Sheti Utapanna Bajar Samiti, Satara V. Assistant Commissioner of Income-tax,

ITA 232/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2833 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-02-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 06-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Keywords: Reopening of assessment; Benefit of exemption; Condonation of delay
• Section: 143(3); 234B; 12A; 12AA; 147; 148; 12; 11

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.232/PN/2014 ASSESSMENT YEAR : 2003-04 SHETI UTPANNA BAJAR SAMITI, PLOT NO.41, MARKET YARD, SHANIWAR PETH, KARAD, DIST. SATARA. PAN : AAFTS3619C . APPELLANT VS. THE INCOME TAX OFFICER, WARD 1, SATARA. . RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 04.02.2016 / DATE OF PRONOUNCEMENT: 10.02.2016 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS AGA INST THE ORDER OF CIT(A)-III, PUNE DATED 05.12.2013 RELATING TO ASSES SMENT YEAR 2003-04 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL :- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE SUBMISSIONS OF THE A SSESSEE-SAMITI THAT IT WAS DEEMED TO HAVE BEEN REGISTERED UNDER S. 12AA OF THE ACT AS PER RELIANCE PLACED ON JUDICIAL VERDICTS. THAT NO SURPLUS IS TAXABLE UNDER THE ACT IN VIEW OF SCHEME OF TAXATION OF TRUSTS-INSTITUTIONS REGISTERED U/S 12AA OF THE ACT. THE INCOME ASSESSED AND CONFIRMED BY LD. CIT(A) BE HELD AS NOT TAXABLE UNDE R THE ACT. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE LEGAL ISSUE THAT S. 148 OF T HE ACT WAS NOT APPLICABLE IN THE CASE OF THIS ASSESSEE AS NO INCOME HAD ESCAPED TAXA TION IN VIEW OF INHERENT 2 ITA NO.232/PN/2014 EXEMPTION TO SUCH INCOME. THE ASSESSMENT BEING BAD IN LAW AND WITHOUT JURISDICTION BE QUASHED. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEVY OF INTEREST U/S 234B AND 234C IS NOT JUSTIFIED. THE LEVY OF INTERES T BE QUASHED. 4) THE APPELLANT CRAVES/LEAVE TO ADD, AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 3. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF SERVICE OF NOTICE. THE LD. DEPARTMENTAL REPRESE NTATIVE, SHRI DHEERAJ KUMAR JAIN APPEARED ON BEHALF OF THE RESPONDENT/REV ENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE INSPITE OF SERVICE OF NOTICE, WE PRO CEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE AFTER HEARING THE RESPONDENT/REVENUE ON MERITS IN TERMS OF RULE 24 OF THE INCOME TAX (APPELLATE TRIBU NAL) RULES, 1963. 4. BRIEFLY STATED, THE ASSESSEE IS ONE OF THE AGRIC ULTURAL PRODUCE MARKETING COMMITTEES WHICH CAME INTO EXISTENCE IN THE YEAR 19 50 AS PER GOVERNMENT NOTIFICATION UNDER THE BOMBAY AGRICULTURAL PRODUCE MARKET ACT, 1939. THE OBJECT OF MARKETING COMMITTEES WAS TO RENDER PUBLIC UTILITY SERVICES FOR MARKETING OF AGRICULTURAL PRODUCE TO ULTIMATE CONSU MERS AND PROVIDE SERVICES AS PER THE SAID ACT. UNDER THE SAID ACT, THE AGRIC ULTURAL PRODUCE MARKETING COMMITTEES WERE ENTITLED TO CHARGE CESS ON SALE OF AGRICULTURAL PRODUCE AT THE RATE DETERMINED BY SECTION 31 OF THE MARKET REGULAT ION ACT. THE SURPLUS/INCOME OF THE AGRICULTURAL PRODUCE MARKETIN G COMMITTEES WAS BEING GRANTED EXEMPTION FROM TAX UNDER SECTION 10(20) OF THE I.T. ACT BY TREATING THE SAID COMMITTEES AS LOCAL AUTHORITY. IT IS NOTED BY THE ASSESSING OFFICER THAT BY AN AMENDMENT BROUGHT INTO SECTION 10(20) BY THE FINANCE ACT, 2002 AND INSERTION OF EXPLANATION TO THIS SECTION W.E.F. 01. 04.2003, THE DEFINITION OF LOCAL AUTHORITY HAS BEEN RESTRICTED TO PANCHAYAT, MUNICIP ALITY, MUNICIPAL COMMITTEE AND DISTRICT BOARD AND CANTONMENT BOARD, THEREBY DI SENTITLING THE AGRICULTURAL PRODUCE MARKETING COMMITTEES OF EXEMPTION HITHERTO BEING GRANTED TO SUCH ASSESSEES. SIMILARLY, IT IS FURTHER NOTED BY THE A SSESSING OFFICER THAT THE EXEMPTION BEING GRANTED TO SUCH COMMITTEES UNDER SE CTION 10(29) OF THE I.T. 3 ITA NO.232/PN/2014 ACT IN RESPECT OF INCOME FROM LETTING OF GODOWNS ET C. HAD ALSO BEEN WITHDRAWN W.E.F. 01.04.2003. IT IS ALSO BROUGHT OUT BY THE A SSESSING OFFICER THAT SUBSEQUENT TO WITHDRAWAL OF THE EXEMPTIONS, THE ASS ESSEE WAS SHOWING ITS STATUS AS ASSOCIATION OF PERSONS (TRUST) AND CLAIME D EXEMPTION UNDER SECTION 11 & 12 OF THE I.T. ACT. HOWEVER, THE ASSESSING OF FICER NOTED THAT THE ASSESSEE WAS GRANTED REGISTRATION UNDER SECTION 12A ONLY W.E.F. 01.04.2003 RELEVANT TO ASSESSMENT YEAR 2004-05 AND THEREFORE T HE ASSESSEE WAS NOT ENTITLED TO CLAIM EXEMPTION UNDER SECTION 11 & 12 FOR THE AS SESSMENT YEAR UNDER CONSIDERATION. THEREFORE, PROCEEDINGS UNDER SECTIO N 147 WERE INITIATED LEADING TO ASSESSMENT OF THE ASSESSEE IN THE STATUS AS AN A SSOCIATION OF PERSONS, DENYING THE BENEFIT OF EXEMPTION UNDER SECTION 11, BY ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 DATED 20.12.2007. 5. THIS ORDER OF THE ASSESSING OFFICER WAS CHALLENG ED BY THE ASSESSEE BEFORE THE CIT(A). IT IS THE CASE OF THE ASSESSEE BEFORE THE CIT(A) THAT APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT WAS FILED DATED 31.08.2006 ON 01.09.2006. THE FIRST APPLICATION FO R REGISTRATION WAS FILED ON 24.11.2003. THE APPLICATION FOR REGISTRATION WAS R EJECTED VIDE ORDER DATED 29.03.2007. THE APPEAL AGAINST THIS ORDER OF THE C IT-III, PUNE FILED BEFORE THE ITAT IN ITA NO.543/PN/2007. THE TRIBUNAL DECIDED T HE APPEAL VIDE ORDER DATED 31.08.2007. IT IS THE CASE OF THE ASSESSEE T HAT THE TRIBUNAL IN ITS ORDER DATED 31.08.2007 DID NOT MENTION ANYTHING ABOUT THE APPLICATION FOR CONDONATION OF DELAY FILED ON 01.09.2006 BEFORE THE CIT-III, PUNE. IT IS THE FURTHER CASE OF THE ASSESSEE BEFORE THE CIT(A) THAT THE CIT-III, PUNE GRANTED REGISTRATION PURSUANT TO APPLICATION UNDER SECTION 12AA OF THE ACT W.E.F. 01.04.2003 WITHOUT CONSIDERING THE PRAYER OF THE AS SESSEE-SAMITI TO CONDONE THE DELAY AND GRANT REGISTRATION W.E.F. 01.04.2002. THE CIT(A) NOTED THAT REGISTRATION UNDER SECTION 12A OF THE ACT GRANTED T O THE ASSESSEE IS OPERATIVE W.E.F. 01.04.2003 BY VIRTUE OF THE ORDER OF THE CIT -III, PUNE DATED 28.11.2007. IN THE CIRCUMSTANCES, NO INFIRMITY CAN BE ATTRIBUTE D TO THE ACTION OF THE ASSESSING OFFICER IN DENYING EXEMPTION UNDER SECTIO N 11 & 12 OF THE ACT TO 4 ITA NO.232/PN/2014 THE ASSESSEE IN THE ASSESSMENT YEAR 2003-04 ON THE GROUND THAT DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSID ERATION, THE ASSESSEE DID NOT HAVE REGISTRATION UNDER SECTION 12A OF THE ACT. TH US, IN THE ABSENCE OF VALID REGISTRATION UNDER SECTION 12A DURING THE YEAR UNDE R CONSIDERATION, THE PRE- REQUISITE FOR CLAIMING EXEMPTION UNDER SECTION 11 & 12 OF THE ACT ITSELF IS NOT MET. ACCORDINGLY, THE CIT(A) CONCLUDED THAT THE AS SESSING OFFICER WAS JUSTIFIED ON FACTS AND IN LAW IN DENYING THE BENEFI T OF EXEMPTION UNDER SECTION 11 & 12 OF THE ACT TO THE ASSESSEE FOR THE YEAR UND ER CONSIDERATION. HE ALSO UPHELD THE ACTION UNDER SECTION 147 OF THE ACT TAKE N BY THE ASSESSING OFFICER. 6. AGGRIEVED BY THE IMPUGNED ORDER OF THE CIT(A), T HE ASSESSEE IS IN APPEAL BEFORE US. 7. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF SEVERAL OPPORTUNITIES GRANTED IN THIS REGARD. THE FIRST HE ARING WAS FIXED ON 20.01.2015 WHICH WAS ADJOURNED TO 27.04.2005 AS NONE APPEARED. ON 27.04.2015, THE MATTER WAS AGAIN ADJOURNED TO 05.08.2015 AT THE REQ UEST OF THE COUNSEL OF THE ASSESSEE. THEREAFTER, NONE APPEARED ON 05.08.2015 AND 17.11.2015 AS FIXED FOR HEARING. THE MATTER WAS RE-SCHEDULED FOR HEARI NG ON 04.02.2016 WHERE AGAIN NOBODY APPEARED FOR THE ASSESSEE. IN THE CIR CUMSTANCES, THE MATTER WAS PROCEEDED EX-PARTE AS NOTED ABOVE. 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE CONTENDED THAT IN VIEW OF THE FACT THAT REGISTRATION UNDER SECTION 12 A IS AVAILABLE TO THE ASSESSEE W.E.F. 01.04.2003 RELEVANT TO ASSESSMENT YEAR 2004- 05, THE ACTION OF THE ASSESSING OFFICER IN DENYING EXEMPTION CLAIMED UNDE R SECTION 11 & 12 OF THE ACT RELEVANT TO ASSESSMENT YEAR 2003-04 UNDER CONSI DERATION HAS BEEN RIGHTLY UPHOLD BY THE CIT(A) AND CANNOT BE INTERFERED WITH. HE THEREFORE RELIED UPON THE ORDER OF THE CIT(A). HE ALSO SUBMITTED THAT TH ERE IS NO CONCEPT OF DEEMED REGISTRATION UNDER SECTION 12AA AND 12A OF THE ACT IN VIEW OF THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. MUZAFAR NAGAR 5 ITA NO.232/PN/2014 DEVELOPMENT AUTHORITY IN INCOME TAX APPEAL NO.348 O F 2008, ORDER DATED 05.02.2015. HE THEREAFTER SUBMITTED THAT GROUND NO .2 IN RELATION TO THE ACTION UNDER SECTION 148 OF THE ACT OBJECTED TO BY THE ASS ESSEE IS ONLY CONSEQUENTIAL. ONCE THE REGISTRATION UNDER SECTION 12A IS NOT AVAI LABLE TO THE ASSESSEE FOR AN ASSESSMENT YEAR, THE INCOME ARISING TO THE ASSESSEE BECOMES CHARGEABLE TO TAX UNDER THE NORMAL PROVISIONS OF THE ACT AND THEREFOR E ESCAPEMENT OF INCOME CHARGEABLE TO TAX BECOMES UNASSAILABLE. 9. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE A UTHORITIES BELOW AND SUBMISSIONS MADE ON BEHALF OF THE REVENUE AND CASE LAW CITED. THE PRIMARY OBJECTION OF THE ASSESSEE-SAMITI IS THAT IT WAS DEE MED TO HAVE BEEN REGISTERED UNDER SECTION 12AA OF THE ACT FOR THE RELEVANT ASSE SSMENT YEAR AND THEREFORE SURPLUS AVAILABLE WITH THE ASSESSEE IS NOT TAXABLE UNDER THE ACT. WE NOTICE THAT THE ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SE CTION 12AA OF THE ACT W.E.F. 01.04.2003 AND ACCORDINGLY THE BENEFIT UNDER SECTIO N 11 & 12 OF THE ACT IS AVAILABLE FOR THE FINANCIAL YEAR COMMENCING FROM 01 .04.2003 RELEVANT TO ASSESSMENT YEAR 2004-05. THE ISSUE RAISED ON BEHAL F OF THE ASSESSEE THAT THE ASSESSEE SHOULD BE DEEMED TO BE REGISTERED FOR THE RELEVANT ASSESSMENT YEAR 2003-04 IS DECIDED AGAINST THE ASSESSEE BY THE FULL BENCH DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN MUZAFAR NAGAR DEVEL OPMENT AUTHORITY (SUPRA). RESPECTFULLY FOLLOWING THE DECISION OF TH E HONBLE ALLAHABAD HIGH COURT, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY, THE GROUND NO.1 OF THE APPEAL OF THE A SSESSEE IS DISMISSED. 10. AS PER GROUND NO.2, THE ASSESSEE HAS ALSO CHALL ENGED THE REOPENING OF ASSESSMENT UNDER SECTION 148 OF THE ACT ON THE GROU ND THAT NO INCOME HAS ESCAPED TAXATION IN VIEW OF INHERENT EXEMPTION TO T HE INCOME DERIVED BY THE ASSESSEE AND CONSEQUENTIALLY THE ASSESSMENT IS BAD IN LAW AND WITHOUT JURISDICTION AND THEREFORE REQUIRED TO BE QUASHED. WE ARE OF THE VIEW THAT THIS GROUND OF THE ASSESSEE ALSO DESERVES TO BE REJECTED SINCE THE SURPLUS OF THE ASSESSEE IS FOUND TO BE CHARGEABLE TO TAX UNDER THE NORMAL PROVISIONS OF THE 6 ITA NO.232/PN/2014 ACT IN THE ABSENCE OF VALID REGISTRATION UNDER SECT ION 12AA OF THE ACT. THEREFORE, WE DO NOT FIND ANY MERIT IN THE PLEA OF THE ASSESSEE. ACCORDINGLY, GROUND NO.2 IS ALSO DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON THIS 10 TH DAY OF FEBRUARY, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 10 TH FEBRUARY, 2016. % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE