THE PRESIDENCY C0 OPERATIVE HSG COEITY LTD, MUMBAI V. ACIT 21(1), MUMBAI

ITA 4051/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78891 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 16-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Keywords: Revised return
• Section: 139(5); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C , MUMBAI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 4051/M/2011 ASSESSMENT YEAR: 2007 - 08 M/S. THE PRESIDENCY CO - OPERATIVE HOUSING SOCIETY LTD. C/O. JAI HINDI SOCIETY RECREATION CLUB, PLOT NO.51, N.S. ROAD, NO.11, VILE PARLE (W), MUMBAI 400 049 PAN: AAAAT4479M VS. ACIT 21(1), MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. PARMINDER, D.R. DATE OF HEARING : 10.03. 201 4 DATE OF PRONOUNCEMENT : 16.05.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HERE INAFTER REFERRED TO AS CIT(A)] DATED 23.02.11. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1 REVISED COMPUTATION NOT ACCEPTED ON WRONG APPRECIATION OF FACTS: THE LD. CIT(A) ERRED IN NOT ENTERTAINING THE BONAFIDE CLAIM OF THE APPELLANT QUA REVISED COMPUTATION WHICH WAS INADVERTENTLY OMITTED WHILE FILING ORIGINAL RETURN. AS THE CLAIM HAD BEEN MADE BONAFIDELY BEFORE THE COMPLETION OF ASSESSMENT PROCEEDING AND THROUGH A PROPER CHANNEL, THE LD. CIT(A) IS NOT CORRECT TO DERECOGNIZE THE SAME ON TECHNICAL PARAMETERS. ITA NO. 4051/M/2011 M/S. THE PRESIDENCY CO - OPERATIVE HOUSING SOCIETY LTD. 2 MERITS: 2. ADDITION ON ACCOUNT OF TRANSFER FEES AND TDR PREMIUM THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF TRANSFER FEES (RS.7,64,271/ - ) AND TDR PREMIUM (RS.26,80,203/ - ) WITHOUT APPRECIATING TO THE FACT T HAT THE IMPUGNED RECEIPTS OF THE SOCIETY ARE NOT TAINTED WITH COMMERCIALITY AND AS THE PRINCIPLE OF MUTUALITY APPLIES, THE LD. CIT(A) IS AT WRONG TO DERECOGNIZE THE CLAIM OF THE APPELLANT. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE , A CO - OPERATIVE HO USING SOCIETY , FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.34,84,470/ - . HOWEVER, SUBSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE REVISED THE COMPUTATION OF INCOME CLAIMING THAT RECEIPTS OF TRANSFER FEE AND TDR PREMIUM WE RE EXEMPT ON THE PRINCIPLE OF MUTUALITY AND THEREFORE NOT LIABLE TO TAX. ACCORDINGLY, THE ASSESSEE FILED A REVISED COMPUTATION BEFORE THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS . THE AO HOWEVER RELYING ON THE DECISION IN THE CASE OF GOETZ INDIA LTD. (SC) DID NOT ACCEPT THE REVISED CLAIM ON THE GROUNDS THE SAME WAS NOT FILED WITHIN THE TIME PERMISSIBLE UNDER SECTION 139(5) AND ACCORDINGLY ASSESSED THE INCOME OF THE ASSESSEE AS PER THE ORIGINAL RETURN FILED. 3. IN THE FIRST APPEAL, THE LD. CIT(A) WHILE RELYING UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SIND CHS LTD. 317 ITR 47 (BOM) OBSERVED THAT THE ASSESSEE EVEN OTHERWISE DID NOT FULFILL THE CONDITIONS FOR APPLICABIL ITY OF PRINCIPLE MUTUALITY. HE THEREFORE HELD THAT THE CLAIM OF THE ASSESSEE WAS NOT ADMISSIBLE AND THAT THE AO RIGHTLY DENIED THE CLAIM IGNORING THE REVISED COMPUTATION FILED BY THE ASSESSEE. AGGRIEVED AGAINST THE ORDER OF THE LD. CIT(A) , THE ASSESSEE PREFERRED IN APPEAL BEFORE US. ITA NO. 4051/M/2011 M/S. THE PRESIDENCY CO - OPERATIVE HOUSING SOCIETY LTD. 3 4. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND ALSO HAVE GONE THROUGH THE RECORDS. WE MAY OBSERVE THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. ITA NO.3908 OF 2010 DECIDED ON 21.06.12, WHILE RELYING UPON THE VARIOUS DECISIONS OF THE HONBLE SUPREME COURT AND OTHER HONBLE HIGH COURTS HAS HELD THAT EVEN IF A CLAIM IS NOT MADE BEFORE THE AO IT CAN BE MADE BEFORE THE APPELLATE AUTHORITIES. THE JURISDICTION OF THE APPEL LATE AUTHORITIES TO ENTERTAIN SUCH A CLAIM IS NOT BARRED. THE HONBLE HIGH COURT WHILE RELYING UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF INDIA LIMITED VS. CIT 1991 SUPP (2) SCC 744 = (1991) 187 ITR 688 HAS OBSERVE D THAT THE POWER OF THE APPELLATE COMMISSIONER IS COTERMINOUS WITH THAT OF THE INCOME TAX OFFICE AND AN APPELLATE AUTHORITY WHILE HEARING APPEAL AGAINST THE ORDER OF THE SUBORDINATE AUTHORITY HAS ALL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECI DING THE QUESTIONS BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATIONS IF ANY PRESCRIBED BY STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISION THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE AUTHORITIES BUT IS ALSO ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION WHETHER OR NOT TO PER MIT SUCH ADDITIONAL CLAIMS TO BE RAISED. IT CANNOT, HOWEVER, BE SAID THAT THEY HAVE NO JURISDICTION TO CONSIDER THE SAME. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MERELY WITH ADDITIONAL GROUNDS WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE O F CIRCUMSTANCES OR LAW, BUT WITH ADDITIONAL GROUNDS WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED BUT COULD NOT HAVE BEEN RAISED AT THAT STAGE OR THE GROUNDS WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW. THE WORDS COULD NOT HAVE B EEN RAISED MUST BE CONSTRUED LIBERALLY AND NOT STRICTLY. IT IS OPEN TO THE ITA NO. 4051/M/2011 M/S. THE PRESIDENCY CO - OPERATIVE HOUSING SOCIETY LTD. 4 ASSESSEE TO CLAIM A DEDUCTION BEFORE THE APPELLATE AUTHORITY WHICH COULD NOT HAVE BEEN CLAIMED BEFORE THE AO. THE HONBLE HIGH COURT HAS FURTHER OBSERVED THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LIMITED V. CIT (2006) 157 TAXMAN 1, RELATING TO THE RESTRICTION OF MAKING THE CLAIM THROUGH A REVISED RETURN WAS LIMITED TO THE POWERS OF THE ASSESSING AUTHORITY AND THE SAID JUDGMENT DOES NOT IMPINGE ON THE POWER OR NEGATE THE POWERS OF THE APPELLATE AUTHORITIES TO ENTERTAIN SUCH CLAIM BY WAY OF ADDITIONAL GROUND. 5 . FURTHER, IN OUR VIEW, WHILE REFUSING TO TAKE INTO CONSIDERATION THE RELEVANT CLAIM OF THE ASSESSEE WHICH WAS VERY MUCH NECESSARY FOR THE JUST DECISION OF THE CASE, LD. CIT(A) FAILED TO EXERCISE HIS APPELLATE JURISDICTION UNDER SECTION 250 OF THE ACT. THE DUTY WAS ALSO CAST UPON THE LD. CIT(A) TO ADMIT AND CONSIDER THE EVIDENCE PRODUCED BEFORE HIM BY THE ASSESSEE. THE HONBLE BOMBAY H IGH COURT IN THE CASE OF SMT. PRABHAVATI S. SHAH V. CIT (1998) 231 ITR 1 (BOM.) HAS HELD THAT THE POWERS CONFERRED ON THE FIRST APPELLATE AUTHORITY UNDER SUB - SECTION (4) OF SECTION 250 OF THE ACT, BEING A QUASI - JUDICIAL POWER, IT IS INCUMBENT ON HIM TO E XERCISE THE SAME, IF THE FACTS AND CIRCUMSTANCES JUSTIFY. IT MAY BE OBSERVED THAT THOUGH THE DISCRETION IS VESTED WITH THE APPELLATE AUTHORITIES TO ADMIT OR REJECT THE NEW/ADDITIONAL CLAIM BUT THE DISCRETION IN THAT REGARD IS TO BE EXERCISED FAIRLY AND JU STIFIABLY SO AS TO SERVE THE INTEREST OF JUSTICE. 6 . SO FAR THE OBSERVATION OF THE LD. CIT(A) THAT THE CLAIM OF THE ASSESSEE EVEN ON MERITS WAS NOT ADMISSIBLE, IT MAY BE OBSERVED FROM THE ORDERS , PLACED ON THE RECORD, OF THE TRIBUNAL DATED 30.03.11 PA SSED IN ITA NO.3440/M/2005 RELATING TO ASSESSMENT YEAR 2001 - 02 AND ORDER DATED 26.04.11 PASSED IN ITA NO.1953 TO 1957/M/2010 RELATING TO ASSESSMENT YEAR 1990 - 91, 1992 - 93, 1995 - 96, 1999 - 2000 AND 2004 - 05 RESPECTIVELY , WHEREIN THE CO - ITA NO. 4051/M/2011 M/S. THE PRESIDENCY CO - OPERATIVE HOUSING SOCIETY LTD. 5 ORDINATE BENCHES OF THE T RIBUNAL IN THE OWN CASES OF THE ASSESSEE FOR THE ABOVE MENTIONED ASSESSMENT YEARS , WHILE CONSIDERING THE SAME AUTHORITY OF THE HONBLE BOMBAY HIGH COURT WHICH HAS BEEN RELIED UPON BY THE LD. CIT(A) I.E. IN THE CASE OF SIND CHS LTD. (SUPRA) , HAS ALLOWED T HE IDENTICAL CLAIM OF THE ASSESSEE FOR THE ABOVE MENTIONED ASSESSMENT YEARS. 7 . IN VIEW OF OUR OBSERVATIONS AND LEGAL POSITION AS NARRATED ABOVE, WE DEEM IT FIT TO REMAND THE ISSUE BACK TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO DECIDE THE CLAIM OF THE ASSESSEE AFRESH ON MERITS TAKING INTO CONSIDERATION THE RELEVANT DECISIONS OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE ON THE IDENTICAL ISSUE FOR THE EARLIER ASSESSMENT YEARS AND ALSO AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE TO PRESENT I TS CASE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16.05.2014 . SD/ - SD/ - ( N.K. BILLAIYA ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 16.05.2014 . * KISHORE COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BEN CH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.