Bhubaneswar Club Ltd, Bhubaneswar V. ACIT, Bhubaneswar

ITA 177/CTK/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4445 (ITAT-CUTTACK)
• Duration Of Justice: 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 1999-2000
• Appeal Filed On: 01-04-2011
• Court: TRIBUNAL
• Department Lawyers: PA NIGRAHI
• Assessee Lawyers: G NAIKR KAR ARS
• Keywords: Opportunity of being heard; Condonation of delay; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 177,178,179,180 AND 181/CTK/2011 / ASSESSMENT YEAR S 1999 - 2000,2000 - 01,2001 - 02,2002 - 03 AND 2003 - 04 BHUBANESWAR CLUB LTD., RAJPATH AGS SQUARE, UNIT IV, BHUBANESWAR 751 001 P AN: AABCB 3582 C - - - VERSUS - ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), BHIBANESWAR ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI G.NAIK/R.KAR, ARS / FOR THE RESPONDENT: / SH RI M.R.PANIGRAHI, DR / ORDER PER BENCH : THESE APPEALS BY THE ASSESSEE ARE AGITATING THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) COMMON FOR ALL THE IMPUGNED AYS WHICH WAS APPEALED AGAINST BEFORE THE LEARNED CIT(A) ON AN APPEAL EFFE CT GIVING ORDER U/S.251. 2. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATING THE FACTS CLARIFIED THAT THE LEARNED CIT(A) IN A COMMON ORDER DT. 31.12.2007 FOR THE IMPUGNED AYS HAD RESTORED THE ISSUE FOR CONSIDERATION BY THE LEARNED ASSESSING OFFICER THE ISSUE REGARDING CONCEPT OF MUTUALITY ON ITS INCOME/RECEIPTS WHICH HE HAD CATEGORIZED IN PARA 28 OF HIS ORDER AND ALSO IN PARA 29 WHEN INTEREST INCOME EARNED ON DEPOSITS MADE IN A BANK WHETHER COULD BE IDENTIFIED THEREFOR . THE AO GIVING EFFECT TO THE ORDER CATEG ORICALLY PICKED OUT THE RECEIPTS SHOWN UNDER THESE HEADS IN THE IMPUGNED AYS FOR CREATING DEMAND IN HIS ORDER U/S.251. A COPY OF THE ORDER OF THE LEARNED CIT(A) AND THE ORDER GIVING APPEAL EFFECT U/S.251 IS BEING FURNISHED , WHICH MAY KINDLY BE PERUSED. HE POINTED OUT THAT THE LEARNED ASSESSING OFFICER DID NOT GAVE ANY OPPORTUNITY I.T.A.NO.177,178,179,180 AND 181/CTK/2011 2 TO EXPLAIN THE NATURE OF DIRECTION OF THE LEARNED CIT(A) TO THE ASSESSING OFFICER FOR GIVING EFFECT TO HIS ORDER WHEN HE HAS ARBITRARILY PICKED OUT THE RECEIPTS UNDER THE RESPECTIV E HEADS FOR TAXATION BY COMPUTING THE RECEIPTS CLAIMED UNDER THESE HEADS WHICH WERE DIRECTED BY THE LEARNED CIT(A) TO BE CONSIDERED FOR DELETION AFTER VERIFYING ON THE CONCEPT OF MUTUALITY EMBEDDED THEREIN HOLDING THAT THE APPEAL EFFECT CANNOT BE KEPT IN A BEYANCE . ON APPEAL , THE PRESENT LEARNED CIT(A) DISMISSED THE ASSESSEES APPEAL BY DISMISSING THE PETITION FOR CONDONATION OF DELAY IN FILING THE APPEAL S BEFORE HIM HOLDING THAT THE ASSESSEE OUGHT TO HAVE FILED THE APPEALS AGAINST THE ORDER GIVING EFFECT TO THE PREDECESSOR CIT(A)S ORDER WITHIN THE STIPULATED TIME AS PROVIDED U/S.246(2). 3. THE LEARNED COUNSEL ARGUED THAT A DIRECTION TO THE ASSESSING OFFICER TO AFFORD OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE CONFIRMING WHETHER CONCEPT OF MUTUALITY U NDER THE VARIOUS HEADS AS INDICATED BY HIM IN HIS ORDER IN PARAGRAPHS 28 AND 29 WAS TO BE SUBJECTED TO CONFRONTATION TO THE ASSESSEE AND NOT A S DIRECTION TO TAX THE SAME WHEN OTHER INCOMES HAD BEEN HELD BY THE LEARNED CIT(A) NOT TO BE TAXED UNDER THE CONCE PT OF MUTUALITY AS HAS BEEN HELD BY HONBLE SUPREME COURT IN THE CASE OF CHELMSFORD CLUB V. CIT [2000] 243 ITR 89 (SC) . THE LEARNED CIT(A) WAS THEREFORE VERY CLEAR THAT THE CONCEPT OF MUTUALITY UNDER THESE HEADS WAS TO BE VERIFIED FIRST WHICH THE ASSESSING OFFICER ON GIVING EFFECT TO THE APPEAL ORDER CONFIRMED THE SAME AS RECEIPTS OF INCOME BY RAISING DE MAND THEREON. THE PRESENT CIT(A) ERRED IN HOLDING THAT THE APPEAL WAS AGAINST THE ORIGINAL ORDER U/S.143(3)/147 IN THE CASE OF THE ASSESSEE WHICH HAS ALREADY BEEN ADJUDICATED UPON BY HIS PREDECESSOR CIT(A) AND THE INTERVENING PERIOD WAS TO BE IGNORED BUT W AS GIVEN EFFECT TO BY THE ASSESSING OFFICER WHICH CANNOT BE CONSIDERED AS AN ORDER TO BE APPEALED AGAINST AGAIN BY MEASURE OF I.T.A.NO.177,178,179,180 AND 181/CTK/2011 3 CORRECTION BEFORE IN HIS OFFICE AGAIN. HE PRAYED THAT A SUITABLE DIRECTION TO THE ASSESSING OFFICER FOR GIVING APPEAL EFFECT INASM UCH AS THE DIRECTION OF THE LEARNED CIT(A) TO BE ADHERED IN AFFORDING AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE CONCEPT OF MUTUALITY WHETHER EMBODIED IN THESE RECEIPTS OR NOT WHICH ORDER WOULD BE APPEALABLE BEFORE THE FIRST APPELLATE AUTHORITY FOR APPR ECIATION OF HAVING GIVEN EFFECT TO ORDER IN THE FIRST PLACE. 4. THE LEARNED DR DID NOT HAVE ANY OBJECTION TO THE PRAYER OF THE LEARNED COUNSEL FOR THE ASSESSEE TO RESTORE THE ISSUES FOR CONSIDERATION BY THE ASSESSING OFFICER IN THE LIGHT OF THE DIRECTION O F THE LEARNED CIT(A) AS HAS GIVEN IN HIS COMMON ORDER DT. 3 1.12.2007 FOR THE IMPUGNED ASSESSMENT YEARS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD . ON OUR CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE REQUEST OF THE LEARNED COUNSEL FOR THE ASSESSEE. THE ORDER GIVING APPEAL EFFECT CANNOT BE KEPT IN ABEYANCE INSOFAR AS THE ORDER GIVING APPEAL EFFECT TO ON AN ORDER OF THE APPELLATE AUTHORITY WHO HAD DIRECTED THE ASSESSING OFF ICER TO VERIFY THE CLAIM OF THE ASSESSEE FIRST THAT CERTAIN INCOME/RECEIPTS UNDER PARTICULAR HEADS WHETHER COULD BE TAXED AS INCOME WHICH INCOME ASSESSEE CLAIMS IS COVERED UNDER THE CONCEPT OF MUTUALITY WAS NOT TO BE TAXED IN THE CASE OF A CLUB IN ACCORDAN CE WITH THE CITED DECISION. THE PRESENT CIT(A) THEREFORE ERRED IN HOLDING THAT THE ORDER GIVING APPEAL EFFECT HA D BEEN APPEALED BEFORE HIM BEYOND DUE DATE AS MENTIONED IN SECTION 246(2) AS NO TIME LIMIT IS PRESCRIBED FOR RECTIFICATION .THE SPECIFIC DIRECTI ON OF THE CIT(A) WAS NOT CARRIED OUT BY THE ASSESSING OFFICER IN HIS ORDER GIVING EFFECT THEREFORE REQUIRES CONSIDERATION AS PER THE DIRECTION OF THE LEARNED CIT(A) WHICH HAS BEEN PRAYED FOR BY THE LEARNED COUNSEL BY RESTORING THE ISSUE TO THE FILE OF I.T.A.NO.177,178,179,180 AND 181/CTK/2011 4 THE AO FOR CONSIDERATION IN ITS ENTIRETY. THE LEARNED DR HAS NOT OPPOSED THIS PRAYER WHICH WE ARE INCLINED TO ALLOW. THE IMPUGNED ORDER OF THE LEARNED CIT(A) IS , THEREFORE, SET ASIDE AND THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERAT ION AS PER THE DIRECTION OF THE FIRST APPELLATE AUTHORITY DT.31.12.2007 AND SEEK ASSISTANCE FROM THE ASSESSEE TO DELIBERATE ON IT AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 28 TH APRIL, 2011 S D/ - S D/ - ( . . . ) , ( K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DAT E: 28 TH APRIL, 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : BHUBANESWAR CLUB LTD., RAJPATH AGS SQUARE, UNIT IV, BHUBANESWAR 751 001 2 / THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), BHIBANESWAR 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.