M/s. New Okhla Industrial Development Authority, Noida V. ACIT, Noida

ITA 2207/DEL/2014

• Counselvise Citation: 220720114 RSA 2014
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 12-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GUNJAN PRASHAD
• Assessee Lawyers: REEMA MALIK CAS
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Bonafide belief; Source of fund; Question of law; Right to appeal; Revenue expenditure; Capital expenditure
• Section: 43B; 142(1); 147; 145; 148; 28; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. I. C. SUDHIR , JM ITA NO S . 2203 TO 2207 /DEL /20 1 4 : ASSTT. YEAR S : 200 4 - 0 5 TO 2008 - 09 M/S N EW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY, SECTOR - 6, NOIDA VS ACIT, CIRCLE - 1, NODIA (APPELLANT) (RESPONDENT) PAN NO. A AA LN0120A ASSESSEE BY : SH . AJAY WADHWA , ADV. , SUNIL KUMAR, DINESH VERMA, RAJ RANI LAKRA & REEMA MALIK, CAS REVENUE BY : SH . GUNJAN PRASHAD, CIT DR DATE OF HEARING : 06 .0 8 .2015 DATE O F PRONOUNCEMENT : 30 . 10 .2015 ORDER PER N.K . SAINI , A.M. THESE APPEAL S BY THE A SSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER S EACH DATED 2 0.01.2014 FOR THE ASSESSMENT YEARS 2004 - 05 TO 2008 - 09 OF THE L D. CIT(A) , NOIDA . 2. COMMON ISSUES ARE INVOLVED IN THESE APPEALS WHICH WERE HEARD TOGETHER , SO , THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3 . FIRST WE WILL DEAL WITH THE APPEAL IN ITA NO. 2203/DEL/2014 FOR THE ASSESSMENT YEAR 2004 - 05. FOLLOWING ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 2 GROUNDS HA VE BEEN RAISED IN THIS APPEAL WHICH ARE ALSO COMMON IN ALL OTHER APPEALS : 1. THAT THE LD. CIT (A) WITHOUT ACCEPTING OR REJECTING THE W RITTEN SUBMISSIONS BY THE APPELLANT WITH RESPECT TO THE GROUND NO.1, 3 & 8 HAS SIMPLY DISMISSED THEM ON THE GROUND THAT - 'NOT PRESSED BY THE APPELLANT AND HENCE BEING DISMISSED.' IT APPEARS THAT THE ORDER PASSED BY LD . CIT (A) IS PREDETERMINED AND PREME DITATED. 2. THAT LD. CIT (A) WITHOUT APPRECIATING THE MERIT OF WRITTEN SUBMISSIONS FILED BY THE APPELLANT WITH RESPECT TO GROUND NO.2 HAS SIMPLY REPRODUCED THE SAME IN HIS ORDER AND HAS DISMISSED THE SAME IN VIEW OF THE JUDGMENT OF HONORABLE ALLAHABAD HI GH COURT. 3. THAT LD. CIT (A) WITHOUT APPRECIATING THE MERIT OF WRITTEN SUBMISSIONS FILED BY THE APPELLANT WITH RESPECT TO GROUND NO.4, 5 & 6 HAS SIMPLY STATED THAT - 'IN VIEW OF THE HON'BLE ALLAHABAD HIGH COURT'S JUDGMENT DATED 28.02.2011 IN APPELLANT'S OWN CASE IN WRIT PETITION NO. 1338 OF 2005 THE ABOVE CONTENTIONS OF THE APPELLANT DO NOT MERIT CONSIDERATION AND HENCE SAME ARE REJECTED. 4. THAT LD. CIT (A) HAS WITHOUT APPRECIATING THE NATURE OF EXPENDITURE UNDER GROUND NO.7 HAS SIMPLY DISALLOWED THE SAME. 5. THAT LD. CIT (A) HAS FAILED TO TAKE COGNIZANCE OF THE FACT THAT THE APPELLANT HAS FILED A SPECIAL LEAVE PETITION WITH HONORABLE SUPREME COURT OF INDIA AND THE SAME HAS BEEN ADMITTED ON 17.01.2014. ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 3 FOR THE SAKE OF BREVITY, THE GROUNDS OF APPEAL ARE REPRODUCED BELOW - GROUND NO. 1 - THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. AO HAS ACTED AGAINST THE PRINCIPLES OF NATURAL JUSTICE IN COMPLETING TH E ASSESSMENT WITHIN A SHORT PERIOD OF 51 DAYS. GROUND NO.2 THAT HAVI NG REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. AO HAS ERRED IN INTERPRETING THE PROVISIONS OF THE SECTION 10(20) OF THE INCOME TAX ACT, 1961. GROUND NO.3 THAT THE LD. AO WITHOUT APPRECIATING THE FACTS AND DETAILS ON RECORD AND WITHOUT ACCORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE PASSED AN ASSESSMENT ORDER UNDER SECTION 144 OF THE INCOME TAX ACT 1961. (RAJENDER KUMAR GARG V DEPUTY COMMISSIONER OF INCOME TAX [2000] 67 TTJ (DELHI) 347) GROUND NO.4 - THE LD. AO HAS NOT TAK EN THE COGNIZANCE OF THE PROVISIONS OF THE ARTICLE 12 OF THE CONSTITUTION OF INDIA WHEREIN THE LOCAL AUTHORITIES HAVE BEEN DEFINED AS STATE AND THIS INTERPRETATION HAS BEEN CONFIRMED BY THE HONORABLE SUPREME COURT OF INDIA IN THE CASE OF SUKHDEV SINGH V BH AGATRAM AIR 1975 SC 133) ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 4 GROUND NO.5 THE LD. AO HAS NOT TAKEN THE COGNIZANCE OF THE PROVISIONS OF THE ARTICLE 289 OF THE CONSTITUTION OF INDIA WHEREIN IT HAS BEEN SPECIFICALLY PROVIDED THAT THE PROPERTY AND INCOME OF A STATE SHALL BE EXEMPT FROM UN ION TAXATION; GROUND NO.6 THE LD. AO HAS DISREGARDED THE PRONOUNCEMENT OF THE ITAT MUMBAI IN THE CASE OF CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, ITR 102, 2012 (250); GROUND NO.7 THE LD. AO WHILE MAKING THE ABOVE ADDITION HAS FAILED TO TAKE THE COGNIZANCE OF ERSTWHILE SECTION 36 (1) (XII) OF THE INCOME TAX ACT, 1961 WHICH WAS INSERTED BY THE FINANCE ACT, 2003 W.E.F. 01 - 04 - 2002; GROUND NO.8 - THE LD. AO HAS FULLY DISREGARDED THE INSTRUCTIONS OF CENTRAL BOARD OF DIRECT TAX (INSTRUCTION NO. NO. 767, DATED 4 - 10 - 1974) BY COMPLETING THE ASSESSMENT THREE MONTHS BEFORE THE TIME ALLOWED FOR SUCH ASSESSMENT BY THE PROVISIONS OF THE INCOME TAX, 1961. GROUND NO.9 THAT THE LD. AO HAS FA ILED TO TAKE COGNIZANCE OF THE FACT THAT THE MATTER IS SUB - JUDICE BEFORE THE HONORABLE SUPREME COURT OF INDIA. ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 5 PRAYER: 1. AS PER THE FACTS AND CIRCUMSTANCES OF THE CASE MENTIONED IN STATEMENT OF FACTS AND GROUNDS OF APPEAL SUBMITTED BY THE APPELLANT - PROCEEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT,1961, BE QUASHED. 2. THE ADDITIONS AMOUNTING TO RUPEES 50,54,520/ - UNDER SECTION 36(L)(XII) OF THE INCOME TAX ACT, 1961, BE DELETED. 3. THE ADDITIONS AMOUNTING TO RUPEES 29,94,65,671/ - BE DELETED. 4 . THE ASSESSEE ALSO MOVED AN APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS WHICH READ AS UNDER: 1. NOIDA IS A STATUTORY BODY CORPORATION ESTABLISHED UNDER THE U. P. INDUSTRIAL AREA DEVELOPMENT ACT, 1976. IT WHOLLY AND EXCLUSIVELY DISCHARGES FUNCTI ONS OF CREATING AND MAINTAINING PUBLIC UTILITY AND INFRASTRUCTURE WITHIN THE NOTIFIED AREA. 2. IT ALSO DISCHARGES SOVEREIGN FUNCTIONS WITHIN THE NOTIFIED AREA. 3. BROAD SOVEREIGN FUNCTIONS DISCHARGE BY NOIDA ARE AS FOLLOWS - IT ACTS AS MUNICIPALITY WITHIN THE NOTIFIED AREA; IT COLLECTS TAXES AS MANDATED BY THE STATE; IT PREPARE AND PLAN THE MASTER PLAN FOR DEVELOPMENT OF THE NOTIFIED AREA; ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 6 IT ACQUIRES THE LAND WITHIN THE NOTIFIED AREA; IT ALLOTS THE LAND IN ACCORDANCE WI TH THE MASTER PLAN WITHIN THE NOTIFIED AREA; IT DEVELOPS SOCIAL INFRASTRUCTURE SUCH AS, SCHOOLS, COLLEGES, HOSPITALS, COMMUNITY CENTERS, ROADS ETC.; IT PROVIDES BASIC AMENITIES SUCH AS WATER, ELECTRICITY, SEWER, ROADS ETC. IN THE NOTIFIED AREA, AMONGST HOST OF OT HER FUNCTIONS; 4. ITS SURPLUS HAS BEEN A SUBJECT MATTER OF LITIGATION. THE AUTHORITY IS OF BONAFIDE BELIEF THAT IT IS AKIN TO THE STATE AND IS NOT AMENABLE TO THE PROVISIONS OF THE INCOME TAX ACT. THE DEPARTMENT HAS BEEN VERY UNFAIR TO NOIDA AND HAS SHOWN UNUSUAL HURRY IN TAXING THE ENTIRE SURPLUS AS PER THE AUDITED INCOME & EXPENDITURE ACCOUNT AND RECOVERING HUGE AMOUNT OF TAX CONSEQUENTLY. 5. NOIDA HAS SINCE SOUGHT HELP OF A SPECIALIST IN TAX MATTERS WHO ON PERUSAL OF THE GROUNDS BEING AGITATED SO FAR, HAS OPINED THAT CERTAIN CRUCIAL AND CRITICAL GROUNDS OF APPEAL GOING INTO ROOT OF THE MATTER HAVE BEEN OMITTED FROM BEING TAKEN BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL. 6. THESE GROUNDS ARE PURELY LEGAL IN NATURE AND ARE BORNE FROM THE FACTS ON RECORD. THE GROUNDS SOUGHT TO BE RAISED AS ADDITIONAL GROUNDS ARE AS FOLLOWS: - A) THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN TAKING THE ENTIRE SURPLUS IN THE INCOME & EXPENDITURE ACCOUNT AS INCOME. THEY HAVE FAILED TO APPRECIATE THAT T HE RECEIPTS AND EXPENDITURE OF NOIDA HAVE COMPONENTS WHICH ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 7 ARE CAPITAL IN NATURE, EXEMPT IN MANY CASES, DO NOT RELATE TO THE FINANCIAL YEAR ETC. TO SUM UP, THE COMPUTATION .OF INCOME AS PER THE PROVISIONS OF INCOME TAX ACT, 1961 HAVE NOT BEEN UNDERTAKEN AN D THE ENTIRE SURPLUS HAS BEEN TAKEN AS INCOME. B) THAT THE AUTHORITIES BELOW HAVE ERRED TO APPRECIATE THE FACT THAT NOIDA DOES NOT AND CANNOT UNDERTAKE ANY BUSINESS ACTIVITY AND, THEREFORE, THE SURPLUS, IF ANY, IS NOT TAXABLE UNDER ANY HEAD OF INCOME. C) THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACT THAT SURPLUS AS PER THE INCOME AND EXPENDITURE ACCOUNT HAS FURTHER BEEN ALLOCATED/PROVIDED FOR THE ACTIVITIES OF NOIDA AND, THEREFORE, THE AMOUNTS BEING IN ,THE NATURE OF PROVISION, THERE IS NO SURPLUS AVAILABLE TO TAXATION AFTER REDUCING THESE ALLOCATIONS /PROVISIONS. D) THAT THE AUTHORITIES BELOW HAVE FAILED TO GIVE CREDIT FOR THE TAX COLLECTED BY THEM FROM BANKS AND INSTITUTIONS WITH WHOM NOIDA WAS MAINTAINING DEPOSITS AND GETTING INTERES T THEREON. E) THAT THE AUTHORITIES BELOW HAVE ERRED IN GRANTING CREDIT FOR TDS BY ALLOTTEES AND BANKS AND IGNORED THE HUGE AMOUNTS OF TAX APPEARING IN FORM 26AS/FORM 16A. F) THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACT THAT NOIDA CAN B E HELD TO BE CARRYING OUT CHARITABLE ACTIVITIES AND, THEREFORE, ITS RECEIPTS ARE NOT AMENABLE TO TAX. 7. IT IS HUMBLY PRAYED THAT THE AFORESAID GROUNDS BEING PURELY LEGAL IN NATURE DESERVE TO BE ADMITTED IN VIEW OF THE JUDGMENT OF THE HON'BLE SUPREME COU RT IN THE CASE OF NTPC VS. CIT (1998) 229 ITR 383. ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 8 5 . DURING THE COURSE OF HEARING RELATING TO THE ADMISSION OF THE ADDITIONAL GROUNDS, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTS OF THE APPLICATION MOVED FOR ADMISSION OF THE ADDITIONAL GROUN DS AND REQUESTED TO ADMIT THE SAID GROUNDS. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE SUPREME COURT IN TH E CASE OF NTPC VS CIT (1998) 229 ITR 383. IT WAS FURTHER SU BMITTED THAT THE ASSESSEE IS A PUBLIC A UTHORITY CONSTITUTED U/S 3 OF THE UTTAR PRADESH INDU STRIAL AREA DEVELOPMENT ACT, 1976 (UP ACT NO. 6 OF 1976 IN SHORT) AND IS RESPONSIBLE FOR THE PLAN NED DEVELOPMENT OF THE AREA UNDER ITS JURISDICTION AND IS DECLARED AS INDUSTRIAL TOWNSHIP BY THE GOVERNOR OF UTTAR PRADESH UNDER PROVISO TO CLAUSE ( 1 ) OF ARTICLE 243Q OF THE CONSTITUTION OF INDIA. SO, IT IS A LOCAL AUTHORITY IN AS MUCH AS , IT IS BESTOW ED THE AUTHORITY TO DISCHARGE FUNCTIONS OF AN INDUSTRIAL TOWNSHIP AS WELL AS MUNICIPALITY . B ESIDES THAT , IT DISCHARGES FUNCTION S OF MAINTAINING SEWERAG E, WATER, ELECTRICITY, ROAD S AND SOCIAL INFRASTRUCTURE , SUCH AS SCHOOL, COLLEGES, UNIVERSIT IES, DISPENSARIES , HOSPIT ALS, PARKS, COMMUNITY CENTERS ETC. FOR THE BENEFIT OF PUBLIC AT LARGE AND THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT IT WAS AKIN TO A STA TE AND WAS NOT AMENABLE TO THE PROVISIONS OF INCOME TAX ACT . HOWEVER, THE AFORESAID ISSUES HAVE NOT BEEN ADJUDICATED BY THE AUTHORITIES BELOW. IT WAS CONTENDED THAT ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 9 THESE ADDITIONAL GROUNDS ARE PURELY LEGAL IN NATURE AND ARE BORNE FROM THE FACTS ON RECORD. THEREFORE, THE ADDITIONAL GROUNDS RAISE D BY THE ASSESSEE DESERVE TO BE ADMITTED. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: NATIONAL THERMAL POWER CO. LTD. VS CIT (1998) 229 ITR 383 (SC) MOHAN DAIRY VS UNION OF INDIA (2007) 163 TAXMAN 274 (ALL) DR. Y D SINGH BRD MEDICAL COLLEGE VS DCIT, ITAT ALLAHABAD CIT - II, LUCKNOW VS SALARPUR COLD STORAGE PVT. LTD. (2014) 50 TAXMAN 105 (ALL) CIT VS RAJEEV SHARMA (2010) 192 TAXMAN 197 (ALL) 6. IN HIS RIVAL SUBMISSIONS THE LD. DR OPPOSED THE ADMISSION OF THE AD DITIONAL GROUNDS AND FURTHER STATED THAT THE ISSUE RELATING TO THE STATUS OF THE ASSESSEE AS LOCAL AUTHORITY U/S 10(20) OF THE ACT HAS BEEN SETTLED BY THE HON BLE ALLAHABAD HIGH COURT. THEREFORE, THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE MAY NOT BE ADM ITTED. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE PURELY LEGAL IN NATURE AND T HESE GO TO THE ROOT OF THE MATTER. THEREFORE, ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 10 THESE GROUNDS DESERVE TO BE ADMITTED AS PER THE RATIO LAID DOWN BY THE HON BLE SUPREM E COURT IN THE CASE OF NTPC VS CIT 229 ITR 38 3 (SUPRA) WHEREIN IT HAS BEEN HELD AS UNDER: BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS - OBJECTIONS BEFORE THE TRIBUNAL. THE TRIBUNAL SHOULD NOT BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS, ALTHOUGH NOT RAISED EARLIER. THE VIEW THAT THE TRIBUNAL IS CONFINED ON LY TO ISSUES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER (APPEALS) IS TOO NARROW A VIEW TO TAKE OF THE POWERS OF THE TRIBUNAL. IT HAS BEEN FURTHER HELD AS UNDER: UNDOUBTEDLY, THE TRIBUNAL HAS THE DISCRETION TO ALLOW OR NOT TO ALLOW A NEW GROUND T O BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER THE QUESTION OF LAW ARISING FROM FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS, THERE IS NO REASON WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CON SIDER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE . 8. WE, THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN BY THE HON BLE APEX COURT IN THE AFORESAID REFERRED TO CASE ADMIT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE . ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 11 9. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS CASE RELATES TO THE OPPORTUNITY OF BEING HEARD NOT PROVIDED BY THE AO AND THAT THE LD. CIT(A) HAD NOT ADJUDICATED THE ISSUES RAISED BEFORE HIM RELATING TO THE STATUS OF THE ASSESSEE CLAIMED AS A LOCAL AUTHORITY SINCE IT IS DISCHARGING SOVEREIGN FUNCTION WITHIN THE NOTIFIED AREA. 10 . THE FACTS OF THE CASE IN BRIEF ARE THAT THE AO ISSUED A NOTICE DATED 29.08.2005 U/S 142(1) OF THE ACT TO THE ASSESSEE CALLING FOR THE RETURN OF INCOME FOR THE ASSESSM ENT YEARS 2003 - 04 AND 2004 - 05, I N VIEW OF THE PROVISIONS OF SECTION 10(20A) OF THE ACT, VIDE THE SAID NOTICE , THE AO REQUIRED THE ASSESSEE TO FURNISH THE RETURN OF INCOME ON OR BEFORE 12.09.2005. HOWEVER, THE ASSESSEE DID NOT FILE ANY RETURN AND STATED VIDE LETTER DATED 20.09.2005 THAT IT DOES NOT FALL UNDER THE CATEGORY OF SECTION 10(20 A ) OF THE ACT. THE ASSESSEE ALSO FILED WRIT PETITION BEFORE THE HON BLE HIGH COURT OF JUDICATURE AT ALLAHABAD IN WRIT PETITION NO. 1338 OF 2005. T HE HON BLE HIGH COURT ADMITTED THE WRIT PE TITION AND DIRECTED THE AO NOT TO PROCEED OR TAKE ACTION IN PURSUANCE OF NOTICE U/S 142(1) OF THE ACT DATED 29.08.2005. FINALLY THE HON BLE HIGH COURT DELIVERED THE JUDGMENT ON 28.02.2011 AND THE WRIT PETITION OF THE ASSESSEE WAS DISMISSED. THEREAFTER THE AO ISSUED THE NOTICE U/S 142(1) OF ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 12 THE ACT ON 18.11.2011 AND ASK ED THE VARIOUS DETAILS WHICH HAVE BEEN MENTIONED IN PARA 2 OF THE ASSESSMENT ORDER DATED 09.12.2011. THE AO OBSERVED THAT THE ASSESSEE HAD NOT FURNISHED PARTICULARS OF ITS INCOME AND ALSO NOT FILED THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 142(1) OF THE ACT. HE COMPLETED THE ASSESSMENT U/S 144 OF THE ACT AT AN INCOME OF RS. 30,45,20,191/ - VIDE ORDER DATED 09. 12.2011 FOR THE ASSESSMENT YEAR 2004 - 05 . IN THE MEANWHILE THE ASSESSEE FILED S LP DATED 24.12.2011 IN THE HON BLE SUPREME COURT OF INDIA AGAINST THE ORDER OF THE HON BLE HIGH COURT WHICH HAD BEEN ADMITTED VIDE ORDER DATED 17.01.2014 . 11 . BEING AGGRIEVED THE ASSESSEE AGAINST THE EX - PARTE ORDER DATED 09.12.2011 PASSED BY THE AO CARR IED THE MATTER TO THE LD. CIT(A) AND FILED QUITE DETAILED AND EXHAUSTIVE NARRATION OF FACTS MIXED WITH GROUNDS OF APPEAL FO R ADJUDICATION AND FINALLY REA RRANGED THE GROUNDS OF APPEAL AS UNDER: 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. AO HAS ACTED AGAINST THE PRINCIPLES OF NATURAL JUSTICE IN COMPLETING THE ASSESSMENT WITHIN A SHORT PERIOD OF 20 DAYS. 2. THAT HAVING REGARD TO THE FACT AND CIRCUMSTANCES OF THE CASE, THE LD. AO HAS ERRED IN ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 13 INTERPRETING THE PROVISIONS OF THE S ECTION 10(20) OF THE INCOME TAX ACT, 1961. 3. THAT THE LD. AO WITHOUT APPRECIATING THE FACTS AND DETAILS ON RECORD AND WITHOUT ACCORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE PASSED AN ASSESSMENT ORDER UNDER SECTION 144 OF THE INCOME TAX ACT, 1961. (RAJENDER KUMAR GARG V. DEPUTY COMMISSIONER OF INCOME TAX (2000) 67 TTJ (DELHI) 347). 4. THE LD. AO HAS NOT TAKEN THE COGNIZANCE OF THE PROVISIONS OF THE ARTICLE 12 OF THE CONSTITUTION OF INDIA WHEREIN THE LOCAL AUTHORITIES HAVE BEEN DEFINED AS STAT E AND THIS INTERPRETATION HAS BEEN CONFIRMED BY THE HON BLE SUPREME COURT OF INDIA IN THE CASE OF SUKHDEV SINGH V BHAGATRAM AIR 1975 SC 133. 5. THE LD. AO HAS NOT TAKEN THE COGNIZANCE OF THE PROVISIONS OF THE ARTICLE 289 OF THE CONSTITUTION OF INDIA WHERE IN IT HAS BEEN SPECIFICALLY PROVIDED THAT THE PROPERTY AND INCOME OF A STATE SHALL BE EXEMPT FROM UNION TAXATION. 6. THE LD. AO HAS DISREGARDED THE PRONOUNCEMENT OF THE ITAT MUMBAI IN THE CASE OF CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. VS ASSISTANT COMMISSIONER OF INCOME TAX, ITR 102, 2012(250). 7. THE LD. AO WHILE MAKING THE ABOVE ADDITION HAS FAILED TO TAKE THE COGNIZANCE OF ERSTWHILE SECTION 36(1)(XII) OF THE INCOME TAX ACT, 1961 WHICH WAS INSERTED BY THE FINANCE ACT, 2003 W.E.F 01.04.2002. ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 14 8. THE LD. AO HAS FULLY DISREGARDED THE INSTRUCTIONS OF CENTRAL BOARD OF DIRECT TAX (INSTRUCTION NO. 767 DATED 04.10.1974) BY COMPLETING THE ASSESSMENT THREE MONTHS BEFORE THE TIME ALLOWED FOR SUCH ASSESSMENT BY THE PROVISIONS OF THE INCOME T AX ACT, 1961. 12. BEFORE THE LD. CIT(A), T HE ASSESSEE CHALLENGED THE JURISDICTION OF THE AO WHILE PASSING THE ASSESSMENT ORDER U/S 144 OF THE ACT AND STATED THAT THE AO DISREGARDED THE INSTRUCTION OF CBDT NO. 767 DATED 04.10.1974 BY COMPLETING THE ASSESS MENT THREE MONTHS BEFORE THE TIME ALLOWED FOR SUCH ASSESSMENT BY THE PROVISIONS OF THE ACT. IT WAS ALSO STATED THAT THE AO COMPLETED THE ASSESSMENT WITHIN A PERIOD OF 20 DAYS ONLY IN HASTE AND COMPLE TI ON OF THE ASSESSMENT IN SUCH A SHORT TIME WAS AGAINST T HE PRINCIPLES OF NATURAL JUSTICE. THE RELIANCE WAS PLACED ON THE DECISION OF THE ITAT DELHI BENCH IN THE CASE OF RAJENDER KUMAR GARG VS DCIT (2000) 67 TTJ 347. TH E ASSESSEE ALSO CLAIMED THAT IT I S A LOCAL AUTHORITY CONSTITUTED U/S 3 OF UP INDUSTRIAL DEVELO PMENT ACT, 1976. 13. THE LD. CIT(A) DISMISSED THE GROUND S RAISED BY THE ASSESSEE RELATING TO THE OPPORTUNITY NOT BEING PROVIDED BY THE AO AND THAT THE ASSESSMENT WAS FRAMED WITHIN A SHORT PERIOD OF 20 DAYS BY OBSERVING THAT THESE GROUNDS WERE NOT ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 15 PRESSE D . AS REGARDS TO THE STATUS OF THE ASSESSEE CLAIMED TO BE A LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 10(20) OF THE ACT. THE LD. CIT(A) HELD THAT THE ASSESSEE FILED A WRIT PETITION BEFORE THE HON BLE HIGH COURT WHER EIN VIDE ORDER DATED 28.02.2011, I T WAS HELD THAT AFTER AMENDMENT IN SECTION 10(20) OF THE ACT W.E.F 01.04.2003, THE ASSESSEE IS NOT A LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 10(20) OF THE ACT. THE LD. CIT(A) ACCORDINGLY HELD THAT THE ASSESSEE S CLAIM FOR EXEMPTION U/S 10(20) OF THE AC T WAS RIGHTLY REJECTED BY THE AO. THE LD. CIT(A) ALSO DID NOT ACCEPT THIS PLEA OF THE ASSESSEE THAT SINCE SLP HAS BEEN FILED IN THE HON BLE SUPREME COURT AGAINST THE ORDER OF THE HON BLE ALLAHABAD HIGH COURT, THE MATTER SHOULD HAVE BEEN KEPT IN ABEYANCE TI LL THE DISPOSAL OF THE SLP BY OBSERVING THAT MERE FILING OF SLP IN THE HON BLE SUPREME COURT IS NO BAR ON THE AO TO PROCEED AND COMPLETE THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 14 . NOW THE ASSESSEE IS IN APPEAL. 15 . THE LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS NOT PROVIDED A DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND FRAMED THE ASSESSMENT IN HASTE. IT WAS FURTHER SUBMITTED THAT FOR THE ASSESSMENT YEAR 2004 - 05, ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 16 THE AO ISSUED THE FIRST QUE STIONNAIRE ON 18.11.2011 AND THE ASSESSMENT WAS COMPLETED ON 09.12.2011 I.E. WITHIN 20 DAYS. THEREFORE, THE ASSESSMENT WAS FRAMED IN HASTE WITHOUT PROVIDING DUE AND PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT SECTION 10 (20) OF THE ACT WAS AMENDED W.E.F 01.04.2003 BUT EARLIER, T HE ASSESSEE WAS ELIGIBLE FOR DEDUCTION AS A LOCAL AUTHORITY AND ITS INCOME WAS EXEMPT U/S 10(20A ) AS WELL AS 10(20) OF THE ACT. IT WAS FUR THER SUBMITTED THAT ARTICLE 243P (E) READ WITH ARTICLE 243Q OF THE CONSTITU TION OF INDIA DEFINES THE WORD M UNICIPALITY AND AS PER THE PROVISO TO SECTION 243Q(1) OF THE CONSTITUTION OF IN DIA, ITS INCOME OUGHT TO BE EXEMPT. IT WAS POINTED OUT THAT VIDE NOTICE DATED 29.08.2005 U/S 142(1) OF THE ACT FOR THE ASSESSMEN T YEARS 2003 - 04 AND 2004 - 05, THE INCOME TAX DEPARTMENT SOUGHT FILING OF RETURN FROM THE ASSESSEE. THEREAFTER THE ASSESSEE FILED A WRIT BEFORE THE HON BLE ALLAHABAD HIGH COURT WHICH WAS FINALLY DISMISSED ON 28.0 2 .2011 HOLDING , INTER ALIA THAT THE ASSESSEE I S NOT A LOCAL AUTHORITY WIT HIN THE MEANING OF SECTION 10(20 ) OF THE ACT . IT WAS STATED THAT AGAINST THE SAID ORDER OF T HE HON BLE ALLAHABAD HIGH COURT, T HE ASSESSEE FILED SLP WHICH HAD BEEN ADMITTED BY THE HON BLE SUPREME COURT VI DE ORDER DATED 17.01.2014 ( A REFERENCE WAS MADE TO PAGE NO . 90 THE ASSESSEE S PAPER BOOK ) . IT WAS CONTENDED ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 17 THAT THE JUDGMENT OF THE HON BLE ALLAHABAD HIGH COURT IS A PER - IN - CURIUM A JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF ADITYA PUR INDUSTRIAL ARE A DEVELOPMENT AUTHORIT Y REPORTED AT 153 TAXMAN 107 BECAUSE IN THE SAID CASE THE HON BLE SUPREME COURT NEVER EVER REFERRED TO OR INTERPRETED ARTICLE 243Q AND/ OR ARTICLE 243P OF THE CONSTITUTION OF INDIA. THEREFORE, THE JUDGMENT OF THE HON BLE ALLAHABAD HIGH COURT THOUGH DELIVERE D IN THE ASSESSEE S OWN CASE , HAVING WRONGLY APPLIED THE JUDGMENT OF THE HON BLE SUPREME COURT AND IS NOT BINDING IN RESPEC T OF SUBSEQUENT ASSESSMENT YEAR S . IT WAS FURTHER STATED THAT ON A SIMILAR ISSUE THE ITAT AHMADABAD BENCH IN THE CASE OF ITO VS SACHIN NOTIFIED AREA REPORTED AT 43 SOT 411 BY RELYING UPON THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF SAI J GRAM PANC H A YAT VS STATE OF GUJARAT HELD THAT T HE SAID ASSESSEE TO BE A DEEMED MUNICIPALITY. IT WAS STATED THAT THE FUNCTIONS OF THE ASSESSEE AND THE SACHIN NOTI FIED AREA (SUPRA) ARE IDENTICAL AS THE ASSESSEE IS DISCHARGING SOVEREIGN FUNCTIONS OF STATE AND PROVIDING PUBLIC UTILITIES & SERVICES. T HUS, THE FUNCTIONS OF THE ASSESSEE ARE EXEMPT FROM TAX. IT WAS FURTHER SUBMITTED THAT STATUS OF THE ASSESSEE HAS WRONGLY BEEN MENTIO NED AS ARTIFICIAL JURIDICAL PERSON U/S 2(31) OF THE ACT IN THE ASSESSMENT ORDER INSTEAD OF LOCAL AUTHORITY U/S 10(20) OF THE ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 18 ACT. IT WAS ALSO STATED THAT THE ASSESSEE MAY NOT BE A LOCAL AUTHORITY F OR THE PURPOSE OF ALLOWABIL ITY OF EXEMPTION U/S 10(20) OF THE ACT BUT IT IS A LOCAL AUTHORITY AS FAR AS ITS STATUS IS CONCERNED. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF R.C J AIN (1981) AIR 951/ (1981) SC (2 ) 854. IT WAS SUBMITTED THAT THE A SSESSMENT O N IN CORRECT STATUS IS A JURISDICTIONAL DEFECT WHICH IS NOT CURABLE U/S 292B OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE INCOME OF THE ASSESSEE IS IN FACT THE IN COME OF THE STATE BECAUSE THE U P STATE INDUSTRIAL ACT STATES THAT ALL DISSOLUTION O F FUNDS WILL VEST TO THE GOVERNMENT AND THE U P STATE GOVERNMENT CAN DIRECT THE ASSESSEE TO DEPLOY ITS FUNDS WHEREVER IT SO DESIRE (A REFERENCE WAS MADE TO PAGE NO. 208 OF THE ASSESSEE S PAPER BOOK). IT WAS FURTHER SUBMITTED THAT SINCE THE ASSESSEE WAS ALWA YS EXEMPT FROM TAX . H ENCE , ITS ACCOUNT S HAVE ALWAYS BEEN MADE IN A VERY RUDIMENTARY FASHION WITH NO CONCEPT OF, WRITE OFFS, REVENUE/CAPITAL EXPENDITURE, PROVISIONING ETC. AND ITS ACCOUNTS ARE ALIEN TO THE ACCOUNTS GENERALLY ACCEPTED BY THE INCOME TAX ACT A ND ACCOUNTING PRINCIPLES. HOWEVER, THE DEPARTMENT IN 51 DAYS AFTER THE FIRST NOTICE SEEKING DETAILS WAS ISSUED, CLOSED THE PROCEEDINGS ON 01.01.2013 FOR THE ASSESSMENT YEAR 2005 - 06, EVEN THOUGH THE ASSESSMENT WAS TIME BARRING ON 31.03.2013 AND FOR THE ASSE SSMENT YEAR ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 19 2004 - 05, THE ASSESSMENT ORDER WAS PASSED ON 09.12.2011 WITHIN 20 DAYS FROM THE ISSUE OF THE NOTICE U/S 142(1) OF THE ACT. HENCE, THE ASSESSMENT WAS MADE IN A HURRIED MANNER WITHOUT AFFORDING ADEQUATE OPPORTUNITY AND GIVING THE PRINCIPLES OF NAT URAL JUSTICE A GO - BYE. IT WAS CONTENDED THAT THE ASSESSMENT WITHOUT GIVING SUFFICIENT, ADEQUATE AND MEANINGFUL OPPORTUNITY IS INVALID IN THE EYES OF LAW AND DESERVES TO BE QUASHED. THE RELIANCE WAS PLACED ON THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF J. T. INDIA VS UOI 177 CTR 108. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) ALSO PASSED THE ORDER IN HURRY BY INCORRECTLY STATING THAT THE GROUND RELATING TO EX - PARTE AND NON ADHERING OF NATURAL JUSTICE WAS WITHDRAWN BY THE ASSESSEE. IT WAS V EHEMENTLY ARGUED THAT THE GROUND AT PAGE NO. 19 OF THE IMPUGNED ORDER WAS NEVER WITHDRAWN. IN SUPPORT OF THE ABOVE CONTENTION AN AFFIDAVIT HAS BEEN FURNISHED. IT WAS ACCORDINGLY CONTENDED THAT THE AO AS WELL AS THE LD. CIT(A) HAD DELIBERATELY DISREGARDED T HE PRINCIPLE OF NATURAL JUSTICE AND THEREFORE, THE ASSESSMENT DESERVES NECESSARILY TO BE QUASHED. IT WAS FURTHER SUBMITTED THAT THE ENTIRE SURPLUS HAD BEEN TAXED BY THE AO WITHOUT CONSIDERING THE CORRECT TAXABLE AMOUNT (A REFERENCE WAS MADE TO PAGE NO. 67 OF THE ASSESSEE S PAPER BOOK). IT WAS STATED THAT INCOME OVER EXPENDITURE AT THE YEAR END WAS EARMARKED FOR CREATION OF ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 20 THE NEW INFRASTRUCTURE FACILITY AND PUBLIC UTILITY. SO, IT WAS A PROVISION FOR EXPENDITURE WHICH HAS TO BE ALLOWED AND THE SAME WAS BASE D ON A DECISION TAKEN TO ALLOCATE AMOUNT TO CREATE AND IMPROVE THE EXISTING INFRASTRUCTURE AND, THEREFORE, HAS TO BE ALLOWED IN THE YEAR WHEN THE PROVISION IS MADE. IT WAS ALSO EMPHASIZED THAT A NUMBER OF INVESTMENTS WHICH WERE ACTUALLY IN THE NATURE OF GR ANTS WERE EXPENSES SINCE NOTHING WAS TO COME BACK AND THUS OUGHT TO HAVE BEEN WRITTEN OFF AS REVENUE EXPENDITURE AS IT REDUCES THE PROFIT. IT WAS FURTHER STATED THAT THE BUILDING UNDER CONSTRUCTION HAD BEEN COMPLETED SINCE 1995 , OUGHT TO BE CAPITALIZED AND DEPRECIATION WAS TO BE ALLOW ED AND SIMILARLY THE STORES WHICH WERE JUST APPEARING IN THE BOOKS OF ACCOUNT AND NOT ACTUALLY EXISTED OUGHT TO BE WRITTEN OFF BUT THE AO HAD NOT CONSIDERED THE AFORESAID F ACTS AND SIMILARLY INTEREST ON PROVIDENT F UND WHICH IS EXEMPT U/S 10 OF THE ACT HAS WRONGLY BEEN TREATED AS INCOME AN D THAT THE LEASE RENT WHICH WAS RECEIVED IN ADVANCE WAS NOT APPORTION ED WHILE WORKING OU T THE TAXABLE INCOME. IT WAS FURTHER STATED THAT THE AMOUNTS COLLECTED FOR DISCHARGING MUNICIPAL FUNCTIONS HAD BEEN WRONGLY TREATED AS INCOME, THEREFORE, THE AO FRAMED THE ASSESSMENT IN AN ARBITRARY MANNER. IT WAS EMPHASIZED THAT THE GROUNDS WHICH WERE RAISED WERE NOT ADJUDICATED FOR THE BEST REASON KNOWN TO THE ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 21 LD. CIT(A). THEREFORE, THE LD. CIT(A) WAS NOT JU STIFIED IN CONFIRMING THE ACTION OF THE AO. 16 . IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT AS PER THE AMENDMENT IN INCOME TAX ACT W.E.F - 1.04.2003, T HE ASSESSEE IS NOT A LOCAL AUT HORITY , HOWEVER, IT WAS CLAIMED THAT ITS INCOME IS NOT TAXABLE BEING A LOCAL AUTHORITY. IT WAS FURTHER SUBMITTED THAT SECTION 10(20) OF THE ACT DEALS WITH THE EXEMPTION OF THE INCOME OF A LOCAL AUTHORITY WHICH IS CHARGEABLE UNDER THE HEAD INCOME FROM HOU SE PROPERTY , CAPITAL GAIN AND INCOME FROM OTHER SOURCES OR FROM A TRADE OR BUSINESS CARRIED ON BY IT WHICH ACCRUES OR ARISES FROM THE SUPPLY OF A COMMODITY OR SERVICE WITHIN ITS OWN JURISDICTIONAL AREA OR FROM SUPPLY OF WATER OR ELECTRICITY WITHIN O R OUTSIDE JURISDICTIONAL AREA. IT WAS FURTHER STATED THAT LOCAL AUTHORITY HAS ALSO BEEN EXPLAINED TO BE A PANCHAYAT A S REFERRED TO IN ARTICLE 243(D) OF THE CONSTITUTION OF INDIA. THE MUNICIPALITY MEANS TO BE A MUNICIPAL COMMITTEE AND DISTRICT BOARD OR A CA NTONMENT BOARD. IT WAS FURTHER STATED THAT ARTICLE 243 ( A ) DEFINES CONSTITUTION OF MUNICIPALITY AND AS PER ARTICLE 243 ( A ), MUNICIPALITY IS AN INSTITUTION OF SELF - GOVERNMENT CONSTITUTED UNDER ARTICLE 243 ( A ) (A REFERENCE WAS MADE TO ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 22 PAGE NO. 134 OF THE ASSE SSEE S PAPER BOOK). IT WAS FURTHER STATED THAT AS PER THE DECISION OF ITO VS SACHIN NOTIFIED AREA REPORTED AT 43 SOT 411 (AHD) RELIED BY THE LD. COUNSEL FOR THE ASSESSEE , THE SO CALLED MUNICIPALITY SHOULD BE FOR THE PURPOSE OF LOCAL SELF - GOVERNANCE. IN OTH ER WORDS THERE HAS TO BE POPULAR REPRES ENTATION BUT IN ASSESSEE S CASE, T HE UP INDUSTRIAL AREA DEVELOPMENT ACT, 1976 NOTIFIED IT AND THE CONSTITUTION OF THE ASSESSEE HAD BEEN MENTIONED IN PARA 3 OF THE SAID ACT (A REFERENCE WAS MADE TO PAGE NO. 108 & 111 O F THE ASSESSEE S PAPER BOOK). IT WAS EMPHASIZED THAT THERE IS NO POPULAR REPRESENTATION WHILE CONSTITUTING THE ASSESSEE AND THE MEMBERS ARE NOT CHOSEN DIRECTLY OR INDIRECTLY BY THE INHABITANTS OF NOIDA. AS REGARDS TO THE DECISION OF THE HON BLE APEX COURT IN THE CASE OF UNION OF INDIA VS R.C. JAIN AIR (SC) 951, THE LD. CIT DR SUBMITTED THAT THE SAID CASE HAD BEEN ANALYZED BY THE NAGPUR BENCH OF THE ITAT IN THE CASE OF VIDARBHA IRRIGATION DEVELOPMENT CORPORATION VS ADD. CIT REPORTED AT 93 ITD 184 AND IT HAD BEEN STATED THAT THE ATTRIBUTES AND CHARACTERISTICS HAD BEEN STATED IN PARA 19 OF THE SAID DECISION OF SH. R.C. JAIN, HE ALSO MADE THE REMARKS IN THE FOLLOWING MANNER: ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 23 S. NO. ATTRIBUTES/CHARACTERISTICS REMARKS IF ANY 1. MUST HAVE SEPARATE LEGAL EXISTENC E AS CORPORATE BODIES. MUST NOT BE MERE GOVERNMENTAL AGENCY. I) IT IS A CORPORATE BODY UNDER UP, IDC ACT, 1976 (PG. 111 OF THE A P.B.) II) IT IS NOT A GOVERNMENTAL AGENCY. III) DOES NOT HAVE A DESIGNATED AREA. 37 VILLAGES HAVE ONLY BEEN INDICATED IN THE N OTIFICATION. 2. IT SHOULD HAS DIRECT OR INDIRECT REPRESENTATION OF THE LOCAL INHABITANTS. I) IN OTHER WORDS THEY SHOULD BE DEMOCRATIC INSTITUTIONS. II) PAGE 111 AND PAGE 112 OF ASSESSEE PAPER BOOK CLEARLY SHOWS THAT THE CONSTITUTION OF THE AUTHORITY IS N OT DEMOCRATIC. PEOPLE IN THE AUTHORITY ARE ALL GOVERNMENT FUNCTIONARIES. 3. THEY MUST ENJOY A CERTAIN DEGREE OF AUTONOMY, WITH FREEDOM TO DECIDE THEMSELVES QUESTIONS OF POLICY AFFECTING THE AREA ADMINISTERED BY THEM. I) THE AUTHORITY DOES NOT HAVE THE F REEDOM TO LEVY TAXES WITHOUT THE PREVIOUS APPROVAL OF THE STATE GOVERNMENT (PAGE 114 OF THE A P.B.). 4. AUTHORITY MUST BE ENTRUSTED BY STATUTE WITH SUCH GOVERNMENT FUNCTION AS ARE USUALLY ENTRUSTED TO MUNICIPAL BODIES. AUTHORITY ONLY RENDERS MUNICIPAL SE RVICES. 5. AUTHORI TY MUST HAVE THE POWER TO RAISE FUNDS FOR THE FURTHERANCE OF THEIR ACTIVITIES AND FULFILLMENT OF THEIR PROJECTS BY LEVYING TAXES, CHARGES OR FEES. THIS MAY BE IN ADDITION OF MONEY RECEIVED BY THE GOVERNMENT. I) PAGE 114 A PB CLEARLY ST ATES THAT NO TAXES CAN BE RAISED WITHOUT THE PREVIOUS APPROVAL OF THE STATE GOVERNMENT. II) A DOES NOT HAVE ANY POWER OF COMPULSORY EXECUTION OF TAXES. 17 . THE LD. CIT DR FURTHER STATED THAT PAGE NO. 117 OF THE ASSESSEE S PAPER BOOK CL EARLY STATES THAT SUBJECT TO ANY DIRECTION OF ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 24 THE STATE GOVERNMENT , THE AUTHORITY (THE ASSESSEE) MAY KEEP MONEY IN CURREN T ACCOUNT OF ANY SCHEDULED BANK , IT WOULD MAINTAIN A SINKING FUND AND IN FACT, THE ASSESSEE SHALL PREPARE A BUDGET IN SUCH FORM AND S UCH TIME , EVERY YEAR AS THE STATE GOVERNMENT MAY SPECIFY AND EVEN ACCOUNTS ARE TO BE AUDITED BY C&AG. THEREFORE, THE ASSESSEE IS NOT A LOCAL AUTHORITY UNDER THE ATTRIBUTES SPECIFIED IN THE CASE OF R.C. JAIN (SUPRA) RELIED BY THE ASSESSEE AND ANALYZED IN TH E CASE OF VIDARBHA IRRIGATION DEVELOPMENT CORPORATION (SUPRA). THE LD. CIT DR FURTHER STATED THAT THE LD. COUNSEL FOR THE ASSESSEE EMPHASIZED THAT THE ASSESSEE IS A GOVERNMENT AGENCY BUT BEFORE ARRIVING AT A CONCLUSION, THE ASSESSEE HAS TO DECIDE FIRST AS TO WHETHER IT IS A LOCAL AUTHORITY OR A GOVERNMENT AGENCY UNDER ARTICLE 289 OF THE CONSTITUTION OF INDIA AND IF IT IS A LOCAL AUTHORITY IT CANNOT BE A GOVERNMENT AGENCY AND IF IT IS A GOVERNMENT AGENCY THAN IT WOULD COME U/S 10(46) OF THE ACT WHICH CAME IN TO EFFECT BY THE FINANCE ACT, 2011 W.E.F 01.06.2011 WHICH IS NOT APPLICABLE TO THE YEARS UNDER CONSIDERATION. THE LD. CIT DR ALSO REFERRED TO PAGE NO. 111 OF THE ASSESSEE S PAPER BOOK AND SUBMITTED THAT THE ASSESSEE IS A BODY CORPORATE AND IT IS NEITHER A LOCAL AUTHORITY NOR A GOVERNMENT AGENCY. IT WAS FURTHER STATED THAT AT THE MOST THE ASSESSEE CAN BE CONSIDERED AS A GOVERNMENT COMPANY WHICH IS ASSESSABLE ONLY IN THE STATUS OF THE COMPANY AS DEFINED U/S 2(17) OF THE ACT. IT WAS EMPHASIZED THAT EARLIER THE INCOME OF THE ASSESSEE WAS EXEMPTED U/S 10(20) OF THE ACT. HOWEVER AN AMENDMENT WAS BROUGHT OUT BY FINANCE ACT, 2002, ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 25 WHICH CAME INTO EFFECT FROM 01.04.2003 AND HAD BEEN EXPLAINED BY CIRCULAR NO. 8 OF 2002 ISSUED BY THE CBDT WHICH CLEARLY STATES THAT THE ASSESSEE IS OUTSIDE THE AMBIT OF SECTIONS OF EXEMPTION PROVISIONS. IT WAS POINTED OUT THAT THE ASSESSEE HAD APPROACHED THE JURISDICTIONAL HIGH COURT, ALLAHABAD WITH THE PLEA THAT IT WAS EXEMPTED FROM TAX U/S 10(20) OF THE ACT. HOWEVER, THE SAID PLEA WAS DI SMISSED VIDE ORDER DATED 28.02 .2011 , A REVIEW PETITION FILED BY THE ASSESSEE ON 08.07.2011 WAS DISMISSED ON 02.09.2011 AND ANOTHER APPLICATION TO RECALL THE ORDER DATED 28.02.2011 WAS DISMISSED VIDE ORDER DATED 04.11.2011 WHICH CLEARLY SHOWS THAT THE ASSES SEE REPEATEDLY APPROACHED THE JURISDICTIONAL HIGH COURT AND LOST. IT WAS FURTHER STATED THAT THE ASSESSEE IS A COMPANY BUT IT DOES NOT FOLLOW THE PROVISIONS OF BOOK KEEPING AS PROVIDED IN SECTION 145 AND SECTION 145A OF THE ACT, WHICH CLEARLY SHOWS THAT TH E ASSESSEE DOES NOT WANT TO FOLLOW THE LAW, THEREFORE, IT SHOULD NOT BE GIVEN ANY LEVERAGE. THE LD. CIT DR ALSO FURNISHED A CHART EMPHASIZING THE FOLLOWING EVENTS FOR THE ASSESSMENT YEAR 2005 - 06 : SL. NO. DATE EVENT 1. 15.03.2012 NOTICE U/S 148 ISSUED. 2 . 31.03.2012 LETTER RECEIVED FROM P.K. JINDAL & CO., A/R; NO. RETURN WAS FILED. 3. 19.11.2012 QUESTIONNAIRE ISSUED WOULD FOR REVIEW PETITION BEFORE ALLAHABAD HIGH COURT. 4. 23.11.2012 NIKHIL GOEL, CA FILED PART; SEEKS ADJOURNMENT ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 26 5. 27.11.2012 SOUGHT ADJOURNMENT; DATE FIXED 4.12.2012 6. 04.12.2012 NONE ATTEND. 7. 17.12.2012 SHOW CAUSE NOTICE ISSUED FOR EX - PARTE ASSESSMENT. 8. 28.12.2012 NIKHIL GOEL FILES PART REPLY. 9. 04.01.2013 FILES LETTER FOR TEP. 10. 09.01.2013 ORDER ISSUED UNDER SECTION 14 4 18 . ON THE BASIS OF THE ABOVE CHART THE LD. CIT DR SUBMITTED THAT THE ASSESSEE HAD CHOSEN TO FILE REPLIES IN A DELAYED MANNER AND DID NOT DO ANYTHING SINCE FEBRUARY, 2012 T O AVOID PAYMENT OF INCOME TAX ON TECHNICALITIES AND THE AO GAVE AMPLE OPPORTUNIT IES BEFORE ISSUING THE ASSESSMENT ORDER U/S 144 OF THE ACT. IT WAS FURTHER STATED THAT THE ASSESSEE DID NOT PRESS THE GROUNDS BEFORE THE LD. CIT(A) AND EVEN IF IT IS ASSUMED THAT THE LD. CIT(A) DID NOT ADJUDICATE THE GROUNDS, T HE MATTER MAY GO BACK TO THE LD. CIT(A) TO ADJUDICATE THE SAME. 19. IN HIS REJOINDER THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT N EITHER THE AO NOR THE LD. CIT(A) HAS CONSIDERED THE DECISION OF THE ITAT AHMADABAD BENCH IN THE CASE OF ITO VS SACHIN NOTIFIED AREA REPORTED AT 43 SO T 411 WHEREIN IN SIMILAR CIRCUMSTANCES IT HAS BEEN HELD THAT THE ASSESSEE WAS PERFORMING THE FUNCTION OF MUNICIPALITY AND IT COMES UNDER THE CATEGORY OF LOCAL AUTHORITY . IT WAS FURTHER STATED THAT THE DECISION OF THE HON BLE ALLAHABAD HIGH COURT WHICH HELD THAT THE ASSESSEE IS NOT A LOCAL AUTHORITY IS SUBJUDICE AND PENDING ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 27 BEFORE THE HON BLE SUPREME COURT. THEREFORE, THE INC OME OF THE ASSESSEE WAS EXEMPT, ALTERNATIVELY , I T WAS STATED THAT THE MATTER MAY GO BACK TO THE AO BECAUSE DUE AND PROPER OPPORTUNI TY OF BEING HEARD WAS NOT GIVEN AND THE LD. CIT(A) HAD ALSO NOT ADJUDICATED THE GROUNDS RAISED BY THE ASSESSEE. 20 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE , IT IS AN ADMITTED FACT THAT THE ASSESSEE IS CONSTITUTED U/S 3 OF UP INDUSTRIAL AREA DEVELOPMENT ACT, 1976 (UP ACT NO. 6 OF 1976) AS PASSED BY THE UP LEGISLATURE BY THE HON BLE GOVERNOR OF UTTAR PRADESH IN EXERCISE OF THE POWER CONFIRMED UNDER THE PROVISO OF CLAUSE (1) OF ARTICLE 243Q OF THE CONSTITUTION OF INDIA. IT IS CLEAR THAT THE ASSESSEE IS AN INDUSTRIAL TOWNSHIP W.E.F 24 TH DAY OF DECEMBER 2001 UNDER PART - IX - A OF THE CONSTITUTION OF INDIA WHICH DEALS WITH THE MUNICIPALITY . EARLIER THE ASSESSEE WAS NOT FILING ANY RETURN OF INCOME ON THE BASIS THAT IT IS NOT LIABLE FOR INCOME TAX BEING A LOCAL AUTHORITY , SINCE IT WAS PERFORMING THE STATUTORY SOVEREIGN FUNCTIONS , SO WAS COVERED BY THE PROVISIONS OF SECTION 10(20) OF THE ACT. HOWEVER, IN VIEW OF THE A MENDMENT U/S 10(20) OF THE ACT W.E.F 01.04.2003, THE AO WAS OF THE VIEW THAT THE ASSESSEE IS NO MORE A LOCAL AUTHORITY WITHIN THE ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 28 MEANING OF SECTION 10(20) OF THE ACT AND HENCE NOT EXEMPT FROM INCOME TAX. THE AO REQUIRED THE ASSESSEE TO FILE THE RETURN O F INCOME AND ISSUED THE NOTICE SINCE U/S 142(1) OF THE ACT. HOWEVER, WHEN THE ABOVE NOTICE WAS ISSUED TO THE ASSESSEE CALLING FOR FILING THE RETURNS OF INCOME, THE ASSESSEE FILED WRIT PETITION NO. 1338 OF 2005 BEFORE THE HON BLE ALLAHABAD HIGH COURT WHEREI N VIDE ORDER DATED 29.09.2005, THE DEPARTMENT WAS DIRECTED NOT TO PROCEED OR TAKE ACTION IN PURSUANCE OF NOTICE DATED 29.08.2005 U/S 142(1) OF THE ACT. IN THIS REGARD, THE HON BLE JURISDICTIONAL HIGH COURT DELIVERED THE FINAL JUDGMENT ON 28.02.2011 WHEREBY ASSESSEE S WRIT PETITION WAS DISMISSED AND IT WAS HELD THAT THE ASSESSEE IS NOT A LOCAL AUTHORITY AFTER THE AMENDMENT IN SECTION 10(20) OF THE ACT W.E.F 01.04.2003 . A GAINST THE SAID ORDER OF T HE HON BLE ALLAHABAD HIGH COURT, T HE ASSESSEE FILED SLP DATED 24.12.2011 BEFORE THE HON BLE SUPREME COURT OF INDIA. THE SAID SLP HAS BEEN ADMITTED BY THE HON BLE SUPREME COURT OF INDIA VIDE ORDER DATED 17.01.2014 AND COP Y OF THE SAME IS PLACED AT PAGE NO. 90 OF THE ASSESSEE S PAPER BOOK. THEREFORE, THE ISSUE AS TO W HETHER THE ASSESSEE IS A LOCAL AUTHORITY OR NOT, IS SUBJUDICE AND PENDING BEFORE THE HON BLE SUPREME COURT. IN THE PRESENT CASE, THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) HAD NOT ADJUDICATED THE ISSUE RELATING TO ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 29 THE PROPER OPPORTUNITY OF BEING HEARD NOT PROVIDED BY THE AO . IT IS NOTICED THAT THE LD. CIT(A) IN THE IMPUGNED ORDER MENTIONED THAT THE ASSESSEE DID NOT PRESS THESE GROUNDS, HOWEVER NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT HOW AND IN WHAT MANNER THESE GROUNDS WERE NOT PR ESSED. ON THE CONTRARY, IT IS CLAIMED THAT THE ASSESSEE H AS FILED AN AFFIDAVIT STATING THEREIN THAT THESE GROUNDS WERE NOT WITHDRAWN. IN THE PRESENT CASE, THE LD. CIT DR DURING THE COURSE OF HEARING STATED THAT THESE GROUNDS MA Y BE SET ASIDE TO THE LD. CIT (A) FO R ADJUDICATION, IF THESE WERE NOT ADJUDICATED. T HE ANOTHER GRIEVANCE OF THE ASSESSEE , IS THAT THE AO HAD NOT GIVEN A DUE AND REASONABLE OPPORTUNITY OF BEING HEARD WHILE FRAMING THE ASSESSMENT EX - PARTE U/S 144 OF THE ACT AND INCLUDED THE GRANTS WHICH WERE TO BE UTILIZED FOR CREATION OF INFRASTRUCTURE FACILITY & PUBLIC UTILITY AS AN INCOME OF THE ASSESSEE AND EVEN DID NOT ALLOW THE DEPRECIATION ON THE ASSETS WHICH WERE CAPITALIZED. IN OTHER WORDS THE CLAIM OF THE ASSESSEE IS THAT THE ASSESSMENT WAS FRAM ED IN HASTE BY THE AO WITHOUT PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE AO FOR THE ASSESSMENT YEAR 2004 - 05 ISSUED THE FIRST QUESTIONNAIRE ALONG WITH THE NOTICE U/S 142(1) OF THE ACT ON 18.11.2011 WHICH WAS CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON 22.11.2011. THE AO ASKED ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 30 THE ASSESSEE TO FURNISH VARIOUS DETAILS WHICH ARE MENTIONED AT PAGE NOS. 3 & 4 OF THE ASSESSMENT ORDER AND READ AS UNDER: SUB: ASSESSMENT PROCEEDINGS FOR THE A.Y. 2004 - 0 5 IN THE CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY INITIATED THROUGH U/S 142(1) OF THE IT ACT, 1961 DATED 29.08.2005 REGARDING. PLEASE REFER TO THE ASSESSMENT PROCEEDINGS AS ABOVE AND ALSO REFER TO NOTICE U/S 142(1) DATED 14.03.2011 AND 27.04.2 011 AND YOUR LETTER DATED 28.07.2011 FILED ON 13.07.2011 SIGNED BY YOUR COUNSEL R.K. JINDAL & CO. 2. THE WRIT PETITION NO. 1338 OF 2005 FILED BY YOU BEFORE THE HON BLE ALLAHABAD COURT HAS ALREADY BEEN DECIDED ON 28.02.2011. HON BLE HIGH COURT HAS DISMISSE D YOUR PETITION AND IT IS HELD THAT NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY (NOIDA) IS NOT A LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 10(20) OF THE INCOME TAX ACT, 1961. THE C.M. REVIEW PETITION NO. 95157 OF 2011 AND C.M. RECALL APPLICATION NO. 232 788 OF 2011 HAVE ALSO BEEN DISMISSED BY THE HON BLE HIGH COURT. 3. IN VIEW OF THESE DEVELOPMENTS YOU ARE REQUESTED TO COMPLY WITH THE PROVISIO NS OF IT ACT, 1961 AND FURNISH FOLLOWING DETAILS: 1. PAN NUMBER. 2. NATURE OF YOUR ACTIV ITIES IN DETAIL. ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 31 3. DETAILS OF YOUR INCOME DURING THE YEAR FROM ALL SOURCES WITH AMOUNT. 4. COPIES OF BALANCE SHEET AS ON 31.03.2004, COPY OF INCOME & EXPENDITURE ACCOUNT FOR FINANCIAL YEAR 2003 - 04 WITH ALL ANNEXURES. ALSO FURNISH COPY OF AUDIT REPORT IF THE ACCOUNTS ARE AUDITED AS PER P ROVISION OF SECTION 44AB OF IT ACT OR UNDER ANY OTHER LAW WITH NOTES ON ACCOUNTS. 5. DETAILS OF EXPENSES ACCOUNT DEBITED TO INCOME & EXPENDITURE ACCOUNT WITH COPIES OF ACCOUNT UNDER EACH HEAD. PLEASE EXPLAIN GENUINENESS OF EXPENDITURE WITH DOCUMENTARY EVIDEN CE. 6. DETAILS OF BANK ACCOUNT (OTHER THAN LOAN ACCOUNTS) WITH BANK STATEMENT FOR THE PERIOD 01.04.2003 TO 31.03.2004. ALSO FURNISH COPIES OF REQUEST/FORMS SUBMITTED TO THE BANK FOR NON - DEDUCTION OF SOURCE, IF ANY. 7. DETAILS OF BANK LOAN TAKEN (SECURED LOAN) WITH NAME AND ADDRESS OF THE BRANCH, NATURE OF ACCOUNT AND AMOUNT OF LOAN TAKEN DURING THE YEAR ALONG WITH COPY OF BANK STATEMENT FROM 01.04.2003 TO 31.03.2004. 8. DETAILS OF BANK DEPOSITS WITH NAME AND ADDRESS OF BANK - BRANCH, OUTSTANDING CREDIT WITH COMPLE TE STATEMENT FROM 01.04.2003 TO 31.03.2004. 9. DETAILS OF FIXED ASSETS AS ON 31.03.2003 AND 31.03.2004 WITH SOURCE OF FUNDS EMPLOYED DURING THE YEAR. ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 32 10. WHETHER TDS WAS DEDUCTED IN ELIGIBLE CASES OF EXPENDITURE. PLEASE FURNISH COMPLETE DETAILS OF TRANSACTION W ITH AMOUNT OF TDS DEDUCTED AND DEPOSITED TO THE CENTRAL GOVERNMENT ACCOUNT AND PROOF OF FILING TDS RETURNS. 11. DETAILS OF EXPENDITURES OF EMPLOYEES WITH DETAILS OF EXPENDITURE COVERED UNDER THE PROVISION OF SECTION 43B OF IT ACT. 12. DETAILS OF CURRENT LIABILI TIES AND PROVISION WITH LIST AND COMPLETE ADDRESS OF SUNDRY CREDITOR S, DEPOSITS FROM SUPPLIERS AND CONTRACTORS, ALLOTTEE S SECURITIES, RECOVERY FROM STAFF. CPF AND OTHER LIABILITIES WITH DATE OF PAYMENTS IN SUBSEQUENT YEARS IF ANY. 13. COPY OF RETURN FILED B Y YOU, IF ANY, FOR A.Y. 2004 - 05 IN RESPONSE TO NOTICE U/S 142(1) DATED 29.08.2005 OR SUBSEQUENT NOTICES ISSUED IN THIS REGARD. 14. DETAILS OF BOOKS OF ACCOUNT MAINTAINED BY YOU. 15. COPIES OF YEARLY STATEMENTS/RETURNS OF TAX DEDUCTED AT SOURCE UNDER THE PROVISION OF IT ACT ALONG WITH COPIES OF TAX CHALLAN. 16. FURNISH COPY OF RETURN FILED, IF ANY, IN RESPONSE TO NOTICE U/S 142(1) DATED 29.08.2005. DATE OF COMPLIANCE 24.11.2011 YOURS FAITHFULLY, (L.S. YADAV) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE, NOIDA ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 33 21 . FROM THE ABOVE LETTER IT IS CLEAR THAT DATE OF COMPLIANCE WAS GIVEN BY THE AO AS ON 24.11.2011 WHILE THE LETTER WAS CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON 22.11.2011. IT THEREFORE, APPEA RS THAT IT WAS NOT POSSIBLE FOR THE ASSESSEE T O GIVE ALL THE DETAILS WITHIN 2 DAYS, AS THE TIME GIVEN BY THE AO WAS VERY LESS. MOREOVER, IN THIS CASE THE ASSESSMENT U/S 144 OF THE ACT HAS BEEN FRAMED EX - PARTE ON 09.12.2011 I.E. WITHIN 20 DAYS FROM ISSUING THE NOTICE U/S 142(1) OF THE ACT , E VEN WHEN THE TIME FOR FRAMING THE ASSESSMENT WAS STILL AVAILABLE WITH THE AO. T HEREFORE, IT IS CLEAR THAT THE ASSESSMENT WAS FRAMED IN HASTE. I T IS WELL SAID THAT JUSTICE HURRIED IS JUSTICE BURIED . IN OUR OPINION, THE A O OUGHT TO HAVE GIVEN A PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND SUFFICIENT TIME WAS TO BE GIVEN FOR THE COMPLIANCE OF THE NOTICE U/S 142(1) OF THE ACT. THE ASSESSEE ALTHOUGH CHALLENGED THIS ISSUE BEFORE THE LD. CIT(A)VIDE GROUND NOS. 1, 3 & 8 , HOWEVER THOSE GROUNDS WERE NOT ADJUDICATED BY THE LD. CIT(A) 22 . IN THE PRESENT CASE ANOTHER ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE WAS THAT A CO - ORDINATE BENCH AT AHMADABAD HAS DECIDED THE CASE OF SIMILAR NATURE IN THE CASE OF ITO VS SACHIN NOTIF IED AREA REPORTED AT 43 SOT 411, BUT IT IS NOT BROUGHT ON RECORD AS TO WHETHER THE SAID DECISION ATTAINED THE FINALITY. IN OTHER WORDS IT IS NOT BROUGHT ON RECORD AS TO WHETHER THE HON BLE HIGH COURT CONFIRMED THAT ORDER OR REVERSED THE SAME, EVEN WHEN A S PECIFIC QUERY WAS RAISED DURING ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 34 THE COURSE OF HEARING. HOWEVER, IT IS AN ADMITTED FACT THAT THE ISSUE RELATING TO THE STATUS OF THE ASSESSEE IS SUBJUDICE BEFORE THE HON BLE APEX COURT WHEREIN THE SLP AGAINST THE ORDER DATED 28.02.2011 OF THE HON BLE ALLAHA BAD HIGH COURT, WAS ADMITTED VIDE ORDER DATED 17.01.2014. FROM THE ABOVE NARRATED FACT S , IT IS CRYSTAL CLEAR THAT THE AO WHILE FRAMING THE ASSESSMENT VIDE ORDER DATED 09.12.2011 FOR THE ASSESSMENT YEAR 2004 - 05 HAD NOT PROVIDED A DUE AND REASONABLE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE AND FRAMED THE ASSESSMENT EX - PARTE U/S 144 OF THE ACT IN HASTE. THE LD. CIT(A) ALSO DID NOT ADJUDICATE THE SPECIFIC ISSUES RAISED BY THE ASSESSEE AGAINST THE EX - PARTE ORDER , WHILE PASSING THE IMPUGNED ORDER AND THE ISSUE S RAISED IN THE ADDITIONAL GROUNDS BY THE ASSESSEE WERE NOT SUBJECT TO ADJUDICATION BEFORE THE AUTHORITIES BELOW AND THAT THE ISSUE RELATING TO THE STATUS OF THE ASSESSEE IS STILL PENDING BEFORE THE HON BLE APEX COURT. FURTHERMORE, THE ORDER OF THE CO - ORDI NATE BENCH OF ITAT AHMADABAD IN THE CASE OF ITO VS SACHIN NOTIFIED AREA IN ITA NO. 1315/AHD/2007 (COPY OF WHICH IS PLACED AT PAGE NOS. 210 TO 215 OF THE ASSESSEE S PAPER BOOK) WAS NOT AVA ILABLE TO THE AUTHORITIES BELOW. W E , THEREFORE, BY CONSIDERING THE TO TALITY OF THE FACTS AS NARRATED HEREIN ABOVE, DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND REMAND THE MATTER TO THE FILE OF THE AO TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE. WE ALSO DIRECT THE ASSESSEE TO CO - OPERATE AND NOT TO SEEK UNDUE OR UNWARRANTED ADJOURNMENT S . ITA NO S . 2203 TO 2207 /DE L/20 1 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 35 23 . IN ANOTHER APPEAL S RELATING TO THE ASSESSMENT YEARS 2005 - 06 TO 2008 - 09 , THE FACTS ARE IDENTICAL AS WERE INVOLVED IN THE APPEAL FOR THE ASSESSMENT YEAR 2004 - 05. THE ONLY DIFFERENCE IS THAT IN THESE ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2005 - 06 TO 2008 - 09, THE ASSESSMENT S WERE COMPLETED BY THE AO WITHIN 51 DAYS OF I SSUING THE NOTICE U/S 142(1) OF THE ACT INSTEAD OF 20 DAYS FOR THE ASSESSMENT YEAR 20 04 - 05. THEREFORE, OUR FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS. IN THAT VIEW OF THE MATTER WE SET ASIDE THE IMPUGNED ORDERS FOR THESE ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2005 - 06 TO 2008 - 09 ALSO AND REMAND THE CASES BA CK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 24 . IN THE RESULT , THE APPEAL S OF THE ASSESSEE S ARE ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE COURT ON 30 /10 / 2015) . SD/ - SD/ - (I. C. SUDHIR ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 / 10 /2015 * SUBODH * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR