ITO, Madurai V. M/s. Assefa Dairy Development Federation, Madurai

ITA 39/CHNY/2014

• Counselvise Citation: 3921714 RSA 2014
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S DAS GUPTA IRS
• Assessee Lawyers: N QUADIR HOSEYN
• Keywords: Retrospective amendment
• Section: 12AA; 148; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . . , ! BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER. ./ I.T.A. NOS. 38 TO 42/MDS/2014 ( / ASSESSMENT YEARS : 2004-05 & 2006-07, 2008-09, 2009-10 & 2010-11) THE INCOME TAX OFFICER, WARD II (4), MADURAI ( '# /APPELLANT) VS M/S. ASSEFA DAIRY DEVELOPMENT FEDERATION, NO.1, LADY DOAK COLLEGE ROAD, MADURAI 625 002. [PAN: AAATA7562P] ( $%'# /RESPONDENT) / APPELLANT BY : SHRI. S. DASGUPTA, IRS, JCIT. / RESPONDENT BY : SHRI. N. QUADIR HOSEYN, ADVOCATE. /DATE OF HEARING : 25.03.2014 ! /DATE OF PRONOUNCEMENT : 28.03.2014 & / O R D E R PER BENCH THESE FIVE REVENUES APPEALS EMANATE FR OM SEPARATE ORDERS, OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, MADU RAI ALL DATED 28.10.2013 IN ITA NOS.104 TO 107 AND 139/11-12 FOR ASSESSMENT YEARS I.T.A.NOS.38 TO 42/MDS/2014. :- 2 -: 2004-05, 2006-07, 2008-09, 2009-10 & 2010-11 RESPEC TIVELY. THE PROCEEDINGS ARE U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT] EXCEPT IN THE LATTER TWO ASSESSMEN T YEARS WHEREIN ASSESSMENTS U/S143(3) ARE INVOLVED. 2. THE FOLLOWING COMMON GROUND HAS BEEN RAISED IN ALL APPEALS. THE LEARNED CIT(A) HELD THAT THE ASSESSEE IS ELIGI BLE TO CLAIM EXEMPTION U/S.11 AND U/S.12 OF THE I.T. ACT, 1961 A S THE ASSESSEE HAD A VALID REGISTRATION U/S. 12AA OF THE ACT. IT IS SUBMITTED THAT THE ISSUE IN RESPECT OF GRANTING OF REGISTRATION HAS NOT BECOME FINAL. THE ORDER OF CIT(A) IS TREATE D AS COMPOSITE ONE FOR THE PURPOSE OF FILING APPEAL, EVE N THOUGH THE CIT(A) PASSED A SEPARATE ORDER. IN ADDITION TO THIS, IN ITA NOS.41 & 42/MDS/2014, A N ADDITIONAL GROUND NO.3 READS AS FOLLOWS:- THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE R ECENT INSERTION OF SUB-SECTION 8 TO SECTION 13 VIDE FINANCE ACT, 20 12 WITH RETROSPECTIVE EFFECT FROM 01.04.2009. 3. IN THE COURSE OF HEARING, THE REVENUE VEHEMENTLY R EITERATES THE GROUNDS AND SUBMITS THAT THE CIT(A) HAS WRONGLY ALLOWED THE ASSESSEES APPEALS ON MERITS. ITS CONTENTION IS TH AT THE ISSUE OF REGISTRATION HAS NOT BECOME FINAL TILL NOW. SO, AS SESSEE HAS BEEN WRONGLY GRANTED RELIEF. 4. THE ASESSEEE SUPPORTS THE COMMON ORDER OF THE CIT( A) UNDER CHALLENGE AND PRAYS FOR CONFIRMATION THEREOF. I.T.A.NOS.38 TO 42/MDS/2014. :- 3 -: 5. FACTS ARE COMMON IN ALL CASES. THE ASSESSEE IS A C OMPANY REGISTERED UNDER SECTION 25 OF THE COMPANIES ACT AN D CAME INTO BEING ON 13.06.1995. ON 17.09.1996, THE CIT MADURAI HAD GRANTED IT REGISTRATION UNDER SECTION 12A(A) OF THE ACT. IT IS EVIDENT THAT FOR ALL THESE ASSESSMENT YEARS, THE ASSESSEE HAD DECLARED NIL INCOMES AT THE FIRST INSTANCE. THE SAME WERE SUMMARILY PROC ESSED, VIDE ORDER DATED 31.01.2011, THE CIT(A) CANCELLED ASSESSEES REGISTRATION ON THE GROUND THAT IT IS NOT ENGAGED IN ANY CHARITABLE A CTIVITY BUT HAS BEEN PERFORMING COMMERCIAL ACTIVITIES. IN THIS MANNER, HE ORDERED WITHDRAWAL OF THE BENEFITS UNDER SECTION 11(1)(A) O F THE ACT. ON BASIS THEREOF, THE ASSESSING OFFICER ISSUED COMMON SHOW C AUSE NOTICE DATED 31.03.2011 IN ALL IMPUGNED ASSESSMENT YEARS FOR WIT HDRAWING EXEMPTION GRANTED TO THE ASSESSEE UNDER SECTION 11( 1)(A) &(D) READ WITH 11(2). ACCORDINGLY, THE ASSESSING OFFICER FRAM ED REASSESSMENT IN ASSESSMENT YEARS 2004-05, 2006-2007, 2008-2009 AND SCRUTINY ASSESSMENT IN ASSESSMENT YEARS 2009-2010 AND 2010-2 011 COMPUTING ASSESSEES INCOME AT I2,77,270/-, I5,97,370/-, I10, 92,530/-, I16,64,900/- AND I33,83,100/- RESPECTIVELY. 6. AGGRIEVED, THE ASSESSEE PREFERRED SEPARATE APPEALS. IN THE FIRST THREE ASSESSMENT YEARS, IT HAD ALSO CHALLENGED VALI DITY OF REOPENING. I.T.A.NOS.38 TO 42/MDS/2014. :- 4 -: WE FIND THAT THE CIT(A) DECLINED TO ACCEPT ASSESSEE S LEGAL PLEA AND GRANTED RELIEF ON MERITS BY OBSERVING AS UNDER:- 6.1 THE FIRST ISSUE RELATES TO VALIDITY OF NOTICE ISSUED U/S 148 OF THE ACT. THE ASSESSING OFFICER ISSUED THE NOTICE ON THE GROUND OF THE REGISTRATION U/S. 12AA OF THE ACT, WHICH WAS AVAILABLE AT THE TIME OF FILING OF T HE ORIGINAL RETURN, WAS WITHDRAWN AT A LATER POINT OF THE INCOME TAX ACT 1961, IN SHORT 'THE ACT'. TIME DUE T O WHICH THE EXEMPTION CLAIMED & ALLOWED UNDER SEC.11&12 OF THE ACT, 1961 IN THE ORIGINAL RETURN W ILL NOT BE AVAILABLE. THE NOTICE U/S148 WAS ISSUED AFTER OBTAINING PERMISSION OF THE COMMISSIONER OF INCOME TAX-I, MADURAI. THE REASON FOR RE-OPENING THE ASSESSMENT WAS COMMUNICATED TO THE ASSESSEE. IT IS NOT MANDATORY, AS CLAIMED BY THE ASSESSEE, THAT A NOTICE U/S.143(2) SHOULD HAVE BEEN ISSUED BEFORE IS SUE OF NOTICE U/S.148. WHAT IS REQUIRED FOR THE NOTICE U/S148 IS THE SATISFACTION OF THE ASSESSING OFFICER, WHICH EXISTS, IN VIEW OF WRONG ALLOWANCE OF DEDUCTION UNDER SEC.1 1 & 12 OF THE ACT, 1961 CAUSED BY THE WITHDRAWAL OF THE REGISTRATION U/S.12AA AFTER FILING OF THE RETURN. H ENCE, THE NOTICE U/S. 148 IS IN ORDER AND ASSESSEES ARGUMEN TS ARE REJECTED. 7. ISSUE 2 ASSESSABILITY OF THE INCOME 7.1. THE NEXT ISSUE RELATES TO THE ASSESSABILITY OF INCOME. ASSESSEE WAS GRANTED WITH REGISTRATION U/S.12AA OF THE ACT BY THE CIT-I, MADURAI VIDE C.N.464/22/1996-97 DATED 17.09.1996. SUBSEQUENTLY, CIT-I, MADURAI CANCELLED THE REGISTRATION VIDE A DE TAILED ORDER IN C.NO.464/22/CIT-I/MDU/1996-97 DATED 31.1.2011, AFTER AFFORDING OPPORTUNITY TO THE ASSES SEE. 7.2. ASSESSEE PREFERRED APPEAL IN ITAT AGAINST THE ABOVE ORDER OF CIT-1 MADURAI. ITAT VIDE ORDER IN IT A NO.525/MDS/2011 DATED 14/05/2012 CANCELLED THE ORDE R PASSED BY THE CIT-I, MADURAI U/S.12AA (3) OF THE AC T AND HELD THAT THE REGISTRATION ALREADY GRANTED TO T HE ASSESSEE U/S.12AA SHALL HOLD GOOD. 7.3. IN VIEW OF THE ABOVE ORDER OF ITAT, ASSESSEE I S ENTITLED FOR REGISTRATION U/S.12AA OF THE ACT AND I S THUS I.T.A.NOS.38 TO 42/MDS/2014. :- 5 -: ENTITLED FOR CONSEQUENT EXEMPTIONS UNDER SEC.11& 12 OF THE ACT, 1961. HENCE, THE ORDER PASSED BY THE ASSESSING OFFICER REQUIRES TO BE MODIFIED TREATING THE ASSESSEE HAS A VALID REGISTRATION U/S. 12AA OF THE ACT AND THEREFORE ALLOW EXEMPTIONS CLAIMED UNDER SEC. 1 1 & 12 OF THE ACT, 1961. THEREFORE THE REVENUE HAS FILED ALL THESE APPEALS. 7. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH T HE CASE FILES. AS STATED HEREINABOVE, THE ASSESSING OFFICER HAD REOPE NED THE ASSESSMENTS AND FINALIZED REASSESSMENT IN THE THREE ASSESSMENT YEARS UPTO 2008-09 BASED ON CANCELLATION ORDER DATED 31.0 1.2011. IN ASSESSEES APPEALS, THE CIT(A) HAS ISSUED A BLANKET DIRECTION TO THE ASSESSING OFFICER FOR GRANTING EXEMPTION UNDER SEC TION 11 AND 12 OF THE ACT. IN OUR CONSIDERED OPINION, SO FAR AS ASSU MPTION OF JURISDICTION IN FURTHERANCE TO CANCELLATION ORDER IS CONCERNED, THERE IS HARDLY ANY INFIRMITY IN CIT(A)S ORDER. AT THE SAME TIME, WE FIND THAT HE HAS DIRECTED THE ASSESSING OFFICER TO GRANT THE ASSESSE E BLANKET EXEMPTION WITHOUT CONSIDERING ITS APPLICATION OF INCOME UND ER RELEVANT PROVISIONS OF THE ACT. IN THESE CIRCUMSTANCES, QUA THIS LATTE R PORTION ONLY, WE DEEM IT APPROPRIATE TO MODIFY THESE DIRECTIONS TO T HE LIMITED EXTENT THAT NOW IT WOULD BE OPEN FOR THE ASSESSING AUTHORI TY TO RECONSIDER ASSESSEES CLAIM OF APPLICATION AS PER LAW AND PA SS APPROPRIATE ORDERS AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING. W HILE ORDERING SO, WE I.T.A.NOS.38 TO 42/MDS/2014. :- 6 -: ARE CONSCIOUS OF THE FACT IN LATTER TWO ASSESSMENT YEARS, ALREADY ASSESSMENTS HAVE BEEN FRAMED U/S143(3). STILL, IN VIEW OF THE FACT THAT THE CIT(A)S ORDER IN COMMON, WE OBSERVE THAT THE ASSESSING OFFICER SHALL REFRAME ASSESSMENTS AFRESH WITHOUT BE ING INFLUENCED BY HIS EARLIER OPINIONS. 8. TO SUM UP, ALL THESE REVENUES APPEALS ARE P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 28TH O F MARCH, 2014, AT CHENNAI. SD/- SD.- ( A.MOHAN ALANKAMONY ) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER DATED:28TH MARCH, 2014. K.V COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR/ GUARD FILE.