DCIT, Circle-4(2), Kolkata, Kolkata V. M/s the Calcutta Stock Exchange Association Limited, Kolkata

ITA 1874/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6275 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 1994-1995
• Appeal Filed On: 26-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: D S DAMLE
• Keywords: Capital expenditure
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNA L C BENCH : KOLKATA [BEFORE HONBLE SHRI A.T.VARKEY, JM & SHRI M.BALA GANESH, AM] I.T.A NO. 1874 & 1875 /KOL/2016 ASSESSMENT YEARS : 1994- 95 & 1997-98 D.C.I.T., CIRCLE-4(2), -VS- THE CALCUTT A STOCK EXCHANGE ASSOCIATION KOLKATA LTD., KOLKATA [PAN: AABCT 8138 N] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SAURABH KUMAR , ADDL. CIT, SR.DR FOR THE RESPONDENT : SHRI D.S.DAMLE, FCA DATE OF HEARING : 10.05.2018. DATE OF PRONOUNCEMENT : 15.05.2018. ORDER PER M.BALAGANESH, AM THESE APPEALS OF THE REVENUE ARISE OUT OF THE ORDE RS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -25, KOLKATA [ IN SHORT THE LD CITA] IN APPEAL NO. 91 AND 92/2014-15 DATED 19.12.2011 AGAINST THE ORDERS PASSED BY THE J.C.I.T- [EXEMPTION](OSD), KOLKATA [ IN SHORT THE LD AO] UND ER SECTION 254/143(3)/11 OF THE ACT DATED 19.12.2011 FOR THE ASST YEARS 1994-95 AN D 19997-98. 2. THE PRELIMINARY ISSUE TO BE DECIDED IN THESE APP EALS IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ANNULLING THE ASSESSMENTS AS TIME BARRED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS CASE IS THAT THE ASSESSE E IS REGISTERED U/S 12A OF THE ACT AND IN THE RELEVANT ASSESSMENT YEARS, WAS ENTITLED TO CLAIM EXEMPTION U/S 11 OF THE ACT. IN ACCORDANCE WITH ARTICLE 7(3) OF ITS ARTICLES OF ASSOCIATION, A PERSON WHEN ELECTED BY THE ASSESSEE AS ELIGIBLE FOR ADMISSION AS A MEMBER WAS REQUIRED TO PAY TO THE ASSESSEE A 2 ITA NO.1874 & 1875/KOL/2016 THE CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. A.YR.1994-95 & 1997-98 2 FEE/LEVY TOWARDS DEVELOPMENT ACTIVITIES AS MAY BE P RESCRIBED BY THE ASSESSEE. PAYMENT OF THE SAID DEVELOPMENT FEE WAS A CONDITION PRECEDE NT TO BECOME A MEMBER OF THE ASSESSEE. THE SAID ARTICLE 7(3) WAS INSERTED AND GI VEN EFFECT BY THE ASSESSEE WITH THE APPROVAL OF THE CENTRAL GOVERNMENT FOR RAISING SUBS TANTIAL RESOURCES FOR FINANCING CAPITAL EXPENDITURE HAVING REGARD TO THE CENTRAL G OVERNMENTS DIRECTIVE BASED ON REPORT OF HIGH POWERED COMMITTEE. THE DEVELOPMENT F EE RECEIVED IN TERMS OF ARTICLE 7(3) HAD NOTHING TO DO WITH ANY SERVICE RENDERED BY THE ASSESSEE TO THE MEMBERS. CANDIDATES FOR MEMBERSHIP, BEING AWARE THAT THE DEV ELOPMENT FEE WAS BEING COLLECTED UNDER AND FOR THE PURPOSE OF ARTICLE 7(3), PAID IT AS A CORPUS CONTRIBUTION. THE ISSUE REGARDING TREATMENT OF DEVELOPMENT FEE WA S FIRST CONSIDERED BY THE AO IN THE ORDER PASSED UNDER SECTION 143(3). THE AO TR EATED THE DEVELOPMENT FEE OF RS.1,60,00,000/- AS ASSESSEES INCOME UNDER SECTION 28(III). THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A)-XIII. VIDE ORDER IN APPEAL NO.524/XIII/DDIT (ER)/SR/97-98 DATED 14.6.19 98, THE LEARNED CIT(A) DELETED THE ADDITION MADE BY THE AO FOLLOWING HIS ORDER FOR THE ASSESSMENT YEARS 1991-92 AND 1992-93. THIS TRIBUNAL FOR A.YRS. 1993-94 AND 1997-98 IN ITA NO.1352/KOL/1999 AND ITA NO.876/KOL/2002 AND FOR A.YRS. 1994-95 AND 1995 -96 IN ITA NOS. 1810- 1811/CAL/1998 VIDE CONSOLIDATED ORDER DATED 31.07.2 003 HAD RESTORED THE MATTER FOR ALL THESE YEARS TO THE FILE OF THE LD. AO FOR FRESH ADJ UDICATION IN ACCORDANCE WITH THE TRIBUNALS ORDER PASSED FOR A.Y.1991-92 AND 1992-93 . THE LD. AO PASSED ORDER U/S 254/143(3) OF THE ACT ON 19.12.2011 PURSUANT TO THI S TRIBUNALS ORDER FOR A.YRS.1994-95 AND 1997-98 BY ADDING THE RECEIPT OF DEVELOPMENT FE ES AS REVENUE RECEIPT U/S 28(III) OF THE ACT. 4. THE LD. CIT(A) OBSERVED THAT THE STIPULATED TIME LIMIT FOR COMPLETION OF ASSESSMENT IS SPECIFIED U/S 153 OF THE ACT. HE OBSE RVED THAT SINCE THE TRIBUNAL HAD DIRECTED THE LD. AO TO FRAME THE ASSESSMENT AFRESH IN ACCORDANCE WITH LAW, RELEVANT 3 ITA NO.1874 & 1875/KOL/2016 THE CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. A.YR.1994-95 & 1997-98 3 PROVISION UNDER WHICH THE LD. AO IS SUPPOSED TO PAS S THE ORDER IS SECTION 153(2A) OF THE ACT WHICH STIPULATES SPECIFIC TIME LIMIT FOR COMPLE TION OF ASSESSMENT. THE LD. CIT(A) OBSERVED THAT THE ITAT HAD PASSED ITS CONSOLIDATED ORDER ON 31.07.2003. THE SET ASIDE ORDER WAS PASSED BY THE LD. AO (I.E. THE IMPUGNED A SSESSMENT ORDERS) ON 19.12.2011 I.E. AFTER 8 YEARS OF THE ITAT ORDER. HENCE IRRESPECTIVE OF THE DATE OF RECEIPT OF THE TRIBUNALS ORDER BY THE CONCERNED ADMINISTRATIVE CO MMISSIONER/CHIEF COMMISSIONER, THE APPELLATE ORDER COULD HAVE CERTAINLY BEEN RECEI VED BY THE DEPARTMENT DURING THE FINANCIAL YEAR 2003-04 AND ACCORDINGLY ASSESSMENT F RAMED ON 19.12.2011 AFTER A GAP OF 8 YEARS ARE CERTAINLY BARRED BY TIME AND NOT IN COM PLIANCE WITH THE TIME LIMIT STIPULATED U/S 153(2A) OF THE ACT. WITH THIS OBSERVATION THE L D. CIT(A) HELD THAT THE IMPUGNED ASSESSMENT ORDERS ARE BARRED BY TIME U/S 153(2A) OF THE ACT AND ACCORDINGLY ANNULLED THE ASSESSMENT. AGGRIEVED THE REVENUE IS IN APPEAL FOR THESE TWO YE ARS BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS VERY CLEAR THAT THE ITAT HAD REMANDED THE ISSUE TO THE FILE OF THE LD. AO FOR FRESH ORDER S TO BE PASSED THEREON AFTER EXAMINING THE ENTIRE FACTS AVAILABLE ON RECORD. HENCE THE LD. AO IS BOUND TO PASS THE SET ASIDE ASSESSMENT ORDERS IN ACCORDANCE WITH THE TIME LIMIT STIPULATED U/S 153(2A) OF THE ACT. WE FIND THAT THE REVENUE HAD RAISED THE PRELIMINARY GROUND BEFORE US THAT THE ASSESSMENT IS TO BE FRAMED IN TERMS OF SECTION 153( 3)(II) OF THE ACT WHICH DOES NOT STIPULATE TIME LIMIT FOR FRAMING SET ASIDE THE ASSE SSMENTS. BUT IN OUR CONSIDERED OPINION, THE PRESENT CASE SQUARELY FALL U/S 153(2A) OF THE A CT AND NOT 153(3)(II) OF THE ACT. HENCE THE SET ASIDE ASSESSMENTS FRAMED BY THE LD. A O ON 19.12.2011 AFTER A HUGE GAP OF 8 YEARS WAS SQUARELY BARRED BY LIMITATION AND NOT I N ACCORDANCE WITH TIME LIMIT STIPULATED IN CONNECTION WITH SECTION 153(2A) OF TH E ACT. HENCE WE HOLD THAT THE LD. CIT(A) HAD RIGHTLY ANNULLED THE ASSESSMENTS AS BARR ED BY LIMITATION. WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE IN THE SAID ORDER. SINCE THE ASSESSMENTS ARE ANNULLED , THE 4 ITA NO.1874 & 1875/KOL/2016 THE CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. A.YR.1994-95 & 1997-98 4 ISSUE OF TAXABILITY OF DEVELOPMENT RECEIPTS U/S 28( III) OF THE ACT IS LEFT OPEN FOR ALL THESE YEARS. ACCORDINGLY THE GROUNDS RAISED BY THE REVENU E FOR BOTH THE YEARS ARE DISMISSED. 6. IN THE RESULT THE APPEALS OF THE REVENUE ARE DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 15.05.2018. SD/- SD/- [A.T.VARKEY] [M.BALAGANESH] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15.05.2018. RG, SR. PS COPY OF THE ORDER FORWARDED TO: 1. M/S CALCUTTA STOCK EXCHANGE ASSOCIATION LTD., 7, LYONS RANGE, KOLKATA-700001. 2.D.C.I.T., CIRCLE-4 (42), 4 TH FLOOR, ROOM NO.11B, AAYAKAR BHAWAN, P-7, CHOWRINGH EE SQUARE, KOLKATA-700069. 3..C.I.T.(A)- 25, KOLKATA 4. C.I.T.-2, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S 5 ITA NO.1874 & 1875/KOL/2016 THE CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. A.YR.1994-95 & 1997-98 5