Muzaffarnagar Development Authority (MDA), Muzaffarnagar V. Addl. CIT, Muzaffarnagar

ITA 4211/DEL/2011

• Counselvise Citation: 421120114 RSA 2011
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 21-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 20-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: LAKSHMISH KANT
• Keywords: Retrospective amendment; Cancellation of registration
• Section: 143(3); 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 4211(DEL)/2011 ASSESSMENT YEAR: 2007-08 MUZAFFARNAGAR DEVELOPMENT ADDITIONAL COMMISSIONER OF AUTHORITY, 133, SOUTH CIVIL LINES, VS. INCOME-TAX, RANGE-2, MUZAFFARNAGAR, (U.P). MUZAFFARNAGAR. PAN: AAALM0437D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI LAKSHMISH K ANT, C.A. RESPONDENT BY : SHRI A.K. MONGA, SR. DR DATE OF HEA RING : 21.11.2011 DATE OF PRO NOUNCEMENT : 30.11.2011 ORDER PER K.G. BANSAL : AM THE ASSESSEE HAS TAKEN UP FIVE GROUNDS IN THIS APPEAL. THE GROUNDS CONTAIN FACTS AND ARGUMENTS ALSO. THUS, THE GR OUNDS ARE NOT IN ACCORDANCE WITH TRIBUNAL RULES. THE REAL CONTRO VERSY IS PROJECTED IN GROUND NO. 1 TO THE EFFECT THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) ERRED IN UPHOLDING THE ORDER OF THE AO IN WHICH FRINGE BENEFIT TAX WAS LEVIED IGNO RING THE FACT THAT THE ASSESSEE HAD THE BENEFIT OF REGISTRATION U/S 12 AA OF THE INCOME-TAX ACT, ITA NO. 4211(DEL)/2011 2 1961, IN THE RELEVANT PERIOD. IT IS THE ADMI TTED POSITION OF BOTH THE PARTIES THAT FACTS OF THIS CASE ARE SIMILAR TO THE FACTS OF THE CASE FOR ASSESSMENT YEAR 2006-07. THE TRIBUNAL HAD PASSED A CONSOLIDATED ORDER FOR ASSESSMENT YEARS 2005-06 AND 2006-07 IN I TA NOS. 1334 TO 1336(DEL)/2009 ON 19.06.2009. IN THIS ORDER, APP EAL NO. 1336(DEL)/2009 PERTAINS TO FRINGE BENEFIT TAX LEVIED IN ASSES SMENT YEAR 2006-07. THE LEVY WAS CANCELLED BY MENTIONING INTER-ALIA THA T PROCEEDINGS FOR CANCELLATION OF REGISTRATION HAD STARTED ONLY ON 30.04.2008. THEREFORE, THE ORDER WILL BE PASSED ON A SUBSEQUENT DATE, WHICH CANNOT HAVE RETROSPECTIVE EFFECT. FOLLOWING THIS ORDER, IT I S HELD THAT THE ASSESSEE WAS NOT LIABLE TO PAY FRINGE BENEFIT TAX IN ASSES SMENT YEAR 2007-08 ALSO. FOR THE SAKE OF READY REFERENCE, PARAGRAPH NOS. 4 A ND 5 OF THE ORDER ARE REPRODUCED BELOW:- 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS . A PERUSAL OF THE ORDER OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF THE ASSESSEE IN ITA NO. 981(DEL)/2007 DATED 19. 02.2008 CLEARLY SHOWS THAT THE ASSESSEE WAS GRANTED REG ISTRATION U/S 12A OF THE ACT. CONSEQUENT TO THE DECISION OF CO ORDINATE BENCH OF THIS TRIBUNAL, THE LD. CIT HAD ALSO GRAN TED THE ASSESSEE REGISTRATION U/S 12A ON 30.04.2008. T HE CANCELLATION OF THE REGISTRATION U/S 12A HAS NO T BEEN COMPLETED BY THE LD. CIT, MUZAFFARNAGAR. EVEN OT HERWISE AS PER THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF THE SOCIETY FOR THE PROMOTION OF EDUCAT ION, ADVENTURE SPORTS AND CONSERVATION OF INVESTMENT, R EPORTED IN ITA NO. 4211(DEL)/2011 3 216 CTR 167 AT PAGE 11 OF THE SAID ORDER CLEARL Y BRINGS OUT THE ISSUE THAT EVEN IF THE CANCELLATION OF THE R EGISTRATION IS DONE, IT IS ONLY PROSPECTIVE. THUS, EVEN ASSUMIN G THAT THE LD. CIT WISHES TO CANCEL THE REGISTRATION GRANTED U/ S 12A, IT COULD HAVE EFFECT ONLY FROM 30.04.2008 BEING TH E DATE OF ISSUE OF SHOW CAUSE NOTICE AND NOT BEFORE. AS IT IS NOTICED THAT THE ASSESSMENT YEARS INVOLVED IN ITA NOS. 1334 AND 1335 ARE THE ASSESSMENT YEARS 2005-06 AND 2006-0 7, WHICH FALL FOR THE PERIOD WHEN THE ASSESSEE DID HAVE TH E REGISTRATION U/S 12A AND THE SAME HAS NOT BEEN CANCELLED BY THE LD. CIT OBVIOUSLY, THE BENEFIT OF THE EXEMPTION U/S 11 OF THE ACT CANNOT BE DENIED TO THE ASSESSEE. EVEN OTHERWIS E, IT IS NOTICED THAT THE ASSESSMENT U/S 143(3) FOR THE R ELEVANT ASSESSMENT YEARS HAVE BEEN COMPLETED U/S 143(3) READ WITH SECTION 254 ON 05.11.2008 AND THE ASSESSING AUTHO RITY HAD AFTER EXAMINING ALL THE CONDITIONS LAID DOWN, HAS GRANTED THE ASSESSEE EXEMPTION U/S 11 OF THE ACT AND HAS AS SESSED THE SAME AS NIL. THUS, IT CANNOT BE SAID THAT THE ASSESSEE HAD VIOLATED EVEN THE PROVISIONS OF SECTIONS 11, 12 & 13 OF THE ACT. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER OF LD. CIT IN UPHOLDING THE ORDER OF THE ASSESSI NG AUTHORITY DATED 24.09.2007 BY HOLDING THAT THE ASSESSEE DI D NOT HAVE REGISTRATION U/S 12A IS INVALID AND THE SAME IS REVERSED. IN THESE CIRCUMSTANCES, THE ASSESSING AUTHORITY IS DIRECTED TO REDO THE ASSESSMENT BY TREATING THE SAME AS BE ING ENTITLED TO THE BENEFIT OF REGISTRATION U/S 12A OF THE ACT. 5. IN REGARD TO THE ITA NO. 1336(DEL)/2009, I T IS NOTICED THAT THE LD. CIT WAS OF THE VIEW THAT THE ASSE SSEE WAS NOT REGISTERED U/S 12A READ WITH SECTION 12AA OF THE ACT, THE EXEMPTION GIVEN IN PROVISIONS OF SECTION 115W(A)( III) WAS NOT AVAILABLE. AS WE HAVE ALREADY HELD THAT THE AS SESSEE IS ENTITLED TO THE REGISTRATION U/S 12AA FOR THE YEA R 2006-07 ORDER IN ITA NO. 1335(DEL)/2009 OF EVEN DATE OB VIOUSLY THE ASSESSEE WOULD BE ENTITLED TO THE EXEMPTION AV AILABLE IN SECTION 115W(A)(III) AND CONSEQUENTLY THE ASSESS EE IS TO BE ALLOWED TO BE EXCLUDED FROM THE DEFINITION OF EMPLOYER AND CONSEQUENTLY THE PROVISIONS OF FRINGE BENEFIT T AX WOULD NOT BE ITA NO. 4211(DEL)/2011 4 APPLICABLE ON THE ASSESSEE. IN THESE CIRCUMSTANCE S, ALL THE THREE APPEALS OF THE ASSESSEE ARE ALLOWED. 2. IN THE RESULT, THE APPEAL IS ALLOWED. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. MUZAFFARNAGAR DEVELOPMENT AUTHORITY, MUZAF FARNAGAR. 2. ADDITIONAL CIT, RANGE-2, MUZAFFARNAGAR. 3. CIT 4. CIT(A) 5. THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.