M/s JSS Mahavidyapeeta Employees House Building Co-op Society , Mysore V. The Income Tax Officer Ward-1(2), Mysore

ITA 1564/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4639 (ITAT-BANGALORE)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MANOJ KUMAR G
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO S . 1564 TO 1566 /BANG/201 8 ASSESSMENT YEAR S : 20 07 - 08 , 2010 - 11 AND 2011 - 12 M/S. JSS MAHAVIDYAPEETA EMPLOYEES HOUSING BUILDING CO-OP. SOCIETY, 32, BLOCK NO.11, JSS NAGAR, MYSURU 570 011. PAN : AABAJ 3348 Q VS. THE INCOME TAX OFFICER, WARD 1(2), MYSURU. APPELLANT RESPONDENT ASSESSEE BY : MS. JINITHA CHATTERJEE, ADVOCATE REVENUE BY : DR. MANOJ KUMAR G , ADDL. CIT DATE OF HEARING : 0 4 . 0 6 .201 8 DATE OF PRONOUNCEMENT : 08 . 0 6 .201 8 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF CIT(A) ON COMMON GROUNDS. FOR THE SAKE OF REFERENCE, WE EXTRACT THE GROUNDS RAISED IN ITA NO.1564/BANG/2018 AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (A) UPHOLDING THE ASSESSMENT IN AN EX-PARTE ORDER IS OPPOSED TO LAW AND TO THE PRINCIPLES OF NATURAL JUSTICE AND ACCORDINGLY LIABLE TO BE CANCELLED. 2. THE LEARNED COMMISSIONER (A) HAS OBSERVED THAT THE NOTICE OF HEARING WAS SERVED AND ON THE OTHER HAND THE APPELLANT DID NOT HAVE RECEIVED ITA NOS. 1564 TO 1566/BANG/2018 PAGE 2 OF 4 ANY NOTICE OF HEARING WHICH PREVENTED THE APPELLANT TO REPRESENT THE CASE AT THE APPROPRIATE TIME AND ACCORDINGLY THE NON-APPEARANCE WAS ON ACCOUNT OF REASONABLE CAUSE AND THE EX-PARTE AS MADE BY THE COMMISSIONER (A) WAS OPPOSED TO LAW AND TO THE PRINCIPLES OF NATURAL JUSTICE AND THEREFORE LIABLE TO BE CANCELLED. 3. IN THE INTEREST OF JUSTICE, THE LEARNED COMMISSIONER (A) OUGHT TO HAVE GIVEN ONE MORE OPPORTUNITY AT LEAST BY ISSUING THE NOTICE OF HEARING TO THE REPRESENTATIVE OF THE APPELLANT WHOSE ADDRESS HAS ALSO BEEN PROVIDED IN THE APPEAL MEMO FOR THE SERVICE OF THE NOTICE AND HAVING FAILED DO SO, THE ORDER OF THE COMMISSIONER (A) IS OPPOSED TO LAW AND LIABLE TO BE SET ASIDE. 4. WITHOUT PREJUDICE, THE LEARNED COMMISSIONER (A)'S ORDER HAVING BEEN A NON- SPEAKING ORDER AND ACCORDINGLY WAS UNSUSTAINABLE. 5. THE LEARNED COMMISSIONER (A) DID NOT DISPOSE OF THE GROUNDS RAISED BY THE APPELLANT AND ACCORDINGLY HIS ORDER IS UNSUSTAINABLE AND LIABLE TO BE CANCELLED. 6. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE REOPENING OF THE ASSESSMENT U/S.147 OF THE ACT WAS OPPOSED TO LAW AND ACCORDINGLY HE OUGHT TO HAVE HELD THAT THE ASSESSMENT AS MADE WAS UNSUSTAINABLE AND THUS LIABLE TO BE CANCELLED. 7. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE MERE CONDUCTING OF SURVEY U/S.133A OF THE ACT WAS NOT SUFFICIENT FOR JUSTIFYING THE REOPENING, UNLESS THERE WAS MATERIAL TO SUGGEST THAT THERE WAS OMISSION OF INCOME REQUIRED TO BE CHARGED TO TAX AND HAVING FAILED TO ESTABLISH, HE OUGHT TO HAVE HELD THAT THE REOPENING U/S.147 OF THE ACT WAS BAD IN LAW AND ACCORDINGLY HE OUGHT TO HAVE CANCELLED THE ASSESSMENT. 8. THE LEARNED COMMISSIONER (A) FAILED TO APPRECIATE THAT ON PRINCIPLES OF MUTUALITY THE INCOME OF THE APPELLANT SOCIETY WAS NOT LIABLE TO TAX AND HE OUGHT TO HAVE GIVEN ADEQUATE OPPORTUNITY TO THE APPELLANT TO SUPPORT ITS GROUNDS IN THIS REGARD AND HAVING FAILED TO DO SO, THE ORDER OF THE COMMISSIONER (A) IS LIABLE TO BE SET ASIDE. 9. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT SOCIETY IS FOR ITS MEMBERS AND RUNNING OUT OF THE CONTRIBUTIONS OF THE MEMBERS AND INCOME GENERATED OUT OF THE MEMBERS AND THERE BEING NO OUTSIDE RESOURCES ARE INVOLVED, THE PRINCIPLES OF MUTUALITY WOULD APPLY AND ACCORDINGLY THE INCOME OF THE APPELLANT IS NOT TAXABLE. 10. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE SUPREME COURT JUDGMENT IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD., VS. ACIT IN CIVIL APPEAL NO.10245/2017 HAS NO APPLICATION TO THE APPELLANT'S CASE AND ACCORDINGLY THE EXEMPTION U./S.80P IS LIABLE TO BE GIVEN. 11. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE DIRECTED THE ASSESSING AUTHORITY TO ALLOW THE DEDUCTION U/S.80P(2)( C) OF THE ACT AS CLAIMED BY THE APPELLANT. 12. 0N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER (A) OUGHT TO HAVE ALLOWED THE EXEMPTION IN RESPECT OF PROPERTY INCOME AND INTEREST INCOME AS CLAIMED BY THE APPELLANT IN FULL. 13. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE DIRECTED THE ASSESSING AUTHORITY TO ALLOW THE EXPENDITURE AS CLAIMED BY THE APPELLANT IN FULL. 14. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE EXPENDITURE AS CLAIMED WAS FULLY SUPPORTED AND HAD DIRECT NEXUS TO THE INCOME EARNED AND ACCORDINGLY LIABLE TO BE ALLOWED IN FULL. ITA NOS. 1564 TO 1566/BANG/2018 PAGE 3 OF 4 15. THE LEARNED COMMISSIONER (A) ERRED IN UPHOLDING THE LEVY OF INTEREST U/S.234A, 2354B AND 234C OF THE ACT. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT CIT(A) HAD DECIDED THE APPEALS EX-PARTE WITHOUT DEALING WITH THE ISSUES ON MERIT. THEREFORE, THE ORDER OF CIT(A) MAY BE SET ASIDE AND MATTER BE RESTORED TO HIM FOR READJUDICATION OF THE ISSUES AFRESH, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LEARNED DR SIMPLY PLACED RELIANCE UPON THE ORDER OF THE CIT(A). 3. HAVING CAREFULLY EXAMINED THE ORDER OF THE CIT(A), WE FIND THAT CIT(A) HAD DISPOSED OFF THE APPEAL EX-PARTE WITHOUT DEALING WITH THE ISSUES RAISED ON MERIT. MOREOVER, NOTHING IS BORNE OUT FROM THE ORDER OF THE CIT(A) AS TO HOW MANY OPPORTUNITIES WERE AFFORDED TO THE ASSESSEE TO PROSECUTE THEIR APPEAL. FROM THE ORDER OF THE CIT(A) IT IS VISIBLE THAT IT WAS LISTED FOR HEARING ONLY ON 2 DATES I.E., ON 27.11.2017 AND 29.11.2017 BUT IT IS NOT CLEAR FORM THE ORDER OF THE CIT(A) AS TO WHETHER THE NOTICE OF HEARING WAS EVER SERVED UPON THE ASSESSEE. IN THE LIGHT OF THESE FACTS, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO READJUDICATE THESE APPEALS AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 8 TH JUNE, 2018. SD/- SD/- BANGALORE. DATED: 08 TH JUNE, 2018. /NS/* (INTURI RAMA RAO) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER ITA NOS. 1564 TO 1566/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE.