIONER, KOTTAYAM DEVELOPMENT TRUST KANJIRAPPALLY PAN : AABTC5311R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.I. JOHN RESPONDENT BY : SHRI M ANIL KUMAR, COMMISSIONER DATE OF HEARING : 20-08-2014 DATE OF PRONOUNCEMENT : 28-08-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER REJECTING THE APPLICATI ON OF THE ASSESSEE FOR REGISTRATION U/S 12AA OF THE ACT. 2. SHRI K.I. JOHN, THE LD.REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE ORDER OF THE COMMISSIONER IS BARRED BY LIMITATI ON. ACCORDING TO THE LD.REPRESENTATIVE, THE COMMISSIONER IS EXPECTED TO DISPOSE OF THE 2 ITA NO.152/COCH/2014 APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT WI THIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS FILED . ACCORDING TO THE LD.REPRESENTATIVE, THE COMMISSIONER HAS TO PASS AN ORDER AND COMMUNICATE THE SAME TO THE ASSESSEE WITHIN SIX MON THS PERIOD AS PROVIDED IN SECTION 12AA(2) OF THE ACT. IN THIS CA SE, ACCORDING TO THE LD.REPRESENTATIVE, THOUGH THE ORDER WAS DATED 25-02 -2014 IT WAS SERVED ON THE ASSESSEE ONLY ON 11-03-2014. THE LD.REPRESENTA TIVE PLACED HIS RELIANCE ON THE JUDGMENT OF THE KERALA HIGH COURT I N SMT. MONI SENAN (2001) 248 ITR 452 (KER). THE LD.REPRESENTATIVE HA S ALSO PLACED RELIANCE ON THE JUDGMENT OF THE KERALA HIGH COURT IN AGRICUL TURAL INCOME-TAX OFFICER VS K. JOSEPH N JACOB (1995) 3 KTR 224 (KER). ACCOR DING TO THE LD.REPRESENTATIVE, THE ORDER IS DEEMED TO BE PASSED WHEN IT WAS COMMUNICATED TO THE ASSESSEE ON 11-03-2014 WHICH IS BEYOND THE PERIOD OF SIX MONTHS. THE LD.REPRESENTATIVE SUBMITTED THA T THE KERALA HIGH COURT DECIDED THE ISSUE AFTER CONSIDERING THE JUDGMENT OF THE APEX COURT REPORTED IN A.I.R. 1978 S.C. 1109. THE LD.REPRESEN TATIVE FURTHER SUBMITTED THAT THE ORDER OF ANY AUTHORITY COULD NOT BE SAID T O BE PASSED UNLESS IT WAS IN SOME WAY COMMUNICATED OR PUBLISHED. IT WAS NOT ENOUGH IF THE ORDER WAS MADE, SIGNED AND KEPT IN FILE. TO MAKE THE ORD ER COMPLETE AND EFFECTIVE, ACCORDING TO THE LD.REPRESENTATIVE, IT S HOULD GO BEYOND THE CONTROL OF THE AUTHORITY FOR ANY POSSIBLE EFFECT OR MODIFICATION. 3 ITA NO.152/COCH/2014 3. COMING TO THE MERIT OF THE APPEAL, THE LD.REPRES ENTATIVE SUBMITTED THAT DURING THE COURSE OF PROCEEDINGS BEFORE THE CO MMISSIONER, BY A LETTER DATED 11-02-2014, THE COMMISSIONER CALLED FOR CERTA IN DETAILS. THE DETAILS CALLED FOR BY THE COMMISSIONER WERE FURNISHED BY TH E ASSESSEE, COPY OF WHICH IS AVAILABLE IN THE PAPER BOOK. REFERRING TO PAGE 8(C) OF THE PAPER BOOK, THE LD.REPRESENTATIVE SUBMITTED THAT THE COMM ISSIONER CALLED FOR REPORT FROM ITO, WD.1, KOTTAYAM RANGE WHO IS THE AS SESSING OFFICER FOR THE ASSESSEE. ACCORDING TO THE LD.REPRESENTATIVE, THE REPORT SAID TO BE FILED BY THE ITO, WD.1, KOTTAYAM WAS NOT FURNISHED TO THE ASSESSEE. HOWEVER, BY REFERRING TO THE ASSESSMENT ORDER OF SHRI KURIEN JOSEPH, THE MANAGING TRUSTEE OF THE ASSESSEE, IT WAS FOUND THAT THE MANA GING TRUSTEE OF THE ASSESSEE DEPOSITED RS.38,81,545 IN STATE BANK OF IN DIA. ACCORDING TO THE LD.REPRESENTATIVE, THOUGH THE COMMISSIONER CLAIMS T HAT THE MANAGING TRUSTEE ADMITTED BEFORE THE ASSESSING OFFICER THAT THE ABOVE AMOUNT OF RS.38,81,545 WAS THE INCOME OF THE TRUST, THE ASSES SEE WAS NOT GIVEN ANY OPPORTUNITY TO REBUT THE ALLEGATIONS. THE LD.REPRE SENTATIVE FURTHER SUBMITTED THAT SHRI KURIEN JOSPEH NEVER ADMITTED TH AT IT IS THE INCOME OF THE TRUST. IT IS NOT KNOWN WHEREFROM THE COMMISSIO NER GOT THIS INFORMATION. ACCORDING TO THE LD.REPRESENTATIVE, IF AT ALL THE C OMMISSIONER HAS ANY MATERIAL THEN, HE OUGHT TO HAVE PUT IT TO THE ASSES SEE BEFORE PLACING RELIANCE ON THE SAME. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON VARIOUS CASE LAWS INCLUDING THE JUDGMENT OF THE KERALA HIGH COURT IN SHRI GOVINDA 4 ITA NO.152/COCH/2014 PRABHU & BROS VS ADDL SALES-TAX OFFICER, COPY OF WH ICH IS FILED AT PAGE 45 OF THE PAPER BOOK AND SUBMITTED THAT THE ASSESSEE I S ENTITLED TO KNOW AND SHOULD BE INFORMED OF THE BASIS ON WHICH THE REVENU E PROCEEDS TO DETERMINE THE ISSUE. WITHOUT PROVIDING REAL OPPORT UNITY, ON MERE ASSERTION, LIABILITY CANNOT BE SADDLED ON THE ASSES SEE. ACCORDING TO THE LD.REPRESENTATIVE, WITHOUT GIVING ADEQUATE OPPORTUN ITY WITH REGARD TO ALLEGATION MADE BY THE COMMISSIONER IN THE IMPUGNED ORDER, THE APPLICATION WAS REJECTED. ACCORDING TO THE LD.REPR ESENTATIVE, THERE WAS NO VIOLATION OF SECTION 13(1)(C) OF THE ACT. 4. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT THE COMMISSIONER MADE A THOROUGH ENQUIRY TO FIND OUT TH E GENUINENESS OF THE TRUST. THE COMMISSIONER FOUND THAT THE TRUST FUNDS WERE USED BY THE MANAGING TRUSTEE, SHRI KURIEN JOSEPH. THEREFORE, T HE COMMISSIONER SPECIFICALLY CAME TO THE CONCLUSION THAT HE IS NOT SATISFIED ABOUT THE GENUINENESS OF THE OBJECT OF THE TRUST. ONCE THE C OMMISSIONER CAME TO THE CONCLUSION THAT THE GENUINENESS OF THE OBJECT O F THE TRUST WAS NOT SATISFIED, HE HAS NO OTHER OPTION EXCEPT TO REJECT THE CLAIM OF REGISTRATION. 5. REFERRING TO THE CONTENTION OF THE ASSESSEE REGA RDING LIMITATION THE LD.DR SUBMITTED THAT THE APPLICATION WAS ADMITTEDLY FILED ON 05-08-2013. THE ORDER WAS PASSED ON 25-03-2014 AND SERVED ON TH E ASSESSEE ON 11- 5 ITA NO.152/COCH/2014 03-2014. THEREFORE, ACCORDING TO THE LD.DR, THE AP PLICATION OF THE ASSESSEE FOR REGISTRATION WAS DISPOSED OF WITHIN SI X MONTHS FROM THE END OF THE MONTH IN WHICH IT WAS RECEIVED. THE COPY OF THE ORDER WAS ALSO SERVED ON THE ASSESSEE WITHIN 15 DAYS. THEREFORE, ACCORDING TO THE LD.DR, THE IMPUGNED ORDER OF THE COMMISSIONER IS NOT BARRE D BY LIMITATION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE WITH REGARD TO THE DATE OF FILING OF THE APPLICATION, I.E. 05-08-2 013. THE DATE OF THE ORDER ON WHICH THE APPLICATION WAS DISPOSED OF IS ALSO NO T IN DISPUTE, I.E. 25-02- 2014. THE CONTENTION OF THE ASSESSEE IS THAT THE O RDER SHOULD BE SERVED ON THE ASSESSEE BEFORE THE PERIOD OF LIMITATION PRO VIDED U/S 12AA OF THE ACT. THIS TRIBUNAL FINDS THAT AN IDENTICAL ISSUE W AS EXAMINED BY THE MADRAS HIGH COURT IN DIT (EXEMPTION) VS ANJUMAN-E-K HYRKHAH-E-AAM (2013) 354 ITR 474 (MAD) AND FOUND THAT WHEN THE OR DER WAS PASSED BY THE COMMISSIONER WITHIN THE PERIOD OF SIX MONTHS IT CANNOT BE HELD TO BE VIOLATIVE OF SECTION 12AA OF THE ACT. IN THE CASE BEFORE THE MADRAS HIGH COURT, THE APPLICATION WAS DATED 28-01-2009 AND THE ORDER WAS PASSED ON 31-07-2009. THE MADRAS HIGH COURT FOUND THAT THERE WAS NO VIOLATION. 7. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMENT S RELIED UPON BY THE LD.REPRESENTATIVE FOR THE ASSESSEE IN GOVERNMEN T WOOD WORKS VS 6 ITA NO.152/COCH/2014 STATE OF KERALA 69 STC 62 (KER), COPY OF WHICH IS A VAILABLE AT PAGE 15 OF THE PAPER BOOK. THIS JUDGMENT OF THE KERALA HIGH C OURT WAS AFFIRMED BY THE VERY SAME KERALA HIGH COURT IN M/S JAFFIRI & KA REEM VS AGRICULTURAL INCOME-TAX OFFICER 1998 (2) KLT 39, COPY OF WHICH I S AVAILABLE AT PAGE 10 OF THE PAPER BOOK. A SIMILAR VIEW WAS TAKEN BY ANO THER BENCH OF THE KERALA HIGH COURT IN K JOSEPH N JACOB (SUPRA). IN ALL THESE CASES, THE LANGUAGE EMPLOYED BY THE LEGISLATURE IS THAT NO OR DER OF ASSESSMENT SHALL BE MADE AFTER THE EXPIRY OF THE SPECIFIED PERIOD. A SIMILAR LANGUAGE IS EMPLOYED BY THE LEGISLATURE WHILE PROVIDING PERIOD OF LIMITATION FOR MAKING ASSESSMENT U/S 143(3) / 147 IN SECTION 153 OF THE A CT. IN SECTION 263 OF THE INCOME-TAX ACT, THE PARLIAMENT CLEARLY SAYS THA T NO ORDER SHALL BE PASSED AFTER EXPIRY OF TWO YEARS FROM THE END OF TH E FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. HOWEVE R, IN SECTION 12AA(2), THE PARLIAMENT SAYS THAT EVERY ORDER GRANTING OR R EFUSING REGISTRATION UNDER CLAUSE (B) OF SUB SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLI CATION WAS RECEIVED ... INCOME-TAX ACT BEING A SPECIAL ENACTMENT IT WILL OV ERRIDE ALL OTHER ENACTMENTS PROVIDING LIMITATIONS. THE PARLIAMENT I N SOME CASES USED THE WORDS NO ORDER SHALL BE PASSED THEREBY PROHIBITIN G THE AUTHORITY IN PASSING THE ORDER WHEREAS IN SOME CASES THE LANGUAG E USED IS SHALL BE PASSED WITHIN THE SPECIFIED PERIOD. ON A QUERY FR OM THE BENCH WHAT IS THE OBJECT BEHIND USING DIFFERENT LANGUAGES IN DIFFEREN T PLACES, THE 7 ITA NO.152/COCH/2014 LD.REPRESENTATIVE CLARIFIED THAT THE MEANING OF BOT H WORDINGS IS ONE AND THE SAME. HOWEVER, WE ARE UNABLE TO ACCEPT THE CLARIFI CATION OF THE LD.REPRESENTATIVE FOR THE ASSESSEE. THE PARLIAMENT IS WELL AWARE THAT IN CERTAIN CASES NO ORDER SHALL BE PASSED AFTER THE PR ESCRIBED PERIOD. THEREFORE, THEY ARE USING THE WORDS NO ORDER SHALL BE PASSED. HOWEVER, IN RESPECT OF SOME MATTERS THEY SAY THAT THE ORDER SHALL BE PASSED WITHIN THE SPECIFIED PERIOD. THEREFORE, THE MANDATE OF T HE LEGISLATURE IS TO DIRECT THE AUTHORITIES CONCERNED TO PASS ORDER WITHIN THE SPECIFIED PERIOD IN A CASE WHERE THE WORDS THE ORDER SHALL BE PASSED AR E USED AND WHEREVER, THE WORDS NO ORDER SHALL BE PASSED ARE USED, IT I S A TOTAL PROHIBITION FROM PASSING OF THE ORDER. FURTHERMORE, PASSING OF THE ORDER AND SERVICE OF THE ORDER ARE TWO DIFFERENT THINGS. NO DOUBT, THE ORDE R PASSED BY THE OFFICER WILL NOT COME INTO OPERATION UNLESS IT IS COMMUNICA TED TO THE ASSESSEE. AN ORDER PASSED, SIGNED AND KEPT IN FILE WILL NOT COME INTO OPERATION UNLESS THE SAME WAS SERVED ON THE ASSESSEE. BUT ONCE IT I S SERVED ON THE ASSESSEE, THE ORDER WILL BE EFFECTIVE. THE KERALA HIGH COURT IN THE CASE OF GOVERNMENT WOOD WORKS VS STATE OF KERALA 69 STC 62 (KER) AND OTHER CASES CITED SUPRA CLEARLY HELD THAT THE ORDER SHALL GO BEYOND THE CONTROL OF THE CONCERNED AUTHORITY ON A PARTICULAR DATE. 8. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THIS PRINCIPLE LAID DOWN COULD BE EQUALLY EXTENDED WHEN THE PARLIAMENT USES THE WORDS THE 8 ITA NO.152/COCH/2014 ORDER SHALL BE PASSED WITHIN THE SPECIFIED DATE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE LANGUAGE EMP LOYED BY THE PARLIAMENT CONSCIOUSLY, WHEREVER THERE IS PROHIBITI ON FROM PASSING THE ORDER AFTER THE SPECIFIED PERIOD, THE ORDER SHALL G O OUT OF THE CONTROL OF THE OFFICER WHO HAS PASSED THE ORDER BEFORE THE SPECIFI ED PERIOD. HOWEVER, WHEREVER, THE ORDER SHALL BE PASSED IS MENTIONED, THEN, IT SHALL BE SERVED ON THE ASSESSEE WITHIN A REASONABLE PERIOD SO AS TO ENABLE THE CONCERNED PERSON TO CHALLENGE THE SAME IN CASE THE CONCERNED PERSON FELT AGGRIEVED. ONCE THE ORDER IS SERVED ON CONCERNED PERSON, THE E FFECT OF THE ORDER WILL COME INTO FORCE. SINCE THE ORDER IS ADMITTEDLY SER VED WITHIN A PERIOD OF TWO WEEKS, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE PRINCIPLE LAID DOWN BY THE KERALA HIGH COURT IN GOVERNMENT WOOD WO RKS (SUPRA); M/S JAFFIRI & KAREEM (SUPRA) IN THE CONTEXT OF LANGUAGE EMPLOYED IN THE AGRICULTURAL INCOME-TAX ACT, IS NOT APPLICABLE TO T HE FACTS OF THIS CASE. 9. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE IMPUGNED ORDER PASSED BY THE COMMISSIONER IS NO T BARRED BY LIMITATION. 10. NOW COMING TO THE MERIT OF THE APPEAL, THE ONLY CONTENTION OF THE ASSESSEE IS THAT THE REPORT CALLED FOR BY THE COMMI SSIONER WAS NOT CONFRONTED TO THE ASSESSEE AND THAT THE FINANCIAL T RANSACTION OF THE 9 ITA NO.152/COCH/2014 ASSESSEE WITH THE MANAGING DIRECTOR WHICH WAS FOUND IN THE ASSESSMENT ORDER OF THE MANAGING DIRECTOR, WAS NOT ADMITTED. IN THE ABSENCE OF ANY OPPORTUNITY, ACCORDING TO THE LD.REPRESENTATIVE, TH E COMMISSIONER CANNOT SAY THAT THERE WAS VIOLATION OF PROVISIONS OF SECTI ON 13(1)(C) OF THE ACT. 11 FROM THE MATERIAL AVAILABLE ON RECORD IT APPEARS THAT THE COMMISSIONER CALLED FOR REPORT FROM THE ITO, WD.(1) , KOTTAYAM RANGE, WHO HAPPENED TO BE THE ASSESSING OFFICER FOR THE AS SESSEE. WHEN THE REPORT WAS CALLED FOR, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT THE COPY OF THE REPORT SHALL BE SERVED ON THE ASSESSEE AND OPPORTUNITY SHALL BE GIVEN TO THE ASSESSEE TO FILE ITS OBJECTION. TH E COMMISSIONER HAS PLACED MUCH RELIANCE ON THE ASSESSMENT ORDER PASSED IN THE CASE OF THE MANAGING TRUSTEE, SHRI KURIEN JOSEPH. THOUGH THE A SSESSMENT ORDER RELIED UPON BY THE COMMISSIONER IS THAT OF THE MANA GING TRUSTEE, THE LD.REPRESENTATIVE NOW CLAIMS THAT NO ADMISSION IS M ADE IN RESPECT OF CASH DEPOSIT OF RS.38,81,545. AS RIGHTLY SUBMITTED BY T HE LD.REPRESENTATIVE FOR THE ASSESSEE, AN OPPORTUNITY SHALL BE GIVEN TO THE ASSESSEE TO EXPLAIN THE CIRCUMSTANCES UNDER WHICH THE DEPOSIT WAS MADE IN S BI TO THE EXTENT OF RS.38,81,545. SINCE SUCH AN OPPORTUNITY WAS NOT GI VEN, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE IMPUGNED ORDER OF THE COMMISSIONER IS SET ASIDE AND THE ISSUE OF REGISTRATION IS REMITTED BACK TO THE FILE OF THE COMMISSIONER. THE 10 ITA NO.152/COCH/2014 COMMISSIONER SHALL FURNISH THE MATERIALS, INCLUDING THE REPORT FURNISHED BY ITO, WD.1, KOTTAYAM AND THE COPY OF THE ASSESSMENT ORDER IN THE CASE OF MANAGING TRUSTEE SHRI KURIEN JOSEPH TO THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE OF REGISTRATION AFRESH IN ACCORDAN CE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH AUGUST, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 28 TH AUGUST, 2014 PK/- COPY TO: 1. CENTRE FOR HUMN RESOURCE DEVELOPMENT TRUST, KANJ IRAPPALLY, KOTTAYAM 2. THE COMMISSIONER, KOTTAYAM 3. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH