MUMBAI PORT TRUST, MUMBAI V. ADDL CIT 12(1), MUMBAI

ITA 4430/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62210 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 02-06-2011
• Court: TRIBUNAL
• Department Lawyers: PRAVIN VARMA
• Assessee Lawyers: H K PANDA
• Keywords: Charitable institution; Revised return
• Section: 143(3); 12A; 12AA; 154; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI BEFORE SHIRI G.E. VEERABHADRAPPA, HON'BLE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.4428 /MUM/2011 ASSESSMENT YEAR: 2003-2004 & ITA NO.4429 /MUM/2011 ASSESSMENT YEAR: 2006-2007 & ITA NO.4430 /MUM/2011 ASSESSMENT YEAR: 2007-2008 M/S MUMBAI PORT TRUST, PORT BHAVAN, SHOORJI, VALLABHDAS MARG, BALLARD PIER, MUMBAI-400 001. PAN NO.AAATM5001D ADDL. CIT 12(1), PIRAMAL CHAMBERS, 5 TH FLOOR, MUMBAI. APPELLANT-ASSESSEE VS. RESPONDENT-REVENUE AND ITA NO.4462 /MUM/2011 ASSESSMENT YEAR: 2003-2004 & ITA NO.4463/MUM/2011 ASSESSMENT YEAR: 2006-2007 ADDL. CIT 12(1), PIRAMAL CHAMBERS, 5 TH FLOOR, MUMBAI. M/S MUMBAI PORT TRUST, PORT BHAVAN, SHOORJI, VALLABHDAS MARG, BALLARD PIER, MUMBAI-400 001. PAN NO.AAATM5001D APPELLANT-REVENUE VS. RESPONDENT-ASSESSEE \ ASSESSEE BY : MR. H.K.PANDA REVENUE BY : MR. PRAVIN VARMA DATE OF HEARING : 10 TH APRIL 2012 DATE OF PRONOUNCEMENT : 20 TH APRIL 2012 ITA NO : 4428,4429,4430, 2 4462&4463/MUM/2011 . O R D E R PER AMIT SHUKLA (J.M.) : IN THE AFORESAID CROSS APPEALS, ONE COMMON ISSUE WHICH IS PERMEATING THROUGH ALL THE APPEALS, RELATES TO DENIAL OF EXEMPTION UNDER SECTION 11 BY THE AO, WHICH ALONE GOES TO ROOT OF ALL THE DISPUTES AND ADDITIONS AS HAVE BEEN RAISED IN VARIOUS GROUNDS OF APPEAL TAKEN BY BOTH THE PARTIES . THUS, FOR THE SAKE OF CONVENIENCE ALL THE APPEALS ARE DIS POSED OF BY THIS CONSOLIDATED ORDER. 2. BRIEFLY STATED, THE RELEVANT FA CTS FOR ADJUDICATION OF THIS ISSUE ARE THAT, THE ASSESSEE IS A MAJOR PORT TRUST SET UP UNDER THE MAJOR PORT TRUST ACT, 1963 FOR RENDERING PORT SERVICES, I.E, CARGO HANDLING AND STORAGE, PORT AND DOCK FACILITIES FOR SHIPPING, RAILWAY WORKINGS AND RENTABLE LANDS AND BUILDINGS TO PORT USERS FOR LOADING AND UNLOADING AND CARGO PASSING THROUGH MUMBAI PORT BY WAY OF SEA. BY VIRTUE OF SECTI ON 3(31) OF GENERAL CLAUSES ACT, 1897, THE ASSESSEE WAS TREATED AS LOCAL AUTHORITY WITHIN THE MEANING OF ARTICLE 12 OF THE CONSTITUTION OF INDIA. THE STATUS OF LOCAL AUTHORITY WAS EVEN RECOGNISED BY THE DEPARTMENT ALSO UPTO THE ASSESSMENT YEAR 2002-2003 UNDER SECTION 10 (20) OF THE INCOME TAX ACT. HOWEVER, AFTER THE AMENDMENT BROUGHT IN THE SAID SECTION BY FINANCE ACT, 2002 W.E.F. 1-4-2003 BY WHICH ITA NO : 4428,4429,4430, 3 4462&4463/MUM/2011 . EXPLANATION WAS ADDED, THE DEFINITION OF LOCAL AUTHORITY WAS CONSIDERABLY NARROWED DOWN AND CIRCUMSCRIBED. THUS, EXEMPTION UNDER SECTION 10(20) WAS NO LONGER AVAILABLE TO THE ASSESSEE FROM THE ASSESSMENT YEAR 2003- 2004. DESPITE THE FACT THAT, THE ASSESSEE WAS CARRYING OUT ACTIVITI ES OF CHARITABLE PURPOSES WITHIN THE MEANING OF GENERAL PUBLIC UTILITY IT CONTINUED TO FILE ITS RETURN OF INCOME WITHOUT CLAIMING BENEF IT OF EXEMPTION UNDER SECTIONS 11 IN THE VARIOUS YEARS INCLUDING THE YEARS INVOLVED HEREIN THIS APPEAL. THE APPLICATION FOR REGISTR ATION BEFORE DIT (EXEMPTIONS) WAS FILED ON 8-2-2007, WHICH WAS REJECTED BY THE SAID AUTHORITY, VIDE ORDER DATED 29-8-2007. AFTER REPEATED ROUNDS OF APPEAL, FINALLY, THE ITAT VIDE ORDER DATED 16 TH MARCH, 2009 IN ITA NO.6352/M/2007 DIRECTED THE DIT (EXEMPTIONS) TO GRANT THE REGISTRATION UNDER SECTION 12AA TO THE ASSESSEE. IN PURSUANCE THEREOF CERTIFICATE FOR REGISTR ATION WAS GRANTED BY THE DIT (EXEMPTIONS) UNDER SECTION 12(1)(B)(I) VIDE ORDER DATED 8-9-2009, WHEREBY THE ASSESSEE WAS GRANTED REGISTRATION W.E.F. 1-4-2002 I.E. EFFECTIVE FROM THE ASSE SSMENT YEAR 2003-2004. THUS, THE ASSESSEES INCOME AND EXPENDITURE WAS ELIGIBLE FOR BEING COMPUTED UNDER SECTION 11 TO 13 AND WAS ENTITLED FOR EXEMPTION THEREOF. ITA NO : 4428,4429,4430, 4 4462&4463/MUM/2011 . 3. THE STATUS OF RETURN AND ASSESSMENTS THEREOF FOR THE VARIOUS ASSESSMENT YEARS INVOLVED IN THIS APPEAL, WERE AS UNDER :- ASSESSMENT YEAR DATES OF DATE OF COMPLETION OF FILING RETURN ASSESSMENT U/S 143(3) A. 2003-2004 28-11-2003 24-2-2006 B. 2006-2007 31-10-2007 7-11-2008 C. 2007-2008 31-10-2007 17-2-2009 FROM THE ABOVE DATES, IT IS EVIDENT THAT ALL THESE ASSESSMENTS WERE PASSED PRIOR TO THE DATE OF THE PASSI NG OF THE ITATS ORDER (I.E. DATED 16-3-2009) AND ALSO GRANTING OF R EGISTRATION CERTIFICATE BY DIT (EXEMPTIONS) (I.E. DATED 8-9-2009). T HUS, THE ASSESSING OFFICER DID NOT HAVE THE OCCASION TO FRAME THE ASSESS MENT AS PER THE PROVISIONS OF SECTIONS 11 TO 13, IN PURSUANCE OF CERTIFICATE GRANTED UNDER SECTION 12AA. 4. IN THE FIRST APPEAL BEFORE THE CIT(A), THE ASSESSEE RAISED THE ADDITIONAL GROUNDS FOR DENIAL OF EXEMPTION UNDER SECTION 11 IN WAKE OF REGISTRATION GRANTED BY DIT (EXEMPTI ONS). HOWEVER, THE CIT(A) HAS REJECTED THE GROUND AFTER CALLING THE REMAND REPORT FROM THE ASSESSING OFFICER, MAINLY ON THE GROUND THAT :- (I) IN ALL THE YEARS INVOLVED TIME LIMIT FOR FILING OF REVISED RETURN HAD EXPIRED AND SUCH A CLAIM COULD ONLY BE MADE EITHER IN THE RETURN OR IN THE REVISED RETURN AND THE ITA NO : 4428,4429,4430, 5 4462&4463/MUM/2011 . SAME CANNOT BE DONE AT THE APPELLA TE STAGE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CI T, REPORTED IN 284 ITR 323 SC; (II) IN ABSENCE OF REVISED RETURN WHICH IS BARRED BY LIMITATION, THE CIT(A) DOES NO T HAVE ANY STATUTORY POWER TO ENTERTAIN SUCH ADDITIONAL GROUND AND MOREOVER, THE ASSESSEE HAS NOT FILED AUDITED ACCOUNTS AS REQUIRED UNDER SECTION 12A (B) WHICH REQUIRES TO BE EXAMINED IN VIEW OF THE CONDITIONS OF PROVISIONS OF SECTION 11(2), 11(4), 11(5) AND SECTION 13 AND LASTLY; (III) THE CIT(A) IS NOT EMPOWERED EITHER HIMSELF OR DIRECT THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE RAISED IN THE ADDITIONAL GROUND WHICH IS BARRED BY LIMITATION. 6. LEARNED AR APPEARING ON BEHALF OF TH E ASSESSEE SUBMITTED THAT HONBLE ITAT IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 004-2005 AND 2005-2006 HAVE SET AS IDE THE ISSUE BEFORE THE ASSESSING OFFICER TO ADJUDICATE AND DE CIDE THE ISSUE AFRESH IN VIEW OF THE REGISTRATION GRANTED TO IT BY DI T (EXEMPTIONS) IN PURSUANCE OF THE ITAT ORDER. HE THEREFORE, PLEADED THAT MATTER SHOULD BE RESTORED BACK TO THE ASSESSING OFFICER FOR GI VING THE BENEFIT OF SECTION 11 AND COMPUTE THE INCOME ACCORDINGLY. ITA NO : 4428,4429,4430, 6 4462&4463/MUM/2011 . 7. PER CONTRA , LEARNED SENIOR DR RELIED UPON THE FINDINGS GIVEN BY THE CIT (A) AND ALTERNATIVELY, IN RE LATION TO APPEAL FOR THE ASSESSMENT YEAR 2003-2004, HE PLEADED THAT THE MATTER RELATES TO APPEAL UNDER SECTION 154 AND SUCH AN ISSUE CANN OT BE RAISED AS THE SCOPE OF SECTION 154 IS VERY LIMITED AND FOR THE ASSESSMENT YEAR 2003-2004, THE MATTER CANNOT BE SET ASIDE BEFORE THE ASSESSING OFFICER. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND ALSO CAREFULLY CONSIDERED THE FINDINGS OF THE CIT(A) AND THE MATERIAL PLACED ON RECORD BEFORE US. IT IS A MATTER OF FACT NOW, THAT THE ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SECTION 12A W.E.F. 1-4-2002 I.E. FROM ASSESSMENT YEAR 2003-2004 ONWARDS. T HE REGISTRATION SO GRANTED IS A FAIT-ACOMPLI AND NEITHER THE ASSESSING OFFICER, NOR THE CIT(A) CAN GO BEYOND AND DENY THE EXEMPTION UNDER SECTION 11 TO WHICH THE ASSESSEE IS STATUTORILY ENTITLED TO. ONCE THE REGISTRATION HAS BEEN GRANTED UNDER SECTION 12AA, THERE IS NO OPTION BUT TO COMPUTE THE INCOME IN TERMS OF SECTIONS 11 TO 13. THE INCOME OF THE ASSESSEE CANNOT BE COMPUTED UNDER ANY OTHER HEAD OF INCOME. THE VIEW TAKEN BY THE CIT (A), THAT THE CLAIM OF THE ASSESSEE HAS BECOME TIME BARRED, CANNOT BE UPHELD. ONCE, THE CERTIFICATE HAS BEEN ISSUED FROM THE BACK DATE I.E. W.E.F. ASSESSMENT YEAR 2003-2004, THE MATTER WAS VERY WELL ALIVE BEFORE THE CIT(A), WHO SHOULD HAVE DIRECTED THE ITA NO : 4428,4429,4430, 7 4462&4463/MUM/2011 . ASSESSING OFFICER TO COMPUTE THE INCOME UNDER SECTION 11. THERE ARE NO FETTERS ON THE POWERS OF THE APPEL LATE COURT TO GIVE APPROPRIATE DIRECTIONS TO THE ASSESSING OFFICER TO COMPUTE THE INCOME AS PER THE PROVISIONS OF THE ACT AND TO DETERMINE CORRECT INCOME OR EXEMPTION TO WHICH THE ASSESSEE IS ENTITLED TO. 9. WE ALSO FIND THAT THE ITAT IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-2005 AND 200 5-2006 (SUPRA), HAS RESTORED THE MATTER TO THE FILE OF THE ASSESSING O FFICER TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. WE DO NOT FIND ANY REASON TO DEVIATE FROM SUCH A FINDING. 10. SO FAR AS THE ARGUMENT OF THE LEARNED CIT DR THAT IN THE ASSESSMENT YEAR 2003-2004 MATTER CANNOT BE RESTORED BACK AS THE APPEAL IS ARISING OUT OF THE ORDER PASSED UNDER SECTION 154 WHICH HAS A LIMITED SCOPE, WE DO NOT FIND ANY MERIT IN SUCH ARGUMENT BECAUSE ULTIMATELY THE INCOME OF THE ASSESSEE HAS TO BE COMPUTED IN ACCORDANCE WITH LAW AND MATTER IS STILL ALIVE AT THE STAGE OF ITAT. WE DO NOT FEEL THAT THERE IS ANY FETTER TO SET ASIDE THE MATTER BEFORE THE AO TO FRAME THE ASSESSMENT IN ACCORD ANCE WITH LAW. WE, THEREFORE, RESTORE ALL THE APPEALS TO THE FILE OF THE ASSESSING OFFICER FOR ALL THE ASSESSMENT YEARS BEFORE US TO PASS FRESH ASSESSMENT ORDER AFTER COMPUTING THE INCOME STRICTLY IN VI EW OF THE PROVISIONS CONTAINED IN ITA NO : 4428,4429,4430, 4462&4463/MUM/2011 . 8 SECTIONS 11 TO 13 AND TO GRANT EXEM PTION AS PER THE SECTION 11 WHILE COMPUTING THE INCOME. IT IS NEEDLESS TO SAY THAT THE ASSESSING OFFICER WILL PROVIDE DUE AND EFFECTIVE OPPORTUNI TY TO THE ASSESSEE IN SUPPORT OF HIS CLAIM UNDER SECTION 11. THE OT HER GROUNDS OF APPEAL RELATING TO MERITS OF ADDITIONS HAVE BEEN RENDERED INFRUCTUOUS BECAUSE FRESH ASSESSMENT HAS TO BE M ADE AS PER SECTION 11. 11 . IN THE RESULT, APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED ON THIS 20 TH DAY OF APRIL, 2012. SD/- SD/- ( G.E. VEERABHADRAPPA ) ( AMIT SHUKLA ) PRESIDENT JUDICIAL MEMBER MUMBAI, DT: 20 TH APRIL, 2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, B - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI PKM