Institute of Pharmacy and Technology, Cuttack V. ACIT, Cuttack

ITA 225/CTK/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4491 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 21-02-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 11-09-2009
• Court: TRIBUNAL
• Department Lawyers: S K DASH
• Assessee Lawyers: P R MOHANTYS ACHARYA ARS
• Keywords: Principle of natural justice
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A. NOS. 225 AND 299/CTK/2009 / ASSESSMENT YEAR S 2005 - 06 AND 2006 - 07 INSTITUTE OF PHARMACY & TECHNOLOGY, SALEPUR,DIST. CUTTACK 854 202 PAN: AATI5092 C - - - VERSUS - ASST.COMMISS IONER,CIRCLE 1(1), CUTTACK. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI P.R.MOHANTY/S.ACHARYA, ARS / FOR THE RESPONDENT: / SHRI S.K.DASH, DR / ORDER . . . , , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THESE TWO APPEALS ARE FILEDBY THE ASSESSEE FOR THE AYS 2005 - 06 AND 2006 - 07 HAVING BEEN AGGRIEVED BY THE ORDERS PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) IN THE RESPECTIVE ASSESSMENT YEARS. 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES IN THE GROUNDS OF APPEAL. ITA NO.225/CTK/2009. 1. FOR THAT, THE ORDER OF FORUM BELOW IS ILLEGAL, ARBITRARY, ERRONEOUS AND IS BASED ON INCORRECT APPRECIATION OF FACT AS WELL AS LAW AS SUCH THE ORDER DESERVE S TO BE QUASHED IN ENTIRETY. 2. FOR THAT, THE FORA BELOW HAVE GROSSLY FAILED TO APPRECIATE THE FACT THAT THE APPELLANT DURING THE YEAR UNDER CONSIDERATION HAD INCURRED TOTAL EXPENDITURE OF 1,24,02,178 ( 15,30,829 TOWARDS CIVIL CONSTRUCTION 33,39,462 TOWARDS LABORATORY EQUIPMENTS ETC. AND 75,31,887 TOWARDS THE ADMINISTRATIVE EXPENSES) AS AGAINST TOTAL RECEIPT OF INCOME OF 1,16,27,847 THEREBY INCURRING EXCESS OF EXPENDITURE OVER REC EIPT OF INCOME OF 7,74,331, AS SUCH DISALLOWANCE OF RS.39,95,959/ - FOR BEING INCOME OVER EXPENDITURE FOR THE YEAR IS NOTHING BUT COLORABLE EXERCISE OF POWER TO CREATE A NON - EXISTENT DEMAND. 3. FOR THAT THE FORA BELOW ALSO FAILED TO APPRECIATE THE FACT THAT THE REGISTRATION U/S. 12(A) OF THE INCOME TAX ACT, 1961 WAS ISSUED INCORRECTLY GIVING THE DATE OF EFFECT AS 01.04.2006, WITHOUT CONDONING THE DELAY THOUGH THE FACT REMAINS THAT THE APPELLANT HAVING BONAFIDELY 2 FAILED TO MAKE SUCH APPLICATION AFTER ITS REGISTRATION UNDER REGISTRAR OF SOCIETY, ORISSA HAD CATEGORICALLY MOVED AN APPLICATION TO CONDONE THE DELAY AND GRANT REGISTRATION U/S.12(A) RETROSPECTIVELY COVERING THE WHOLE ACTIVITIES OF APPELLANT INCLUDING THE YEAR UNDER ASSESSMENT. 4. FOR THAT DISA LLOWANCES U/S. 40 - A(3) OF THE INCOME TAX ACT, 1961 IS ABSOLUTELY UNJUST IN AS MUCH AS THE PAYMENTS NOTED IN THE ASSESSMENT ORDER DOES NOT PINPOINT AS TO WHAT WERE THE MATERIALS PURCHASED, WHO WERE THE PARTIES AND WHAT WERE THE VOUCHER NUMBER ETC., AS SUCH THE ADDITION DOES NOT STAND TO THE TEST OF APPEAL. 5. FOR THAT DISALLOWANCE U/S. 40 (A) (IA) IS ABSOLUTELY UNLAWFUL IN AS MUCH AS THIS SECTION CAME INTO FORCE W.E.F. FINANCIAL YEAR BEGINNING ON 01.04.2005 AND THE APPELLANTS ASSESSMENT RELATES TO ASSESSM ENT YEAR 2005 - 06 RELATING TO THE PREVIOUS YEAR ENDING ON 31.03.05. AS SUCH THE CONDITIONS OF THIS PROVISION IS NOT APPLICABLE TO THE APPELLANT AND THE ADDITION ON ACCOUNT OF THIS CONSEQUENTIAL IS WITHOUT AUTHORITY OF LAW. 6. FOR THAT ANY OTHER GROUNDS OF APPEAL IF ANY SHALL BE URGED AT THE TIME OF HEARING. ITA NO.299/CTK/2009. 1. FOR THAT THE ORDER OF FORUM BELOW IS ILLEGAL, ARBITRARY, ERRONEOUS AND IS BASED ON INCORRECT APPRECIATION OF FACT AS WELL AS LAW, AS SUCH THE ORDER DESERVES TO BE QUASHED IN LIMINE. 2. FOR THAT, THE LD. ASSESSING OFFICER ALSO FAILED TO APPRECIATE THE FACT THAT THE REGISTRATION U/S 12(A) OF THE INCOME TAX ACT 1961 WAS ISSUED INCORRECTLY GIVING THE DATE OF EFFECT AS 01.04.2006, WITHOUT CONDONING THE DELAY THOUGH THE FACT REMA INS THAT THE APPELLANT HAVING BONAFIDELY FAILED TO MAKE SUCH APPLICATION AFTER RECEIPT OF ITS REGISTRATION CERTIFICATE FROM THE ADD!. REGISTRAR OF SOCIETIES, CUTTACK ON 19.11.87, APPLIED FOR REGISTRATION ON 09.05.2006 WITH AN APPLICATION TO CONDONE THE DEL AY AND GRANT REGISTRATION U/S 12(A) RETROSPECTIVELY COVERING THE WHOLE ACTIVITIES OF APPELLANT INCLUDING THE YEAR UNDER ASSESSMENT. 3. FOR THAT DISALLOWANCE U/S 40 - A(3) OF THE INCOME TAX ACT 1961 IS ABSOLUTELY UNJUST, IN AS MUCH AS THE PAYMENTS NOTED IN THE ASSESSMENT ORDER DOES NOT PINPOINT AS TO WHAT WERE THE MATERIALS PURCHASED, WHO WERE THE PARTIES AND WHAT WERE THE VOUCHER NUMBERS ETC., AS SUCH THE ADDITION DOES NOT STAND TO THE TEST OF .REASONING AND AS SUCH LIABLE TO BE QUASHED. 4. FOR THAT DISAL LOWANCES OF EXPENDITURE U/S 40A(IA) OF 2,93,288/ - IS EQUALLY ERRONEOUS IN AS MUCH AS THE ID. ASSESSING OFFICER HAS FAILED TO BRINGING TO RECORD THE SPECIFIC OBJECTIONS AS TO ATTRACT TDS U/S 194C OF THE J.T. ACT. 5. FOR THAT OTHER GROUNDS OF APPEAL , IF ANY SHALL BE URGED AT THE TIME OF HEARING. 3. BOTH THE PARTIES WERE HEARD ON THE ISSUES AND THEIR LEGAL IMPLICATIONS. 3 4. AT THE TIME OF HEARING, THE LEARNED AR OF THE ASSESSEE HAS MADE AVAILABLE TO THE TRIBUNAL THE TRUE COPY OF THE ORDER DT.15.2.2011 PA SSED BY THE ITAT, CUTTACK BENCH IN ASSESSEES OWN CASE IN ITA NO.300/CTK/2009 AND ITA NO.01/CTK/2011, WHEREIN DIRECTION HAS BEEN GIVEN TO THE DEPARTMENT TO GRANT REGISTRATION U/S.12A TO THE ASSESSEE W.E.F. 19.11.1987. THE IMPUGNED ORDERS IN THE PRESENT APP EALS WERE PASSED TAKING INTO CONSIDERATION THAT THE REGISTRATION OF THE ASSESSEE WAS GRANTED W.E.F. 1.4.2006.SINCE, THE TRIBUNAL IN ITS ORDER DT.15.2.2011 IN ITA NO. 300/CTK/2009 AND ITA NO.01/CTK/2011 HAS CATEGORICALLY DIRECTED THE DEPARTMENT TO GRANT REG ISTRATION W.E.F. 19.11.1987 AS PRAYED FOR BY THE ASSESSEE IN ITS APPLICATION FOR GRANT OF REGISTRATION, THEREFORE, IN THE LIGHT OF THE MATERIAL CHANGE OCCURRED IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER PASSED IN THE PRESENT APPEALS ARE REQUIRED TO BE SET ASIDE . ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDERS AND RESTORING THE MATTER TO THE FILE OF THE ASSESSING OFFICER, WE DIRECT THE ASSESSING OFFICER TO PASS THE ASSESSMENT ORDER AFRESH AS PER LAW IN THE LIGHT OF THE ORDER DT.15.2.2011 PASSED BY THE TRIBUNAL IN ITA NO. 300/CTK/2009 AND ITA NO.01/CTK/2011 IN ASSESSEES OWN CASE, HOWEVER, STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE AR E ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 21.2.2011 S D/ - S D/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASA D RAO), JUDICIAL MEMBER. ( ) DATE: 4 TH APRIL, 2011 ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY. 4 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : INSTITUTE OF PHARMACY & TECHNOLOGY, SALEPUR,DIST. CUTTACK 854 202 2 / THE RESPONDENT: ASST.COMMISSIONER,CIRCLE 1(1), CUTTACK. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY