The Mumbai Metropolitan Regional Iron & Steel Market Committee, Raigad V. Joint Commissioner of Income-tax,

ITA 2124/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9169 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 26-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D B SHAH; D B AGNIHOTRI
• Keywords: Charitable institution; Maximum Marginal Rate; Additional evidence; Benefit of exemption; Condonation of delay
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2124 /P U N/201 4 / ASSESSMENT YEAR : 20 1 0 - 11 THE MUMBAI METROPOLITAN REGIONAL IRON & STEEL MARKET COMMITTEE, CENTRAL FACILITY BUILDING, STEEL M ARKET YARD, K ALAMBOLI, DISTT. - RAIGAD, PAN : AAALT0433E ....... / APPELLANT / V/S. JOINT COMMISSIONER OF INCOME TAX, PANVEL CIRCLE, PANVEL, DISTT. - RAIGAD / RESPONDENT ASSESSEE BY : S/SHRI D.B. SHAH & D.B. AGNIHOTRI REVENUE BY : SHRI ACHAL SHARMA / DATE OF HEARING : 1 3 - 07 - 2017 / DATE OF PRONOUNCEMENT : 26 - 0 7 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - I, THANE DATED 1 1 - 07 - 2014 FOR THE ASSESSMENT YEAR 2010 - 11. 2 ITA NO . 2124/PUN/2014, A.Y. 2010 - 11 2. THE ASSESSEE HAS FILED THIS APPEAL WITH THE DELAY OF 15 DAYS. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY IN FILING OF THE APPEAL SUPPORTED BY AN AFFIDAVIT. AFTER PERUSAL OF THE SAME, WE ARE SATISFIED WITH THE DELAY IN FILING OF THE AP PEAL IS NOT INTENTIONAL OR DELIBERATE BUT HAS OCCURRED FOR THE PLAUSIBLE REASONS MENTIONED IN THE APPLICATION. ACCORDINGLY, THE DELAY IN FILING OF THE APPEAL IS CONDONED AND THE APPEAL IS ADMITTED TO BE HEARD AND DISPOSED OF ON MERITS. 3. THE ASSESSEE IN APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ASSESSMENT ORDER DENYING EXEMPTION U/S. 11 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 4. THE BRIEF FACTS OF THE CASE AS EMANATING FROM R ECORDS ARE: THE ASSESSEE IS A STATUTORY BODY ESTABLISHED UNDER THE MUMBAI METROPOLITAN REGION SPECIFIED COMMODITIES MARKETS (REGULATION OF LOCATION) ACT, 1983 (HEREINAFTER REFERRED TO AS MMRSCM ACT). THE ASSESSEE WAS GRANTED REGISTRATION U/S. 12A OF THE ACT W.E.F. 01 - 04 - 2003. THE COMMISSIONER OF INCOME TAX, THANE VIDE ORDER DATED 30 - 03 - 2012 CANCELLED THE REGISTRATION U/S. 12AA(3) OF THE ACT W.E.F. 01 - 04 - 2009. AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX, THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL IN ITA NO. 661/PN/2013. THE TRIBUNAL VIDE ORDER DATED 28 - 04 - 2014 SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX AND RESTORED THE REGISTRATION U/S. 12AA GRANTED TO THE ASSESSEE. DURING THE INTERVENING PERIOD WHEN THE REGISTRATION U/S. 12A WAS CANCELLE D BY THE COMMISSIONER OF INCOME TAX AND SUBSEQUENTLY, RESTORED BY THE TRIBUNAL , T HE ASSESSING OFFICER VIDE ORDER DATED 26 - 03 - 2013 COMPLETED THE ASSESSMENT FOR ASSESSMENT YEAR 2010 - 11 DISALLOWING THE CLAIM OF EXEMPTION U/S. 11 TO THE ASSESSEE. AGAINST THE SAID ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL 3 ITA NO . 2124/PUN/2014, A.Y. 2010 - 11 BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER REJECTED THE CLAIM OF THE ASSESSEE AND UPHELD THE FINDINGS OF ASSESSING OFFICER. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL AGAINST THE DENIAL OF EXEMPTION U/S. 11 OF THE ACT. 5. S/SHRI D.B. SHAH & D.B. AGNIHOTRI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESS EE IS A STATUTORY BODY AND IS ENGAGED IN PROVIDING SERVICES VIZ. CONSTRUCTION OF ROADS IN MARKET YARD , MAINTENANCE AND MANAGEMENT OF WHOLESALE MARKETS ESTABLISHED FOR THE DEALERS IN IRON AND STEEL COMMODITY WITHIN MUMBAI METROPOLITAN REGION AND TO PROVIDE FOR THE MATTERS CONNECTED OR INCIDENTAL THERETO. THE ASSESSEE IS NOT A PROFIT MAKING BODY BUT PROVIDES SERVICES TO THE MEMBERS OF IRON AND STEEL MARKET. THE ASSESSEE WAS GRANTED THE BENEFIT OF REGISTRATION U/S. 12A OF THE ACT VIDE ORDER DATED 23 - 04 - 2008 W.E.F. 01 - 04 - 2003. THE COMMISSIONER OF INCOME TAX, THANE VIDE ORDER DATED 30 - 03 - 2012 CANCELLED THE REGISTRATION WHICH WAS RESTORED BY THE TRIBUNAL VIDE ORDER DATED 28 - 04 - 2014. DURING THE PERIOD WHEN THE REGISTRATION WAS CANCELLED UNDER THE PROVISIONS OF SECTION 12AA(3) BY THE COMMISSIONER OF INCOME TAX , THE ASSESSMENT FOR ASSESSMENT YEAR 2010 - 11 WAS COMPLETED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER REJECTED ASSESSEES CLAIM OF EXEMPTION U/S. 11 PRIMARILY ON THE GROUND THAT THE BENEFIT OF REGISTR ATION GRANTED TO THE ASSESSEE HAS SINCE BEEN WITHDRAWN , THE BENEFIT OF SECTION 11 CANNOT BE ALLOWED TO THE ASSESSEE. AFTER PASSING OF THE ASSESSMENT ORDER ON 26 - 03 - 2013 , THE TRIBUNAL RESTORED THE REGISTRATION ON 28 - 04 - 2014. THE ORDER OF TRIBUNAL WAS PLA CED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IN FIRST APPELLATE PROCEEDINGS. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) REFUSED TO FOLLOW THE ORDER OF TRIBUNAL AND DISMISSED THE APPEAL OF THE ASSESSEE. 4 ITA NO . 2124/PUN/2014, A.Y. 2010 - 11 THE LD. AR POINTED THAT THE BENEFIT OF SECTION 11 WAS GRANTED TO THE ASSESSEE IN SCRUTINY ASSESSMENT PROCEEDINGS IN ASSESSMENT YEARS 2013 - 14 AND 2014 - 15. THE LD. AR FILED AN APPLICATION FOR PLACING ON RECORD ADDITIONAL EVIDENCES WHICH INCLUDE ASSESSMENT ORDERS FOR ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 AND SOME OTHER DOCUMENTS. THE LD. AR POINTED THAT THE ASSESSMENT ORDERS FOR ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 WERE PASSED SUBSEQUENT TO THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND THUS, WERE NOT AVAILABLE DURING THE FIRST APPELLATE PR OCEEDINGS. 6. ON THE OTHER HAND SHRI ACHAL SHARMA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ASSESSMENT ORDER AND REJECTING ASSESSEES CLAIM OF EXEMPTION U/S. 11 OF THE ACT. 7. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . THE ASSESSEE HAS FILED ADDITIONAL EVIDENCES BEFORE US. THE CASE OF ASSESSEE IS THAT THE AUTHORITIES BELOW HAVE DENIED THE BENEFIT OF EXEMPTION U/S. 11 OF THE ACT IN ASSESSMENT YEAR 2010 - 11 PRIMARILY FOR THE REASON THAT THE REGISTRATION U/S. 12A GRANTED TO THE ASSESSEE WAS CANCELLED BY THE COMMISSIONER OF INCOME TA X. THE TRIBUNAL IN ITA NO. 661/PN/2013 HAS SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORED REGISTRATION U/S. 12AA TO THE ASSESSEE. WE OBSERVE THAT THE ORDER OF TRIBUNAL WAS PLACED BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER REPRODUCING THE SAME REFUSED TO GRANT THE BENEFIT OF EXEMPTION U/S. 11 TO THE ASSESSEE ON THE GROUND THAT AFTER AMENDMENT TO SECTION 2(15) OF THE ACT, THE ACTIVITIES OF THE ASSESSEE D OES NOT FALL WITHIN THE MEANING OF EXPRESSION CHARITABLE 5 ITA NO . 2124/PUN/2014, A.Y. 2010 - 11 PURPOSE. HENCE, DENIED THE BENEFIT OF SECTION 11 OF THE ACT TO THE ASSESSEE. NOW, BEFORE US, THE ASSESSEE HAS FILED ASSESSMENT ORDER FOR ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 AS ADDITIONAL EVIDENC ES WHEREIN THE BENEFIT OF EXEMPTION U/S. 11 HAS BEEN GRANTED TO THE ASSESSEE. 8. IN VIEW OF THE FACT THAT REGISTRATION U/S. 12AA OF THE ACT HAS BEEN RESTORED TO THE ASSESSEE AND IN THE SUBSEQUENT ASSESSMENT YEARS THE ASSESSING OFFICER HAS ALLEGEDLY GRAN TED THE BENEFIT OF EXEMPTION U/S. 11 OF THE ACT , W E DEEM IT APPROPRIATE TO REMIT THIS FILE BACK TO THE ASSESSING OFFICER TO FRAME THE ASSESSMENT AFRESH AFTER TAKING INTO CONSIDERATION THE ORDER OF TRIBUNAL IN ITA NO. 661/PN/2013 AND THE ASSESSMENT ORDERS I N EARLIER AND THE SUBSEQUENT ASSESSMENT YEARS. THE ASSESSING OFFICER IN DE - NOVO PROCEEDINGS SHALL ALSO EXAMINE WHETHER THE ASSESSEE HAS FULFILL ED ALL THE CONDITIONS FOR CLAIMING THE BENEFIT OF EXEMPTION U/S. 11 IN THE ASSESSMENT YEAR UNDER APPEAL. THE AS SESSING OFFICER SHALL GRANT OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH LAW . 9. AS FAR AS REASONS FOR DISALLOWING THE BENEFIT OF SECTION 11 BY COMMISSIONER OF INCOME TAX (APPEALS) ARE CONCERNED, WE OBSERVE FROM THE PERUSAL OF ASSESSMENT OR DER THAT THE ONLY REASON FOR DISALLOWING THE CLAIM OF EXEMPTION U/S. 11 BY THE ASSESSING OFFICER IS WITHDRAWAL OF REGISTRATION U/S. 12A OF THE ACT. THERE IS NO FINDING BY THE ASSESSING OFFICER IN ASSESSMENT ORDER THAT THE ACTIVITIES OF ASSESSEE DOES NOT F ALL WITHIN THE AMBIT OF CHARITABLE PURPOSE AFTER AMENDMENT TO THE PROVISIONS OF SECTION 2(15) OF THE ACT. THE REVENUE IN THE SUBSEQUENT ASSESSMENT YEARS HAS PURPORTEDLY ACCEPTED THAT THE ACTIVITIES OF THE ASSESSEE ARE FOR CHARITABLE PURPOSE AND HAVE E XTENDED THE BENEFIT OF SECTION 11 OF THE ACT. NOTHING HAS BEEN BROUGHT BEFORE US TO SHOW THAT THERE HAS BEEN CHANGE IN THE NATURE OF ACTIVITIES CARRIED BY THE ASSESSEE DURING THE PERIOD RELEVANT TO 6 ITA NO . 2124/PUN/2014, A.Y. 2010 - 11 ASSESSMENT YEAR UNDER APPEAL AND THE SUBSEQUENT ASSESSMEN T YEARS. IN VIEW OF THE FACTUAL POSITION POINTED ABOVE, WE ARE OF CONSIDERED OPINION THAT THE REASONS GIVEN BY COMMISSIONER OF INCOME TAX (APPEALS) TO DECLINE THE CLAIM OF ASSESSEE ARE NOT SUSTAINABLE. 10. IN THE RESULT, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 26 TH DAY OF JULY, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 26 TH JULY, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - I, THANE 4. / THE CIT - II, THANE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE