DCIT, Trichy V. M/s. The Trichirappalli District Bus Operators Association, Trichy

ITA 1799/CHNY/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 7706 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-12-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 28-08-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: TAPAS KUMAR DUTTA
• Assessee Lawyers: PHILIP GEORGE ITA
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH C BEFORE DR.O.K.NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER I.T.A. NOS.1798 AND 1799/MDS/2008 ASSESSMENT YEARS : 2000-01 & 2004-05 THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II, TRICHY. VS. M/S.THE TRICHIRAPPALLI DISTRICT BUS OPERATORS ASSOCIATION, 5G,LAWSONS ROAD, TRICHY. PAN - AAATT 9428 K (APPELLANT) (RESPONDENT) I.T.A. NOS.1802 AND 1803/MDS/2008 ASSESSMENT YEARS : 2000-01 & 2004-05 M/S.THE TRICHIRAPPALLI DISTRICT BUS OPERATORS ASSOCIATION, TRICHY. VS. THE DEPUTY COMMISSIONER OF INCOME TAX , TRICHY. (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI TAPAS KUMAR DUTTA ASSESSEE BY : SHRI PHILIP GEORGE ITA 1798,1799,1802 & 1803/08 :- 2 -: O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THESE ARE FOUR APPEALS FILED BY THE REVENUE AND TH E ASSESSEE, FOR THE ASSESSMENT YEARS 2000-01 AND 2004 -05. THESE SETS OF CROSS APPEALS ARE DIRECTED AGAINST TH E ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AT TIRUCHIRAPA LLI DATED 19.6.2008. THEY ARISE OUT OF THE ASSESSMENTS COMPL ETED UNDER SEC.143(3) READ WITH SEC.147 OF THE I.T. ACT, 1961. 2. ONE OF THE PREDOMINANT ISSUES TO BE CONSIDERED I N THESE APPEALS IS THE CORRECT STATUS OF THE ASSESSEE IN LA W. THE ASSESSEE-ASSOCIATION HAS RETURNED THE INCOME IN THE STATUS OF A MUTUAL ASSOCIATION. AFTER EXAMINING THE FACTS OF THE CASE, THE ASSESSING OFFICER CAME TO A CONCLUSION THAT THE BEN EFITS OF THE ACTIVITIES OF THE ASSESSEE-ASSOCIATION HAS GONE BEY OND THE CIRCLE OF MUTUALITY AND, THEREFORE, THE ASSESSEE COULD NOT BE GIVEN THE STATUS OF A MUTUAL ASSOCIATION. ACCORDINGLY, THE C LAIM OF THE ASSESSEE OF NON TAXABILITY OF THE SURPLUS HAS BEEN REJECTED. THE ASSESSING AUTHORITY, ON THE OTHER HAND, TREATED THE ASSESSEE AS ITA 1798,1799,1802 & 1803/08 :- 3 -: AN ASSOCIATION OF PERSONS AND COMPLETED THE ASSESSM ENTS. IN FIRST APPEALS, THE COMMISSIONER OF INCOME-TAX (APPE ALS) AGREED WITH THE VIEW OF THE ASSESSING OFFICER THAT THERE I S NO MUTUALITY IN ASSESSEES CASE AND IT COULD NOT BE ASSESSED IN THE STATUS OF A MUTUAL CONCERN. BUT HE HELD THAT THE ASSESSEE COUL D HAVE CLAIMED THE STATUS OF A CHARITABLE SOCIETY BUT FOR THE REGISTRATION UNDER SEC.12A, HAVING NOT OBTAINED. 3. IN THE ABOVE BACKGROUND, THE CONTENTION OF THE ASS ESSEE IS THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS E RRED IN TREATING IT AS A CHARITABLE SOCIETY AND NOT AS A MU TUAL CONCERN. THE CONTENTION OF THE REVENUE IS THAT THE COMMISSIO NER OF INCOME-TAX (APPEALS) HAS ERRED IN HOLDING THAT THE ASSESSEE IS A CHARITABLE ASSOCIATION AND NOT AS AN ASSOCIATION OF PERSONS. ON THE FINDING OF THE COMMISSIONER OF INCOME-TAX (APPE ALS) THAT THE ASSESSEE IS A CHARITABLE ASSOCIATION, BOTH THE ASSE SSEE AS WELL AS THE REVENUE ARE IN APPEALS. THEREFORE, THE REAL DISPUTE IS BETWEEN THE STATUS OF A MUTUAL CONCERN OR ASSOCIATI ON OF PERSONS. THE ASSESSEE, THE ASSESSING AUTHORITY AND THE COMMI SSIONER OF INCOME-TAX (APPEALS) HAVE GONE ON DIFFERENT TANGET, AS A RESULT OF WHICH THE ORDERS HAVE BECOME POINTLESS. ITA 1798,1799,1802 & 1803/08 :- 4 -: 4. WHILE EXAMINING THE ISSUE OF CORRECT STATUS OF THE ASSESSEE, WE FIND THAT THE DISCUSSIONS AVAILABLE IN THE ORDER S OF THE LOWER AUTHORITIES ARE NOT SUFFICIENT TO COME TO A REASONA BLE CONCLUSION. WE ARE AFRAID THAT THE FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT THE ASSESSEE IS A CHARITABLE INSTITU TION IS SOMEWHAT FARFETCHED. HE HAS NOT CRITICALLY EXAMINED THE OBJ ECTS OF THE ASSESSEE-ASSOCIATION AND CHARITABLE ACTIVITIES CARR IED ON BY THE ASSESSEE. WITHOUT SUCH BASIC FACTS ON RECORD, IT I S QUITE PREMATURE TO CONCLUDE THAT THE ASSESSEE IS A CHARIT ABLE SOCIETY. TAXING OF THE INCOME FOR WANT OF REGISTRATION UNDER SEC.12A IS A DIFFERENT ISSUE. 5. AT THE SAME TIME, THE ARGUMENT OF THE ASSESSEE THAT IT IS A MUTUAL CONCERN IS ALSO NOT EASILY DIGESTIBLE. 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THESE CASES HAVE TO BE RECONSI DERED BY THE ASSESSING AUTHORITY IN A DETAILED MANNER, DE NOVO, IN ACCORDANCE WITH LAW. DETERMINATION OF THE STATUS IS A CRUCIAL ISSUE THAT HAS TO BE EXAMINED SYSTEMATICALLY AND CAREFULLY. WE REMIT BACK THESE ITA 1798,1799,1802 & 1803/08 :- 5 -: FILES TO THE ASSESSING OFFICER TO CALL FOR DETAILS FROM THE ASSESSEE AND TO DECIDE THE ISSUE OF STATUS AFTER GIVING AN O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. ONCE THE QUESTION OF STATUS IS DETERMINED BY THE ASSESSING OFFICER, HE MAY EXAMINE OTHER ISSUES RELATING TO THE COMPUTATION OF INCOME. 7. IN RESULT, THESE CASES ARE REMITTED BACK TO THE ASS ESSING OFFICER. THE APPEALS FILED BY THE REVENUE AND THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 15 TH OF DECEMBER, 2010. SD/- SD/- (HARI OM MARATHA) JUDICIAL MEMBER ( DR.O.K.NARAYANAN) VICE-PRESIDENT CHENNAI : 15 TH DEC., 2010 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR