Ahmedabad Urban Development Corporation, Ahmedabad V. The Dy.DIT.,(Exemption), Ahmedabad

ITA 1682/AHD/2011

• Counselvise Citation: 168220514 RSA 2011
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-08-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 22-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARTAR SINGH
• Keywords: Depreciation; Charitable institution; Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings; Capital expenditure
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI T.K. SHARMA, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.1682 / AHD/2011 (ASSESSMENT YEAR 2008-09) AHMEDABAD URBAN DEVELOPMENT AUTHORITY, SRADAR VALLABHBHAI PATEL SANKUL, USMANPURA, ASHRAM ROAD, AHMEDABAD VS. DCIT (EXEMPTION) AHMEDABAD PAN/GIR NO. : AAALA0233B (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI S N SOPARKAR, AR RESPONDENT BY: SHRI KARTAR SINGH, CIT DR DATE OF HEARING: 30.08.2011 DATE OF PRONOUNCEMENT: 09.09.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) XXI, AHMEDABAD DATED 31.05.2011 FOR THE ASSE SSMENT YEAR 2008- 09. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDE R: 1. LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN DISMISSING THE APPEAL OF THE APPELLANT ACCEPTING THE REASONING OF THE DIT (EXEMPTION) THAT DEPARTMENT PROPOSED TO CHALLENGE THE ORDER OF THE HON'BLE ITAT BEFORE THE HON'BLE GUJARAT HIGH COURT. THIS AC TION OF THE LOWER AUTHORITIES CHOOSING NOT TO FOLLOW THE ORDER OF THE SUPERIOR AUTHORITY IS JUDICIAL IMPROPRIETY AND THEIR ORDERS DESERVE TO BE QUASHED. 2. LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO DENYING DEDUCTION CLAIMED BY THE APPELLANT U/ S 11 OF THE ACT. LD. CIT (A) HAS FURTHER ERRED IN CONFIRMING TH E ASSESSMENT I.T.A.NO. 1682 /AHD/2011 2 MADE BY AO IN THE STATUS OF AOP INSTEAD OF CHARITAB LE INSTITUTION IN LIGHT OF THE REGISTRATION GRANTED U/S 12AA OF TH E ACT BY DIT (EXEMPTION) TO THE APPELLANT EFFECTIVE FROM 01/02/2 004. THIS ACTION OF ID. CIT (A) IN GROSS VIOLATION OF PROVISI ONS OF LAW AND PRINCIPLES OF NATURAL JUSTICE OUGHT TO BE QUASHED. 3. LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO THAT THE ACTIVITIES OF APPELLANT AUTHORITY AR E OF COMMERCIAL NATURE WITHOUT APPRECIATING THE FACT THAT THE APPEL LANT AUTHORITY WAS CREATED TO DEVELOP AREAS IN ACCORDANCE WITH THE APP ROVED TOWN PLANNING SCHEMES FOR CARRYING OUT THE OBJECT OF ADV ANCEMENT OF GENERAL PUBLIC UTILITY. BOTH THE AUTHORITIES OUGHT TO HAVE APPRECIATED THE FACT THAT THE AUTHORITY IS A PUBLIC CHARITABLE INSTITUTION DEDICATING ITS ENTIRE INCOME FOR THE PU RPOSE OF GENERAL PUBLIC WELFARE. 4. LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION MADE BY AO OF RS. 2, 72, 19, 0007- TREATING CAPITAL EXPENDITURE ON ROAD, DRAINAGE ETC. AS WORK IN PROGRESS DENYING DED UCTION OF THE SAME AS EXPENSES U/S 11 & 12 OF THE ACT. LD. CIT (A ) OUGHT TO HAVE DELETED THE ADDITION. 5. LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF CLAIM OF DEPRECIATION OF RS. 1, 10, 33, 0007-MADE BY AO HOLDING THE SAME TO BE INCONSISTENT WITH ACCO UNTING PRINCIPLES AS IT WOULD TANTAMOUNT TO DOUBLE DEDUCTI ON. BOTH THE LOWER AUTHORITIES HAVE COMPLETELY FAILED TO APPRECI ATE THE FACT THAT THE APPELLANT IS ELIGIBLE TO CLAIM THE DEPRECIATION AS PER THE PROVISIONS OF SECTION 11 & 12 OF THE ACT. 6. LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF RS. 53, 99, 55, 0007-, & OF RS. 36, 76, 78, 0007- MADE BY AO DENYING STATUTORY DEDUCTION CLAIMED BY T HE APPELLANT U/S 1 L(L)(A) OF THE ACT ON THE GROUND THAT THE ORD ER OF THE HON'BLE ITAT CONFIRMING GRANT OF REGISTRATION U7S 12AA OF T HE ACT IS CHALLENGED BY THE DEPARTMENT BEFORE THE HON'BLE GUJ ARAT HIGH COURT. BOTH THE LOWER AUTHORITIES ERRED IN NOT ACCE PTING THE BINDING DECISION OF THE HIGHER AUTHORITY. 7. LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF RS. 15, 00, 00, 0007- MADE BY AO DE NYING THE CLAIM MADE BY THE APPELLANT TOWARDS AMOUNT ACCUMULA TED. BOTH THE AUTHORITIES ERRED IN NOT GRANTING THE DEDUCTION CLAIMED FOLLOWING THE ORDER OF THE HON'BLE ITAT. LD. CIT (A ) OUGHT TO HAVE DELETED SUCH DISALLOWANCE. I.T.A.NO. 1682 /AHD/2011 3 8. LEARNED CIT (A) HAS ERRED IN LAW AND ON FA CTS IN CONFIRMING THE ACTION OF AO IN NOT GRANTING SET OFF OF UNABSORBED DEFICIT AND DEPRECIATION PERTAINING TO A. Y. 2003/04 TO 2006/07 OF RS. 63,35, 83, OOO/- CLAIMED BY THE APPELLANT AS PER THE PROVI SION OF SECTION 11 OF THE ACT. BOTH THE LOWER AUTHORITIES ERRED IN NOT FOLLOWING THE ORDER OF THE HON'BLE ITAT UPHOLDING THE REGISTRATIO N OF THE APPELLANT TRUST U/S 12AA OF THE ACT. 10. LEVY OF INTEREST U/S 234A, 234B, 234C & 234D OF THE ACT IS UNJUSTIFIED. 11. INITIATION OF PENALTY PROCEEDINGS U/S 271(L)(C ) OF THE ACT IS UNJUSTIFIED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, E DIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEA L AT THE TIME OF OR BEFORE THE HEARING OF THE APPEAL. 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT IN THE PRESENT CASE, REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 WAS GRANTED TO THE ASSESSEE W.E.F. 01.04. 2002 VIDE ORDER DATED 23.10.2003 OF DIT(EXEMPTION), AHMEDABAD. IT IS ALS O SUBMITTED THAT SUBSEQUENTLY, THE DIT (EXEMPTION) AHMEDABAD VIDE HI S ORDER U/S 12AA(3) DATED 15.2.2010 CANCELLED THE REGISTRATION U/S 12AA W.E.F. 01.04.2002. IT IS FURTHER SUBMITTED THAT AGAINST T HIS ORDER OF DIT(E), ASSESSEE WAS IN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL AS PER ORDER DATED 21.05.2010 IN I.T.A.NO. 754/AHD/2010, CANCELL ED THIS ORDER OF DIT(E) PASSED BY HIM U/S 12AA(3). HE HAS SUBMITTED A COPY OF THIS TRIBUNAL DECISION. HE HAS ALSO SUBMITTED A COPY OF THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 IN I.T.A.NO. 1835/AHD/2010 DATED 05.08.2010. IT WAS POINTED OUT THAT IN THAT YEAR ALSO, THE A.O. AND LD. CIT(A) DENIED THE BENEFIT OF SECTION 11 TO 13 TO THE ASSESSEE. IT WAS HELD BY THEM THAT THE ASSESSE E IS NOT ELIGIBLE FOR I.T.A.NO. 1682 /AHD/2011 4 EXEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 AS IN THE PRESENT YEAR. IT IS POINTED OUT THAT IN THAT YEAR, THE TRIBUNAL HAS RES TORED THE MATTER BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION WITH A DI RECTION TO RECOMPUTE THE INCOME OF THE ASSESSEE IN THE LIGHT OF THE PROVISIO NS OF SECTION 11, 12 AND 13 OF THE INCOME TAX ACT, 1961 AND IN ACCORDANCE WI TH LAW. OUR ATTENTION WAS DRAWN TO PARA 4 OF THIS TRIBUNAL DECI SION IN THIS REGARD. IT WAS HIS SUBMISSION THAT SINCE THE FACTS ARE IDENTIC AL, IN THE PRESENT YEAR ALSO, THE ISSUE SHOULD BE RESTORED BACK TO THE FILE OF THE A.O. FOR FRESH DECISION WITH SIMILAR DIRECTION. LD. D.R. OF THE R EVENUE SUPPORTED THE ORDER OF LD. CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IN ASSESSMENT YEAR 2007-08, THE TRIBUNAL HAS C ONSIDERED THE FULL FACTS AND LEGAL POSITION AND RESTORED THE MATTER BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION. THE RELEVANT PARA OF THE TRIBUNAL DECISION IS PARA 4 WHICH IS REPRODUCED BELOW: 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS OF TH E PARTIES, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RE-CONSIDERATI ON AT THE LEVEL OF THE AO. IT IS ADMITTED FACT THAT THE ASSESSEE HAD B EEN GRANTED REGISTRATION U/S 12AA OF THE IT ACT AND THE AO HAS GIVEN BENEFIT OF SECTION 11 OF THE IT. ACT ON THE BASIS OF CERTIF ICATION OF REGISTRATION TO THE ASSESSEE IN EARLIER THE ASSESSM ENT YEAR UNDER APPEAL UNTIL CANCELLATION OF THE OF REGISTRATION UP TO THE DATE OF PASSING-OF THE ASSESSMENT ORDER REGISTRATION WAS EF FECTIVE IN FAVOUR OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE DEMAND BEFORE THE HON'BLE GUJARAT HIGH COURT AS WAS THROUGH THE ASSES SMENT ORDER DATED 30-12-2009 AND THE CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED BY THE HON'BLE HIGH COURT. THEREFORE, OBSERVATION O F THE HON'BLE HIGH COURT SHALL HAVE TO BE COMPLIED WITH BY THE AU THORITIES BELOW. SIMILARLY, THE REGISTRATION CERTIFICATE WAS CANCELLED LATER ON BY THE DICT (EXEMPTION) U/S 12AA (3) OF THE IT ACT WHICH ORDER WAS SET ASIDE BY THE TRIBUNAL IN ITA NO.754/AHD/201 0 VIDE ORDER I.T.A.NO. 1682 /AHD/2011 5 DATED 21-05-2010. THEREFORE, CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR THAT REGISTRATION U/S 12AA OF THE IT ACT I S EFFECTIVE AND IS IN FORCE IN FAVOUR OF THE ASSESSEE FOR ASSESSMENT Y EAR UNDER APPEAL. THEREFORE, THE AO 'SHALL HAVE TO COMPUTE THE INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 11, 12 AND 13 OF THE IT ACT AS IS PROVIDED U/S 12A OF THE IT ACT. THEREFORE, THE MATTER REQUIRES RE-CONSIDERATION AT THE LEVEL OF TH E AC). WE ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIE S BELOW AND RESTORE THE MATTER IN ISSUE TO THE FILE OF THE AO W ITH DIRECTION TO RECOMPUTE THE INCOME OF THE ASSESSEE IN THE LIGHT. OF THE PROVISIONS OF SECTION 11, 12, AND 13 OF THE IT ACT AND IN ACCO RDANCE WITH LAW. THE AO SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE PRESENT YEAR ALSO, NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY THE LD. D.R. OF THE REVENUE. WE FIND NO REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR AND HENCE, BY RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE, WE HOLD THAT IN THE PRESENT YEAR ALSO, THE MATTER REQUIRE RECONSIDERAT ION AT THE LEVEL OF THE A.O. AND ACCORDINGLY, WE SET ASIDE THE ORDERS OF AU THORITIES BELOW AND RESTORE THE MATTER BACK TO THE FILE OF THE A.O. WIT H A DIRECTION TO RECOMPUTE THE INCOME OF THE ASSESSEE IN THE LIGHT O F THE PROVISIONS OF SECTION 11, 12 AND 13 OF THE INCOME TAX ACT, 1961 A ND IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED FOR STATISTICAL PURPOSES. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH SEP., 2011. SD./- SD./- (T.K. SHARMA) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 09.09. 2011 SP I.T.A.NO. 1682 /AHD/2011 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE 1. DATE OF DICTATION 02/09 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER05/09 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 6/9 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 09.09.2011 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.09/09 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 09/09/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..