M/s. Erode Market Committee, CHENNAI V. ACIT, Erode

ITA 1712/CHNY/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3945 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 11-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S SRIDHAR
• Section: 12A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , !' .$%$&, ( ') BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NOS.1709, 1710, 1711 & 1712/MDS/2012 & +& / ASSESSMENT YEARS : 2003-04, 2004-05 & 2006-07 M/S ERODE MARKET COMMITTEE, VIDYA NAGAR, THENRAL, ERODE 638 012. PAN : AAAAE 1488 R V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, ERODE. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-1, ERODE. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /0-. 1 2 / RESPONDENT BY : SHRI SUPRIYO PAL, JCIT 3 1 4( / DATE OF HEARING : 13.10.2016 56+ 1 4( / DATE OF PRONOUNCEMENT : 23.11.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE FOUR APPEALS OF THE ASSESSEE ARE DIRECTE D AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, COIMBATORE. SINCE COMMON ISSUE ARISES FOR CONSIDER ATION IN ALL THESE FOUR APPEALS, WE HEARD THESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2 I.T.A. NOS.1709 TO 1712/MDS/12 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE APPLICATION FILED BY THE ASSESSEE FOR REGI STRATION UNDER SECTION 12A OF THE INCOME-TAX ACT, 1961 (IN SHORT ' THE ACT') IS PENDING BEFORE THE COMMISSIONER AND THE SAME WAS NO T DISPOSED OF. REFERRING TO THE JUDGMENT OF APEX COURT IN CIT V. SOCIETY FOR THE PROMOTION OF EDUCATION IN CIVIL APPEAL NO.1478 OF 2 016, THE LD.COUNSEL SUBMITTED THAT IF THE APPLICATION OF THE ASSESSEE WAS NOT DISPOSED OF WITHIN SIX MONTHS, THE REGISTRATION UND ER SECTION 12A OF THE ACT IS DEEMED TO BE GRANTED FROM THE DATE OF AP PLICATION. THE ASSESSEE IS CLAIMING EXEMPTION ON THE PRINCIPLE OF MUTUALITY SINCE THE APPLICATION UNDER SECTION 12A OF THE ACT WAS NO T DISPOSED OF BY THE COMMISSIONER. SINCE THE APPLICATION IS PENDING BEFORE THE COMMISSIONER, ACCORDING TO THE LD. COUNSEL, THE MAT TER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO RE-EXAMINE THE MATTER IN THE LIGHT OF THE JUDGMENT OF APEX COURT I N SOCIETY FOR THE PROMOTION OF EDUCATION (SUPRA). THE LD.COUNSEL FUR THER SUBMITTED THAT FOR THE ASSESSMENT YEAR 2006-07, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THIS I S ALSO FURTHER CONFIRMED BY THE CIT(APPEALS) AND THE ASSESSEE IS C HALLENGING THE SAME BEFORE THIS TRIBUNAL IN I.T.A. NO.1712/MDS/201 2. THE PENALTY WAS LEVIED ONLY ON THE GROUND THAT THE ASSESSEE IS CLAIMING 3 I.T.A. NOS.1709 TO 1712/MDS/12 EXEMPTION ON MUTUALITY. ACCORDING TO THE LD. COUNS EL, SINCE THE ISSUE OF REGISTRATION IS DEEMED TO BE GRANTED BY VI RTUE OF THE JUDGMENT OF APEX COURT (SUPRA), THERE CANNOT BE LEV Y OF PENALTY, THEREFORE, THE ISSUE OF PENALTY ALSO NEEDS TO BE RE CONSIDERED. 3. ON THE CONTRARY, SHRI SUPRIYO PAL, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMS THAT AN APPLICATION FOR REGISTRATION UNDER SECTION 12A OF T HE ACT WAS FILED BEFORE THE COMMISSIONER AND THE SAME IS PENDING. T HE STATUS OF APPLICATION IS NOT KNOWN. THE PRINCIPLE OF MUTUALI TY IS NOT APPLICABLE TO THE ASSESSEE. THE ASSESSEE BEING AN AUTHORITY T O REGULATE THE MARKET, THERE IS NO QUESTION OF ADOPTING THE PRINCI PLE OF MUTUALITY. THERE IS NO IDENTITY OF BENEFICIARIES AND THE PEOPL E WHO ARE CONTRIBUTING TO THE FUNDS OF THE ASSESSEE. THEREFO RE, ACCORDING TO THE LD. D.R., THE PRINCIPLE OF MUTUALITY IS NOT APP LICABLE AT ALL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT THE INCOME IS EXEMPTED ON PRINCIPLE OF MUTUALITY. THE ASSESSEE ALSO CLAIMS THAT THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRATION UNDER SECTION 12A OF THE ACT IS STILL PENDING BEFORE THE COMMISSIONER. AS RIGHTLY SUBMITTED BY THE LD.COUNS EL FOR THE 4 I.T.A. NOS.1709 TO 1712/MDS/12 ASSESSEE, IN VIEW OF JUDGMENT OF APEX COURT IN SOCI ETY FOR THE PROMOTION OF EDUCATION (SUPRA), IF THE APPLICATION IS NOT DISPOSED OF BY THE COMMISSIONER WITHIN A PERIOD SIX MONTHS, IT WOULD BE TAKEN THAT THE ASSESSEE IS REGISTERED UNDER SECTION 12A O F THE ACT FROM THE DATE OF APPLICATION. HOWEVER, NO MATERIAL IS A VAILABLE ON RECORD TO SUPPORT THE CLAIM OF THE ASSESSEE THAT AN APPLIC ATION IS FILED BEFORE THE COMMISSIONER AND THE SAME IS PENDING. T HEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE VERIFIED. ACCORDINGLY, THE ORDERS OF THE LOWER AUT HORITY ARE SET ASIDE IN ALL THE APPEALS AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL VERIFY WHETHER THE ASSESSEE HAS FILED ANY APPLICATION FOR REGISTRA TION UNDER SECTION 12A OF THE ACT AND IF SUCH AN APPLICATION IS FILED, WHETHER IT IS DISPOSED OF BY THE COMMISSIONER. THEREAFTER, THE A SSESSING OFFICER SHALL TAKE INTO CONSIDERATION THE JUDGMENT OF APEX COURT IN SOCIETY FOR THE PROMOTION OF EDUCATION (SUPRA) AND DECIDE THE ISSUE ON MERIT, IN ACCORDANCE WITH LAW, AFTER GIVING A RE ASONABLE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSES SEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5 I.T.A. NOS.1709 TO 1712/MDS/12 ORDER PRONOUNCED ON 23 RD NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( !' .$%$& ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ( / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 23 RD NOVEMBER, 2016. KRI. 1 /49: ;:+4 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. 3 <4 () /CIT(A)-1, COIMBATORE 4. 3 <4 /CIT-II, COIMBATORE 5. := /4 /DR 6. >& ? /GF.