Sahara Welfare Foundation., Kolkata V. I.T.O(Exemp)-II, Kolkata, Kolkata

ITA 439/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78290 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2013
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: J P KHAITAN
• Keywords: Opportunity of being heard
• Section: 12A; 11

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 439/KOL/2013 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2008-09 SAHARA WELFARE FOUNDATION VS. INCOME-TAX OFFICER (EXEMPTION)-II, (PAN: AAECS 4143H) KOLKATA (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 07.04.2014 DATE OF PRONOUNCEMENT: 07.04.2014 FOR THE APPELLANT: SHRI J. P. KHAITAN, SR. ADVOCATE FOR THE RESPONDENT: SHRI VARINDER MEHTA, CIT, DR $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), JALPAIGURI IN APPEAL NO. 330/CIT(A)-XIV/10-11 DATED 24.01.2013. ASSESSMENT WAS FRAMED BY ITO (EXEMPTION)-II, KOLKATA U/S. 143(3)/13(1)(C) READ WITH 13(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEARS 2008-09 VIDE HIS ORDER DATED 31.12.2010. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SHRI J. P. KHAITAN, SR. ADVOCATE, FIRST OF ALL DREW OUR ATTENTION TO GROUND NO. 2 STATING THAT NO OPPORTUNITY /SHOW CAUSE NOTICE WAS ISSUED FOR ENHANCING THE ASSESSMENT BY CIT(A). THE RELEVA NT GROUND NO. 2 READS AS UNDER: 2. THAT NO OPPORTUNITY/SHOW CAUSE AS PROVIDED UNDE R SECTION 251(1) OF THE INCOME TAX ACT BEFORE ENHANCING THE ASSESSMENT OF THE APPE LLANT BY A SUM OF RS.12,77,00,000/- HAS BEEN GIVEN BY THE LD. CIT(A) WHICH RENDERS THE ORDER PASSED AS VOID AB INITIO AND BAD IN LAW. 3. LD. COUNSEL FOR THE ASSESSEE TOOK US TO PARA 5D OF THE ORDER OF CIT(A) WHEREIN IT HAS BEEN DIRECTED TO THE AO TO ENAHANCE THE ASSESSMENT BY THE SUM OF RS.12.77 CR. ON QUERY FROM THE BENCH, THE LD. CIT, DR FAIRLY CONCEDED THAT NO SHOW CAUSE NOTICE ENHANCING THE ASSESSMENT WAS ISSUED. IN SUCH CIRCUMSTANCES, LD. SR. COUNSEL SHRI KHAITAN ARGUED THAT THE 2 ITA NO.439/K/2013 SAHARA WELFARE FOUNDATION AY:2008-09 ISSUE CAN BE RESTORED BACK TO THE FILE OF THE CIT(A ) SO THAT ASSESSEE CAN BE ALLOWED OPPORTUNITY OF BEING HEARD ON THE ISSUES. 4. LD. COUNSEL FOR THE ASSESSEE FURTHER ARGUED AS R EGARDS TO SECOND ISSUE OF VIOLATION OF SECTION 13(1)(C) READ WITH SECTION 13(3) OF THE ACT . LD. COUNSEL FOR THE ASSESSEE TOOK US TO GROUNDS RAISED BEFORE CIT(A) AND THE RELEVANT GROUN DS AS RAISED BEFORE CIT(A) I.E. GROUND NO. 4 READS AS UNDER: 4. THAT THE LD. ASSESSING OFFICER HAS NOT CORRECTL Y APPRECIATED THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE NATURE OF PAYMENT MADE AS PER THE AGREEMENT EXISTING AND THE RESOLUTION OF THE BOARD AUTHORIZING THE AFO RESAID PAYMENT AND IS WRONG IN DRAWING ADVERSE INFERENCES AND TREATING THE PAYMENT TO ALLEGEDLY DIRECTLY OR INDIRECTLY PROVIDE BENEFIT TO INTERESTED PERSONS AND THEREBY I NVOKING THE PROVISIONS OF SECTION 13(1)(C) READ WITH SECTION 13(3) OF THE INCOME TAX ACT. 5. LD. COUNSEL FOR THE ASSESSEE TOOK US TO THE ASSE SSMENT ORDER PAGE 3 LAST PARA AND ARGUED THAT THE AO HAS NOT SHOWN DIRECT OR INDIRECT BENEFI T TAKEN BY PARTIES IN TERM OF SECTION 13(1) OF THE ACT AND IN SUCH CIRCUMSTANCES HE ONLY REQUES TED THAT THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION AS THE AS SESSEE HAS FILED COMPLETE EVIDENCE BEFORE THE AO AS WELL AS BEFORE CIT(A) WHICH WAS IGNORED AND N OT CONSIDERED. LD. COUNSEL FOR THE ASSESSEE BEFORE US DREW OUR ATTENTION TO THE RELEVA NT GROUND RAISED IN MEMO OF APPEAL VIDE GROUND NO 5, WHICH READ AS UNDER: 4. THAT WITHOUT PREJUDICE ON THE FACTS AND CIRCUMS TANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER FOR WITHDRAWAL OF CLAIM OF THE APPELLANT UNDER SECTION 11 IN RESPECT OF DONATION R ECEIVED TOWARDS CORPUS OF THE APPELLANT FOUNDATION WHICH IS DULY RECOGNISED UNDER SETION 11 IN RESPECT OF DONATION RECIVED TOWARDS CORPUS OF THE APPELLANT FOUNDATION WHICH IS DULY RECOGNISED UNDER SECTION 12A OF THE INCOME TAX ACT. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW IN ANY VIEW OF THE MATTER THE LD. CIT(A) IN NOT JUSTIFIED IN CONFIRMIN G THE ACTION OF THE ASSESSING OFFICER BY TREATING THE PAYMENT MADE TOWARDS CHARITABLE PURPOS ES DULY AUTHORISED BY THE OBJECTS OF THE APPELLANT-FOUNDATION TOWARDS PROMOTION OF SPORT S TO BE IN THE NATURE OF ADVERTISEMENT EXPENSES AND CONFIRMING THE INVOCATION OF PROVISION S OF SECTION 13 OF THE INCOME TAX ACT AND HOLDING THAT THE AMOUNT IS FOR COMMERCIAL BENEF IT FOR OWNERS OF THE APPELLANT- FOUNDATION. 6. ON THE OTHER HAND, LD. CIT, DR SHRI VIRENDER MEH ATA DREW OUR ATTENTION TO PARA 2 AT PAGE 3 OF THE ASSESSMENT ORDER AND STATED THAT THE ASSESSEE HAS BENEFITED THE TWO GROUP COMPANIES I.E. SAHARA INDIA COMMERCIAL CORPORATION LTD. AND SAHARA INDIA FINANCIAL CO. LTD. ON A QUERY FROM THE BENCH WHETHER THERE IS A DIRECT NEXUS OR NOT FOR THE BENEFIT OR WHETHER THE 3 ITA NO.439/K/2013 SAHARA WELFARE FOUNDATION AY:2008-09 SAME IS ANSWERED BY THE AO OR IT IS IGNORED. IN SU CH CIRCUMSTANCES, LD. CIT, DR ALSO FAIRLY CONCEDED THAT THE ISSUE BE REMITTED TO THE CIT(A) F OR FRESH CONSIDERATION AS CONCEDED BY LD. SR. ADVOCATE SHRI KHAITAN. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE, IN THE ABOVE CIRCUMSTANCES, ARE OF THE VIEW THA T LET THE CIT(A) DECIDE THESE TWO ISSUES AFRESH I.E. ENHANCEMENT AS WELL AS THE ISSUE OF EXE MPTION IN VIEW OF VIOLATION OF PROVISIONS OF SECTION 13(1)(C) AND 13(3)OF THE ACT. IN SUCH CIR CUMSTANCES, WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT HIM TO READJUDICATE THE APPEAL AFTER ALL OWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN CASE, THERE IS A REQUIREMENT O F CALLING A REPORT FROM AO IN THE EVENTUALITY OF ANY FRESH EVIDENCE AS FILED BY THE ASSESSEE, HE CAN ALWAYS ASK FOR REMAND REPORT FROM THE AO. IN SUCH CIRCUMSTANCES, WE SET ASIDE BOTH THE ISSUES TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. APPEAL OF ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 7 TH APRIL, 2014 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- SAHAR WELFARE FOUNDATION, 2A, SHAKESPEA RE SARANI, KOLKATA 2 ./,- / RESPONDENT ITO (EXEMPTION)-II, KOLKATA. 3 . 0' ( )/ THE CIT(A), JALPAIGURI 4. 5. 0' / CIT JALPAIGURI <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .