SWARN JAYANTI RAIL NAGAR FLAT OWNERS ASSOCIATION, NOIDA V. ITO, EXEMPTION WARD, GHAZIABAD

ITA 2705/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7064 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 18-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , DELHI BENCH SMC, NEW DELHI BEFORE SHRI BHAVNSH SAINI, JUDICIAL MEMBER ITA NO. 2705/DEL./2018 ASSESSMENT YEAR : 2010-11 SWARN JAYANTI RAIL NAGAR FLAT OWNERS ASSOCIATION A-1, SECTOR-50, NOIDA UTTAR PRADESH, PIN- 201907 PAN : AADTS4242H VS ITO, EXEMPTION WARD GHAZIABAD, UTTAR PRADESH (APPELLANT) (RESPONDENT) ASSESSEE BY : G.C.SRIVASTAVA, ADV. SH. SUVINAY DASH, ADV. REVENUE BY : SH. S.L.ANURAGI, SR. D R DATE OF HEARING : 12.07.2018 DATE OF PRONOUNCEM ENT : 13.07.2018 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER : THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(A)-1, NOIDA DATED 27.03.2018 FOR ASSESSMENT YEAR 2010-11. 2. BRIEFLY FACTS OF THE CASE ARE THAT IN THIS CASE, ASSESSMENT WAS ORIGINALLY COMPLETED ON 14 TH FEBRUARY, 2013 ON TOTAL INCOME OF RS. 18,18,600/- IN THE STATUS OF AOP , AS AGAINST NIL RETURNED INCOME. THE MAIN ADDI TION OF RS. 18,18,600/- ITA NO.2705/DEL/2018 2 PERTAINS TO BANK INTEREST INCOME AND INTEREST ON IN COME TAXED REFUND, TAX CONSIDERING THE VERDICT OF HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB VS. CIT DATED 14 TH JANUARY, 2013. THE LD. CIT(A) DISMISSED THE APPEA L OF ASSESSEE. THE ASSESSEE PREFERRED APPEAL BEFORE ITAT, NEW DELHI. THE ASSESS EE SUBMITTED THAT ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY ITAT VIDE ORDER DATED 31 ST AUGUST, 2009 IN ITA NO. 3708/2008 FOR ASSESSMENT YEAR 2004-05 IN ASSESSEES OWN CASE. THE AO NOTED THAT THE TRIBUNAL CONSIDERING ITS ORDER FOR A SSESSMENT YEAR 2004-05 REMITTED BACK THE ISSUE OF EXPENSES OF RS. 28,70,532/- TO TH E FILE OF AO FOR FRESH CONSIDERATION AS PER LAW. THE ORDER OF THE TRIBUNAL DATED 13.10.2016 IN PARA 7 AND 8 IS REPRODUCED BY THE AO IN THE ASSESSMENT ORDER, TH E SAME READS AS UNDER :- 7. WITH REGARD TO GROUND NO. 3 IS CONCERNED W HICH IS RELATING TO NOT CONSIDERING AND THEREBY ALLOWING THE EXPENSES O F RS. 28,70,532/- BY THE LOWER AUTHORITIES, WHICH WERE IN THE NATURE OF RECURRING, OFFICE AND ADMINISTRATIVE EXPENSES INCURRED IN THE COURSE OF E ARNING INCOME. I FIND THAT BOTH THE REVENUE AUTHORITIES HAVE NOT DISCUSSE D THIS ISSUE IN THEIR RESPECTIVE ORDERS, THEREFORE, THE GROUND NO. 3 IS R EMITTED BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION, AS PER LAW, AFTE R GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ITA NO.2705/DEL/2018 3 3. THE AO IN VIEW OF THE ORDER OF THE TRIBUNAL RE-F IXED THE MATTER FOR FRESH HEARING. THE AO REFERRED TO THE ORDER OF THE TRIBUN AL DATED 13 TH OCTOBER, 2016 AND NOTED THAT THE TRIBUNAL HAS REMITTED BACK THE MATTE R TO THE FILE OF AO FOR FRESH CONSIDERATION. THE ASSESSEE SUBMITTED BEFORE ITAT F OR THE YEAR UNDER CONSIDERATION THAT ITAT HAS ALLOWED THE APPEAL OF ASSESSEE VIDE ORDER DATED 31 ST AUGUST, 2009 PASSED IN ITA NO. 3708/2008 FOR ASSESSMENT YEAR 200 4-05 IN ASSESSEES OWN CASE. THE AO REFERRED TO THE FACTS FOR ASSESSMENT YEAR 20 04-05 AND NOTED THAT THE DEPARTMENT HAS FILED APPEAL BEFORE HONBLE ALLAHABA D HIGH COURT AND THE DEPARTMENTAL APPEAL HAVE BEEN DISMISSED ON THE GROU ND OF LOW MONETARY LIMIT FOR FILING APPEAL BEFORE THE HIGH COURT. THE AO FURTHER NOTED THAT SUBSEQUENT TO THE DECISION OF THE ITAT IN THE CASE OF ASSESSEE FOR AS SESSMENT YEAR 2004-05 (SUPRA), THE SUPREME COURT IN THE CASE OF BANGLORE CLUB VS. CIT DATED 14 TH JANUARY, 2013 (SUPRA) HELD THAT THE AMOUNT OF INTEREST EARNED BY THE ASSESSED FROM THE AFORENOTED FOUR BANKS WILL NOT FALL WITHIN THE AMBIT OF PRINC IPLE OF MUTUALITY AND WILL THEREFORE BE EXIGIBLE TO INCOME TAX IN THE HANDS OF THE ASSES SEE CLUB. THE AO ACCORDINGLY REPEATED ADDITION OF RS. 18,18,599/- ON ACCOUNT OF BANK INTEREST AND OTHER INCOME. THE TOTAL INCOME OF ASSESSEE WAS COMPUTED AT RS. 18 ,18,600/-. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(A). ALL THE SUBMISSIONS OF THE ASSESSEE ARE NOTED IN THE APPELLATE ORDER IN CLUDING THAT THE AO HAS DISOBEYED ITA NO.2705/DEL/2018 4 ORDER OF THE ITAT, HOWEVER, THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED. THE LD. CIT(A) ALSO ISSUED A NOTICE OF ENHANCEMENT OF I NCOME TO RS. 32,55,494/- AND AFTER HEARING THE ASSESSEE ENHANCE THE ADDITION FRO M 18,18,599/- TO RS. 32,55,494/-. ACCORDINGLY APPEAL OF THE ASSESSEE WERE DISMISSED B Y MAKING THE ABOVE ENHANCEMENT. 5. THE ASSESSEE IN THE PRESENT APPEAL HAS CHALLENGE D THE ADDITION OF RS. 18,18,599/- MADE BY AO ON ACCOUNT OF BANK INTEREST AND OTHER INCOME AS WELL AS CHALLENGED THE ORDER OF LD. CIT(A) IN ENHANCING TH E INCOME FROM 18,18,599 TO RS. 32,55,494/-. 6. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ITAT , DELHI BENCH IN THE CASE OF THE SAME ASSESSEE FOR ASSESSMENT YEAR UNDER APPEAL I.E. 2010-11 EARLIER DECIDED THE APPEAL OF ASSESSEE VIDE ORDER DATED 13 TH OCTOBER, 2016, COPY OF THE SAME IS PLACED ON RECORD AND PROVIDED TO LD. DR. HE HAS SUBMITTED THAT IN THE APPEAL THE ASSESSEE RAISED THE ISSUE OF ADDITION OF RS. 18,18,599/- ON GROUND NO. 1 AND 2 AND GROUND NO. 3 ASSESSEE CHALLENGED THE ALLOWANCE OF EXPENSES OF RS. 28,70,532/-. HE HAS SUBMITTED THAT THE TRIBUNAL FOLLOWING ITS EARLIER O RDER ASSESSMENT YEAR 2004-05 ALLOWED GROUND NO. 1 AND 2 OF THE APPEAL OF ASSESSE E MEANING THEREBY THE ADDITION OF RS. 18,18,599/- HAVE BEEN DELETED. HE HAS FURTHER S UBMITTED THAT ON GROUND NO. 3 REGARDING ALLOWING OF THE EXPENSES OF RS. 28,70,532 /- , THE TRIBUNAL REMITTED THE MATTER BACK TO THE FILE OF AO FOR FRESH CONSIDERATI ON. HE HAS SUBMITTED THAT ONCE ITA NO.2705/DEL/2018 5 ADDITION HAVE BEEN DELETED BY THE ITAT VIDE ITS EAR LIER ORDER DATED 13 TH OCTOBER, 2016, THERE WAS NO JUSTIFICATION TO MAKE THE ADDITI ON AGAIN IN THE APPEAL EFFECT ORDER AND FURTHER THE CIT(A) SHOULD NOT HAVE ENHANCED TH E SAME ADDITION. ON THE OTHER HAND, LD. DR MERELY RELIED UPON ORDERS OF THE AUTHO RITIES BELOW. 7. I HAVE CONSIDERED RIVAL SUBMISSION AND PERUSED T HE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT EARLIER AO PASSED THE ASSESSMEN T ORDER ON 14 TH FEBRUARY, 2013 AND MADE ADDITION OF RS. 18,18,600/- ON ACCOUNT OF BANK INTEREST INCOME AND OTHER INTEREST. THE ASSESSEE ULTIMATELY PREFERRED APPEAL BEFORE THE TRIBUNAL IN ITA NO. 6361/2015 FOR A.Y. 2010-11 IN APPEAL WHICH IS DECID ED BY THE TRIBUNAL VIDE ORDER DATED 13 TH OCTOBER, 2016. THE TRIBUNAL FOLLOWING ITS EARLIER DECISION IN THE CASE OF SAME ASSESSEE FOR ASSESSMENT YEAR 2004-05 DELETED T HE ADDITION OF RS. 18,18,599/- (18,18,600/-) AND GROUND NO. 1 AND 2 HAVE BEEN ALLO WED. THE AO REPRODUCED ORDER OF THE TRIBUNAL DATED 13 TH OCTOBER, 2016 IN PARA 7 AND 8 IN THE ASSESSMENT OR DER WHICH IS ALSO REPRODUCED ABOVE. GROUND NO. 3 WAS WI TH REGARD TO EXPENSES OF RS. 28,70,532/-. IT APPEARS THAT AO MISUNDERSTOOD THE FINDINGS OF THE TRIBUNAL IN PARA 7 AND 8 AND HAD TAKEN THAT THE ISSUE OF ADDITION OF R S. 18,18,599/- IS ALSO RESTORED TO THE FILE OF AO, DESPITE OF THE FACT THIS ADDITION H AS ALREADY BEEN DELETED BY THE TRIBUNAL. SIMILARLY, THE LD. CIT(A) MISUNDERSTOOD T HE ORDER OF THE ITAT AND WITHOUT ANY JUSTIFICATION ENHANCED THE SAME ADDITIO N. IT IS WELL SETTLED LAW THAT WHEN PARTICULAR MATTER IS REMANDED TO ASSESSING OFFICER ON LIMITED ISSUE, THE JURISDICTION ITA NO.2705/DEL/2018 6 OF THE AO IS CONFINED TO SUCH ISSUE ONLY. IN SUPPO RT OF ABOVE PROPOSITION OF LAW, I RELY UPON DECISION OF ALLAHABAD HIGH COURT IN THE C ASE OF S.P. COCHAR 145 ITR 255, DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF SRI VIDHYAVASNI GUPTA 186 ITR 253 AND DECISION OF CALCUTTA HIGH COURT IN THE CASE OF KATHIAR JUTE MILLS 120 ITR 86. SINCE, IN THE PRESENT CASE THE TRIBUNAL RESTORED T HE ISSUE OF EXPENSES OF RS. 28,70,532/- ONLY TO THE AO VIDE ORDER DATED 13 TH OCTOBER, 2016, THE ASSESSING OFFICER SHOULD HAVE CONFINED TO THIS ISSUE ONLY IN SET ASID E PROCEEDING U/S 143(3) / 254 OF IT ACT IN THE IMPUGNED ASSESSMENT ORDER DATED 06.11.20 17. I MAY FURTHER NOTE THAT THE ASSESSING OFFICER IN SET ASIDE PROCEEDING DESPITE R E-PRODUCING THE RELEVANT PARA OF THE ORDER OF THE TRIBUNAL IN THE ASSESSMENT ORDER DID N OT DECIDE THE ISSUE OF EXPENSES OF RS. 28,70,532/- AND THUS DID NOT FOLLOW ORDER OF TH E TRIBUNAL DATED 13 TH OCTOBER, 2016. I MAY ALSO NOTE THAT THE AO FURTHER DISOBEYE D THE ORDER OF THE TRIBUNAL DATED 13 TH OCTOBER, 2016 BY REPEATING THE ADDITION OF RS. 18, 18,599/- ON ACCOUNT OF BANK INTEREST AND OTHERS WHICH ADDITION HAS ALREADY BEEN DELETED BY THE TRIBUNAL VIDE ORDER DATED 13 TH OCTOBER, 2016. THUS, THE AO AND THE LD. CIT(A) HAV E EXCEEDED THEIR JURISDICTION IN MAKING ADDITION AND ENHANCING THE SAME ADDITION ON ACCOUNT OF BANK INTEREST ETC. THE ORDERS OF THE AUTHORITIES BE LOW ARE ILLEGAL, VOID AB INITIO. THE AO AND THE CIT(A) HAVE WITHOUT ANY JUSTIFICATION FA IL TO FOLLOW THE ORDER OF THE TRIBUNAL AND AS SUCH LIABLE FOR PROCEEDINGS UNDER C ONTEMPT OF COURTS ACT. IN VIEW ITA NO.2705/DEL/2018 7 OF THE ABOVE DISCUSSION, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION MADE BY THE AO AND ENHANCED BY THE LD. CIT(A). 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT.) SD/- (BHAVNESH SAINI) JUDICIAL MEMB ER DATED: 13 /07/2018 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE OF DICTATION 12.07.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.07.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 13.07.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 13.07.2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 13.07.2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 13.07.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 13.07.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER ITA NO.2705/DEL/2018 8