Appeal details
Counselvise Citation
[2017] 126 COUNSELVISE.COM (IT) 8423 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 4 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
10-11-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
20-02-2017
Assessment Year
2008-2009
Appeal Filed On
21-06-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH , JUDICIAL MEMBER ITA NO. 4305/MUM/2012 : A.Y : 2008 - 09 MAHARASHTRA LABOUR WELFARE BOARD, WELFARE COMMISSIONER, MAHARASHTRA LABOUR WELFARE BOARD, MUMBAI GIRNI KAMGAR KREEDA BHAVAN, SENAPATI BAPAT MARG, ELPHINSTONE, MUMBAI 400 013 PAN : AAAAM3255A (APPELLANT) VS. ITO - 18(2)(4), MUMBAI (RESPONDENT) APPELLANT BY : SHRI VIPUL JOSHI & SHRI ASHOK J. PATIL RESPONDENT BY : SUMAN KUMAR DATE OF HEARING : 09/11/2017 DATE OF PRONOUNCEMENT : 10 /11/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 29, MUMBAI DATED 27.03.2012 PERTAINING TO THE ASSESSMENT YEAR 2008 - 09 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER, MUMBAI DATED 30.12.2010 U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 ITA NO. 4305/MUM/2012 MAHARASHTRA LABOUR WELFARE BOARD 2. THE APPELLANT BEFORE US IS AN ASSOCIATION OF PERSON S WHICH HAS BEEN CONSTITUTED UNDER SEC. 4 OF THE MAHARASHTRA LABOUR WELFARE FUND ACT, 1953 AND IS ENGAGED IN LABOUR WELFARE AND ITS FUNDING IS STATUTOR IL Y PRESCRIBED BY WAY OF TRIPARTITE CONTRIBUTIONS FROM THE STATE GOVERNMENT, EMPLOYERS AND EMPLOYEES, AND IT EXISTS FOR THE BENEFIT OF WELFARE OF WORKERS AND LABOUR IN THE STATE OF MAHARASHTRA. FOR THE ASSESSMENT YEAR 2008 - 09, IT FILED A RETURN OF INCOME DECLARING NIL INCOME, INTER - ALIA , CLAIMING ITS INCOME TO BE EXEMPT. ON BEING SHOW - CAUSED DURING THE ASSE SSMENT PROCEEDINGS, ASSESSEE REFERRED TO SEC. 10(23AAA) OF THE ACT TO JUSTIFY ITS CLAIM OF EXEMPTION, BUT AS THE REQUISITE CONDITIONS WERE NOT COMPLIED WITH, THE ASSESSING OFFICER REJECTED THE CLAIM. INSTEAD, THE ASSESSING OFFICER NOTED THREE ELEMENTS OF INCOME CREDITED IN THE INCOME & EXPENDITURE ACCOUNT OF THE ASSESSEE, NAMELY, INTEREST ON DEPOSIT RS.2,09,046/ - ; INTEREST ON BANK DEPOSIT RS.1,60,25,751/ - ; AND OTHER MISCELLANEOUS RECEIPTS INCLUDING RATES AND TAXES RS.9,28,263/ - TOTALLING TO RS.1,71,6 3,060/ - , WHICH ACCORDING TO THE ASSESSING OFFICER WERE RECEIPTS IN THE NATURE OF INCOME AND ACCORDINGLY ASSESSED THE TAXABLE INCOME AT RS.1,71,63,060/ - . THE CIT(A) HAS ALSO CONFIRMED THE ASSESSMENT PRIMARILY FOR THE REASONS ADVANCED BY THE ASSESSING OFFIC ER INASMUCH AS THE REQUISITE APPROVAL REQUIRED FOR CLAIM OF EXEMPTION U/S 10(23AAA) OF THE ACT W AS NOT RECEIVED . IN THIS MANNER, ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE BRIEFLY TOUCHED UPON THE HISTORY OF THE ASSESSEE INASMUCH AS IT WAS ORIGINALLY SET - UP FOR THE WELFARE OF LABOUR BY THE GOVERNMENT OF BOMBAY (AS IT THEN EXISTED) AND IT WAS EXEMPT FROM TAX IN TERMS OF SEC. 3 ITA NO. 4305/MUM/2012 MAHARASHTRA LABOUR WELFARE BOARD 4(3)(1) OF THE ERSTWHILE INCOME TAX ACT, 1922. PRESENTLY, IT IS POINTED OUT THAT WITH EFFECT FROM ASSESSMENT YEAR 2011 - 12 IT HAS ALREADY BEEN ACCORDED EXEMPTION IN TERMS OF SEC. 10(23C)(IV) OF THE ACT. SO HOWEVER, FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, IT IS POINTED OUT THAT IT HAS ALREADY MOVED AN APPLICATION SEEKING APPROVAL OF THE COMPETENT AUTHORITY FOR EXEMPTION IN TERMS OF SEC. 10(46) OF THE ACT, A COPY OF SUCH APPLICATION DATED 28.12.2011 HAS BEEN PLACED AT PAGE 128 OF THE PA PER BOOK. OUR ATTENTION WAS ALSO INVITED TO PAGE 145 OF THE PAPER BOOK WHEREIN IS PLACED A COPY OF THE COMMUNICATION RECEIVED FROM THE CBDT DATED 24.05.2012 IN TERMS OF WHICH THE PROCESSING OF ASSESSEES APPLICATION IS STILL NOT COMPLETED. BE THAT AS IT MAY, AS OF NOW, THE ASSESSEE DOES NOT HAVE ANY APPROVAL PRESCRIBED IN TERMS OF SEC. 10(46) OF THE ACT. 4. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO AN ADDITIONAL GROUND OF APPEAL PREFERRED BY THE ASSESSEE, WHICH READS AS UNDER : - 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LAW, NO INCOME TAX IS PAYABLE BY THE APPELLANT, AS IT IS A STATE, AND/OR AGENT OF THE STATE AND/OR INSTRUMENTALITY OF THE STATE ON THIS BASIS, IT IS SOUGHT TO BE POINTED OUT TH AT THE CLAIM OF THE ASSESSEE FOR EXEMPTION IS NOT IN THE CONTEXT OF ANY SPECIFIC PROVISION OF THE ACT, BUT ON THE STRENGTH OF ARTICLE 289 OF THE CONSTITUTION OF INDIA, AS ITS ACTIVITIES ARE AKIN TO THAT OF THE STATE OR AN AGENT OF STATE. THE LEARNED REPRE SENTATIVE POINTED OUT THAT THE AFORESAID PLEA OF THE ASSESSEE CAN BE APPRECIATED ON THE STRENGTH OF THE STATUTE UNDER WHICH 4 ITA NO. 4305/MUM/2012 MAHARASHTRA LABOUR WELFARE BOARD IT HAS BEEN SET - UP BY THE STATE LEGISLATURE AND, THEREFORE, THE NEW GROUND INVOLVES A LEGAL ISSUE AND DOES NOT REQUIRE ANY LONG DRAW N INVESTIGATION OF FRESH FACTS. IT WAS POINTED OUT THAT THOUGH THE ASSESSEE HAS NOT RAISED SUCH A PLEA BEFORE THE LOWER AUTHORITIES, BUT THE FACT THAT THE ASSESSEE IS DISCHARGING THE FUNCTIONS OF A STATE OR AN AGENT OF THE STATE CANNOT BE DOUBTED. IT WAS , THEREFORE, CONTENDED THAT THE ADDITIONAL GROUND OF APPEAL BE ADMITTED FOR ADJUDICATION AND SINCE IT HAS NOT BEEN RAISED BEFORE THE LOWER AUTHORITIES , THE ASSESSEE WOULD BE SATISFIED EVEN IF THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR A DECISION AFRESH. 5. ON THE OTHER HAND, THE LD. DR APPEARING FOR THE REVENUE SUBMITTED THAT THE ADDITIONAL GROUND SOUGHT TO BE RAISED BY THE ASSESSEE WOULD INVOLVE INVESTIGATION OF FRESH FACTS WHICH WERE HITHERTO NOT BEEN REFERRED TO AT ALL IN THE P ROCEEDINGS BEFORE THE LOWER AUTHORITIES AND, THEREFORE, SUCH A GROUND CANNOT BE ADMITTED AT THIS STAGE FOLLOWING THE RATIO OF THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ULTRA T ECH CEMENT LTD. VS. ADDL. CIT, (2017) 81 TAXMANN.COM 74 (BOM.) 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. NOTABLY, THE ADDITIONAL GROUND THAT IS SOUGHT TO BE RAISED BY THE ASSESSEE IS BASED ON ARTICLE 289 OF THE CONSTITUTION OF INDIA. ARTICLE 289(1) OF THE CONSTITUTION OF INDIA PROVIDES THAT THE PROPERTY AND INCOME OF THE ST ATE SHALL BE EXEMPT FROM UNION TAXATION. CLAUSE (2) & (3) OF ARTICLE 289 OF THE CONSTITUTION OF INDIA PRESCRIBES SOME OF THE EXCEPTIONS FROM THE PROVISIONS OF ARTICLE 289(1) OF THE CONSTITUTION. IN ANY CASE, THE POINT 5 ITA NO. 4305/MUM/2012 MAHARASHTRA LABOUR WELFARE BOARD SOUGHT TO BE MADE OUT BY THE ASSESSE E IS THAT IT MUST BE CONSIDERED AS STATE OR GOVERNMENT OR AN AGENT OF THE STATE SO AS TO FALL WITHIN THE PRESCRIPTION OF ARTICLE 289(1) OF THE CONSTITUTION. IT IS AXIOMATIC THAT IN ORDER TO ADJUDICATE THE SAID CONTROVERSY ONE HAS TO EXAMINE THE STATUTE UN DER WHICH ASSESSEE IS CONSTITUTED AND THE PURPORT AND MANNER OF ITS ACTIVITIES . AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE REFERRED TO THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF M AHARASHTRA LTD. VS. ACIT, [2012] 25 TAXMANN.COM 333 (MUM.) WHEREIN A SIMILAR ARGUMENT IN THE CONTEXT OF CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. WAS CONSIDERED. THE LEARNED REPRESENTATIVE ALSO REFERRED TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY VS. DY. DIRECTOR OF INCOME TAX (EXEMPTION - 1)(1), [2015] 55 TAXMANN.COM 307 (BOMBAY) WHEREIN ALSO SIMILAR ARGUMENT BASED ON THE STRENGTH OF ARTICLE 289 OF THE CONSTITUTION HA S BEEN NOTED IN THE CASE OF MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (SUPRA). BE THAT AS IT MAY, WHAT WE HAVE TO DECIDE AT THE THRESHOLD IS WHETHER OR NOT ASSESSEE IS COMPETENT TO RAISE THE SAID PLE A, WHICH HAS NOT BEEN HITHERTO RAISED BEFORE THE LOWER AUTHORITIES. 7. IN OUR CONSIDERED OPINION, THE PLEA OF THE ASSESSEE GOES TO THE ROOT OF THE JURISDICTION OF THE ASSESSING OFFICER TO LEVY TAX ON THE INCOME OF THE ASSESSEE. NO DOUBT, SUCH A PLEA HAS NOT BEEN TAKEN BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES, SO HOWEVER, IT CANNOT BE DENIED THAT WHAT THE ASSESSEE HAS RAISED IS A PURE POINT OF LAW AND IS QUITE RELEVANT TO DETERMINE ITS TAX LIABILITY. THE ONLY ASPECT RAISED BY 6 ITA NO. 4305/MUM/2012 MAHARASHTRA LABOUR WELFARE BOARD THE LD. DR WAS THAT THE NEW PLEA INVOLVES FRESH INVESTIGATION OF FACTS A ND, THEREFORE, IT IS IMPERMISSIBLE TO BE RAISED AT THIS STAGE. THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS COMMISSIONER O F INCOME TAX , 229 ITR 383 (SC) HELD THAT IT IS OPEN FOR THE APPELLATE AUTHORITIES TO ADMIT A FRESH PLE A, WHICH HAS NOT HITHERTO RAISED BEFORE THE LOWER AUTHORITIES PROVIDED, OF COURSE, THE NECESSARY FACTS TO DECIDE THE PLEA ARE ON RECORD. PERTINENTLY, THE PLEA OF THE ASSESSEE IS PRIMARILY TO BE EXAMINED IN THE CONTEXT OF THE CHARTER , IN TERMS OF WHICH IT HAS BEEN SET - UP BY THE STATE LEGISLATURE. WE ARE NOT CONVINCED THAT THE PLEA OF THE LD. DR THAT THE ADJUDICATION OF THE FRESH PLEA WOULD REQUIRE AFRESH INVESTIGATION OF FACTS. RATHER, IN OUR VIEW, ALL THAT IS REQUIRE D IS A FRESH APPRAISAL OF FACTS IN THE CONTEXT OF THE LEGAL POINT , AND NOT A FRESH INVESTIGATION TO OBTAIN THE FACTS . THEREFORE, IN OUR VIEW, THE RATIO OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. (SUPRA) SUPPORTS THE PLEA OF THE ASSESSEE FOR ADMISSION OF THE SAID ADDITIONAL GROUND OF APPEAL SINCE IT INVOLVES A POINT OF LAW AND NO NEW FACTS ARE REQUIRED TO BE INVESTIGATED, BUT ARE ONLY REQUIRED TO BE APPRAISED . PERTINENTLY, AT THIS STAGE, WE MAY ALSO NOTICE THAT THE BONA FIDE OF THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE HAVE NOT BEEN CHALLENGED AND, THEREFORE, IN OUR VIEW, CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITIONAL GROUND OF APPEAL DESERVES TO BE ADMITTED FOR ADJUDICATION. SINCE THE SAID PLEA W AS NOT BEFORE THE LOWER AUTHORITIES, AND AS IT WOULD CERTAINLY REQUIRE THE DETAILING OF FACTS IN A SLIGHT DETAIL, IN ALL FAIRNESS, WE DEEM IT FIT AND PROPER TO RESTORE IT BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL CONSIDER AND ADJUDICATE IT AS PER LAW. 7 ITA NO. 4305/MUM/2012 MAHARASHTRA LABOUR WELFARE BOARD 8. THE RELIANCE PLACED BY THE LD. DR ON THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ULTRATECH CEMENT LTD. (SUPRA), IN OUR VIEW, IS QUITE MISPLACED IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. IN THE CASE BEFORE THE HON'BLE HIGH COURT, A NEW CLAIM WAS RAISED BY THE ASSESSEE WITHOUT THERE BEING ANY EVIDENCE ON RECORD IN THE RELEVANT YEAR FOR ITS SUPPORT. IN FACT , IT WAS FOUND THAT THE CLAIM REQUIRED LEADING OF EVIDENCE FOR THE RELEVANT YEAR BEFORE THE ASSESSING OFFICER, WHICH WAS IMPERMISSIBLE. F OR THE SAID REASON S , THE HON'BLE HIGH COURT UPHELD THE STAND OF THE TRIBUNAL NOT TO ADMIT THE FRESH PLEA. THE FACT - SI TUATION IN THE PRESENT CASE STANDS ON A DIFFERENT FOOTING INASMUCH AS WE ARE DEALING WITH AN ENTITY WHICH HAS BEEN SET - UP BY AN ACT OF LEGISLATURE AND SECONDLY, THE STATUTE UNDER WHICH IT FUNCTIONS IS ALREADY IN THE KNOW OF THE REVENUE INASMUCH AS FROM ASS ESSMENT YEAR 2011 - 12 ONWARDS IT HAS BEEN ACCORDED EXEMPTION BY THE CHIEF COMMISSIONER OF INCOME TAX - 10, MUMBAI UNDER SECTION 10(23C)(IV) OF THE ACT BY ORDER DATED 28.12.2012. THEREFORE, FOR ALL THE AFORESAID REASONS, WE DEEM IT FIT AND PROPER TO ADMIT THE FRESH PLEA OF THE ASSESSEE, WHICH SEEKS TO DETERMINE THE ROOT OF THE JURISDICTION OF THE ASSESSING OFFICER TO BRING THE ASSESSEE INTO THE TAX FOLD IN THE LIGHT OF ARTICLE 289 OF THE CONSTITUTION OF INDIA. 9. IN VIEW OF THE AFORESAID DISCUSSION, WE HEREBY SET - ASIDE THE ORDER OF CIT(A) AND RESTORE THE ENTIRE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL PASS AN ORDER DE NOVO , AS PER LAW. NEEDLESS TO MENTI O N, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AND ONLY THEREAFTER HE SHALL PASS AN ORDER AFRESH IN ACCORDANCE WITH LAW. 8 ITA NO. 4305/MUM/2012 MAHARASHTRA LABOUR WELFARE BOARD 10. BEFORE PARTING, WE MAY CLARIFY THAT OUR DECISION TO ADMIT AND RESTORE THE ADDITIONAL GROUND OF APPEAL FOR ADJUDICATION BY THE ASSESSING OFFICER IS NO REFLECTION ON THE MERITS O F THE ISSUE, WHICH SHALL BE GONE INTO AND DECIDED BY THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS PUT FORTH BY THE ASSESSEE ON MERITS AS PER LAW . 11. RESULTANTLY, APPEAL OF THE ASSESSEE IS ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 1 0 T H NOVEMBER, 2017 SD/ - SD/ - ( PAWAN SINGH ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 1 0 T H NOVEMBER , 201 7 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, B BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI
