ITO, Ward-11(1), Hyderabad, Hyderabad V. M/s Babaiah Weaker Section & Waddera Labour Co-op Society Ltd., Hyderabad

ITA 1795/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87476 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 26-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 28-11-2014
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Keywords: Principle of natural justice
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO. 1795/HYD/2014 ASSESSMENT YEAR: 2008-09 INCOME TAX OFFICER , WARD-11(1), HYDERABAD VS M/S. BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT CO-OP SOCIETY LTD., HYDERABAD [PAN: AAEFB2283L] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI RAJAT MITRA, DR FOR ASSESSEE : NONE DATE OF HEARING : 26 - 0 3 - 201 5 DATE OF PRONOUNCEMENT : 31 - 03 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS REVENUE'S APPEAL WAS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-VI, HYDERABAD, DATED 26-08-2014 FOR THE ASSESSMENT YEAR (AY) 2008-09. WHEN THE CAS E WAS TAKEN UP FOR HEARING EVEN THOUGH NOTICE WAS SENT TO ASSESSEE, NO NE APPEARED ON BEHALF OF ASSESSEE. ACCORDINGLY, THE CASE WAS TAKE N UP EXPARTE ASSESSEE- RESPONDENT. I.T.A. NO. 1795/HYD/14 M/S. BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT CO-OP. SOCIETY LTD. :- 2 -: 2. BRIEFLY STATED, ASSESSEE-SOCIETY HAS OBTAINED A PAN NO.AAEFB2283L IN THE STATUS OF FIRM, THEREFORE, THE INCOMES WHICH ARE RETURNED BY ASSESSEE WERE CONSIDERED AS 'BUSINESS I NCOMES'. ASSESSEE IS A CIVIL CONTRACTOR DOING CIVIL WORKS OF GHMC. ON T HE GROSS RECEIPTS OF RS.1,95,50,602/- RECEIVED DURING THE YEAR, ASSESSIN G OFFICER (AO) ESTIMATED THE PROFIT AT 8% OF THE GROSS RECEIPTS AN D BROUGHT TO TAX AN AMOUNT OF RS.15,64,050/-. AGGRIEVED, ASSESSEE PREF ERRED AN APPEAL BEFORE THE CIT(A). LD.CIT(A) FOLLOWING THE ITAT'S ORDER IN AY.2006-07 HELD THAT ASSESSEE BEING A CO-OPERATIVE SOCIETY HAV ING MEMBERSHIP OF OVER 70 MEMBERS MAINLY FROM WADDERA COMMUNITY IS EN TITLED FOR DEDUCTION U/S.80P(2)(VI) OF THE INCOME TAX ACT [ACT ]. LD.CIT(A) DIRECTED THAT THE PROFIT SHOULD BE ESTIMATED AT 6% AS AGAINS T 8% ADOPTED IN THE ASSESSMENT ORDER AND THE ASSESSEE-SOCIETY DESERVES TO BE CO-OPERATIVE SOCIETY AND IS ELIGIBLE FOR DEDUCTION U/S.80P. AO WAS DIRECTED ACCORDINGLY. HE HOWEVER, STATED THAT THE DEDUCTION MAY BE ALLOWED SUBJECT TO THE CONDITION THAT ASSESSED INCOME IS NO T LESS THAN THE RETURNED INCOME. WITH THESE OBSERVATIONS, APPEAL I S TREATED PARTLY ALLOWED. ASSESSEE DID NOT PREFER ANY APPEAL WHEREA S, REVENUE IS AGGRIEVED AND RAISED THE FOLLOWING GROUNDS: '1. THE CIT(A) OUGHT TO HAVE FOLLOWED THE DIRECTION S OF THE HON'BLE ITAT IN ALL ITS ENTIRELY AND OUGHT TO HAVE RESTORE D ALL THE ISSUES TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTI ON TO FRAME FRESH ASSESSMENT BY CONSIDERING THE CLAIM OF THE ASSESSE E FOR DEDUCTION U/S.80P OF THE I.T.ACT. 2. THE CIT(A) HAS ERRED IN DECIDING THE ISSUE OF A PPLICABILITY OF SECTION 80P HIMSELF WHILE FOLLOWING THE TRIBUNAL O RDER IN ITA NO.1023/HYD/2011 FOR A.Y.2006-07'. 3. AFTER CONSIDERING THE LD.DR'S CONTENTIONS, WE AG REE WITH REVENUE. AS FAR AS ISSUE OF STATUS OF ASSESSEE IS CONCERNED, THE MATTER WAS RESTORED TO THE FILE OF AO BY ITAT IN AN EARLIER YE AR TO EXAMINE AND I.T.A. NO. 1795/HYD/14 M/S. BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT CO-OP. SOCIETY LTD. :- 3 -: DECIDE WHETHER ASSESSEE IS A CO-OPERATIVE SOCIETY O R NOT AND IS ELIGIBLE FOR DEDUCTION U/S.80P. THE ORDER OF ITAT VIDE ITA NO.1 023/HYD/2011 DT. 17-04-2014 IS AS UNDER: '5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. ADMITTEDLY, THE ASSESSEE HAS BEEN ASSESSED UNDER T HE STATUS OF PARTNERSHIP FIRM. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND HENCE, IT COULD NOT BE CON SIDERED AS PARTNERSHIP FIRM. WE ALSO NOTICE THAT THE ASSESSEE DID NOT CLAIM DEDUCTION UNDER SECTION 80P OF THE ACT IN THE RETU RN OF INCOME FILED BEFORE THE A.O. AND THE SAID CLAIM WAS PUT FORTH B EFORE THE CIT(A) IN THE APPELLATE PROCEEDINGS. THOUGH THE A.O. AND LD. CIT(A) HAVE EXPRESSED THE VIEW THAT THE ASSESSEE IS NOT ENTITL ED FOR DEDUCTION UNDER SECTION 80P OF THE ACT, YET LEARNED A.R. SUB MITTED THAT THE ASSESSEE WOULD BE IN A POSITION TO SUBSTANTIATE IT S CLAIM WITH SUPPORTING MATERIAL AND CASE LAW, IF ONE MORE OPPO RTUNITY IS GIVEN TO THE ASSESSEE. LEARNED A.R. ALSO SUBMITTED THAT THE PRESENT SOCIETY HAS BEEN FORMED BY ILLITERATE LABOURERS. C ONSIDERING THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT, IN THE INTEREST OF NATURAL JUSTICE, THE ASSESSEE MAY BE GIVEN ONE MORE OPPORT UNITY TO SUBSTANTIATE ITS CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE ACT. FURTHER THE IMPUGNED ASSESSMENT HAS BEEN FRAMED U/ S 144 OF THE ACT AND FOR THAT REASON ALSO, THE ASSESSEE IS SEEK ING ONE MORE OPPORTUNITY. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE A.O. WITH A DIRECTION TO FRAME FRESH ASSESSMENT BY CONSIDERING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80P OF THE ACT AND ALSO AN Y OTHER CLAIM THAT MAY BE PUT BEFORE HIM'. 4. SINCE, CIT(A) DID NOT HAVE ANY POWER TO SET ASID E THE ASSESSMENT, HE MIGHT HAVE DIRECTED THE AO TO ALLOW THE DEDUCTIO N U/S.80P HOLDING THAT ASSESSEE IS A CO-OPERATIVE SOCIETY, WHICH IS I N OUR VIEW IS LITTLE PREMATURE AS THE ISSUE OF STATUS IN AY.2006-07 WAS PENDING BEFORE THE AO. CIT(A) SHOULD NOT HAVE PRE-JUDGED THE ISSUE. R EVENUE GROUND IS ALSO ON THE SAME LINES THAT THE ISSUE SHOULD HAVE R ESTORED TO THE FILE OF AO TO FRAME FRESH ASSESSMENT. SINCE THE CO-ORDINAT E BENCH HAS RESTORED THE ISSUE TO THE FILE OF AO IN AY.2006-07, WE ARE O F THE OPINION THAT THIS ISSUE ALSO IS TO BE RESTORED TO THE FILE OF AO FOR FRESH EXAMINATION AND I.T.A. NO. 1795/HYD/14 M/S. BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT CO-OP. SOCIETY LTD. :- 4 -: ADJUDICATION ON SIMILAR LINES AS IN AY.2006-07. TH EREFORE, THE ORDER OF CIT(A) IS MODIFIED AND THE ISSUE IS RESTORED TO THE FILE OF AO. 5. AS SEEN FROM THE ORDERS, ASSESSEE'S STATUS HAS B EEN SHOWN AS FIRM INSTEAD OF CO-OPERATIVE SOCIETY WHILE OBTA INING PAN NUMBER WHICH MAY BE THE CAUSE OF CONFUSION. IN CASE THE STATUS IS DETERMINED AS A SOCIETY, ASSESSEE IS WELL ADVISED TO EITHER APPLY F OR FRESH PAN WITH THE CORRECT STATUS OR MODIFY THE EXISTING PAN TO THE CO RRECT STATUS. 6. WITH THESE OBSERVATIONS, REVENUE'S APPEAL IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 31 ST MARCH, 2015. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUN TANT MEMBER HYDERABAD, DATED 31 ST MARCH, 2015 TNMM COPY TO : 1. THE INCOME TAX OFFICER , WARD - 11(1) , D' BLOCK, 5 TH FLOOR, I.T. TOWERS, A.C.GUARDS, HYDERABAD. 2. M/S. BABAIAH WEAKER SECTION & WADDERA LABOUR CON TRACT CO-OP. SOCIETY LTD., H.NO.23-75, GIRI NAGAR, OPP. I DPL COLONY, QUTHBULLAPUR MANDAL, HYDERABAD. 3. CIT(APPEALS)-VI, HYDERABAD 4. CIT-V, HYDERABAD 5. D.R. ITAT, HYDERABAD