Muzaffarnagar Development Authority , Muzaff V. ACIT, Circle- 1, Muzaffarnagar

ITA 191/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5413 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 08-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Capital asset converted into stock in trade; Revised return
• Section: 143(3); 12A; 12AA; 191; 11

Judgement Text

1 ITA NOS. 191 & 192/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO. 191/DEL/201 8 (A.Y 2012-13) & I.T.A. NO. 192/DEL/201 8 (A.Y 2013-14) (THROUGH VIDEO CON FERENCING) MUZAFFARNAGAR DEVELOPMENT AUTHORITY C/O. DINESH GULATI & CO. 1 ST FLOOR, 554, ANSARI ROAD, MUZAFFARNAGAR UTTAR PRADESH AAALM0437D (APPELLANT) VS ACIT CIRCLE-1 MUZAFFARNAGAR (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 27/12/2016 PASSED BY CIT(A)- MUZAFFARNAGAR FOR ASSESSMENT YEA R 2012-13 2. THE GROUNDS OF APPEAL ARE AS UNDER: I.T.A. NO. 191/DEL/2018 (A.Y 2012-13) 1. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, T HE ID. CIT(A) HAD ERRED IN NOT APPRECIATING THAT ONCE THE REGISTRATION U/S 12AA STOOD RESTORED TO THE ASSESSEE, IT CANNOT BE DENIED EXEMPTION U/S 11/12 O F THE I.T. ACT 1961, EVEN THOUGH SUCH EXEMPTION WAS CLAIMED THROUGH A BELATED LY FILED REVISED RETURN. APPELLANT BY SH. C. S. ANAND, ADV RESPONDENT BY SH. GAURAV PUNDIR, SR. DR DATE OF HEARING 02.09.2021 DATE OF PRONOUNCEMENT 23.09.2021 2 ITA NOS. 191 & 192/DEL/2018 2.THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE CIT(A) HAD ERRED IN NOT APPRECIATING THE ASSESSEE'S SUBMISSIONS THAT THE DE CISION OF HON'BLE SUPREME COURT IN THE CASE OF GOETZ (INDIA) LTD. IS CONFINED TO THE POWERS OF THE ASSESSING OFFICER AND DOES NOT AFFECT THE POWERS OF THE CIT(APPEAL). 3. THAT THE ID. CIT(A) HAD ERRED IN HOLDING THAT IN THE LIGHT OF THE RATIO OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GOETZ (INDIA) LTD., NO SUCH CLAIM (EXEMPTION U/S 11/12 OF THE I.T. ACT 1961) CA N BE ENTERTAINED AT THIS (FIRST APPELLATE) STAGE. 3. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE EXEMPTION U/S 11/12 OF THE I.T. ACT 1961 SHOULD NOT HAD BEEN DISALLOWED TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, PARTICULARLY WHEN THE REG ISTRATION GRANTED TO THE ASSESSEE U/S 12AA ON 30.04.2008 (WHICH WAS CANCELLE D ON 04.06.2008) STOOD ALREADY RESTORED TO THE ASSESSEE VIDE ORDER D ATED 12.01.2015 PASSED BY THE HON'BLE ITAT, NEW DELHI IN ITA NO. 4231/DEL/ 2013. 5. THAT THE AUTHORITIES BELOW OUGHT TO HAD APPREC IATED THAT AS PER ARTICLE 265 OF THE CONSTITUTION OF INDIA, NO TAX CAN BE LEV IED EXCEPT WHEN AUTHORIZED BY LAW, AND ALSO THAT ONLY LEGITIMATE TAX CAN BE RE COVERED AND EVEN A CONCESSION BY A TAX-PAYER DOES NOT GIVE AUTHORITY T O THE TAX COLLECTOR TO RECOVER MORE THAN WHAT IS DUE FROM HIM UNDER THE LAW. 6. THATTHE AUTHORITIES BELOW OUGHT TO HAD OUGHT TO HAD TAKEN INTO CONSIDERATION THE HON'BLE CBDT CIRCULAR NO. 14(XL-3 5) DATED 11-4-1955 , THROUGH WHICH IT WAS EMPHASIZED THAT THE IT DEPARTM ENT SHOULD NOT TAKE ADVANTAGE OF AN ASSESSEE'S IGNORANCE, TO COLLECT MO RE TAX OUT OF HIM THAN IS LEGITIMATELY DUE FROM HIM. I.T.A. NO. 192/DEL/2018 (A.Y 2013-14) 1. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE ID. CIT(A) HAD ERRED IN NOT APPRECIATING THAT ONCE THE REGISTRATION U/S 12A A STOOD RESTORED TO THE ASSESSEE, IT CANNOT BE DENIED EXEMPTION U/S 11/12 O F THE I.T. ACT 1961, EVEN THOUGH SUCH EXEMPTION WAS CLAIMED THROUGH A BELATED LY FILED REVISED RETURN. 2. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE CIT(A) HAD ERRED IN NOT APPRECIATING THE ASSESSEE'S SUBMISSIONS THAT THE DECISION OF HON'BLE 3 ITA NOS. 191 & 192/DEL/2018 SUPREME COURT IN THE CASE OF GOETZ (INDIA) LTD. IS CONFINED TO THE POWERS OF THE ASSESSING OFFICER AND DOES NOT AFFECT THE POWER S OF THE CIT(APPEAL). 3. THATTHE ID. CIT(A) HAD ERRED IN HOLDING THAT IN THE LIGHT OF THE RATIO OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GOETZ (INDIA) LTD., NO SUCH CLAIM (EXEMPTION U/S 11/12 OF THE I.T. ACT 196 1) CAN BE ENTERTAINED AT THIS (FIRST APPELLATE) STAGE. 4. THATON THE FACTS OF THE CASE AND UNDER THE L AW, THE EXEMPTION U/S 11/12 OF THE I.T. ACT 1961 SHOULD NOT HAD BEEN DISA LLOWED TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, PARTICULARLY WHEN THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12AA ON 30.04.2008 (WHICH WAS CANC ELLED ON 04.06.2008) STOOD ALREADY RESTORED TO THE ASSESSEE VIDE ORDER D ATED 12.01.2015 PASSED BY THE HON'BLE ITAT, NEW DELHI IN ITA NO. 4231/DEL/ 2013. 5. THATTHE AUTHORITIES BELOW OUGHT TO HAD APPR ECIATED THAT AS PER ARTICLE 265 OF THE CONSTITUTION OF INDIA, NO TAX CAN BE LEV IED EXCEPT WHEN AUTHORIZED BY LAW, AND ALSO THAT ONLY LEGITIMATE TAX CAN BE RE COVERED AND EVEN A CONCESSION BY A TAX-PAYER DOES NOT GIVE AUTHORITY T O THE TAX COLLECTOR TO RECOVER MORE THAN WHAT IS DUE FROM HIM UNDER THE LA W. 6. THAT THE AUTHORITIES BELOW OUGHT TO HAD OU GHT TO HAD TAKEN INTO CONSIDERATION THE HON'BLE CBDT CIRCULAR NO. 14(XL-3 5) DATED 11-4-1955 , THROUGH WHICH IT WAS EMPHASIZED THAT THE IT DEPARTM ENT SHOULD NOT TAKE ADVANTAGE OF AN ASSESSEE'S IGNORANCE, TO COLLECT MO RE TAX OUT OF HIM THAN IS LEGITIMATELY DUE FROM HIM. 3. WE ARE TAKING UP THE FACTS OF I.T.A. NO. 191/DEL /2018 (A.Y 2012-13) AS BOTH THE APPEAL ARE IDENTICAL. THE ASSESSEE, MUZAFF ARNAGAR DEVELOPMENT AUTHORITY (MDA) WAS CREATED BY AN ENACTMENT OF UTTA R PRADESH URBAN PLANNING AND DEVELOPMENT ACT, 1973 VIDE NOTIFICATION (G.O.) NO 4521/9 AWAS-5-96-1 GATHAN-96, DATED 21-11-1996 FOR THE OBJECTS OF PLAN NING, DEVELOPMENT AND IMPROVEMENT OF CITIES, TOWNS AND VILLAGES FOR GENER AL PUBLIC UTILITY. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2012-13 4 ITA NOS. 191 & 192/DEL/2018 ELECTRONICALLY ON 30.09.2012 VIDE E-FILING ACKNOWL EDGMENT NO. 506943631300912 , DECLARING THE TOTAL INCOME OF RS. 3,13,89,620.00. THE ASSESSMENT FOR THE ABOVE STATED ASSESSMENT YEAR WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT,1961 VIDE ORDER DATED 20.03.2015 AT A TOTAL INCOME OF RS. 3,19,54,483.00 AS DETAILED BELOW RETURNED INCOME RS.31389620 ADD (AS DISCUSSED ABOVE) DISALLOWANCE U/S 40(A)(A) RS. 564863 ASSESSED INCOME RS.3,19,54,483/ - DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE HAS REVISED ITS RETURN ' TO CLAIM BENEFIT/EXEMPTION UNDER SECTION 1 1 OF THE INCOME TAX ACT, 1961 BECAUSE THE HONBLE ITAT-DELHI, VIDE ITS ORDER DATED 12.01.2015 IN ITA NO . 4231/D EL /2013 HAS RESTORED THE REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT. BUT, THE LEARNED ASS ESSING OFFICER DID NOT CONSIDER THE CLAIM OF THE ASSESSEE AND THE ASSESSME NT WAS COMPLETED BY DENYING THE CLAIMS/BENEFITS OF SECTION 11 OF THE IN COME TAX ACT, 1961. ON ASSESSMENT, VIDE ORDER DATED 20.03.2015, THE TAX DE MAND WAS CREATED FOR RS. 3,64,500.00/-. 4. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESS EE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) PARTLY ALLOWED THE APPEAL OF T HE ASSESSEE. 5. THE LD. AR SUBMITTED THAT AS REGARDS GROUND NO. 1 TO 4, THE 12 REGISTRATION WAS RESTORED BY THE TRIBUNAL VIDE ORDE R DATED 12/1/2015. THEREFORE, THE ASSESSING OFFICER HAS WRONGLY DENIED THE CLAIM OF THE EXEMPTION U/S 11 OF THE ACT. THE LD. AR RELIED UPON THE DECI SION OF THE HON'BLE SUPREME COURT IN CASE OF GOETZ INDIA LTD. AND SUBMITTED THA T THE CIT(A) SHOULD HAVE ENTERTAIN THE CLAIM OF THE ASSESSEE FOR EXEMPTION U /S 11 AT THE TIME OF APPELLATE PROCEEDINGS WHICH WAS TOTALLY DENIED BY T HE CIT(A). 5 ITA NOS. 191 & 192/DEL/2018 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). THE LD. DR ALSO RELIED UPON THE DECISION OF DALMIA POWER (S.C). THE LD. DR FURTHER SUBMITTED THAT THE REVISED RETURN FILED BY THE ASSESSEE WAS AFTER THE EXPIRY OF THE TIME LIMIT AVAILABLE UNDER THE STATUT E AND THE DECISION OF THE HON'BLE SUPREME COURT IN GOETZ INDIA WILL NOT BE AP PLICABLE IN THE PRESENT CASE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE REGISTRATI ON U/S 12AA WAS GRANTED TO THE ASSESSEE VIDE TRIBUNALS ORDER AND SAME WAS POINTED OUT BY THE ASSESSEE BEFORE THE CIT(A) WHICH WAS NOT AT ALL CONSIDERED. SINCE, THE REGISTRATION WAS GRANTED W.E.F. 30/04/2008, THE CLAIM OF THE ASSESSEE FOR AS SESSMENT YEAR 2012-13 & 2013-14 ARE VALID CLAIM FOR EXEMPTION U/S 11. THER EFORE, THE APPEAL OF THE ASSESSEE BEING ITA NO. 191/DEL/2018 (A.Y 2012-13) I S ALLOWED. BOTH THE APPEALS ARE IDENTICAL IN NATURE AND NO DISTINGUISHI NG FACTS WERE POINTED OUT BY BOTH THE PARTIES, HENCE, ITA NO. 192/DEL/2018 (A.Y 2013-14) ALLOWED. 9. IN RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF SEPTEMBER, 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 23/09/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NOS. 191 & 192/DEL/2018