ADIT(E), Delhi V. M/s Oil Industry Safety Directorate, New Delhi

ITA 3646/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86941 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 09-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Section: 143(3)

Judgement Text

ITA NO. 364 6 / DEL/ 201 2 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A.NO. 364 6 /DEL/201 2 A.Y. : 200 9 - 10 ASSTT. DIRECTOR OF INCOME TAX (E), INV. CIRCLE - II, DELHI ROOM NO. 306, 3 RD FLOOR, AAYAKAR BHAWAN, DISTRICT CENTRE, LAXMI NAGAR, DELHI 110 092 VS . OIL INDUSTRY SAFETY DIRECTORATE, 7 TH FLOOR, NEW DELHI HOUSE, 27, BARAKHAMBA ROAD, NEW DELHI (PAN: AAALO0048G) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. P. DAM. KANUNJNA, SR. DR ASSESSEE BY : NONE PRESENT DATE OF HEARING : 0 9 - 0 3 - 201 5 DATE OF ORDER : 1 1 - 0 3 - 201 5 ORDER PER H.S. SIDHU : J M THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 16 / 5 /20 1 2 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XXI , NEW DELHI FOR THE ASSTT. YEAR 2009 - 10 ON THE FOLLOWING GROUNDS: - 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE ON THE BASIS OF ASSESSMENT COMPLETED AS AOP. THE ASSESSEE HAS NOWHERE PROVED THAT IT FALLS UNDER THE CATEGORY OF ARTIFICIAL JURIDICAL PERSON. ITA NO. 364 6 / DEL/ 201 2 2 2. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 2 . THE FACTS NARRATED BY THE REVENUE ARE NOT DISPUTED BY BOTH THE PARTIES, HENCE, NEED NOT TO REPEAT THE SAME HERE FOR THE SAKE OF BREVITY. 3 . IN THIS CASE A NOTICE WAS SENT TO THE ASSESSEE ON THE ADDRESS GIVEN BY IT, HOWEVER, NONE APPEARED ON BEHALF O F THE ASSESSEE NOR ANY REQUEST FOR ADJOURNMENT IS FILED. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT NO USEFUL PURPOSE WOULD BE SERVED TO ADJOURN THE CASE AGAIN AND AGAIN. THEREFORE, WE ARE DECIDING THE APPEAL, EXPARTE QUA ASSESSEE, AFT ER HEARING THE LD. DR AND PERUSING THE RECORDS AVAILABLE ON RECORD. 4 . LD. DR RELIED UPON THE ORDER PASSED BY THE AO AND ALSO REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 5 . WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDER PASSED BY THE LD. CIT(A) . WE FIND THAT LD. CIT(A) IN THE IMPUGNED ORDER HAS DELETED THE ADDITION IN DISPUTE BY RESPECTFULLY FOLLOWING HIS OWN EARLIER ORDER DATED 19.3.2012 PASSED IN APPEAL NO. 333/07 - 08) FOR THE A SSTT. YEAR 2004 - 05 IN WHICH THE FACTS AND CIRCUMSTANCES OF THE CASE WERE SAME AND IDENTICAL. WE FIND THAT THE LD. CIT(A) HAS ADJUDICATED THE ISSUE IN DISPUTE VIDE PARA NO. 3 TO 3.2 AT PAGES 3 TO 5 VIDE HIS ORDER DATED 16.5.2012. FOR THE SAKE OF CONVEN IENCE, THE RELEVANT PORTION OF THE LD. CIT S ORDER IS REPRODUCED AS UNDER: - ITA NO. 364 6 / DEL/ 201 2 3 3. GROUND NO.1 TO 7 ARE TAKEN TOGETHER, SINCE THEY ARE INTERLINKED. IN THIS REGARD, VIDE HEARING DATED 24.4.2012, LD.AR OF THE APPELLANT HAS SUBMITTED AS UNDER: - ' 1. THE APPELLANT HAD FILED THE RETURN DECLARING NIL INCOME. THE RETURN WAS FILED IN THE STATUS OF ARTIFICIAL JURIDICAL PERSON (A J P). SINCE IT IS CREATED BY THE MINISTRY OF PETROLEUM AND NATURAL GAS AS ITS EXTENSION WING. 2. MINISTRY OF PETROLEUM AND NATURAL GAS, GOVERNMENT OF INDIA VIDE ITS RESOLUTION DATED 10.1.1986 HAD DECIDED TO SET UP A SAFETY COUNCIL WITH THE MAJOR OBJECTIVE OF LAYING DOWN THE PROCEDURE AND GUIDELINES IN THE MATTER OF DESIGN, OPERATIONS, MAINTENANCE HAS ALSO CREATION OF ASSETS WITH A VIEW TO ACHIEVING THE HIGHEST SAFETY STANDARD IN A COST EFFECTIVE MANNER. FURTHER, THE SAME RESOLUTION IT HAS BEEN MENTIONED THAT SAFETY COUNCIL WILL BE ASSISTED BY A SAFETY DIRECTORATE AND THUS THE OIL INDUSTRY SAFETY DIRECTORATE HAS BEEN CREATED. 3. MINISTRY O F PETROLEUM AND NATURAL GAS VIDE ITS RESOLUTION NO. 13013/4/84 - 0R - I DATED 10.1.986 HAD SET UP THE OIL INDUSTRY SAFETY DIRECTORATE WITH THE FOLLOWING FUNCTIONS AND RESPONSIBILITIES. A) OVERSEE THE IMPLEMENTATION OF ALL THE DECISIONS OF THE SAFETY COUNCIL. B) KEEP ABREAST OF THE LATEST DESIGN AND OPERATING PRACTICES IN THE AREA OF SAFETY AND FIRE FIGHTING IN THE HYDROCARBON ITA NO. 364 6 / DEL/ 201 2 4 PROCESSING INDUSTRY IN THE DEVELOPED COUNTRIES, SO AS TO DEVELOP STANDARDS AND CODES THAT WOULD BE SUITABLE FOR THE CONDITIONS IN INDIA . C) LIASE WITH THE STATUTORY ORGANIZATIONS ON CURRENT VIEWS AND DEVELOPMENTS AND HELP EVOLVE A CONCERNED EFFORT FOR THE INDUSTRY. D) CARRY OUT PERIODIC SAFETY AUDITS, REVIEW, SUGGEST PROCEDURES FOR IMPROVEMENTS AND REPORT ON THE IMPLEMENTATION OF THE SU GGESTIONS TO SAFETY COUNCIL. E) COLLECT THE RELEVANT INFORMATION AND EXCHANGE IT WITH THE MEMBERS OF THE OIL INDUSTRY INCLUDING INFORMATION REGARDING NEAR ACCIDENTS, ACCIDENTS AND DISASTERS OCCURRING IN THE OIL INDUSTRY, AND SHALL ALSO ORGANIZE INTER COMP ANY MEETINGS FOR EXCHANGE OF EXPERIENCE. F ) CARRY OUT ENQUIRIES INTO ACCIDENTS, WHENEVER REQUIRED, AND PROVIDED SUPPORT TO ENQUIRY COMMITTEES SET UP BY THE GOVERNMENT. G) ENSURE IMPLEMENTATION OF ALL IMPROVED COES OF PRACTICES FOR INDUSTRIAL HYGIENE. H) REVIEW PRACTICES IN THE STORAGE AND HANDLING OF DANGEROUS CHEMICALS AND ENSURE COMPLIANCE WITH LATEST STANDARDS. ITA NO. 364 6 / DEL/ 201 2 5 I) REVIEW DISASTER CONTROL PROCEDURES AND COMPANY PREPAREDNESS. J) REVIEW IMPLANT TRAINING PROGRAMMES WITH REGARD TO SAFETY. K) SPECIFY CRI TICAL DRAWING/LAYOUTS THAT NEED TO BE VETTED BY SAFETY SPECIALISTS AT THE DESIGN STAGE AND CARRYOUT SPOT CHECKS OF DESIGN STANDARDS BASED ON SITE AUDIT FINDINGS TO SERVE AS FEEDBACK FOR ESTABLISHING NEW STANDARDS AT THE DESIGN STAGE, AND L) REVIEW ZONING REGULATIONS ROUND INSTALLATIONS AND ADVISE INDUSTRY/STATE DI C 'S. 4. ON THE BASIS OF THE AFORESAID NOTIFICATION ISSUED BY THE MINISTRY OF PETROLEUM AND NATURAL GAS, IT IS VERY CLEAR THAT IT IS NOTHING BUT A GOVERNMENT AND AN EXTENSION OF THE GOVERNMENT. HE NCE IT IS NOT LIABLE FOR ANY TAX; 5. THE ASSIGNING OFFICER HAD ON HIS OWN HAD CHANGED THE STATUS OF THE APPELLANT FROM A J P TO AOP. THIS LEGALLY HE CANNOT DO IT AND THE ENTIRE ASSESSMENT IS WRONG AND BAD IN LAW. IT IS LIABLE TO BE ANNULLED. ON THE SIMILAR GROUND, THE HON'BLE CIT(A) IN APPEAL NO.333/2007 - 08 VIDE ORDER DATED 19 TH MARCH 2012 FOR THE A. Y 2004 - 05 HAD ALLOWED THE CONTENTION OF THE APPELLANT AND THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF THE CIT(A). ITA NO. 364 6 / DEL/ 201 2 6 6. ASSUMING WHILE DENYING THE FACT THAT THE APPELLANT IS SUBJECT TO TAX, THE APPELLANT HAD RECEIVED DURING THE YEAR UNDER APPEAL, GRANT FROM OIDB TO THE EXTENT OF RS.6,95,00,000/ - . THIS IS BASICALLY A CAPITAL GRANT AS PER THE DIRECTIONS OF THE GOVERNMENT A ND ACCORDINGLY NOT LIABLE TO BE TAXED. 7. FURTHER THE ORDER UNDER SECTION 143(3) PASSED BY THE AO IS SUFFERING FROM AN INCURABLE DEFECT TO THE EXTENT THAT THE A O HAS NO JURISDICTION TO WITHDRAW THE EXEMPTION UNDER SECTION 11 AND 12 UNLESS REGISTRATION UND ER SECTION12AA IS WITHDRAWN OR CANCELLED BY THE DIRECTOR OF EXEMPTION. TILL DATE, WE HAVE NOT RECEIVED ANY NOTICE FROM THE OFFICE OF THE DIRECTOR (EXEMPTION) FOR SUCH WITHDRAWAL. ACCORDINGLY, ON THE DATE OF THE AO COMPLETING THE ASSESSMENT, THERE WAS NO SU CH WITHDRAWAL AND THE ASSESSMENT FRAMED BY THE A 0 IS WRONG AND BAD IN LAW.' 3.1 FURTHERMORE, VIDE SUBMISSION DATED 2.5.2012, ISSUE WAS FURTHER CLARIFIED AS UNDER: - 'IN PURSUANT TO THE PERSONAL HEARING BEFORE YOUR GOODSELF ON 24TH APRIL, 2012, THE FOLLO WING FURTHER SUBMISSION IS GIVEN ON THE BASIS OF THE QUERY RAISED BY YOURSELF. THE APPELLANT IS A BODY CREATED BY NOTIFICATION BY MEANS OF A RESOLUTION DATED 10 TH JANUARY, 1986 AS AN EXTENSION OF THE MINISTRY OF PETROLEUM AND NATURAL GAS. THUS OIL INDUSTRY SAFETY DIRECTORATE CAME INTO EXISTENCE. THUS IT ACQUIRES THE STATUS OF ARTIFICIAL JURIDICAL PERSON (AJP). ITA NO. 364 6 / DEL/ 201 2 7 2. THE APPELLANT HAD FILED THE RETURN IN THE STATUS OF AJP WHICH IS DESCRIBED AS CODE NO.10. THE PHOTOCOPY OF RETURN AND THE ACKNOWLEDGEMENT IS ATTA CHEDFOR YOUR RECORDS EVIDENCING THE FILING OF THE RETURN IN STATUS OF AJP. 3. THE ASSESSING OFFICER HAD COMPLETED THE ASSESSMENT IN THE STATUS OF AOP WITHOUT ANY DISCUSSION WITH THE APPELLANT. THE CHANGE IN THE STATUS CANNOT BE CARRIED OUT UNILATERALLY BY THE ASSESSING OFFICER WITHOUT GIVING PROPER EXPLANATION AND OPPORTUNITY. THE ASSESSMENT DONE IN STATUS OTHER THAN FILED BY THE APPELLANT IS NULL AND VOID. 4. ON THE SIMILAR FACTS FOR THE ASSESSMENT YEAR 2004 - 05 IN THE CASE OF THE APPELLANT, THE HON'BLE C IT(A} IN APPEAL NO.333/2007 - 08 VIDE ORDER DATED 19.03.2012 HAD ACCEPTED THE SIMILAR CONTENTION. COPY OF THE ORDER HAD ALREADY BEEN GIVEN FOR YOUR RECORDS. IN VIEW OF THE FOREGOING FACTS, THE ASSESSMENT FRAMED U/S.143(3} IN THE STATUS OF AOP MAY KINDLY BE ANNULLED.' 3.2 I HAVE GONE THROUGH THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER AND WRITTEN SUBMISSION OF THE LD.AR. SIMILAR ISSUE WAS ALSO INVOLVED IN A .Y.2004 - 05 WHICH HAS BEEN DECIDED BY ME IN FAVOUR OF THE APPE LLANT VIDE ORDER DATED 19.3.02012 (APPEAL NO.333/07 - 08). AS FACTS REMAINS THE SAME, GROUND NO.1 TO 7 OF THE APPELLANT ARE ALLOWED. ITA NO. 364 6 / DEL/ 201 2 8 6 . AFTER GOING THROUGH THE AFORESAID ORDER PASSED BY THE LD. CIT(A) ON THE ISSUE IN DISPUTE , WE ARE OF THE CONSIDERED VIEW THAT THE LD. FIRST APPELLATE AUTHORITY HAS PASSED A WELL REASONED ORDER BY FOLLOWING HIS OWN ORDER DATED 19.3.2012 FOR THE ASSTT. YEAR 2004 - 05 IN APPEAL NO. 333/07 - 08, WHEREIN THE SIMILAR I SSUE WAS DEALT WITH. THEREFORE, W E FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THEREFORE, NO INTERFERE IS REQUIRED ON OUR PART, HENCE, WE UPHOLD THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE AND DECIDE THE ISSUE AGAINST THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 1 1 / 0 3 /20 1 5 . S D / - S D / - [ T.S. KAPOOR ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 1 1 / 0 3 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 364 6 / DEL/ 201 2 9