Income tax Officer, Ward-1, Hassan V. AOP of paduvalahippe Village, Hassan

ITA 1682/BANG/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8523 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-02-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 29-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G. KAMALADHAR
• Assessee Lawyers: H. C. KINCHA
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 142(1); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NOS.1667&1668, 1674&1675, 1676-85, /BANG/2014 ASSESSMENT YEARS : 2006-07 TO 2012-13 ITA NOS. APPELLANT ASSESSMENT YEAR RESPONDENT 1667/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2010 - 11 VS. AOP OF BOMMEGOWDA AND RANGEGOWDA, PADUVALAHIPPE VILLAGE, HOLE NARASIPURATALUK, HASSAN DISTRICT. PAN : BR002/HSN 1668/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2011 - 12 VS. AOP OF BOMMEGOWDA AND RANGEGOWDA, PADUVALAHIPPE VILLAGE, HOLE NARASIPURATALUK, HASSAN DISTRICT. PAN : BR002/HSN 1674/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2010 - 11 VS. AOP OF BASAVEGOWDA AND VENKATESH, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : BV001/HSN 1675/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2011 - 12 VS. AOP OF BASAVEGOWDA AND VENKATESH, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : BV001/HSN 1676/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2006 - 07 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-I, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV001/HSN ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 2 OF 20 1677/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2007 - 08 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-I, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV001/HSN 1678/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2008 - 09 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-I, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV001/HSN 1679/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2009 - 10 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-I, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV001/HSN 1680/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2010 - 11 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-I, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV001/HSN 1681/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2011 - 12 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-I, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV001/HSN 1682/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2012 - 13 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-I, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV001/HSN 1683/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2010 - 11 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-2, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV002/HSN ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 3 OF 20 1684/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2011 - 12 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-2, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV002/HSN 1685/BANG/2014 THE INCOME TAX OFFICER, WARD-1, HASSAN. 2012 - 13 VS. AOP OF PADUVALAHIPPE VILLAGE, GROUP-2, PADUVALAHIPPE VILLAGE, HOLE NARASIPURA TALUK, HASSAN DISTRICT. PAN : PV002/HSN REVENUE BY : SHRI. G. KAMALADHAR, STANDING COUNSEL ASSESSEE BY : SHRI. H. C. KINCHA, CA DATE OF HEARING : 08.02.2017 DATE OF PRONOUNCEMENT : 23 .02.2017 O R D E R PER BENCH THESE ARE THE APPEALS ARISING OUT OF THE ORDER DATE D 05.08.2014 WITH THE FOLLOWING GROUNDS: ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 4 OF 20 2. GROUNDS OF APPEAL: 3. ON 14.4.2016, THE REVENUE HAS FILED ANOTHER ADDI TIONAL 3 GROUNDS WHICH ARE AS UNDER: ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 5 OF 20 4. AT THE OUTSET, THE LEARNED AR FOR THE RESPONDENT HAS MADE THE OBJECTION ABOUT THE MAINTAINABILITY OF THE APPEAL A ND SUBMITTED THAT AS PER RULE 14 OF THE INCOME TAX INCOME APPELLATE TRIB UNAL RULES, THE APPELLANT HEREIN (REVENUE) HAS NOT MADE THE APPELLA NT BEFORE THE CIT(A) AS RESPONDENT IN THE PRESENT APPEAL AND SUBM ITTED THAT PRESENT APPEALS ARE REQUIRED TO BE DISMISSED. THE LEARNED AR HAS DRAWN OUR ATTENTION TO RULE 14 WHICH PROVIDES AS UNDER: IN AN APPEAL BY THE INCOME-TAX OFFICER 1[/ASSESSING OFFICER] UNDER SUB-SECTION (2) OF SECTION 253, THE APPELLANT BEFOR E THE APPELLATE ASSISTANT COMMISSIONER 1[/COMMISSIONER OF INCOME-TAX (APPEALS )] SHALL BE MADE A RESPONDENT TO THE APPEAL. 5. THE LEARNED AR HAS ALSO DRAWN OUR ATTENTION TO S ECTION 2(7) WHICH READS AS UNDER: 26 (7) 'ASSESSEE' 27 MEANS A PERSON BY WHOM 28 [ANY TAX] OR ANY OTHER SUM OF MONEY IS PAYABLE UNDER THIS ACT, AND INCLUDES (A) EVERY PERSON IN RESPECT OF WHOM ANY PROCEEDING UNDE R THIS ACT HAS BEEN TAKEN FOR THE ASSESSMENT OF HIS INCOME 29 [OR ASSESSMENT OF FRINGE BENEFITS] OR OF THE INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE, OR OF THE LOSS SUSTAINED BY HIM OR BY SUCH OTHER PERSON, OR OF THE AMOUNT OF REFUND DUE T O HIM OR TO SUCH OTHER PERSON ; (B) EVERY PERSON WHO IS DEEMED TO BE AN ASSESSEE UNDER ANY PROVISION ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 6 OF 20 OF THIS ACT ; (C) EVERY PERSON WHO IS DEEMED TO BE AN ASSESSEE IN DEF AULT UNDER ANY PROVISION OF THIS ACT ; 6. THE LEARNED AR HAS ALSO REFERRED TO SECTION 156 WHICH READS AS UNDER: 1 56. NOTICE OF DEMAND.- WHEN ANY TAX, INTEREST, PENALTY, FINE OR ANY OTHER SUM IS PAYABLE IN CONSEQUENCE OF ANY ORDER PASSED U NDER THIS ACT, THE ASSESSING OFFICER SHALL SERVE UPON THE ASSESSEE A NOTICE OF D EMAND IN THE PRESCRIBED FORM SPECIFYING THE SUM SO PAYABLE : PROVIDED THAT WHERE ANY SUM IS DETERMINED TO BE PAY ABLE BY THE ASSESSEE UNDER SUB-SECTION (1) OF SECTION 143, THE INTIMATION UNDE R THAT SUB-SECTION SHALL BE DEEMED TO BE A NOTICE OF DEMAND FOR THE PURPOSES OF THIS SECTION. 7. ON THE BASIS OF THE ABOVE, IT WAS CONTENDED BY T HE AR THAT THE APPELLANT BEFORE THE CIT(A) WAS AN INDIVIDUAL, AS H E HAS FILED THE APPEAL AGAINST THE ORDER PASSED BY THE AO, AS THE S TATUS OF THE ASSESSEE HAS BEEN CHANGED FROM INDIVIDUAL TO AOP. THEREFORE, IT WAS SUBMITTED THAT THE APPELLANT SHOULD HAVE MADE THE INDIVIDUAL AS THE RESPONDENT/S, IN THE PRESENT APPEAL, INSTEAD OF FILING THE APPEAL AGAINST AOP ARRAYING AS RESPONDENT. 8. PER CONTRA, THE LEARNED COUNSEL FOR THE APPELLA NT HAS DRAWN OUR ATTENTION TO THE ASSESSMENT ORDER WHEREIN IN COLUMN 1 OF THE ASSESSMENT ORDER, IT IS MENTIONED IN THE NAME OF TH E ASSESSEE AS AOP OF SHRI. BOMMEGOWDA AND SHRI.RANGEGOWDA. HE HAS AL SO DRAWN OUR ATTENTION TO THE ORDER OF CIT(A) WHEREIN THE NAME O F APPELLANT HAS BEEN MENTIONED AS SHRI. RANGEGOWDA, AOP OF SHRI. BO MMEGOWDA AND SHRI.RANGEGOWDA. IT WAS SUBMITTED BY THE LEARNED C OUNSEL ON BEHALF ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 7 OF 20 OF THE APPELLANT THAT NO PREJUDICE WAS CAUSED TO TH E PRESENT RESPONDENT BY FILLING THE APPEAL IN THE NAME OF AOP OF SHRI. B OMMEGOWDA AND SHRI. RANGEGOWDA. 9. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . THE REVENUE CAN PREFER AN APPEAL AGAINST THE ORDER PASSED BY TH E CIT(A) U/S 253(2) OF THE ACT BEFORE THE APPELLATE TRIBUNAL. THE PROC EDURE OF THE APPELLATE TRIBUNAL IS PROVIDED U/S 255 OF THE IT AC T. THE TRIBUNAL WHILE EXERCISING ITS POWER U/S 255(5) OF THE ACT HA D FRAMED THE RULES TO REGULATE THE PROCEDURE OF APPELLATE TRIBUNAL. AS I S CLEAR FROM SECTION 253(2), THE DEPARTMENT, IF OBJECTS TO AN ORDER PASS ED BY CIT, MAY DIRECT AO TO FILE AN APPEAL BEFORE THE APPELLATE TR IBUNAL. IN THE PRESENT CASE, THE CIT(A) HAS PASSED AN ORDER ON THE APPEAL OF SHRI. BOMMEGOWDA AND SHRI. RANGEGOWDA WITHOUT ENSUR ING THAT AOP OF SHRI. BOMMEGOWDA AND SHRI. RANGEGOWDA IS TO BE M ADE AS A PARTY AGAINST WHICH THE ASSESSMENT ORDER WAS PASSED. 10. IN OUR VIEW, THE IMPUGNED ORDER CAN BE CHALLENG ED BY THE REVENUE BEFORE THE TRIBUNAL ONLY BY MAKING THE AOP OF SHRI. BOMMEGOWDA AND SHRI. RANGEGOWDA AS RESPONDEN T IN THE PRESENT CASE. ADMITTEDLY, SHRI. BOMMEGOWDA AND SHR I. RANGEGOWDA WERE PART OF THE AOP AND THEREFORE THERE IS A COMPL IANCE OF THE RULE 14 OF ITAT RULES OF 1963. MOREOVER, APPELLANT BEFORE THE CIT USED IN RULE 14 OF ITAT RULES, 1963, IS REQUIRED TO BE INTE RPRETED LIBERALLY, SO AS TO INCLUDE ANY OTHER PERSON, AGAINST WHOM THE IN ITIAL ORDER WAS PASSED BY THE ASSESSING OFFICER, SHOULD ALSO BE PE RMITTED TO BE RESPONDENT IN THE APPEAL FILLED BY THE REVENUE. ME RELY BECAUSE ONE OF THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT (A) WILL NOT ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 8 OF 20 WITHHOLD THE REVENUE FROM FILLING THE APPEAL AGAINS T THE ACTUAL PERSON AGAINST WHOM THE ASSESSMENT ORDER WAS PASSED BY THE AO. IN OUR VIEW, UNDER THE SCHEME OF THE ACT AN APPEAL MAY BE PREFERRED BY THE ASSESSEE OR BY ANY COLLECTOR OR BY ANY PERSON DENYI NG LIABILITY TO DEDUCT TAX IN CERTAIN CASES BEFORE THE CIT(A). THE REFORE, TO SAY THAT THE PERSON WHO HAD PREFERRED AN APPEAL BEFORE THE C OMMISSIONER SHOULD BE MADE A PARTY AS A RESPONDENT IN THE APPEA L OF THE REVENUE AS AGAINST THE ACTUAL PERSON AGAINST WHOM THE ASSESSME NT ORDER WAS PASSED BY AO, IS NOT CORRECT INTERPRETATION OF RULE 14 OF ITAT RULES, 1963. THE RULES WERE FRAMED TO ADVANCE THE CAUSE O F JUSTICE AND ARE SUPPLEMENTARY TO THE ACT, IF STRICT INTERPRETATION IS DONE THEN IT WILL LEAD TO ANOMALY, AS THE REVENUE WILL NOT BE ABLE TO FILE APPEAL AGAINST THE PERSON ORIGINALLY ASSESSED BY THE AO. 11. THE ORDER OF THE CIT(A) CHALLENGED BEFORE US, I T IS CLEARLY MENTIONED THAT APPELLANT IS SHRI. RANGEGOWDA AOP OF SHRI. BOMMEGOWDA AND SHRI.RANGEGOWDA. BEFORE THE CO MMISSIONER AS WELL BEFORE TRIBUNAL, SHRI.NAGIN KINCHA, CA WAS REPRESENTING THE ASSESSEE (HOWEVER TILL DATE HE HAD NOT FILLED POA O N BEHALF OF RESPONDENTS) I.E., AOP OF SHRI.BOMMEGOWDA AND SHRI. RANGEGOWDA AND INDIVIDUALS. THEREFORE NO PREJUDICE WOULD CAUS E TO THE ASSESSEE BEFORE US FOR NOT IMPLEADING THE INDIVIDUALS BEFORE CIT(A). IT IS ONLY A TECHNICAL OBJECTION WHICH WAS RAISED BY THE LEARNED AR. FURTHER UNDER THE RULES, THE CONSEQUENCE OF FILING THE APPEAL WIT HOUT IMPEDING THE APPELLANT BEFORE THE CIT(A) HAS NOT BEEN PROVIDED I N THE ACT OR IN RULES AS IT IS PROVIDED UNDER ORDER 7 RULE 11 OF CIVIL PROCEDURE CODE. OUR VIEW IS ALSO SUPPORTED BY JUDGMENT OF HONBLE D ELHI HIGH COURT IN ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 9 OF 20 SIMILAR FACTS IN THE MATTER OF [1975] 99 ITR 552 (D ELHI) COMMISSIONER OF INCOME-TAX V. INCOME-TAX APPELLATE TRIBUNAL WHEREIN IT WAS HELD AS UNDER: THE TRIBUNAL HELD THAT REFERENCE APPLICATION NO. 1 722 OF 1964-65 WAS A NULLITY AND THUS DISMISSED THE SAME R EJECTING THE CONTENTION OF THE REVENUE THAT THE DEFECT IN NOT PR OPERLY DESCRIBING THE RESPONDENTS BE ALLOWED TO BE REMOVED AS ALLOWIN G SUCH A REQUEST, ACCORDING TO THE TRIBUNAL, WOULD AMOUNT TO SUBSTITUTING ALTOGETHER A NEW APPLICATION IN THE NAME OF REMOVIN G THE DEFECT. THE TRIBUNAL REJECTED THE REFERENCE APPLICATION ALS O ON THE GROUND THAT THE ASSESSEE IN THE SAID APPLICATION WAS STATE D TO BE ' SAHUJAGDISH PRASAD AND OTHERS'. THE TRIBUNAL PUT A QUESTION TO ITSELF AS TO WHO THOSE 'OTHERS' WERE BECAUSE IT WAS NOT INDICATED IN THE APPEAL WHEREFROM TO GET THEM. IT WAS REQUIRED OF THE DEPARTMENT TO MENTION THE NA MES OF ALL THE RESPONDENTS CLEARLY BUT AT ANY RATE THE FAC T REMAINS THAT THE DEPARTMENT HAD INDICATED THE NAME OF THE ASSESSEE-F AMILY AS SAHUJAGDISH PRASAD, PILIBHIT. MUCH CAPITAL CANNOT B E MADE OUT OF THE FACT THAT INSTEAD OF GIVING THE NAMES OF OTHER RESPONDENTS CLEARLY THE DEPARTMENT CHOSE TO DESCRIBE THEM AS 'A ND OTHERS'. THE TRIBUNAL'S POWERS IN DEALING WITH THE APPEALS A RE OF WIDEST AMPLITUDE AND IDENTICAL WITH THE POWERS OF A N APPELLATE COURT UNDER THE CODE OF CIVIL PROCEDURE AS OBSERVED BY THEIR LORDSHIPS OF THE SUPREME COURT IN THE CASE, INCOME- TAX OFFICER, CANNANORE V. M.K. MOHAMMED KUNHI [1969] 71 ITR 815 . THE TRIBUNAL IS NOT A COURT BUT IT EXERCISES JUDICIAL P OWERS. AS OBSERVED IN THE ABOVE-CITED CASE BECAUSE OF ITS APP ELLATE JURISDICTION THE TRIBUNAL HAS THE POWER OF DOING AL L SUCH ACTS OR EMPLOYING SUCH MEANS AS ARE ESSENTIALLY NECESSARY F OR MAKING ORDERS FOR STAYING PROCEEDINGS TO PREVENT AN APPEAL , IF SUCCESSFUL, FROM BEING RENDERED NUGATORY. BECAUSE OF THE POWERS OF THE TRIBUNAL WHICH ARE OF 'WIDEST AMPLITUDE AND IDENTIC AL WITH THE POWERS OF AN APPELLATE COURT UNDER THE CODE OF CIVI L PROCEDURE' IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL SHOUL D HAVE PERMITTED THE DEPARTMENT TO RECTIFY THE MISTAKE IN MENTIONING THE NAMES OF THE OTHER RESPONDENTS CLEARLY INSTEAD OF T HEIR BEING DESCRIBED AS 'AND OTHERS'. REFERENCE HERE MAY BE MADE TO THE CASE, JHUTA RAM V . RAM SARUP AIR 1937 LAH. 60. IN THAT CASE A SUIT WAS INS TITUTED AGAINST SEVERAL DEFENDANTS OF WHOM THREE WERE MINORS. THE M INOR DEFENDANTS WERE FIRST REPRESENTED BY THEIR RELATION S AS THEIR ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 10 OF 20 RESPECTIVE GUARDIANS BUT SUBSEQUENTLY AS THOSE RELA TIONS REFUSED TO ACT AS GUARDIAN A COURT OFFICIAL WAS APPOINTED AS T HE GUARDIAN OF THE MINOR DEFENDANTS. THE SUIT WAS DISMISSED. THE P LAINTIFF FILED AN APPEAL. THE MINOR DEFENDANTS-RESPONDENTS WERE SHOWN AS BEING REPRESENTED BY THE ORIGINAL GUARDIAN, THEIR RELATIO NS, AND NOT BY THE COURT OFFICIAL. THE APPEAL WAS DISMISSED BY THE FIRST APPELLATE COURT ON THE GROUND THAT THE APPEAL WAS NOT PROPERL Y REPRESENTED AS AGAINST THE MINORS AND COULD NOT, THEREFORE, PRO CEED AS IT COULD NOT PROCEED AGAINST THOSE MINORS, HAVING THUS ABATE D IN ITS ENTIRETY. THE VIEW THAT IT HAD ABATED WAS NEGATIVED HOLDING THAT THERE WAS NO QUESTION OF ABATEMENT IN THE CASE. IT WAS OBSERVED THAT THE FACT THAT THERE WAS A MISTAKE IN THE DESCR IPTION OF THE RESPONDENTS SHOULD NOT ENTAIL THE DISMISSAL OF THE APPEAL. THE DEFECT IN NOT PROPERLY IMPLEADING THE RESPONDENTS A S PARTIES TO THE APPEAL WAS HELD TO BE A FORMAL ONE WHICH SHOULD BE ALLOWED TO BE CORRECTED WHEN BROUGHT TO THE NOTICE OF THE COURT. THE CASE WAS ACCORDINGLY REMANDED TO THE FIRST APPELLATE COURT W ITH A DIRECTION TO PROCEED WITH THE APPEAL ON MERITS AFTER THE DESC RIPTION OF THE MINOR DEFENDANTS HAD BEEN CORRECTED AND THE SERVICE EFFECTED ON THEIR GUARDIAN. REFERENCE MAY ALSO BE MADE TO A DIVISION BENCH DECI SION OF THE OUDH HIGH COURT IN CH. KANHAYABUX SINGH V. M ST. RAM DEVI KUER AIR 1944 OUDH 62. IN THAT CASE IN THE GRO UNDS OF APPEAL THE APPELLANTS NAMED THEMSELVES BUT DID NOT MENTION THE NAMES OF THE IDOLS, WHO WERE DEFENDANTS IN THE SUIT , EITHER IN THE CATEGORY OF THE PERSONS APPEALING OR IN THAT OF THE RESPONDENTS. OBJECTION TO THE COMPETENCY OF THE APPEAL WAS REPEL LED HOLDING THAT OMISSION OF NAMES OF THE IDOLS IN THE GROUNDS OF APPEAL AMOUNTED MERELY TO A MIS-DESCRIPTION. THE APPELLANT S WERE PERMITTED TO AMEND THE MEMORANDUM OF APPEAL SO AS T O SHOW DISTINCTLY THE NAMES OF THE IDOLS. THE OMISSION WAS HELD NOT TO HAVE THE EFFECT OF RENDERING THE JUDGMENT OF THE TRIAL C OURT FINAL IN REGARD TO THE QUESTION AFFECTING THE IDOLS WHO WERE NOT IMPLEADED AS PARTIES TO THE APPEAL. OMISSION TO IMPLEAD THE NAMES OF THE OTHER RESPONDE NTS IN THE APPEAL MERELY AMOUNTED TO A MIS-DESCRIPTION AND BEING A FORMAL ONE SHOULD HAVE BEEN ALLOWED TO BE CORRECTED WHEN BROUGHT TO THE NOTICE OF THE TRIBUNAL RATHER THAN E NTAIL THE DISMISSAL OF THE REFERENCE APPLICATION. ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 11 OF 20 12. IN THE LIGHT OF THE ABOVE, THE OBJECTION OF THE LEARNED AR FOR THE ASSESSEE IS WITHOUT ANY SUBSTANCE AND IS THEREFORE REJECTED. 13. IN THE ASSESSMENT ORDER, WE NOTICED THAT INITIA LLY THE NOTICES U/S 142(1) WERE ISSUED AGAINST SHRI. BOMMEGOWDA AND SHR I. RANGEGOWDA ONLY. HOWEVER, WHEN THEY LEFT THE OFFICE OF THE AO IN THE MIDDLE OF GIVING THE STATEMENTS ON 23.02.2012, THEN THE AO HA D SENT THE NOTICES UNDER SECTION 142(1) TO AOP OF SHRI. BOMMEGOWDA AND SHRI. RANGEGOWDA. THE RELEVANT PARAGRAPHS MENTIONI NG THE ABOVE SAID FACTS IN THE ASSESSMENT ORDER ARE AS UNDER: ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 12 OF 20 ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 13 OF 20 14. WE HAVE NOTICED THAT THE APPEAL WAS FILED BEFOR E THE CIT(A) IN THE INDIVIDUAL CAPACITY BY SHRI. RANGEGOWDA AND OTH ERS AND IS CLEAR FROM FORM 35. THE DETAILS OF THE 19 APPEALS PREFER RED AGAINST THE ASSESSMENT ORDERS ARE AS UNDER: ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 14 OF 20 15. BEFORE THE AO, SHRI. A. SHRIDHAR, ADVOCATE APPE ARED ON 08.02.2013 UNDER THE SIGNATURE OF SHRI. BOMMEGOWDA AND SHRI. RANGEGOWDA. THE CONTENTS OF THE LETTER WERE REPRODUCED IN THE ASSESSMENT ORDER TO THE FOLLOWING FACT: ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 15 OF 20 GIST OF THE LETTER: WE ARE THE RESIDENTS OF PADUVALAHIPPE VILLAGE. DUE TO THE TRANSPORTATION OF SAND IN ABOUT 25 TO 30 LOR RIES THROUGH PRIVATE TRANSPORTERS, VILLAGERS WERE SUFFER ING DUE TO MANY FALLOUTS OF THE SAME. IN A MEETING DATED 02.0 4.2009, THE VILLAGERS TOOK CERTAIN DECISIONS COPY OF WHICH IS ENCLOSED. RUNNING OF LORRIES ON THE LANDS OWNED BY THE VILLAG ERS HAS CAUSED A LOT OF DAMAGE AND BROUGHT HEALTH PROBL EMS TO THE PEOPLE. IN ORDER TO MAKE UP FOR THE LOSS AND S INCE THE VILLAGE PANCHAYATH OR THE GOVERNMENT DID NOT TAKE A NY ACTION, IT IS DECIDED TO COLLECT RS.1,000/- PER LOR RY AS PENALTY. FURTHER, TO COLLECT THIS PENALTY, SHRI. V ENKATESH, S/O. HANUMATHEGOWDA, SHRI. BASAVEGOWDA, S/O. GOWDEGOWDA, SHRI.BOMMEGOWDA, S/O EREGOWDA AND SHRI. RANGE GOWDA, S/O LAKKEGOWDA HAVE BEEN AUTHORI ZED WHO ARE WELL KNOWN PERSONS OF THE VILLAGE. FURTHER , IT IS DECIDED TO OPEN A BANK ACCOUNT AT CAUVERY KALPATHAR U GRAMEENA BANK, PADUVALAHIPPE IN THE JOINT NAMES OF SHRI. VENKATESH, S/OHANUMATHEGOWDA, SHRI. BASAVEGOW DA, S/O GOWDEGOWDA, SHRI. BOMME GOWDA, S/O ERE GOWDA AN D SHRI. RANGE GOWDA, S/O LAKKEGOWDA. IT IS ALSO DECI DED TO DISBURSE THE MONEY AMONG THE 140 AGRICULTURAL ORIEN TED FAMILIES EQUALLY. SIGNED BOMMEGOWDA AND RANGE GOWDA TRANSLATION OF MINUTES OF MEETING DT. 02.04.2009 SUBJECT: TRANSPORTATION OF SAND FROM HEMAVATHI RIVER BY 10 TO 15 LORRY LOADS OF SAND BY PRIVATE TR ANSPORTERS AND LOSS TO THE MEMBERS OF VILLAGE AND FARMERS AC TION TO BE TAKEN REG. DECISION: THE RESPECTED CITIZENS OF PADUVALAHIPPE SHRI. VENKATSH AND SHRI.BASAVEGOWDA AND OTHERS HAVE INFORMED THAT DAILY SOME PRIVATE LORRY OWNERS ARE TRANSPORTING ABOUT 25 TO 30 LOADS OF SAND FROM PADUVALAHIPPE VILLAGE AND SINCE THERE IS NO ROAD CO NTACT TO THE HEMAVATHI RIVER BANK, THEY ARE RUNNING THE LORR IES ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 16 OF 20 THROUGH THE AGRICULTURAL LANDS OF PADUVALAHIPPE VIL LAGE. THIS HAS CREATED HUGE LOSS TO THE CROPS AND THE FAR MS. DUE TO TOO MUCH OF LORRY TRANSPORT, THE VILLAGERS A RE ALSO SUFFERING FROM HEALTH HAZARDS LIKE FEVER, COUG H ETC. EVEN THE WATER OF HEMAVATHIRIVER HAS BECOME DIRTY A ND THE CATTLE ARE NOT ABLE TO USE THE HEMAVATHI WATER DUE TO POLLUTION. EVEN THE GRAMAPANCHAYATH HAS NOT TAKEN ANY ACTION TO PREVENT THIS. IN ORDER TO MAKE UP FOR TH E LOSSES THE RESPECTED VILLAGERS DISCUSSED THE ISSUES AND DECIDE D TO COLLECT RS.1,000/- PER LORRY FROM THE LORRY TRANSPO RTERS. THE POWERS TO COLLECT THIS MONEY IS DELEGATED TO SHRI. VENKATSH, S/O GOWDEGOWDA, SHRI. BOMMEGOWDA, S/O EREGOWDA AND SHRI. RANGE GOWDA, S/O LAKKEGOWDA. IT IS FURTHER D ECIDED TO OPEN TWO BANK ACCOUNTS IN JOINT NAMES AT CAUVERYKALPATHARUGRAMEENA BANK, PADUVALAHIPPE. IT WAS DECIDED TO DISBURSE THE AMOUNT SO COLLECTED AMONG T HE 140 AGRICULTURAL ORIENTED FAMILIES EQUALLY. SIGNED BY: VENKATESH, BASAVEGOWDA, BOMMEGOWDA AND RANGE GOWDA. 16. THE LEARNED CIT WHILE PASSING THE ORDER IN THE APPEAL OF SHRI. RANGEGOWDA IN PARAGRAPHS 24 TO 25 HAS HELD AS UNDER: 25. NOW THE QUESTION WOULD ARISE AS TO WH ETHER THE TWO PERSONS ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 17 OF 20 WHO WERE ALLOWED TO OPEN THE BANK ACCOUNT S AND OPERATE THE SAME, 17. IF WE EXAMINE THE CONCLUSION ARRIVED AT BY THE LEARNED CIT(A), THEN IT IS CLEAR THAT HE HELD THAT THE ACCOUNTS WER E BEING OPERATED BY TWO OR MORE PERSONS VIZ., SHRI. BOMMEGOWDA AND SHRI .RANGEGOWDA AND ALSO BY SHRI.VENKATESH AND SHRI.BASAVEGOWDA IN TERMS OF THE MINUTES OF THE MEETING OF THE MEMBERS OF THE VILLAG E AND WERE COLLECTING AND DEPOSITING AMOUNT IN THEIR RESPECTIV E ACCOUNTS. HOWEVER, THE LEARNED CIT HAS HELD THAT TWO PERSONS OPERATING THE ACCOUNTS CANNOT CONSTITUTE AS AOP AND THEREFORE THE ORDER OF THE AO HAS NO LEGS TO STAND. IN OUR VIEW, THE ORDER PASSE D BY THE LEARNED CIT(A) IS BREFIT OF ANY REASONING AS WAS PASSED WIT HOUT APPRECIATING THE FACTS ON RECORD. IT IS A CONSISTENT CASE OF T HE PERSONS BEFORE THE AO VIZ., SHRI. BOMMEGOWDA AND SHRI.RANGEGOWDA, SHRI. BASAVEGOWDA AND SHRI.VENKATESH WERE AUTHORIZE D BY THE VILLAGERS CONSISTING OF 140 PERSONS TO COLLECT THE AMOUNT FROM THE LORRY FERRYING SAND FROM THE RIVER BED AND THIS HAS BEEN DONE WITH A VIEW TO DEVELOP THE INFRASTRUCTURE IN THE VILLAGE IN THE FO RM OF ROAD, ETC. HOWEVER, DESPITE THE NOTICES AND OPPORTUNITY GIVEN BY THE LEARNED AO, ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 18 OF 20 THE SAID TWO PERSONS HAVE FAILED TO BRING ON RECORD OF THE MEMBERS WHO HAVE AUTHORIZED THEM TO COLLECT AND HAVE FURTHE R FAILED TO GIVE ANY RECORD OF EXPENDITURE MADE BY THEM FOR THE CONSTRUC TION, REPAIR AND MAINTENANCE OF THE ROAD, ETC. 18. IN THE LIGHT OF THE ABOVE, THE AO HAS CONCLUDED THAT THE AMOUNT DEPOSITED IN THE FORM OF CASH IN THE BANK ACCOUNT R EMAINED UNEXPLAINED. THE LEARNED CIT(A) HAS DECIDED THE AP PEAL ON THE BASIS OF THE APPELLANT BEFORE HIM WITHOUT ENSURING THAT A LL THE PERSONS FORMING AOP WHETHER REGISTERED OR UNREGISTERED WERE IMPLEADED IN APPEAL BEFORE HIM IF THE STATUS OF THE AOP HAVE BEE N DISPUTED THAT THE ACCOUNTS AND AMOUNT BELONGED TO THEM. 19. THE APPELLANT BEFORE CIT(A) HAVE NOT DISPUTED T HAT THE ACCOUNTS DO NOT BELONG TO THEM, FURTHER THEY HAVE N OT DISPUTED THAT THE CASH WAS NOT DEPOSITED BY THEM, THEY HAVE NOT DISPU TED THAT THE CASH WAS COLLECTED BY THEM LEGALLY OR ILLEGALLY FROM THE LORRY DRIVERS/VEHICLE OWNERS TO REMOVE SANDS FROM THE RIVER BANK. THEY HAVE ALSO NOT DISPUTED THAT THEY ARE AUTHORIZED BY THE RESIDENTS OF THE VILLAGE BY A RESOLUTION TO COLLECT THE AMOUNT. THEY HAVE ALSO NO T DISPUTED THAT THE SAID AMOUNT WAS REQUIRED TO BE SPENT FOR THE PURPOS ES OF WELFARE OF THE CLUB. WE ARE IN AGREEMENT WITH THE CONTENTION OF T HE LEARNED AR THAT AS PER SECTION 4 OF THE INCOME TAX ACT, THE TAX IS CHARGEABLE IN RESPECT OF THE TOTAL INCOME OF THE PREVIOUS YEAR OF EVERY P ERSON AND A PERSON IS DEFINED IN SECTION 2(31) OF THE IT ACT. THE AOP (A SSOCIATION OF PERSONS) OR BODY OF INDIVIDUALS WHETHER INCORPORATE D OR NOT FALLS WITHIN THE DEFINITION OF PERSON. THE APPELLANT BEF ORE THE CIT (THE ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 19 OF 20 PERSONS BEFORE THE AO) WERE REQUIRED TO EXPLAIN THE AMOUNT DEPOSITED IN THE ACCOUNT AND THEY HAVE EXPLAINED THE SAID AMO UNT BY WAY OF THEIR RESPONSE IN THEIR LETTER DATED 08.02.2013 AS MENTIO NED HEREIN ABOVE. THUS, IN OUR VIEW, EITHER THE MONEY BELONGS TO THE PERSONS IN WHOSE NAMES THE ACCOUNTS WERE MAINTAINED IN THE BANK TO W HOM NOTICES UNDER SECTION 142(1) OF THE ACT WERE GIVEN OR THE M ONEY BELONGS TO THE ASSOCIATION OF THE PERSONS WHO HAVE AUTHORIZED THEM TO COLLECT THE AMOUNT. AS THE APPELLANTS BEFORE THE CIT(A) WERE N OT COOPERATING DURING THE ASSESSMENT PROCEEDINGS, THEREFORE THE AO LEFT THE OFFICE BEFORE THEY COULD BE EXAMINED UNDER SECTION 131. T HE AO WAS HAVING NO OTHER OPTION BUT TO ADJUDICATE THE ISSUE ON THE BASIS OF THE MATERIAL AVAILABLE WITH HIM. 20. IN THE LIGHT OF THE ABOVE, WE DEEM IT APPROPRIA TE TO REMAND THE MATTER TO THE FILE OF THE CIT WITH THE FOLLOWING DI RECTION: I. THAT THE CIT(A) SHALL ISSUE THE APPROPRIATE NOTICE/ NOTICES TO THE ACCOUNT HOLDERS OF THE TWO SAVINGS BANK ACCOUNT S BEARING NOS.013102023278 AND 013102014627 WITH CAUVERY KALPATHARU GRAMEEN BANK, PADAVALAHIPPE VILLAGE. II. THE CIT(A) SHALL IN ADDITION TO THE ABOVE SAID MAY ALSO ISSUE THE NOTICE TO ANY OTHER PERSON, AS MAY BE INFORMED TO HIM BY THE ACCOUNT HOLDERS (ASSESSEE) STATING THAT THE MON EY BELONGS TO THE OTHER PERSONS. IN CASE THE PERSON IN WHOSE NAMES THE ACCOUNTS WERE MAINTAINED NAMELY SHRI. BOMMEGOWDA AN D SHRI. RANGEGOWDA FAIL TO GIVE DETAILS OR PARTICULAR S OF THE NAMES AND ADDRESSES OF THE PERSONS WHO IN THEIR EST IMATION THE AMOUNT LYING IN THE BANK ACCOUNT BELONGS TO THE M OR THEY ITA NOS. 1667&1668, 1674&1675, 1676-85, /BANG/2014 PAGE 20 OF 20 HAD BEEN AUTHORIZED BY THEM TO COLLECT THE AMOUNT T HEN, IN OUR VIEW, THE ASSESSMENT PROCEEDINGS SHALL BE COMPL ETED AGAINST THE SHRI. BOMMEGOWDA AND SHRI. RANGEGOWDA I N ACCORDANCE WITH THE LAW AFTER FOLLOWING THE DUE PRO CESS TREATING THE AMOUNT TO BE OF THE PERSONS/ACCOUNT HO LDERS. 21. WE HAVE DECIDED THE APPEAL BEARING NO.1667/BANG /2014. HAVING ONLY STATED THE FACTS OF THE SAID CASE, WE N OTICE THAT THE FACTS OF OTHER APPEALS ARE SIMILAR TO THE FACTS OF APPEAL NO . 1667/BANG/2014. THEREFORE, WE HAVE NOT DECIDED EACH APPEAL SEPARATE LY. HOWEVER, WE DIRECT THE CIT(A) TO DEAL WITH EACH APPEAL BY FOLLO WING THE DIRECTIONS GIVEN IN PARA 23 TO EACH OF THE ASSESSEES / AOP IN EVERY APPEAL. 22. IN THE RESULT, THE APPEALS OF THE REVENUE ARE A LLOWED FOR THE STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF FEBRUARY, 2017. SD/- SD/- (A. K. GARODIA) (LALI ET KUMAR) ACCOUNTANT MEMBER JUDI CIAL MEMBER BANGALORE. DATED: 23 RD FEBRUARY, 2017. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.00