Deesa Mercantile Co.Op.So.Ltd., Deesa V. The ACIT.,B.K.Circle, Palanpur

ITA 2732/AHD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80258 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 05-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: M K PATEL
• Keywords: Initiation of penalty proceedings
• Section: 244A

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , ! ' #$ #$ #$ #$ %, ' BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. $./ I.T.A. NO.2732/AHD/2012 A.Y. 2008-09 2. $./ I.T.A. NO.2733/AHD/2012 A.Y. 2009-10 THE DEESA MERCANTILE CO.OP.SOCIETY LTD. BASEMENT, RAJIV GANDHI COMPLEX DEESA 385 535 / VS. THE ACIT B.K.CIRCLE PALANPUR 385 001 '( ! $./)* $./ PAN/GIR NO. : AAABT 2083 Q ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI M.K. PATEL, A.R. ,-(+ / . / RESPONDENT BY : SHRI V.K. SINGH, SR.D.R. 0 / ! / / / / DATE OF HEARING 06/08/2014 123 / ! / DATE OF PRONOUNCEMENT 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED A GAINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TA X(APPEALS)-XX, AHMEDABAD (CIT(A) FOR SHORT) BOTH IDENTICALLY DATED 21/09/ 2012 FOR ASSESSMENT YEARS (AYS) 2008-09 & 2009-10. SINCE COM MON ISSUES ARE INVOLVED, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONV ENIENCE. 2. FIRST, WE TAKE UP THE APPEAL IN ITA NO.2732/AHD/ 2012 FOR AY 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL:- ITA NOS.2732&2733/AHD/20 12 THE DEESA MERCANTILE CO-OP.SOC.LTD. VS. ACIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 2 - 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTIN G THE A.O. TO VERIFY WHETHER ANY INTEREST WAS RECEIVED BY THE APP ELLANT ON SHORT TERM DEPOSITS AND GOVERNMENT SECURITIES WHICH IS NOT PERMITTED U/S.251(1) OF THE I.T.ACT, 1961. 2) THE LEARNED A.O. HAS ERRED IN PASSING THE ORDER GIVING EFFECT TO THE CIT(A)S ORDER AND THERE BY MADE AN ADDITION OF RS.8,45,268=00 WHICH IS AGAINST THE FACTS, EVIDENCE , SUBMISSION, EXPLANATION AND INFORMATION ON RECORD AND SAME NEED S TO BE DELETED. 3) THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ACTION OF THE LEARNED A.O. IN LEVYING IN TEREST U/S.234A, 234B, 244A & 234D OF THE I.T. ACT, 1961. 4) THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE REGARDING INITIATION OF PENALTY PROCEEDINGS U/S.271 (1)(C) OF THE I.T. ACT, 1961. 5) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEA RNED CIT(A) MAY BE MODIFIED IN FAVOUR OF THE APPELLANT & ADDITION MADE BY LEARNED A.O. BE DELETED. 6) CRAVE LEAVE TO ADD, AMEND, ALTER, VARY OR WITHDR AW ANY OR ALL THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS REOPENED FOR ASSESSMENT AND THE ASSESSMENT U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 11/10/2011, THEREBY THE ASSESSING OFFICER (AO IN SHORT) DISALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF DEDUCTION U/S.80P(2)(C) OF RS.50,000/- AND U/S.80P(2)(D) OF RS.66,03,834/-. AGAINST THIS, ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DELETED THE ADDITION MADE ON ACCOUNT O F DISALLOWANCE OF CLAIM U/S.80P. HOWEVER, LD.CIT(A) RESTORED THE ISS UE FOR VERIFICATION IN ITA NOS.2732&2733/AHD/20 12 THE DEESA MERCANTILE CO-OP.SOC.LTD. VS. ACIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 3 - RESPECT OF INTEREST EARNED BY THE APPELLANT ON SHOR T-TERM DEPOSITS AND GOVERNMENT SECURITIES AND HE DIRECTED THE AO TO ADD SUCH INTEREST UNDER THE HEAD INCOME FROM OTHER SOURCES. 3. GROUND NOS.1 & 2 ARE INTER-CONNECTED. THEREFORE THESE GROUNDS ARE TAKEN UP TOGETHER. 3.1. GROUND NO.3 IS WITH REGARD TO LEVY OF INTEREST THAT BEING CONSEQUENTIAL IS HELD ACCORDINGLY. 3.2. GROUND NO.4 IS WITH REGARD TO INITIATION OF PE NALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. DURING THE COURSE OF HEA RING, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS T HE SAME. THEREFORE, ON THE BASIS OF THE STATEMENT MADE BY THE LD.COUNSEL F OR THE ASSESSEE, THIS GROUND IS TREATED AS NOT PRESSED. 3.3. GROUND NOS.5 & 6 ARE GENERAL IN NATURE REQUIRE NO INDEPENDENT ADJUDICATION. 4. NOW, THE GROUNDS THAT ARE LEFT WITH US FOR ADJUD ICATION ARE GROUND NOS.1 & 2. 4.1. AT THE OUTSET, LD.COUNSEL FOR THE ASSESSEE SUB MITTED THAT ON THE LAST DATE OF HEARING, THE CASE WAS ADJOURNED AS A QUERY RAISED BY THE BENCH TO VERIFY WHETHER THE REVENUE HAS FILED ANY APPEAL. HE SUBMITTED THAT ON ENQUIRY, IT IS FOUND THAT THE REVENUE HAS NOT CHALL ENGED THE ORDER OF THE LD.CIT(A). THE LD.SR.DR SUPPORTED THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT A LETTER WAS ISSUED TO THE AO WHO HAS INFORMED NO CROSS-APPEAL HAS BEEN FILED. ITA NOS.2732&2733/AHD/20 12 THE DEESA MERCANTILE CO-OP.SOC.LTD. VS. ACIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 4 - 4.2. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) EXCEEDED HIS JURISDICTION BY DIRECTING THE AO TO VE RIFY AND MAKE ASSESSMENT IN RESPECT OF THE INTEREST EARNED ON SHO RT-TERM DEPOSITS AND GOVERNMENT SECURITIES. THE ORDER OF THE LD.CIT(A) TO THIS EXTENT IS EX FACIE ILLEGAL. 4.3. ON THE CONTRARY, LD.DR SHRI V.K.SINGH VEHEMENT LY ARGUED AND SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT TH ERE IS NO ILLEGALITY IN THE ORDER OF THE AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. DURING THE COURSE OF HEARING, LD.COUNSEL FOR THE AS SESSEE POINTED OUT THAT THE LD.CIT(A) HAS EXCEEDED HIS JURISDICTION BY REST ORING THE ISSUE TO THE AO FOR VERIFICATION AND ASSESSMENT OF THE INTEREST EARNED ON SHORT-TERM DEPOSITS AND GOVERNMENT SECURITIES. HE DREW OUR AT TENTION TOWARDS SECTION 251(1) OF THE ACT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVEN IF THE MATTER IS TO BE REMITTED, IT SHOULD BE BY THE HONBLE TRIBUNAL AND NOT BY THE LD.CIT(A). HE RELIED ON THE DECISIO N OF COORDINATE BENCH OF THIS TRIBUNAL (ITAT SMC BENCH AHMEDABAD) IN IT A NO.2747/AHD/2012 FOR AY 2009-10 IN THE CASE OF SHRI CHHATRAPATI SIVAJI SAHAKARI MANDALI LTD.VS. ACIT, DATED 10/1/2014, WHE REIN THE IDENTICAL FACTS, THE CASE WAS RESTORED TO THE FILE OF AO TO F RAME DE NOVO ASSESSMENT IN ACCORDANCE WITH LAW. WE FIND THAT THE DIRECTION GIVEN BY THE LD.CIT(A) TO AO IS ON THE BASIS OF THE JUDGEMENT OF THE HONB LE APEX COURT RENDERED IN THE CASE OF TOTGARS CO-OPERATIVE SALE S OCIETY LTD. VS. ITO REPORTED AT (2010) 322 ITR 283(SC). ITA NOS.2732&2733/AHD/20 12 THE DEESA MERCANTILE CO-OP.SOC.LTD. VS. ACIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 5 - 5.1. AFTER CONSIDERING THE TOTALITY OF THE FACTS AN D THE CASE-LAW AS RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) OUGHT NOT TO HAVE RESTORED THE M ATTER TO THE FILE OF AO, BUT HE SHOULD HAVE SOUGHT REMAND REPORT FROM THE AO IN RESPECT OF THE INTEREST EARNED BY THE ASSESSEE AND ALSO TO ADJUDIC ATE WHETHER SUCH INTEREST WOULD BE ELIGIBLE FOR DEDUCTION U/S.80P(2) IN THE LIGHT OF THE JUDGEMENT OF HONBLE APEX COURT IN THE CASE OF TOTG ARS CO-OPERATIVE SALE SOCIETY LTD. VS. ITO(SUPRA) AND THE DECISION O F COORDINATE BENCH IN THE CASE OF SHRI CHHATRAPATI SIVAJI SAHAKARI MANDAL I LTD. (SUPRA). SINCE FROM A BARE READING OF THE SECTION 251(1) OF THE AC T, IT IS EVIDENT THAT THE LD.CIT(A) IS EMPOWERED TO CONFIRM, REDUCE, ENHANCE AND ANNUL THE ASSESSMENT, BUT HE IS NOT EMPOWERED TO REMAND BACK THE ISSUE TO THE FILE OF AO FOR MAKING A FRESH ASSESSMENT. IN THE CASE I N HAND, THE LD.CIT(A) HAS NOT ONLY ASKED FOR VERIFICATION BUT ALSO DIRECT ED THE AO TO ASSESS SUCH RECEIPTS UNDER THE HEAD INCOME FROM OTHER SOURCES . THEREFORE, HE HAS EXCEEDED THE JURISDICTION CONFERRED UPON HIM BY THE PROVISIONS OF SECTION 251 OF THE ACT. HENCE, WE CANNOT CONFIRM THE ORD ER OF THE LD.CIT(A), THE SAME IS HEREBY SET ASIDE AND THE ISSUE IS RESTO RED BACK TO THE FILE OF LD.CIT(A) TO DECIDE IT AFRESH AFTER SEEKING REMAND REPORT FROM THE AO. THUS, GROUND NOS.1 & 2 ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.2732/AHD/2012 FOR AY 2008-09 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.2732&2733/AHD/20 12 THE DEESA MERCANTILE CO-OP.SOC.LTD. VS. ACIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 6 - 7. NOW, WE TAKE-UP THE NEXT APPEAL OF THE ASSESSEE IN ITA NO.2733/AHD/2012 FOR AY 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTIN G THE A.O. TO VERIFY WHETHER ANY INTEREST WAS RECEIVED BY THE APP ELLANT ON SHORT TERM DEPOSITS AND GOVERNMENT SECURITIES WHICH IS NOT PERMITTED U/S.251(1) OF THE I.T.ACT, 1961. 2) THE LEARNED A.O. HAS ERRED IN PASSING THE ORDER GIVING EFFECT TO THE CIT(A)S ORDER AND THERE BY MADE AN ADDITION OF RS.12,91,128=00 WHICH IS AGAINST THE FACTS, EVIDENC E, SUBMISSION, EXPLANATION AND INFORMATION ON RECORD A ND SAME NEEDS TO BE DELETED. 3) THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ACTION OF THE LEARNED A.O. IN LEVYING IN TEREST U/S.234A, 234B, 244A & 234D OF THE I.T. ACT, 1961. 4) THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE REGARDING INITIATION OF PENALTY PROCEEDINGS U/S.271 (1)(C) OF THE I.T. ACT, 1961. 5) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEA RNED CIT(A) MAY BE MODIFIED IN FAVOUR OF THE APPELLANT & ADDITION MADE BY LEARNED A.O. BE DELETED. 6) CRAVE LEAVE TO ADD, AMEND, ALTER, VARY OR WITHDR AW ANY OR ALL THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 8. GROUND NOS.1 & 2 ARE INTER-CONNECTED. THEREFORE THESE GROUNDS ARE TAKEN UP TOGETHER. 8.1. GROUND NO.3 IS WITH REGARD TO LEVY OF INTEREST THAT BEING CONSEQUENTIAL IS HELD ACCORDINGLY. 8.2. GROUND NO.4 IS WITH REGARD TO INITIATION OF PE NALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. DURING THE COURSE OF HEA RING, LD.COUNSEL FOR THE ITA NOS.2732&2733/AHD/20 12 THE DEESA MERCANTILE CO-OP.SOC.LTD. VS. ACIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 7 - ASSESSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS T HE SAME. THEREFORE, ON THE BASIS OF THE STATEMENT MADE BY THE LD.COUNSEL F OR THE ASSESSEE, THIS GROUND IS TREATED AS NOT PRESSED. 8.3. GROUND NOS.5 & 6 ARE GENERAL IN NATURE REQUIRE NO INDEPENDENT ADJUDICATION. 9. NOW, THE GROUNDS ARE LEFT WITH US FOR ADJUDICATI ON ARE GROUND NOS.1 & 2. 9.1. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE FACTS ARE IDENTICAL TO THE FACTS AS WERE IN ASSESSEES OWN CASE BEARING IT A NO.2732/AHD/2012 FOR AY 2008-09(SUPRA), WHEREIN WE HAVE RESTORED TH E ISSUE BACK TO THE FILE OF LD.CIT(A) TO DECIDE IT AFRESH AFTER SEEKING REMAND REPORT FROM THE AO. SINCE THERE IS NO CHANGE IN THE FACTS AND CIR CUMSTANCES OF THE CASE IN THIS YEAR, FOR THE SAME REASONING, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND RESTORE THIS ISSUE BACK TO THE FILE O F LD.CIT(A) TO DECIDE IT AFRESH AFTER SEEKING REMAND REPORT FROM THE AO. TH US, GROUND NOS.1 & 2 ARE ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( ) ( %) ! ' ' ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 08/08/2014 7.., .../ T.C. NAIR, SR. PS ITA NOS.2732&2733/AHD/20 12 THE DEESA MERCANTILE CO-OP.SOC.LTD. VS. ACIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 8 - 4 / ,8 9 83 4 / ,8 9 83 4 / ,8 9 83 4 / ,8 9 83/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. $$ : / CONCERNED CIT 4. :() / THE CIT(A)-XX, AHMEDABAD 5. 8%; , , , / DR, ITAT, AHMEDABAD 6. ;<= >0 / GUARD FILE. 4 4 4 4 / BY ORDER, -8 , //TRUE COPY// ? ?? ?/ // / $) $) $) $) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 7.8.14 (DICTATION-PAD 10-PAG ES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 7.8.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8.8.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ..8.8.14 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER