CITY AND INDUSTRIAL DEVELOPMENT CORPORTAION OF MAHARASHTRA LTD., MUMBAI V. PR. CIT - 15 , MUMBAI

ITA 2840/MUM/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 3802 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 06-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AWANGSHI GIMSON
• Assessee Lawyers: S E DASTUR SR
• Keywords: Principle of natural justice; Retrospective amendment; Set aside
• Section: 143(3); 260A; 143(2); 113; 13; 22; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, AM & SHRI RAM LAL NEGI, JM ./ I.T.A. NO. 2840 / MUM/ 2019 ( / ASSESSMENT YEAR: 2014 - 15) M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. NIRMAL, 2 ND FLOOR, NARIMAN POINT, MUMBAI - 400 021 / VS. PCIT - 15, ROOM NO. 516, 5 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 ./ ./PAN NO. AACCC3303K ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI S. E. DASTUR, SR. COUNSEL & SHRI MADHUR AGARWAL, AR / RESPONDENTBY : SHRI AWANGSHI GIMSON, DR / DATE OF HEARING : 19.09.2019 / DATE OF PRONOUNCEMENT : 16.10.2019 2 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. PR. COMMISSIONER OF INCOME TAX - 15 IN SHORT REFERRED AS LD. PCIT , MUMBAI, DATED 25.03.19 FOR ASSESSMENT YEAR (IN SHORT AY) 2014 - 15. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2014 - 15 ON 28 - 10 - 2015 DECLARING TOTAL INCOME AT RS. 5 LAKHS. THE CASE WAS SELECTED FOR COMPLETE SCRUTINY UNDER CASS AND STATUTORY NOTICE U/S. 143(2) WAS ISSUED AND SERVED ON THE ASSESSEE. AO FOLLOWED THE ORDER OF ITAT FOR AY 2006 - 07 IN ASSESSEE S OWN CASE AND COMPLETED THE ASSESSMENT FOR AY 2014 - 15 U/S 143(3) OF THE ACT DATED 19.12.16 ASSESSING THE INCOME AT RS. 5 LAKHS RESULTING IN REFUND OF RS. 86,26,160/ - . 3. PR .CIT OBSERVED THAT ASSESSEE COMPANY CLAIMED EXEMPTION U/S. 10(20A) OF THE ACT TILL A.Y. 2002 - 03. SECTION 10(20A) OF THE INCOME TAX ACT WAS OMITTED BY THE FINANCE ACT 2002 W.E.F. 01.04.2003. THEREFORE , UNDER THE INCOME TAX ACT, 1961, NO EXEMPTION IS AVAIL ABLE TO THE ASSESSEE COMPANY. FOLLOWING THE 3 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. OMISSION OF SECTION 10(20A) OF THE I.T. ACT, 1961, THE INCOME OF THE ASSESSEE IS TAXABLE AS PER THE PROVISIONS OF THE INCOME TAX UNDER VARIOUS HEADS. ACCORDING TO PR.CIT, THE ORDER PASSED BY THE AO U/S. 143(3) ON 19.12.16 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, HE ISSUED A SHOW CAUSE NOTICE DATED 07.12.2018 AND SERVED ON THE ASSESSEE. IN RESPONSE TO THE ABOVE NOTICE, ASSESSEE SUBMITTED THAT THE ORDER PASSED BY THE AO U/ S 143(3) IS NOT ERRONEOUS AS IT WAS PASSED BY THE AO FOLLOWING THE BINDING DECISION OF THE JURISDICTIONAL HIGH COURT AS WELL AS THE JURISDICTIONAL TRIBUNAL IN ASSESSEE'S OWN CASE. THEREFORE, THE COMMISSIONER DOES NOT HAVE THE JURISDICTION FOR EXERCISING PO WERS U/S.263 OF THE ACT. 4. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, PR. CIT OBSERVED THAT THERE IS NO ORDER OF THE HON'BLE JURISDICTIONAL HIGH COURT IN INCOME TAX MATTER. WHEREAS, THE ASSESSEE HAS RELIED THE DECISION IN THE CASE OF PERCIVAL JOSEPH PAREIRA VS CIDCO AND OTHERS DATED 07.11.2009. IT PERTAINS TO COMPENSATION UNDER LAND ACQUISITION ACT, 1894. HE FURTHER OBSERVED THAT THE ORDER RELIED BY THE ASSESSEE IN ITS SUBMISSION IS THE ORDER PASSED BY HON BLE 4 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. ITAT FOR AY 2006 - 07. EVEN THOUGH T HE ORDER PASSED BY ITAT, THE DEPARTMENT HAS PREFERRED AN APPEAL IN HON BLE HIGH COURT OF BOMBAY U/S. 260A OF INCOME TAX ACT, 1961. ACCORDING TO PR.CIT, SINCE THE APPEAL HAS BEEN FILED BY THE DEPARTMENT IN THE HON'BLE HIGH COURT AGAINST THE ORDER OF THE TRI BUNAL, IF IN ANY SUBSEQUENT YEAR, ORDERS PASSED BY THE ASSESSING OFFICERS NOT FOLLOWING THE STAND WHICH HAS BEEN TAKEN BY THE DEPARTMENT, WOULD BE IN THE NATURE OF ERRONEOUS ORDERS IN SO FAR AS THEY ARE PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER, HE O BSERVED THAT AO HAS PASSED ASSESSMENT ORDER BY ONLY SUBJECTING REMUNERATION OF RS. 5 LAKHS UNDER THE HEAD 'INCOME FROM BUSINESS, BUT DID NOT TAKE INTO CONSIDERATION THE INCOME IN RESPECT OF PROJECTS I.E. NAVI MUMBAI AND OTHER PROJECTS ETC. ACCORDINGLY, HE CONSIDERED THE ORDER PASSED BY THE ASSESSING OFFICER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER, HE OBSERVED THAT ASSESSEE HAS FILED VARIOUS MATERIAL AND EVIDENCE TO ESTABLISH THAT THE ASSESSEE IS THE AGENT OF THE GOVERNME NT OF MAHARASHTRA WHILE ACTING AS 'NEW TOWN DEVELOPMENT AUTHORITY' AND 'SPECIAL PLANNING AUTHORITY'. FURTHER, HE OBSERVED THAT THE CLAIM OF THE ASSESSEE TO BE DECLARED AS AGENT OF THE GOVERNMENT OF 5 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. MAHARASHTRA IS AN AFTERTHOUGHT. IN SUPPORT OF THE ABOVE CL AIM, ASSESSEE HAS REFERRED TO IN THE REPLY DATED 18.01.2019, SECTION 113(3A) AND SECTION 40(L)(B) R.W.S. 40(3) OF THE MAHARASHTRA REGIONAL AND TOWN PLANNING ACT, GOVERNMENT NOTIFICATION DATED 18.03.1970 AND 20.03, 1971, CASE LAW PERCIVAL, ORDER OF ITAT FOR AY 2003 - 04 TO 2007 - 08 AND ASSESSMENT ORDER FOR A.Y. 2013 - 14. 5. PR. CIT AFTER REVIEWING THE ABOVE INFORMATION FILED BY THE ASSESSE, HE OBSERVED THAT BY VIRTUE OF ARTICLE 289(1) OF THE CONSTITUTION, THE PROPERTY AND INCOME OF THE STATE IS EXEMPT FROM UNIO N TAXATION. ACCORDING TO HIM, BEFORE CONCLUDING, THE INCOME OF THE ASSESSEE IS NOT TAXABLE, IT IS NECESSARY TO ARRIVE AT THE CONCLUSION THAT THE ASSESSEE IS THE SURROGATE OF THE STATE GOVERNMENT AND PERFORMING THE TASKS OF THE GOVERNMENT AND THEREFORE, THE SURPLUS ACCRUING TO THE STATE GOVERNMENT ARE NOT TAXABLE AS PER THE PROVISIONS OF ARTICLE 289(1) OF THE CONSTITUTION OF INDIA. 6. FURTHER, PR.CIT OBSERVED THAT ASSESSE IS NOT AN AGENT OF THE GOVERNMENT AND, THEREFORE, THE TASKS PERFORMED BY THE ASSESSEE C ANNOT BE EQUATED WITH THE TASKS PERFORMED BY THE STATE 6 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. GOVERNMENT. BY REFERRING TO ARTICLE 289(2) OF THE CONSTITUTION OF INDIA, ENABLES LEVY OF UNION TAXATION ON STATE GOVERNMENT OWNED COMPANIES AND THEREFORE, ANY INCOME ACCRUING TO THE ASSESSEE MUST BE SU BJECTED TO THE PROVISIONS OF INCOME TAX ACT. ACCORDING TO HIM, ASSESSEE IS A COMPANY AND THERE IS NO DISPUTE THAT ASSESSEE IS A PERSON AS PER THE PROVISIONS OF SECTION 2(31) OF THE INCOME TAX ACT, 1961. FURTHER, HE OBSERVED THAT ASSESSEE WAS INCORPORATED AS A COMPANY ON 19.03.1970 WITH A SHARE CAPITAL WHICH WAS WHOLLY AND EXCLUSIVELY SUBSCRIBED BY THE GOVERNMENT OF MAHARASHTRA WITH THE OBJECT OF CREATION OF NEW TOWN OF NAVI MUMBAI, NEW AURANGABAD, NEW NASIK ETC. THEREFORE, ASSESSEE IS INCORPORATED AS A COM PANY AND THE ENTIRE SHARE - CAPITAL SUBSCRIBED BY THE GOVERNMENT OF MAHARASHTRA, BUT THIS FACT ITSELF DOES NOT PROVE THAT THE TASKS PERFORMED BY THIS COMPANY ARE THE TASKS OF THE STATE GOVERNMENT. PR. CIT OBSERVED THAT THE ABOVE NEW TOWNS ARE NOT THE EXCLUSI VE TASK OF THE GOVERNMENT. THIS TASK CAN ALSO BE DONE WITH PRIVATE PARTICIPATION. FURTHER, HE OBSERVED THAT THE VARIOUS CASE LAWS WHICH HAVE BEEN CITED BY THE ASSESSEE OR BY THE HON'BLE TRIBUNAL IN ITS ORDER ARE NOT CONSIDERED AS SUPPORTING THE VIEW THAT T HE 7 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. ASSESSEE COMPANY IS THE SURROGATE OF THE STATE GOVERNMENT AND THEREFORE, TAX CANNOT BE IMPOSED ON THE SURROGATE AS PER THE PROVISIONS OF ARTICLE 289(1) OF THE CONSTITUTION OF INDIA. 7. FURTHER, PR.CIT OBSERVED THAT AS THE DECISIONS ARE NOT CONSIDERED AP PLICABLE IN ASSESSEE S CASE, THE DEPARTMENT HAS FILED THE APPEAL BEFORE HON BLE BOMBAY HIGH COURT AGAINST THE ORDER PASSED BY ITAT IN AY 2006 - 07 AND 2007 - 08. PR. CIT OPINED THAT WHEREVER THE ORDER OF THE ASSESSING OFFICER AND THE HON'BLE TRIBUNAL ARE AGAIN ST THE STAND TAKEN BY THE DEPARTMENT IN A.Y. 2006 - 07, REMEDIAL ACTION IF AVAILABLE IS BEING TAKEN IN CONSONANCE TO THE STAND OF THE DEPARTMENT IN A.Y. 2006 - 07 WHICH IS THAT THE INCOME OF THE ASSESSEE AFTER OMISSION OF SECTION 10(20A) IS TAXABLE W.E.F. A.Y. 2003 - 04. 8. FURTHER, PR. CIT REJECTED THE CITATION OF THE VARIOUS DECISIONS OF HON BLE SUPREME COURT I.E. IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD VS. CIT 243 ITR 81 AND CIT VS MAX INDIA LTD. 295 ITR 282. FURTHER, HE OBSERVED THAT ONLY ONE VIEW IS PO SSIBLE AND THAT IS THE ACTS OF THE ASSESSEE COMPANY ARE NOT THE ACTS OF THE STATE AND THEREFORE, THE INCOME OF THE ASSESSEE 8 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. COMPANY LIKE ANY OTHER COMPANY MUST BE SUBJECT TO THE PROVISIONS OF THE INCOME TAX ACT, 1961 AND INCOME TAX RULES 1962. ACCORDINGLY, HE CONSIDERED THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 143(3) ON 19.12.16 AS ERRONEOUS AND IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY, HE SET ASIDE THE ORDER WITH A DIRECTION TO PASS THE ORDER DE NOVO AFTER GIVING OPPO RTUNITY TO THE ASSESSEE. 9. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED THE APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREIN BELOW: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME - TAX - 15 UNDER SECTION 263 OF THE ACT IS INVALID AND BAD IN LAW AS BEING CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME - TAX - 15 UNDER SECTION 263 OF THE ACT IS INVALID AND BAD IN LAW AS THE JURISDICTIONAL CONDITIONS FOR ASSUMING JURISDICTION UNDER SECTION 263 OF THE ACT HAS NOT BEEN FULFILLED BY THE PRINCIPAL COMMISSIONER OF INCOME - TAX - 15. 9 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. 3. ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE AND IN LAW, THE PRINCIPAL COMMISSIONER OF INCOME - TAX - 15 ERRED IN HOLDING THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND HENCE JURISDICTION UNDER SECTION 263 OF THE ACT HAS BEEN PROPERLY EXERCISED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE PRINCIPAL COMMISSIONER OF INCOME - TAX - 15 ERRED IN HOLDING THAT THE APPELLANT IS NOT ACTING AS AN AGENT OF THE GOVERNMENT OF MAHARASHTRA. THE APPELLA NT CRAVES LEAVE TO ADD, ALTER, AMEND OR OMIT ANY OF THE AFORESAID GROUNDS OF APPEAL. 10. SR. COUNSEL OF THE ASSESSEE SHRI DASTUR, BRIEFLY SUBMITTED THAT THIS ORDER OF PR. CIT PASSED U/S 263 AGAINST THE ORDER OF AO, IN WHICH AO HAS ACCEPTED THE ASSESSEE IS AN AGENT OF THE STATE GOVT AND THE INCOME OF THE STATE CANNOT BE CHARGED IN THE HANDS OF THE AGENT. FURTHER, AO HAS CALLED FOR THE VARIOUS INFORMATION FOR THE SAME ISSUE ON WHICH ORDER U/S 263 OF THE ACT WAS PASSED AND ASSESSEE HAS SUBMITTED IN DETAIL ALL THE INFORMATION AS CALLED FOR BY THE AO. NOW, THE SAME ISSUE IN WHICH AO HAS TAKEN A 10 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. VIEW WHICH MAY BE POSSIBLE VIEW, BUT PR. CIT HAS COME TO A DIFFERENT VIEW. FURTHER, HE BROUGHT TO OUR NOTICE WHETHER ASSESSEE SHOULD BE HELD AS AN AGENT OF THE STATE OR A N AUTHORITY OF THE STATE (I..E ARM OF THE STATE). HE SUBMITTED THAT ASSESSEE WAS INCORPORATED AS COMPANY ON 17.03.1970 WITH SHARE CAPITAL, WHICH WAS WHOLLY AND EXCLUSIVELY SUBSCRIBED BY THE GOVT. OF MAHARASHTRA WITH AN OBJECT OF CREATION OF NEW TOWN OF NAV I MUMBAI, NEW AURANGABAD, NEW NASHIK AND OTHER PROJECTS IN THE STATE OF MAHARASHTRA. FOR THAT PROPOSITION, HE BROUGHT TO OUR NOTICE THE VARIOUS NOTIFICATIONS ISSUED BY THE GOVT. OF MAHARASHTRA WHICH IS PLACED IN THE PAPER BOOK. SPECIFICALLY, HE BROUGHT TO OUR NOTICE AT PAGE NO. 209 OF THE PAPER BOOK, WHICH IS A NOTIFICATION ISSUED ON 18 TH MARCH 1970, AS PER WHICH, ASSESSEE HAS TO CARRY ON INDUSTRIAL AND CITY DEVELOPMENT IN THE BOMBAY CITY IN ORDER TO REDUCE THE CONG ESSION IN VARIOUS AREAS. AS PER THE ABOVE NOTIFICATION, ASSESSEE WAS SPECIFICALLY TO ACT AS AGENT OF THE GOVT. FOR THE DEVELOPMENT OF THE AREAS WITH A VIEW TO SECURE THE OBJECTS AS PER THE NOTIFICATION. FURTHER, HE BROUGHT TO OUR NOTICE AT PAGE NO. 215 AND 218 OF THE PAPER BOOK IN WHICH, ASSESSEE WAS APPOINTED AS NEW TOWN DEVELOPMENT AUTHORITY AND 11 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. ASKED TO DEVELOP THE AREA THANE, PANVEL, ETC. AS PER SECTION 15 AND 113(1) OF THE MAHARASHTRA REGIONAL AND TOWN PLANNING ACT (MRTP ACT), 1966 IN ORDER TO DEVELOP NEW BOMBAY. FURTHER, HE BROUGHT TO OUR NOT ICE PARA 4 OF RESOLUTION DATED 20 TH MARCH 1971, WHEREIN ASSESSEE WAS APPOINTED AS AUTHORITY TO DEVELOP NEW BOMBAY AND IN EXERCISE OF POWERS CONFERRED BY SECTION 113(3A) OF THE MRTP ACT, HE BROUGHT TO OUR NOTICE THE PROVISIONS OF SECTION 113(1) AND 113(3A) OF THE MRTP ACT. HE FURTHER SUBMITTED THAT AS PER THE PROVISION OF STATE GOVT. WHILE WORKING THROUGH THE AGENCY OF THE CORPORATION INCLUDING A COMPANY OWNED AND CONTROLLED BY THE STATE OR A SUBSIDIARY COMPANY THERETO, SET UP WITH THE OBJECT OF DEVELOPING A N AREA AS NEW TOWN, THE STATE GOVT. MAY REQUIRE THE WORK OF DEVELOPING AND DISPOSING OF LAND IN THE AREA OF A NEW TOWN TO BE DONE BY ANY SUCH CORPORATION, COMPANY OR SUBSIDIARY COMPANY AFORESA ID AS AN AGENT OF THE STATE ACT . HE SUBMITTED THAT AS PER THE A BOVE PROVISION, THE ASSESSEE WAS APPOINTED AS AGENT ONLY IN ORDER TO DEVELOP NEW TOWN. IN THE SAME PROCESS, ASSESSEE WAS APPOINTED AS SPL. PLANNING AUTHORITY IN THE AREA OF NAGPUR, AURANGABAD, ETC. THE RELEVANT RESOLUTIONS ARE PLACED IN THE PAPER BOOK. 12 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. 11 . LD. SR. COUNSEL SPECIFICALLY BROUGHT TO OUR NOTICE A LETTER RECEIVED FROM URBAN DEVELOPMENT DEPARTMENT, MANTRALAYA, MUMBAI, DATED 1 ST APRIL 2008 IN WHICH, IT IS CLEARLY NOTED THAT ASSESSEE IS WORKING AS AN AGENT OF GOVT. AND IT IS NOT NECESSARY ON ITS PA RT TO PAY THE INCOME TAX RETURNS. FURTHER, HE BROUGHT TO OUR NOTICE THAT ASSESSEE IS HELD AS AN AGENT IN THE ASSESSEE S OWN CASE DECIDED BY THE HON BLE HIGH COURT IN A SINGLE MEMBER IN THE CASE OF PERCIVAL JOSEPH PAREIRA VRS CIDCO, WHICH IS PLACED IN PAGE 11 OF THE PAPER BOOK. IN THE ABOVE DECISION, HON BLE COURT HAS CLEARLY DECIDED THAT ASSESSEE IS AN AGENT OF THE STATE GOVT. APPOINTED U/S 113(3A) OF MRPT ACT, 1966 AND THE DIVISIONAL BENCH OF HON BLE HIGH COURT ALSO CONFIRMED THAT ASSESSEE IS AN AGENT OF THE GOVT, WHICH IS PLACED AT PAGE 198 OF THE PAPER BOOK. IN THE ABOVE CASE, ASSESSEE ITSELF FILED A CASE AGAINST THE SINGLE MEMBER DECISION OF THE HON BLE HIGH COURT AND THE HON BLE DIVISIONAL BENCH HAS BROUGHT ON RECORD THAT AS PER SECTION 113(3A) OF MRTP ACT , IT IS CLEAR THAT NEW TOWN DEVELOPMENT AUTHORITY IS DECLARED AS AGENT OF THE STATE GOVT. HE FURTHER SUBMITTED THAT IN THE BOTH COUNTS I.E. NEW TOWN DEVELOPMENT AUTHORITY AND SPL. PLANNING AUTHORITY, ASSESSEE IS 13 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. HELD TO BE AN AGENT OF THE STATE GOVT AND SU BMITTED THAT THIS CLEARLY ESTABLISHES THAT ASSESSEE IS A DESIGNATED AGENT. IN THIS REGARD, HE SPECIFICALLY EXPLAINED THE MEANING OF THE TERM AGENT , WHICH IS DEFINED AS UNDER: - SECTION 182. AGENT AND PRINCIPAL DEFINED AN AGENT IS A PERSON EMPLOYED TO DO ANY ACT FOR ANOTHER OR TO REPRESENT ANOTHER IN DEALINGS WITH THIRD PERSONS. THE PERSON FOR WHOM SUCH ACT IS DONE, OR WHO IS SO REPRESENTED, IS CALLED THE PRINCIPAL . 12. HE FURTHER SUBMITTED THAT AGENT CAN BE DECIDED ONLY BASED ON THE DOCUMENTS AND IN THIS CASE, RESOLUTION PASSED BY THE STATE GOVT. AS AGENT . FURTHER, HE BROUGHT TO OUR NOTICE THE DECISION OF ITAT IN ASSESSEE S OWN CASE, WHICH IS PLACED IN THE PAPER BOOK AT PAGE NO. 198 FOR AY 2006 - 07, WHEREIN HON BLE ITAT HAS A LREADY DECIDED THAT ASSESSEE IS AN AGENT OF THE GOVT AND IN BRIEF, HE EXPLAINED THE STATUS OF THE FINALITY OF THE ASSESSMENTS OF THE PREVIOUS ASSESSMENT YEARS. I.E. AY 2003 - 04 TO AY 2013 - 14. HE EXPLAINED THAT FROM AY 2003 - 4 TO 2005 - 06 AND 2007 - 08, HON BLE ITAT HELD THAT ASSESSEE IS AN AGENT AND DEPARTMENT IS NOT IN FURTHER APPEAL BEFORE HON BLE HIGH COURT. THEREFORE, THE MATTER 14 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. REACHED FINALITY THAT ASSESSEE IS AN AGENT. FURTHER, HE SUBMITTED THAT ASSESSEE HAS FILED RETURN FOR AY 2008 - 09 AND 2009 - 10 AND AO REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT AND AO ACCEPTED THE RETURNED INCOME FOR THE ABOVE ASSESSMENT YEARS. HE FURTHER SUBMITTED THAT FOR AY 2010 - 11 AND AY 2012 - 13, RE - ASSESSMENT NOTICE WAS ISSUED AND PENDING AS OF NOW. WITH REGARD TO AY 2011 - 12, AO ACCEPTED THE RETURN OF INCOME AND THERE FO RE NO PROCEEDING PENDING AND WITH REGARD TO AY 2013 - 14, AO ACCEPTED THE RETURN OF INCOME AND ASSESSMENT WAS COMPLETED U/S 143(3) ON 19.12.16, WHICH IS PLACED ON RECORD AT PAGE NO. 158 OF THE PAPER BOOK. IN BRI EF, LD. SR. COUNSEL SUBMITTED THAT FROM THE AY 2003 - 04 TO AY 2013 - 14 EXCEPT AY 2010 - 11 AND AY 2012 - 13, THE ISSUE OF TREATING THE ASSESSE AS AGENT WAS ACCEPTED BY THE REVENUE. 13. FURTHER, HE BROUGHT TO OUR NOTICE THE REPLY OF THE ASSESSEE TO THE AO, WHICH IS PLACED ON RECORD AT PAGE NO. 141 TO 152 WHICH INCLUDES A NOTE ON THE ACTIVITIES OF THE ASSESSEE COMPANY AS REQUIRED BY THE AO AND ASSESSSEE HAS EXPLAINED THE VARIOUS ACTIVITIES. HE SUBMITTED THAT BASED ON THE ABOVE SUBMISSION AND 15 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. AO HAS APPLIED HIS MIN D TO REACH THE ONLYPOSSIBLE VIEW THAT ASSESSEE IS AN AGENT OF STATE GOVT., ACCORDINGLY, HE COMPLETED THE ASSESSMENT ORDER U/S 143(3) OF THE ACT. 14. NOW, LD. PR.CIT HAS INVOKED THE PROVISION OF SECTION 263 OF THE ACT BY TREATING THE ABOVE ASSESSMENT AS ER RONEOUS AND PR.CIT HIMSELF IN PARA NO. 4 MENTIONED THAT THERE IS NO ORDER OF THE HON BLE JURISDICTIONAL HIGH COURT IN INCOME TAX MATTER WHICH HAS BEEN PASSED IN THE CASE OF ASSESSEE AS ON DATE. HE FURTHER SUBMITTED THAT THERE IS INFACT HON BLE HIGH COURT D ECISION IN THE ASSESSEE S OWN CASE WHICH IS PLACED ON RECORD, WHICH SHOULD BE BINDING ON THE PR.CIT. ASSESSEE CAN BE TREATED AS AGENT AS PER MRTP ACT AND NOT NECESSARILY THAT ASSSESSEE SHOULD BE TREATED AS AGENT ALSO IN THE CASE OF INCOME TAX. PR. CIT HAS GROSSLY NEGLECTED THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF PERCIVAL JOSEPH PAREIRA (SUPRA) DATED 07.11.09. HOWEVER, PR. CIT OPINED THAT THE ABOVE DECISION PERTAINS TO COMPENSATION UNDER LAND ACQUISITION ACT 1894. FURTHER HE SUBMITTED THA T PR. CIT HAS ACKNOWLEDGED THAT ONLY ORDER PASSED BY THE HON BLE ITAT ON 08.08.12 FOR AY 2006 - 07, 16 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. WHICH IS IN FAVOR OF THE ASSESSEE, BUT ACCORDING TO HIM, THE ABOVE ORDER IS CHALLENGED BEFORE HON BLE BOMBAY HIGH COURT. SINCE THE ABOVE APPEAL FILED BY THE D EPARTMENT IS PENDING BEFORE HON BLE HIGH COURT, THE ORDERS PASSED BY THE AO IS NOT FOLLOWING THE STAND WHICH HAS BEEN TAKEN BY THE DEPARTMENT, WOULD IN THE NATURE OF ERRONEOUS ORDER IN SO FAR AS THEY ARE PREJUDICIAL TO THE INTEREST OF REVENUE. HE STRONGLY OBJECTED TO THE STAND OF THE PR.CIT AND RELIED UPON THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF GABRIEL INDIA LTD. HE FURTHER SUBMITTED THAT EVEN THOUGH IN THE ASSESSEE S CASE, THERE IS ONLY ONE POSSIBLE VIEW, BUT EVEN OTHERWISE TWO POSSIBLE V IEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW FOR WHICH, COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. IN THIS PROPOSITION, HE RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF C IT VRS. MAX INDIA LTD (2007) 295 ITR 282 (SC). 15. HE BROUGHT TO OUR NOTICE THE DECISION IN THE CASE OF MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION MUMBAI VRS. DY. DIRECTOR OF INCOME TAX, IN WHICH HON BLE HIGH COURT OF 17 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. BOMBAY OBSERVED FROM THE SUBMISSI ON OF THE COUNSELS REPRESENTING THE ASSESSEE REFERRED TO THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF ADITYAPUR INDUSTRIAL AREA DEVELOPMENTS AUTHORITY VRS. UNION OF INDIA AND OTHERS, WHEREIN AN IDENTICAL/SIMILAR ENTITY TO THE ASSESSEE HEREIN WAS NO T EXTENDED THE BENEFIT OF ARTICL E 289 OF THE CONSTITUTION OF INDIA IN THE CONTEXT OF BIHAR INDUSTRIAL DEVELOPMENT AUTHORITY ACT, 1974. FURTHER IT WAS BROUGHT TO OUR NOTICE THAT SIMILAR IDENTICAL NATURE OF THE OTHER ENTITY I.E. CIDCO, THE HON BLE BOMBAY HI GH COURT OBSERVED THAT THE DECISION OF THE TRIBUNAL WAS PER INCURIM AS THE ABOVE DECISION OF THE APEX COURT WAS NOT BROUGHT TO ITS NOTICE. 16. LD. SR. COUNSEL OBJECTED TO THE ABOVE OBSERVATION OF THE HON BLE HIGH COURT, WHICH IS NOT BASED ON THE FACTS OF THE CASE OF THE ASSESSEE. HE SUBMITTED THAT THE ISSUE BEFORE HON BLE COURT WAS RELATING TO ARTICLE 289, WHEREAS IN THE CASE OF ASSESSEE, THE ISSUE WAS COMPLETELY DIFFERENT THAT ASSESSE IS DISTINGUISHED AS AGENT OF THE STATE GOVT. NOT SEEKING THE BENEFIT OF ARTICLE 289. THEREFORE, THE OBSERVATION IS BASED WITHOUT CONSIDERING THE REAL FACTS OF THE CASE AND THE ORDER OF THE TRIBUNAL CANNOT BE HELD AS 18 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. PER INQUIRIM IN THAT PROPOSITION. HE BROUGHT TO OUR NOTICE THE CASE OF TATA MOTORS LTD. VRS. TALATHI OF VILLAGE CHIKHALI & ORS (CIVIL APPEAL NO. 10187 OF 2010), WHEREIN IT WAS HELD AS UNDER: - 9. TO KNOW WHETHER THE DEVELOPMENT AUTHORITY WAS AN AGENT OF THE STATE GOVERNMENT AND TO ASCERTAIN ITS STATUS, IT IS NECESSARY TO REFER TO THE RELEVANT PROVISIONS OF THE MAHAR ASHTRA REGIONAL AND TOWN PLANNING ACT, 1966 (FOR SHORT 'MRTP ACT'). SECTION 113 OF MRTP ACT PROVIDES FOR DESIGNATION OF NEW TOWNS AND CONSTITUTION OF DEVELOPMENT AUTHORITIES FOR THOSE NEW TOWNS. SUB - SECTIONS (1), (2), AND (4) OF THAT SECTION ARE EXTRACTED BELOW: '113. (1) IF THE STATE GOVERNMENT IS SATISFIED THAT IT IS EXPEDIENT IN THE PUBLIC INTEREST THAT ANY AREA SHOULD BE DEVELOPED AS A SITE FOR A NEW TOWN AS RESERVED OR DESIGNATED IN ANY DRAFT OR FINAL REGIONAL PLAN IT MAY BY NOTIFICATION IN THE OFFICIA L GAZETTE, DESIGNATE THAT AREA AS THE SITE FOR THE PROPOSED NEW TOWN. THE NEW TOWN SHALL BE KNOWN BY THE NAME SPECIFIED IN THE NOTIFICATION. (2) AFTER PUBLICATION OF THE NOTIFICATION UNDER SUB - SECTION (1) FOR THE PURPOSE OF ACQUIRING, DEVELOPING AND DISPOS ING OF LAND IN THE AREA OF A 19 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. NEW TOWN, THE STATE GOVERNMENT SHALL BY ANOTHER NOTIFICATION IN THE OFFICIAL GAZETTE, CONSTITUTE A NEW TOWN DEVELOPMENT AUTHORITY.......... XXX XXX XXX (4) EVERY DEVELOPMENT AUTHORITY SHALL BE A BODY CORPORATE WITH PERPE TUAL SUCCESSION AND A COMMON SEAL WITH POWER TO ACQUIRE, HOLD AND DISPOSE OF PROPERTY, BOTH MOVEABLE AND IMMOVEABLE, AND CONTRACT AND SUE OR BE SUED BY SUCH NAME AS MAY BE SPECIFIED IN THE NOTIFICATION UNDER SUB - SECTION (2)'. SECTION 114 LAYS DOWN THE OBJE CT OF DEVELOPMENT AUTHORITY AND SUB - SECTION (1) THEREOF IS EXTRACTED BELOW: '114(1) THE OBJECTS OF A DEVELOPMENT AUTHORITY SHALL BE TO SECURE THE LAYING OUT AND DEVELOPMENT OF THE NEW TOWN IN ACCORDANCE WITH PROPOSALS APPROVED IN THAT BEHALF UNDER THE PROV ISIONS OF THIS ACT, AND FOR THAT PURPOSE EVERY SUCH AUTHORITY SHALL SUBJECT TO THE PROVISIONS OF SECTION 113A HAVE POWER TO ACQUIRE, HOLD, MANAGE AND DISPOSE OF LAND AND OTHER PROPERTY TO CARRY OUT BUILDINGS AND OTHER OPERATIONS, TO PROVIDE WATER, ELECTRIC ITY, GAS, SEWERAGE AND OTHER SERVICES, AMENITIES AND 20 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. FACILITIES AND GENERALLY TO DO ANYTHING NECESSARY OR EXPEDIENT FOR THE PURPOSE OF THE NEW TOWN OR FOR PURPOSES INCIDENTAL THERETO.' SECTION 116 EMPOWERS DEVELOPMENT AUTHORITIES TO ACQUIRE LANDS. SECTION 118 DEALS WITH DISPOSAL OF LANDS BY DEVELOPMENT AUTHORITIES AND SUBSECTION (1) THEREOF WHICH IS RELEVANT IS EXTRACTED BELOW: '118.(1) SUBJECT TO ANY DIRECTIONS GIVEN BY THE STATE GOVERNMENT UNDER THIS DEVELOPMENT ACT, A DEVELOPMENT AUTHORITY MAY DISPOSE OF ANY LAND ACQUIRED BY IT OR VESTING IN IT TO SUCH PERSONS, IN SUCH MANNER, AND SUBJECT TO SUCH TERMS OR CONDITIONS AS THEY CONSIDER EXPEDIENT FOR SECURING THE DEVELOPMENT OF THE NEW TOWN IN ACCORDANCE WITH PROPOSALS APPROVED BY THE STATE GOVERNMENT UNDER T HIS ACT: PROVIDED THAT, A DEVELOPMENT AUTHORITY SHALL NOT HAVE POWER, EXCEPT WITH THE CONSENT OF THE STATE GOVERNMENT, TO SELL ANY LAND OR TO GRANT A LEASE OF ANY LAND FOR A TERM OF MORE THAN NINETY - NINE YEARS, AND THE STATE GOVERNMENT SHALL NOT CONSENT TO ANY SUCH DISPOSAL OF LAND UNLESS IT IS SATISFIED THAT THERE ARE EXCEPTIONAL CIRCUMSTANCES WHICH 21 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. RENDER THE DISPOSAL OF THE LAND IN THAT MANNER EXPEDIENT.' 10. IT IS EVIDENT FROM SECTION 113,114 AND 118 OF MRTP ACT THAT THE DEVELOPMENT AUTHORITY IS A B ODY CORPORATE WHICH CAN ACQUIRE, HOLD, MANAGE AND DISPOSE OF LAND. SECTION 113 PROVIDES FOR CONSTITUTION OF A NEW TOWN DEVELOPMENT AUTHORITY. SECTION 114 STATES THE OBJECTS OF SUCH DEVELOPMENT AUTHORITY. SECTION 118 OF MRTP ACT PROVIDES FOR DISPOSAL BY THE DEVELOPMENT AUTHORITY OF ANY LAND ACQUIRED BY IT OR VESTING IN IT. THE DEVELOPMENT AUTHORITY IS THEREFORE A BODY CORPORATE WHICH CAN ACQUIRE, HOLD, POSSESS, MANAGE, DEVELOP AND DISPOSE OF LAND IN ITS NAME AND ON ITS OWN BEHALF. THE FACT THAT THE DEVELOPME NT AUTHORITY REQUIRES THE CONSENT OF THE STATE GOVERNMENT TO DISPOSE OF ANY OF ITS LAND BY WAY OF LEASES IN EXCESS OF 99 YEARS WILL NOT ALTER THE POSITION THAT THE LANDS LEASED ARE LANDS OF THE DEVELOPMENT AUTHORITY. THERE IS NO PROVISION IN MRTP ACT WHICH REQUIRES THE NEW TOWN DEVELOPMENT AUTHORITY, TO HOLD AND DISPOSE OF ANY GOVERNMENT LAND AS AGENT OF THE STATE GOVERNMENT. IN CONTRAST, MRTP ACT CONTAINS A SPECIFIC PROVISION ENABLING THE STATE GOVERNMENT TO REQUIRE A CORPORATION OR COMPANY (OTHER THAN A N EW TOWN DEVELOPMENT AUTHORITY, WHICH IS SPECIFIC TO A NEW TOWN), TO EXECUTE 22 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. DEVELOPMENT WORK AND DISPOSE OF ITS LANDS AS ITS AGENT. SUB - SECTION (3A) OF SECTION 113 OF MRTP ACT PROVIDES: '(3A). HAVING REGARD TO THE COMPLEXITY AND MAGNITUDE OF THE WORK INVO LVED IN DEVELOPING ANY AREA AS A SITE FOR THE NEW TOWN, THE TIME REQUIRED FOR SETTING UP NEW MACHINERY FOR UNDERTAKING AND COMPLETING SUCH WORK OF DEVELOPMENT, AND THE COMPARATIVE SPEED WITH WHICH SUCH WORK CAN BE UNDERTAKEN AND COMPLETED IN THE PUBLIC INT EREST, IF THE WORK IS DONE THROUGH THE AGENCY OF A CORPORATION INCLUDING A COMPANY OWNED OR CONTROLLED BY THE STATE OR A SUBSIDIARY COMPANY THEREOF, SET UP WITH THE OBJECT OF DEVELOPING AN AREA AS A NEW TOWN, THE STATE GOVERNMENT MAY, NOTWITHSTANDING ANYTH ING CONTAINED IN SUB - SECTION (2), REQUIRE THE WORK OF DEVELOPING AND DISPOSING OF LAND IN THE AREA OF A NEW TOWN TO BE DONE BY ANY SUCH CORPORATION, COMPANY OR SUBSIDIARY COMPANY AFORESAID, AS AN AGENT OF THE STATE GOVERNMENT; AND THEREUPON, SUCH CORPORATI ON OR COMPANY SHALL, IN RELATION TO SUCH AREA, BE DECLARED BY THE STATE GOVERNMENT, BY NOTIFICATION IN THE OFFICIAL GAZETTE, TO BE THE NEW TOWN DEVELOPMENT AUTHORITY FOR THAT AREA.' 23 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. MIDC IS A CORPORATION WHICH WOULD FALL UNDER SUB - SECTION 113(3A) WHEREAS T HE DEVELOPMENT AUTHORITY FALLS UNDER SECTION 113(2) OF MRTP ACT. THE CIRCULAR ISSUED WITH REFERENCE TO MIDC IS THEREFORE OF NO ASSISTANCE TO CONTEND THAT LAND LEASED BY THE DEVELOPMENT AUTHORITY TO APPELLANT IS A GOVERNMENT LAND. THE CONTENTION OF APPELLAN T THAT THE DEVELOPMENT AUTHORITY IS THE AGENT OF STATE GOVERNMENT AND THAT THE APPELLANT IS A GOVERNMENT LESSEE ARE THEREFORE REJECTED. 17. FURTHER, HE BROUGHT TO OUR NOTICE THE RELEVANT FACTS OF THE CASE AND IT IS CLEARLY HELD THAT AS PER MIDC IS A CORPO RATION WHICH WOULD FALL UNDER SUB - SECTION 113(3A) WHEREAS THE DEVELOPMENT AUTHORITY FALLS UNDER SECTION 113(2) OF MRTP ACT. THE CIRCULAR ISSUED WITH REFERENCE TO MIDC IS THEREFORE OF NO ASSISTANCE TO CONTEND THAT LAND LEASED BY THE DEVELOPMENT AUTHORITY TO ASSESSEE IS A GOVERNMENT LAND. THE HON BLE SUPREME COURT MADE CLEARDISTINCTION BETWEEN THE NOTICE WHICH FALLS UNDER SECTION 113(2) AND 113(3A). 18. FURTHER, HE BROUGHT TO OUR NOTICE THAT THE DECISION BEFORE THE HON BLE HIGH COURT THAT THEY WOULD NOT HAVE MADE OBITER 24 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. DICTA AND FURTHER HE SUBMITTED THAT THUS, IT WOULD BE INCORRECT TO SAY THAT EVERY OPINION OF THE SUPREME COURT WOULD BE BINDING UPON THE HIGH COURT OF INDIA; THE ONLY OPINION WHICH WOULD AN OPINION EXPRESSED ON A QUESTION THAT AROSE FOR THE DE TERMINATION OF SUPREME COURT, EVEN THOUGH ULTIMATELY IT MIGHT BE FOUND THAT THE PARTICULAR QUESTION WAS NOT NECESSARY FOR THE DECISION OF THE CASE. THE ORBITER DICTA OF THE SUPREME COURT SHOULD BE FOLLOWED BY THE HIGH COURTS, BUT WHERE THEY ARE IN CONFLICT WITH THE RATIO OF THE SAME OR ANOTHER DECISION OF THE SUPREME COURT, THE RATIO SHOULD BE FOLLOWED IN PREFERENCE TO THE OBITER DICTA. SIMILARLY, THE RATIO OF A COURT S DECISION, AS OPPOSED TO THE GENERAL PROPOSITIONS STATED THERE, SHOULD BE FOLLOWED. 19. FURTHER HE BROUGHT TO OUR NOTICE THAT THE STAY ORDER PASSED BY THE HON BLE BOMBAY HIGH COURT IN ASSESSEE S OWN CASE AND IN THE ABOVE DECISION, THE STAY WAS GRANTED TREATING THE ASSESSEE AS AN AGENT. HE FILED A COPY OF THE DECISION AND HE SUBMITTED THAT THE CA SE OF MIDC IS THAT OF DIFFERENT FACTS AND RELYING ON ASSESSEE S CASE WHICH IS DIFFERENT AND TO TREAT THAT AS PER ENQUIRIM IS WRONG AND THE CASE OF MIDC IS NOT RELEVANT TO ASSESSEE S CASE. 25 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. 20. FURTHER, HE BROUGHT TO OUR NOTICE AT PAGE NO. 221 OF THE PAPER BOOK, IN WHICH RESOLUTION PASSED BY THE STATE OF MAHARASHTRA DATED 24 TH JAN 1972, AS PER WHICH ASSESSEE WAS APPOINTED TO UNDERTAKE ALL THE DEVELOPMENTWORK AND TO PROVIDE THE SOCIAL AND PHYSICAL INFRASTRUCTURE TO ATTAIN THE OBJECTIVES LAID DOWN IN THE GOVT. RESOLUTIONS DATED 18 TH MARCH 1970 ON BEHALF OF THE GOVT AND TO DISPOSE OF THE LAND TO THE EXTENT APPROPRIATE. HE SUBMITTED THAT ASSESSEE WAS APPOINTED AS AGENT OF THE GOVT OF MAHARASHTRA AND ASSESSEE WAS ELIGIBLE TO CLAIM THE EXPENDITURE IT INCURS ON THE PROJECT, INCLUSIVE OF ADMINISTRATIVE EXPENSES THERETO PLUS AGENCY REMUNERATION OF RS. 3 LAKHS FOR THE YEAR ENDED 31 ST MARCH 1971 TO BE INCREASED EACH YEAR BY RS. 1 LAKHS SUBJECT TO A MAXIMUM OF RS. 5 LAKHS FOR ANY ONE YEAR. THEREFORE, THE MAXIMUM REMUNERAT ION AVAILABLE TO THE ASSESSEE TO CLAIM IS RS. 5 LAKHS AND THE SAME WAS DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME AND OFFERED TO TAX. 21 LD. SR. COUNSEL OBJECTED TO THE OBSERVATION OF PR. CIT THAT IT IS THE ONLY ONE VIEW POSSIBLE IN THE CASE OF ASSE SSEE, HE SUBMITTED THAT IT IS NOT THE ONLY ONE VIEW POSSIBLE WHEREAS PR. CIT DECIDING THE ISSUE ONLY ON ARTICLE 289 OF THE CONSTITUTION, 26 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. WHEREAS THE ASSESSEE SUBMITTED BEFORE THE AO THAT IT IS NOT CLAIMING UNDER ARTICLE 289, WHEREAS IT HAS OFFERED THE INCO ME OF THE ASSESSEE AS AGENT OF THE GOVT. OF MAHARASHTRA AND THE WHOLE INCOME WAS OFFERED TO TAX . THEREFORE, AO ACCEPTED THE VIEW OF THE ASSESSEE THAT ASSESSEE IS AN AGENT OF GOVT. OF MAHARASHTRA AND NEVER CLAIMED DEDUCTION UNDER ARTICLE 289 OF THE CONSTITUT ION, THEREFORE IT IS TWO VIEWS, VIEW OF THE AO THAT ASSESSEE IS AN AGENT AND OFFERED TO TAX THE INCOME OF THE ASSESSEE AS AGENT OF THE GOVT. OF MAHARASHTRA, WHEREAS PR. CIT TAKEN A VIEW THAT ASSESSEE S INCOME IS TAXABLE UNDER INCOME TAX BY VIRTUE OF DELETI ON OF SECTION 10(20A) OF THE I.T. ACT AND ASSESSEE IS CLAIMING DEDUCTION UNDER ARTICLE 289 (1) OF THE CONSTITUTION. THEREFORE, THERE ARE TWO VIEW, ACCORDINGLY HE RELIED IN THE CASE OF CIT VRS. MAX INDIA LTD (2007) 295 ITR 282 (SC), WHEREIN IT WAS HELD THAT WHEN AN ITO ADOPTED ONE OF THE COURSE PERMISSIBLE IN LAW AND IT HAS RESULTED A LOSS OF REVENUE OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS ERRONEOUS ORDER PREJUDICIAL TO TH E INTEREST OF REVENUE. SINCE THE VIEW TAKEN BY THE ITO IS SUSTAINABLE IN LAW. 27 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. 22 FURTHER, HE OBJECTED TO THE OBSERVATION OF PR.CIT THAT THE DEPARTMENT IS IN APPEAL BEFORE HON BLE HIGH COURT AND THE AO SHOULD HAVE PASSED THE ORDER FOLLOWING THE STAND TAKEN BY THE DEPARTMENT BEFORE HIGH COURT AND REJECTING THE ORDER PASSED BY THE ITAT. HE SUBMITTED THAT JUDICIAL DISCIPLINE SEEKS THAT THE AO IN THE JURISDICTION OF THE ITAT MUST FOLLOW THE ORDER PASSED BY THE JURISDICTIONAL ITAT. IN THIS REGARD, HE RELIED UPON THE CASE OF UNION OF INDIA & OTHERS VRS. KAMLAKSHI FINANCE CORPORATION LTD. (1992 SUPP (1) SC CASES 648, WHEREIN IT WAS HELD AS UNDER: - 3. WHEN THE MATTER THUS WENT BACK TO THE ASSISTANT COLLECTOR HE PASSED AN ORDER ON 12.5.89, REITERATING THE CONCLUSION THAT HAD BEEN REACHED BY HIS PREDECESSOR. HE ALSO DID NOT GIVE ANY REASONS AS TO WHY THE ORDER OF THE COLLECTOR (APPEALS) IN RESPECT OF THE BORIVILI PLANT WAS NOT FOLLOWED. NOT ONLY THIS, THE ASSESSEE HAD PLACED BEFORE HIM A DECISION OF THE CENTRAL EXCISE AND GOLD CONTROL APPELLATE TRIBUNAL ('THE TRIBUNAL') IN THE CASE OF M/S. CHETNA PLYCOATS (P) LTD., REPORTED IN 1988(37) ELT 252 TO A SIMILAR EFFECT. THE ASSISTANT COLLECTOR DISTINGUISHED IT OBSERVING THAT THE SAID DECISION HAD NOT BEEN AGREED TO BY THE DEP ARTMENT WHICH HAD FILED AN APPEAL TO THE SUPREME COURT THEREFROM. THE SECOND ORDER PASSED BY THE 28 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. ASSISTANT COLLECTOR WAS PRACTICALLY A REPETITION OF THE EARLIER ORDER. 4. THE ASSESSEE THEREUPON FILED A WRIT PETITION IN THE BOMBAY HIGH COURT. THE HIGH COURT QUASHED THE ORDER OF THE ASSISTANT COLLECTOR AND DIRECTED THE DEPARTMENT TO ALLOCATE THE MATTER TO A COMPETENT OFFICER TO PASS A PROPER ORDER. THE UNION OF INDIA HAS PREFERRED THIS APPEAL. THE LEARNED ADDITIONAL SOLICITOR GENERAL, APPEARING FOR THE UNION, FAIRLY CONCEDES THAT SO FAR AS THE MERITS ARE CONCERNED, THE DEPARTMENT CAN HAVE NO GRIEVANCES, SINCE THE HIGH COURT HAS ONLY SET ASIDE THE ORDER OF THE ASSISTANT COLLECTOR AND REMANDED THE MATTER BACK FOR A PROPER CONSIDERATION AND A PROPER ORDER. WE ARE , THEREFORE, NOT CALLED UPON TO ENTER INTO THE MERITS OF THE CLASSIFICATION IN THE PRESENT CASE EXCEPT TO OBSERVE THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. CHETNA POLYCOATS PVT. LTD. WAS THE SUBJECT MATTER OF CIVIL APPEAL NO. 2321 OF 1989 PREFE RRED BY THE DEPARTMENT WHICH WAS DISMISSED AT THE STAGE OF ADMISSION BY THIS COURT ON 13TH FEBRUARY, 1991. 5. THE LEARNED ADDITIONAL SOLICITOR GENERAL, HOWEVER, SUBMITS THAT THE LEARNED JUDGES HAVE ERRED IN PASSING SEVERE STRICTURES AGAINST THE TWO ASSISTA NT COLLECTORS WHO HAD DEALT WITH THE MATTER. HE SUBMITTED THAT THESE 29 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. OFFICERS HAD GIVEN REASONS FOR CLASSIFYING THE GOODS UNDER HEADING 39.19 AND NOT 85.46 AND COULD DO NO MORE. HE SUBMITTED THAT THEY ACTED BONA FIDE IN THE INTERESTS OF REVENUE IN NOT ACCE PTING A CLAIM WHICH, THEY FELT, WAS NOT TENABLE. 6. SRI REDDY IS PERHAPS RIGHT IN SAYING THAT THE OFFICERS WERE NOT ACTUATED BY ANY MALA FIDES IN PASSING THE IMPUGNED ORDERS. THEY PERHAPS GENUINELY FELT THAT THE CLAIM OF THE ASSESSEE WAS NOT TENABLE AND TH AT, IF IT WAS ACCEPTED, THE REVENUE WOULD SUFFER. BUT WHAT SRI REDDY OVERLOOKS IS THAT WE ARE NOT CONCERNED HERE WITH THE CORRECTNESS OR OTHERWISE OF THEIR CONCLUSION OR OF ANY FACTUAL MALAFIDES BUT WITH THE FACT THAT THE OFFICERS, IN REACHING IN THEIR CON CLUSION,BY - PASSED TWO APPELLATE ORDERS IN REGARD TO THE SAME ISSUE WHICH WERE PLACED BEFORE THEM,ONE OF THE COLLECTOR (APPEALS) AND THE OTHER OF THE TRIBUNAL. THE HIGH COURT HAS, IN OUR VIEW, RIGHTLY CRITICISED THIS CONDUCT OF THE ASSISTANT COLLECTORS AND THE HARASSMENT TO THE ASSESSEE CAUSED BY THE FAILURE OF THESE OFFICERS TO GIVE EFFECT TO THE ORDERS OF AUTHORITIES HIGHER TO THEM IN THE APPELLATE HEIRARCHY. IT CANNOT BE TOO VEHEMENTLY EMPHASISED THAT IT IS OF UTMOST IMPORTANCE THAT, IN DISPOSING OF THE Q UASI - JUDICIAL ISSUES BEFORE THEM, REVENUE OFFICERS ARE BOUND BY THE DECISIONS OF THE APPELLATE AUTHORITIES; THE 30 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. ORDER OF THE APPELLATE COLLECTOR IS BINDING ON THE ASSISTANT COLLECTORS WORKING WITHIN HIS JURISDICTION AND THE ORDER OF THE TRIBUNAL IS BINDING UPON THE ASSISTANT COLLECTORS AND THE APPELLATE COLLECTORS WHO FUNCTION UNDER THE JURISDICTION OF THE TRIBUNAL. THE PRINCIPLES OF JUDICIAL DISCIPLINE REQUIRE THAT THE ORDERS OF THE HIGHER APPELLATE AUTHORITIES SHOULD BE FOLLOWED UNRESERVEDLY BY THE SUBORD INATE AUTHORITIES. THE MERE FACT THAT THE ORDER OF THE APPELLATE AUTHORITY IS NOT 'ACCEPTABLE' TO THE DEPARTMENT - IN ITSELF AN OBJECTIONABLE PHRASE - AND IS THE SUBJECT MATTER OF AN APPEAL CAN FURNISH NO GROUND FOR NOT FOLLOWING IT UNLESS ITS OPERATION HA S BEEN SUSPENDED BY A COMPETENT COURT. IF THIS HEALTHY RULE IS NOT FOLLOWED, THE RESULT WILL ONLY BE UNDUE HARASSMENT TO ASSESSEE AND CHAOS IN ADMINISTRATION OF TAX LAWS. 23. ON THE OTHER HAND, LD. DR BROUGHT TO OUR NOTICE AT PAGE NO. 7 OF THE ORDER OF 26 3 IN WHICH ASSESSEE S INCOME IS CHARGEABLE TO INCOME TAX UNDER ARTICLE 289(2) AND PR. CIT CLEARLY BROUGHT ON RECORD THAT ASSESSEE IS NOT AN AGENT OF THE GOVT. OF MAHARASHTRA AND NOT EXEMPT UNDER ARTICLE 289(1) OF THE ACT AND AO HAS NOT FOLLOWED THE PRECED ENCE AND AS CLEARLY 31 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. BROUGHT ON RECORD THAT ONLY ONE VIEW IS POSSIBLE AND AO HAS COMPLETED THE ASSESSMENT WITHOUT PROPERLY VERIFYING THE SUBMISSION OF THE ASSESSEE. FURTHER HE SUBMITTED THAT ASSESSE IS A SEPARATE LEGAL ENTITY AND THE INCOME OF THE ASSESSEE IS TAXABLE UNDER THE INCOME TAX ACT 1961 AND HE RELIED UPON THE CASE OF ADITYAPUR INDUSTRIAL AREA DEVELOPMENT AND SUPPORT THE ORDER OF PR. CIT IN ITS ESSENCE. 23. CONSIDERING THE RIVAL SUBMISSION AND MATERIAL PLACED ON RECORD AS WELL AS ORDER PASSED BY P R.CIT U/S 263 OF THE ACT, WE OBSERVE THAT ASSESSEE IS A STATUTORY BODY AND INCORPORATED ON 17.19.70 WITH THE ENTIRE SHARE CAPITAL SUBSCRIBED BY THE GOVT. OF MAHARASHTRA AND GOVT. OF MAHARASHTRA APPOINTED THE ASSESSEE AS NEW TOWN DEVELOPER AND SPL. PLANNING AUTHORITY FOR THE DEVELOPMENT OF MUMBAI CITY. IN THE RESOLUTION PASSED BY THE GOVT. OF MAHARASHTRA, ASSESSEE WAS APPOINTED IN EXERCISE OF POWERS CONFERRED U/S 113(3A) MRTP ACT 1966 AS AN AGENT AND TO FUNCTION ON BEHALF OF GOVT. OF MAHARASHTRA. THE HON BLE HIGH COURT OF BOMBAY IN THE CASE OF PERCIVAL JOSEPH PAREIRA, BOTH SINGLE BENCH AS WELL AS DIVISIONAL BENCH HAS HELD THAT THE 32 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. ASSESSEE IS AN AGENT OF GOVT. OF MAHARASHTRA AS PER SECTION 113(3A) OF THE MRTP ACT. THE QUESTION AROSE WHETHER THE ASSESSEE SHOUL D BE TREATED AS AGENT BY RELYING ON THE DECISION OF THE HON BLE HIGH COURT OF MUMBAI IN THE SEVERAL CASES. PR. CIT HAS REJECTED THE CONTENTION OF THE ASSESSEE BY RELYING ON THE SEVERAL APPEAL FILED BEFORE HON BLE BOMBAY HIGH COURT AS THERE IS NO DECISION F ROM THE HON BLE HIGH COURT IN THE INCOME TAX ACT. HE ACKNOWLEDGED THE COORDINATE BENCH OF ITAT HAS HELD THAT THE ASSESSE IS AN AGENT OF GOVT. OF MAHARASHTRA IN THE AY 2006 - 07 AND PR. CIT HAS EXPRESSED HIS VIEW NOT TO FOLLOW THE DECISION OF THE ORDER OF JUR ISDICTIONAL ITAT. FROM THE FACTS BROUGHT OUT BY THE LD. SR. COUNSEL THAT IN THE PREVIOUS ASSESSMENT YEARS COMMENCING FROM AY 2003 - 04 TO 2013 - 14 EXCEPT AY 2006 - 07 AND 2007 - 08, IN ALL THE AYS, THE REVENUE HAS ACCEPTED THAT ASSESSEE IS AN AGENT OF THE GOVT. O F MAHARASHTRA AND COMPLETED THE ASSESSMENTS, THAT MEANS IN ALL AYS COMMENCING FROM AY 2003 - 04 EXCEPT AY 2006 - 07 AND AY 2007 - 08 , THE DEPARTMENT HAS ACCEPTED THE ASSESSEE IS AN AGENT AND WHATEVER INCOME OFFERED BY THE ASESSEE AS AGENT WAS ACCEPTED BY THE DE PARTMENT. THE ADDITION IN THE PREVIOUS AY 33 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. 2013 - 14, THE ASSESSMENT WAS COMPLETED U/S 143(3) BY ACCEPTING THE ASSESSEE AS AGENT AND INCOME OFFERED BY THE ASSESSEE AS INCOME FROM THE BUSINESS. 24. FROM THE ORDER PASSED BY PR. CIT U/S 263, WE NOTICED THAT HE INTENDS TO CORRECT THE ASSESSMENTS MADE BY THE AO U/S 143(3) BY OBSERVING THAT THE CASE OF THE ASSESSEE FALL UNDER ARTICLE 289(1) AND PRESUMED THAT ASSESSEE IS CLAIMING THE EXEMPTION UNDER ARTICLE 289(1), WHEREAS ALL THESE YEARS, ASSESSEE HAS FILED THE RET URN OF INCOME AND DECLARED INCOME EARNED FROM THE GOVT. OF MAHARASHTRA AS AN AGENT. AS PER THE RESOLUTION PASSED BY THE GOVT. OF MAHARASHTRA, THE REMUNERATION FIXED AT RS. 5 LAKHS PER ANNUM AND THE SAME WAS DECLARED BY THE ASSESSEE OVER THE YEARS AND THE D EPARTMENT HAS ACCEPTED THE STAND TAKEN BY THE ASSESSEE FROM AY 2003 - 04 TO 2013 - 14 OTHER THAN AY 2006 - 07 AND 2007 - 08 IN WHICH DEPARTMENT IS IN APPEAL BEFORE HIGH COURT. WHEN THE AO ACCEPTED THE ASSESSEE IS AN AGENT AND COMPLETED THE ASSESSMENT U/S 143(3) OV ER THE YEARS, IT MEANS THAT THE AO COMPLETED THE ASSESSMENT WITH ONE PARTICULAR VIEW, WHEREAS PR. CIT INTENDS TO CORRECT THE ABOVE VIEW AND PRESUMED THAT THE CASE OF ASSESSEE FALLS UNDER ARTICLE 289(1) AND COME TO A CONCLU SION 34 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. THAT ASSESSEE IS NOT COMES UN DER ARTICLE 289 AND SUBJECTED TO TAX UNDER INCOME TAX ACT, THEREFORE, IN OUR VIEW, THIS IS ANOTHER VIEW IN THE CASE OF ASSESSEE. THEREFORE, PR. CIT CANNOT INVOKE THE PROVISION OF SECTION 263 OF THE ACT WHEN TWO VIEWS ARE POSSIBLE AS HELD IN THE CASE OF CIT VRS. MAX INDIA LTD, WHEREIN IT WAS HELD AS UNDER: - 1. IN OUR VIEW AT THE RELEVANT TIME TWO VIEWS WERE POSSIBLE ON THE WORD 'PROFITS' IN THE PROVISO TO SECTION 80HHC(3). IT IS TRUE THAT VIDE THE 2005 AMENDMENT THE LAW HAS BEEN CLARIFIED WITH RETROSPECTIVE EFFECT BY INSERTION OF THE WORD 'LOSS' IN THE NEW PROVISO. WE EXPRESS NO OPINION ON THE SCOPE OF THE SAID AMENDMENT OF 2005. SUFFICE IT TO STATE THAT IN THIS PARTICULAR CASE WHEN THE ORDER OF THE COMMISSIONER WAS PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, TWO VIEWS ON THE SAID WORD 'PROFITS' EXISTED. IN OUR VIEW THE MATTER IS SQUARELY COVERED BY THE JUDGMENT OF THIS COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. V. CIT REPORTED IN (2000) 243 ITR 83; AS ALSO BY THE JUDGMENT OF THE CALCUTTA HIGH COURT IN THE CASE OF RUSSELL PROPERTIES P. LTD. V. A. CHOWDHURY, A DDL . CIT . 35 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. 2. AT THIS STAGE WE MAY CLARIFY THAT UNDER PARAGRAPH 10 OF THE JUDGMENT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. V. CIT (2000) 243 ITR 83 THIS COURT HAS TAKEN THE VIEW THAT THE PHRASE 'PREJ UDICIAL TO THE INTERESTS OF THE REVENUE ' UNDER SECTION 263 HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION 'ERRONEOUS' ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCOME TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE ; OR WHERE TWO VIEWS ARE POSSI BLE AND THE INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE , UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW . 25. RESPECTFULLY, FOLLOWING THE ABOVE DECISION, IN OUR CONSIDERED VIEW THAT PR. CIT HAS ADOPTED ONE POSSIBLE VIEW IN THE PRESENT CASE AND THE ORDER PASSED BY PR. CIT U/S 263 OF THE ACT IS ACCORDINGLY DISMISSED AS ASSESSMENT ORDER MAY BE PREJUDICIAL BUT NOT ERRONEOUS. FURTHER, THE MAIN DISPUTE AROUSE DUE TO WHETHER ASSESSEE IS AN AGENT OR NOT. IN THE CIVIL APPEAL, 36 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. HONBLE HIGH COURT HELD THAT ASSESSEE IS AN AGENT AS PER SECTION 113(3A) OF MRTP ACT. PCIT REFUSED TO CONSIDER THIS DECISION AS IT IS NOT ADJU DICATED UNDER INCOME TAX ACT. WE CANNOT NEGLECT THE HONBLE HIGH COURT FINDINGS, WE HAVE TO ACCEPT THE DEFINITION/ MEANINGS BY HIGHER COURT AND MOST OF THE TIME, MEANINGS AND DEFINITIONS ARE ADOPTED FROM OTHER LAW OR FROM WISDOMS OF HIGHER COURTS IN INCOME TAX PROCEEDINGS. PCIT HAS TAKEN A STRANGE STAND NOT TO FOLLOW THE JUDICIAL PRECEDENTS IN ORDER TO DEFEND HIS PROCEEDINGS U/S 263. ACCORDINGLY ORDER U/S 263 IS SET ASIDE. 26. WHEN WE OBSERVED FROM THE SUBMISSIONS MADE BY LD. SR. COUNSEL AND THE ORDER PASS ED BY REVENUE AUTHORITIES, WE NOTICE THAT REMUNERATION FOR THE ASSESSEE WAS FIXED WHEN THE COMPANY WAS INCORPORATED IN 1970 AND AS PER THE RESOLUTION, THE REVENUE WAS FIXED FOR THE FIRST YEAR AT RS. 3 LAKHS AND INCREASED TO RS. 5 LAKHS OVER NEXT TWO YEARS. THE REVENUE WAS FROZEN AT RS. 5 LAKHS AND WAS FIXED IN THE INITIAL YEARS AND THE SAME REVENUE WAS CONTINUED TILL DATE WITHOUT ANY REVISION. THIS WILL DEFINITELY MAKE ANY AUTHORITY TO RAISE THE IR APPREHENSION AS THE INCOME OFFERED BY 37 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. THE ASSESSEE ARE NOT P RACTICAL BUT LEGAL . THEREFORE, ASSESSEE SHOULD TAKE THIS ISSUE WITH THE GOVT. OF MAHARASHTRA TO REVISE THE REMUNERATION. 27. IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCT 2019. SD/ - SD/ - (RAM LAL NEGI) (S. RIFAUR RAHMAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 16 .10.2019 SR.PS. DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1 . 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 3. ( ) / THE CIT(A) 4 . 4. / CIT - CONCERNED 5 . 5. , , / DR, ITAT, MUMBAI 38 I.T.A. NO. 2840/MUM/2019 M/S CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. 6 . 6. / GUARD FILE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI