Income Tax Officer, Lakhimpur-Kheri V. M/s Shree Ram Gramodyog Sansthan, Lakhimpur-Kheri

ITA 420/LKW/2013

• Counselvise Citation: 42023714 RSA 2013
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-12-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 04-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: SANJAY SAXENA F
• Keywords: Opportunity of being heard; Tax effect
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.419 TO 422/LKW/2013 A.YRS.:1999 - 2000 TO 2002 - 2003 & 2005 - 2006 INCOME TAX OFFICER, WARD - 1, LAKHIMPUR KHERI. VS. M/S SHREE RAM GRAMODYOG SANSTHAN, VILL. & P.O. BARWAR, DISTT. LAKHIMPUR KHERI. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. P. SRIVASTAVA, D. R. RESPONDENT BY SHRI SANJAY SAXENA, F.C.A. DATE OF HEARING 18/12/2013 DATE OF PRONOUNCEMENT 0 7 /01/2014 O R D E R PER A. K. GARODIA: ALL THESE APPEALS ARE FILED BY THE REVENUE, WHICH ARE DIRECTED AGAINST A COMBINED ORDER OF LEARNED CIT(A), BAREILLY DATED 20/03/2013 FOR THE ASSESSMENT YEARS 1999 - 2000 TO 2002 - 2003 & 2005 - 2006 . ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT EXCEPT THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 199 9 - 2000 I.E. I.T.A. NO.419/LKW/2013, THE REMAINING THREE APPEALS ARE NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT. 2 3. LEARNED D.R. OF THE REVENUE COULD NOT CONTROVERT THE SUBMISSIONS OF LEARNED A.R. OF THE ASSESSEE AND HENCE , ALL THE SE THREE APPEALS OF THE REVENUE ARE DISMISSED AS NOT MAINTAINABLE FOR LOW TAX EFFECT. 4. NOW WE TAKE UP THE APPEAL OF THE REVENUE IN I.T.A. NO.419/LKW/2013. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.13,95,080/ - MADE BY ASSESSING OFFICER AND DENYING EXEMPTION U/S 10(23B) CLAIMED BY THE ASSESSEE. 2. THAT THE ORDER OF THE CIT(A) MAY BE CANCELLED AND THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 5. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) AS PER H I S DEC ISION ON PAGE 5 OF HIS ORDER. THE RELEVANT PORTION IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: I HAVE CAREFULLY PERUSED THE SUBMISSIONS OF THE AR FOR THE APPELLANT. FROM THE SUBMISSIONS IT IS NOTICED THAT IT IS CLEAR THAT TILL A.Y. 2002 - 03, NO POWER HAD BEEN GIVEN TO WITHDRAW THE APPROVAL U/S 10(23B) ONCE GRANTED BY KVIC AND THE A.O. HAD NO POWER TO WITHDRAW/REFUSE THE EXEMPTION U/S 10(23B) AT ALL. IN THIS BACK GROUND, THE APPELLANT IS ENTITLED TO GET BENEFIT OF SECTION 10(23B)OF THE I.T. A CT, TILL ASSESSMENT YEAR 2002 - 03 AND IN THE 3 ASSESSMENT ORDER FOR THE ASSESSMENT YEAR UNDER APPEAL , THE AO HIMSELF MENTIONED IN THE ORDER THAT THE ASSESSEE SUBMITTED KVIC APPROVAL LETTER NO. 0713217 DATED 16.08.2007 FOR THE RELEVANT YEAR 2004 - 05. THE KVIC HAS INFORMED THAT THE ASSESSEE HAS UNDER TAKEN THE KHADI AND VILLAGE INDUSTRIES PROGRAMME APPROVED BY THE COMMISSION. THE COMMISSION HAS RECOMMENDED THAT THE INSTITUTION MAY BE CONSIDERED FOR THE PURPOSES OF EXEMPTION FROM INCOME TAX U/S 10(232B) OF THE AC T. IN THE CIRCUMSTANCES OF THE CASE, THE APPELLANT IS ALLOWED EXEMPTION U/S 10(23B) OF THE ACT. THE GROUND OF APPEAL STAND ALLOWED. IN THE RESULT THE APPEAL IS ALLOWED. 6.1 FROM THE PROVISION OF SECTION 10(23B) OF THE ACT, WE FIND THAT THIRD PROVISO WAS INSERTED BY FINANCE ACT, 2002 WITH EFFECT FROM 01/04/2003 , AS PER WHICH THE KHADI & VILLAGE INDUSTRIES COMMISSION (KVIC) CAN WITHDRAW THE APPROVAL GRANTED TO AN ASSESSEE U/S 10(23B) AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE CONCERNED AS SESSEE. HENCE, TILL ASSESSMENT YEAR 2002 - 2003 , THERE WAS NO POWER GIVEN TO KVIC TO WITHDRAW THE APPROVAL GRANTED TO AN ASSESSEE. AFTER MAKING AMENDMENT IN SECTION 10(23B), AN AMENDMENT WAS MADE IN SECTION 143(3) ALSO BY WAY OF INSERTION OF PROVISO AS PER WHICH EVEN IF THE ASSESSING OFFICER NOTICES THAT THERE IS ANY CONTRAVENTION OF PROVISION OF CLAUSE 23B OF SECTION 10, THEN ALSO , THE ASSESSING OFFICER CAN REFER THE MATTER TO KVIC FOR WITHDRAWAL OF THE APPROVAL BUT WITHOUT GETTING THE WITHDRAWAL OF APPROV AL FROM KVIC, THE ASSESSING OFFICER CANNOT MAKE AN ASSESSMENT WITHOUT GIVING EFFECT TO THE PROVISION OF SECTION 10. HENCE, EVEN FOR ASSESSMENT YEAR 2003 - 2004 ALSO, THE ASSESSING OFFICER CANNOT REFUSE TO GIVE EFFECT OF SECTION 10(23B) UNLESS THE APPROVAL GRANTED TO THE ASSESSEE 4 HAS BEEN WITHDRAWN AS PER THE PROVISION S OF LAW. THE ASSESSMENT YEAR INVOLVED IN THE PRESENT CASE IS 1999 - 2000 AND HENCE , IN THIS YEAR , THERE IS NO PROVISION FOR WITHDRAWAL OF THE APPROVAL ONCE GRANTED BY KVIC. UNDER THESE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LEARNED CIT(A). 7. IN THE RESULT, ALL THE FOUR APPEALS OF THE REVENUE ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:. 7 T H JANUARY, 2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. DR, ITAT, LUCKNOW ASSTT. REGISTRAR