ACIT, UDAIPUR V. Maharana of Mewar Charitable Foundation, UDAIPUR

ITA 392/JODH/2014

• Counselvise Citation: 39223314 RSA 2014
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-09-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 30-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Assessee Lawyers: CHANDRA RAM
• Keywords: Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 12A; 148

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 387/JODH/2014 (A.Y. 200 5 - 06 ) ITO, WARD - 1(2), UDAIPUR. VS. M/S. MAHARANA MEWAR RESEARCH INSTITUTE, CITY PALACE, UDAIPUR. (APPELLANT) PAN NO. AAATM 1564 F (RESPONDENT) ITA NO. 388 /JODH/2014 (A.Y. 200 5 - 06 ) ITO, WARD - 1(2), UDAIPUR. VS. M/S. MAHARANA HISTORICAL PUBLICATION , CITY PALACE, UDAIPUR. (APPELLANT) PAN NO . AAATP 0922 G (RESPONDENT) ITA NO. 3 92 /JODH/2014 (A.Y. 200 5 - 06 ) ITO, WARD - 1(2), UDAIPUR. VS. M/S. MAHARANA CHARITABLE FOUNDATION , CITY PALACE, UDAIPUR. (APPELLANT) PAN NO. AAATM 1440 N (RESPONDENT) 2 ASSESSEE BY : SHRI CHANDRA RAM. DEPARTMENT BY : SHRI JAI SINGH - D.R. DATE OF HEARING : 22 / 0 9 /201 4 . DATE OF PRONOUNCEMENT : 01 / 1 0/201 4 . O R D E R PER N.K. SAINI, A.M TH ESE APPEAL S BY THE D EPARTMENT ARE DIRECTED AGAINST THE SEPARATE ORDER S EACH DATED 30 /0 4 /201 4 OF L D . CIT(A), UDAIPUR . SINCE THE ISSUE S INVOLVED ARE COMMON AND THE APPEALS WERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE: - 2 FIRST OF ALL, WE WILL DEAL WITH I.T.A.NO. 3 92 /JODH/2014 . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: - 1. QUASHING THE REOPENING PROCEEDING INITIATED U/S. 148 OF THE I.T. ACT, AND THE ASSESSMENT PASSED U/S. 143(3) R.W.S. 147 OF THE I.T. ACT, IGNORING THE FACTS THAT FOUR TRUSTS INCLUDING THIS TRUST ARE SEPARATE LEGAL ENTITIES WITH SEPARATE PANS , & SEPARATE REGISTRATION WITH ASSTT. 3 COMMISSIONER OF DEVASTHAN, UDAIPUR AND THEREFORE, THESE CANNOT BE AS SESSED TO TAX IN NAME OF ONE TRUST. 2. IGNORING THE FACT THAT IN INCOME TAX PROCEEDING THE PRINCIPLE OF RES - JUDICAT A DOES NOT APPLY. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TI ME OF HEARING. 3. FACTS RELATING TO THIS CASE, IN BRIEF, ARE THAT THE ASSESSEE IS REGISTERED U/S. 12A OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) BY THE CIT, RAJASTHAN II, JAIPUR ON 22/01/1976 AND THE RETURN OF INCOME WAS FILED ON 31/10/2005 SHOWING TOTAL INCOME AT NIL. THE ASSESSING OFFICER ISSUED NOTICE ON 28/03/2012 U/S. 148 OF THE ACT BY STATING THAT HE HAD REASONS TO BELIE VE THAT INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 147/143(3) OF THE ACT ON 07/12/2012 AT NIL INCOME. THE ASSESSEE CHALLENGED THE REOPENING OF THE ASSESSMENT U/S. 147 R.W.S. 148 OF THE ACT BEFORE THE LD. CIT(A) , WHO QUASHED THE ASSESSMENT BY OBSERVING AS UNDER: - THE PROCEED ING INITIATED U/S. 148 AND ASSESSMENT PASSE D U/S. 143(3) R.W.S. 147 OF THE ACT WERE QUASHED & DISMISSED IN A.Y. 2004 - 05 AND 2006 - 07 VIDE SEPARATE ORDERS DATED 30/11/2012 AND A.Y. 2007 - 08 & 2008 - 09 VIDE SEPARATE ORDER DATED 07/02/2013 AND FOR A.Y. 2009 - 10 FOR ORDER PASSED U/S. 143(3) DATED 28/03/2013 BY CIT(A) AND HON'BLE ITAT HAS ALSO DISMISSED THE APPEALS OF THE REVENUE VIDE THEIR ORDER DATED 30/08/2013 IN ITA 60 & 281/JODH/2013 (A.Y. 2006 - 07 & 2008 - 09 ), ORDER DATED 22/07/2012 IN ITA 4 283/JODH/2013 (A.Y. 2007 - 08) AND ORDER DATED 17/02/2014 IN ITA NO. 383/JODH/2013 (A.Y. 2009 - 10) . KEEPING IN TO CONSIDERATION THE VARIOUS CASE LAWS OF THE HIGHER APPELLATE AUTHORITIES AND THE HON'BLE COURTS AND THE PAST HISTORY OF THE APPELLANTS CASE I HAVE NO REASON TO DEV IATE FROM THE ABOVE MENTIONED DECISION. ACCORDINGLY, THE APPEAL OF THE APPELLANT IS ALSO ALLOWED AND THE PROCEEDINGS INITIATED U/S. 148 OF THE ACT AND THE ASSESSMENT PASSED U/S. 143(3) R.W.S. 147 OF THE ACT ARE QUASHED. THE OTHER GROUNDS OF APPEAL ARE CONSEQUENTIAL TO GROUND NOS. 1 & 2 , AND HENCE NOT DECIDED SEPARATELY. NOW THE DEPARTMENT IS IN APPEAL. 4. LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT VIDE VARIOUS ORDER OF THE ITAT MENTIONED IN THE IMPUGNED ORDER BY THE LD. CIT(A) , T HEREFORE, THERE IS NO MERIT IN THIS APPEAL OF THE DEPARTME NT. 5. LEARNED D.R. ALTHOUGH, SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED 5 THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS BEEN ADJU DI CATED BY THIS BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN I.T.A.NOS. 60 & 281/JODH/2013 VIDE ORDER DATED 30/08/2013 WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN AT PARAS 16 TO 18 WHICH READ AS UNDER: - 16 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, IT IS AN ADMITTED FACT THAT ASSESSING OFFICER APPLIED HIS MIND AND INITIALLY DROPPED THE PROCEEDINGS U/S 143(3) OF THE ACT BY CONSIDERING THAT THE ASSESSEE WAS A UNIT OF MMCF. THE ASSESSING OFFICER FOR TAKING THE SAID VIEW CONSIDERED THE PAST HISTORY OF THE ASSESSEE, COPY OF THE TRUST DEED OF THE MMCF AND WAS ALSO KNOWING THIS FACT THAT NO SEPARATE REGISTRATION U/S 12A(A ) OF THE ACT, RELATING TO THE ASSESSEE WAS THERE BECAUSE IT WAS COVERED BY THE REGISTRATION GRANTED TO MMCF AND A COPY OF REGISTRATION GRANTED TO MMCF WAS FURNISHED BEFORE HIM. THE ASSESSING OFFICER ACCEPTED THE CONSOLIDATING INCOME AND EXPENDITURE OF THE ASSESSEE AND OTHER THREE UNITS TREATING THE SAME AS PART OF MMCF. THEREFORE, WHILE DROPPING THE PROCEEDINGS INITIATED U/S 143(3) OF THE ACT, ASSESSING OFFICER NOT ONLY APPLIED HIS MIND BUT ALSO CONSIDERED THE VIEW TAKEN BY HIS PREDECESSOR AND THE REGISTR ATION GRANTED U/S 10(23C)(VI) OF THE ACT BY THE LD. C.C.I.T. 17. IT IS WELL SETTLED THAT POWER OF ASSESSMENT OR REASSESSMENT OF ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT HAS BEEN PROVIDED U/S 147 R/W S 148 OF THE ACT, WHICH PROVIDES THAT IF AS SESSING OFFICER HAS THE REASONS TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, THEN HE MAY SUBJECT TO THE PROVISIONS OF SECTIONS 147 TO 153 OF THE ACT ASSESS OR REASSESS SUCH INCOME. HOWEVER, BEFORE ISSUING ANY NOTICE U/S 148 OF THE ACT, ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED TO ASSESSMENT, HOWEVER, THOSE REASONS TO BELIEVE CANNOT BE A REASON TO SUSPECT, BUT THERE MUST BE A DIRECT NEXUS BETWEEN THE MATERIAL COMING TO THE NOTICE OF T HE ASSESSING OFFICER AND THE FORMATION OF THE BELIEF THAT THERE HAS BEEN ESCAPEMENT OF INCOME OF THE ASSESSEE FOR A PARTICULAR YEAR. THE SAID MATERIAL FOR FORMATION OF BELIEF MUST BE RELEVANT AND NOT VAGUE. HOWEVER, MERELY A CHANGE OF OPINION, CANNOT CON STITUTE A REASON TO BELIEVE AND IF THE ASSESSEE HAS 6 DISCLOSED BASIC AND ALL THE TRUE FACTS DURING THE COURSE OF ASSESSMENT AND THE ASSESSMENT IS COMPLETED, THE NOTICE U/S 148 OF THE ACT CANNOT BE ISSUED LATER ON, MERELY BECAUSE THERE IS POSSIBILITY OF ANOT HER VIEW, THE SAID ACTION WILL AMOUNT TO CHANGE OF OPINION. IN THE PRESENT CASE, ALL THE FACTS WERE AVAILABLE ON RECORD WITH THE DEPARTMENT FROM THE VERY BEGINNING AND THOSE FACTS WERE ACCEPTED WHILE FRAMING THE ASSESSMENT OF MMCF TREATING THE ASSESSEE - TR UST AS A UNIT OF THE SAID FOUNDATION, WHICH ESTABLISHES THAT THE CHANGE OF OPINION OF THE ASSESSING OFFICER PROMPTED HIM TO REOPEN THE ASSESSMENT. THEREFORE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN HOLDING THAT REOPENING OF THE ASSESSMENT OF THE ASSESSEES CASE WAS BAD IN LAW AND RIGHTLY QUASHED THE PROCEEDINGS INITIATED U/S 148 OF THE ACT AND THE ASSESSMENT FRAMED U/S 143(3) R/W S 147 OF THE ACT. 18 . WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINABOVE, DO NOT SEE ANY VALID GROUND TO INTERFERE IN THE FINDINGS OF THE LD. CIT(A) AND ACCORDINGLY, DO NOT SEE ANY MERIT IN THE APPEAL OF THE DEPARTMENT . 7 . SINCE THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS INVOLVED FOR THE A.Y. 2006 - 07 & 2008 - 09 IN ASSESSEES OWN CASE , SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DATED 30/08/2013 IN I.T.A.NO. 60 & 281/JODH/2013 , WE DO NOT SEE ANY MER IT IN THIS APPEAL OF THE DEPARTMENT. 8 . FACTS IN I.T.A.NOS. 387 & 388/JODH/2014 ARE SIMILAR TO THE FACTS INVOLVED IN I.T.A.NO. 392/JODH/2014 ( SUP R A ) . THEREFORE, OUR FINDINGS GIVEN IN FORMER PART OF THIS ORDER SHALL APPLY MUTATIS - MUTANDIS FOR THESE APPEALS ALSO. 7 9 . IN THE RESULT APPEALS OF THE DEPARTMENT ARE DISMISSED. ( ORDER PRONOUNCED IN THE COURT ON 01 ST OCTOBER , 201 4) . S D/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01 ST OCTOBER , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .