URBAN IMPROVEMENT TRUST, Kota V. ITO, Kota

ITA 452/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5303 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 10-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA CIT DHK
• Assessee Lawyers: DIPESH KAUR JANI
• Keywords: Revenue expenditure; Reassessment proceedings
• Section: 142(1); 234B; 147; 145; 148; 144

Judgement Text

RAVK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 452/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2005-06 URBAN IMPROVEMENT TRUST, KOTA. CUKE VS. INCOME TAX OFFICER, WARD 1(2), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 453/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 URBAN IMPROVEMENT TRUST, KOTA. CUKE VS. INCOME TAX OFFICER, WARD 1(2), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 403/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD 1(2), KOTA. CUKE VS. URBAN IMPROVEMENT TRUST, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT 2 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO VK;DJ VIHY LA -@ ITA NO. 454/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 URBAN IMPROVEMENT TRUST, KOTA. CUKE VS. INCOME TAX OFFICER, WARD 1(2), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 404/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 INCOME TAX OFFICER, WARD 1(2), KOTA. CUKE VS. URBAN IMPROVEMENT TRUST, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 455/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 URBAN IMPROVEMENT TRUST, KOTA. CUKE VS. INCOME TAX OFFICER, WARD 1(2), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 405/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER, WARD 1(2), KOTA. CUKE VS. URBAN IMPROVEMENT TRUST, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT 3 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO VK;DJ VIHY LA -@ ITA NO. 456/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 URBAN IMPROVEMENT TRUST, KOTA. CUKE VS. INCOME TAX OFFICER, WARD 1(2), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 406/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, WARD 1(2), KOTA. CUKE VS. URBAN IMPROVEMENT TRUST, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI PRAKUL KHURANA (ADV), SHRI ADITYA VIJAY (ADV) & SHRI DIPESH KAUR JANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/05/2016. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 08/06/2016. VKNS'K@ ORDER PER LALIET KUMAR, J.M. THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE A S WELL AS REVENUE ARISE AGAINST THE ORDERS DATED 18/03/2014 AND 21/03 /2014 OF THE LEARNED C.I.T.(A), KOTA FOR THE A.Y. 2005-06 TO 2009-10. THE EFFECTIVE GROUNDS OF ALL THE APPEALS ARE UNDER:- 4 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO GROUNDS OF ITA NO. 452/JP/2014 (ASSESSEES APPEAL)( A.Y.2005- 06) 1 UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), KOTA HAS ERRED IN NOT DECLARING THE REASSESSMENT PROCEEDINGS, INITIATED UNDER SECTION 147/148 OF THE INCOME TAX ACT, 1961, AS INVALID/NULLITY AND THEREBY NOT QUASHING THE ASSESSMENT ORDER ITSELF PASSED IN CONSEQUENCE THEREOF. 2. UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), KOTA HAS ERRED IN NOT QUASHING/NULLIFYING THE EX-PA RTE ASSESSMENT ORDER PASSED UNDER SECTION 144 READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961. 3. UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), KOTA HAS ERRED IN NOT ALLOWING EXEMPTION U/S 10(20) OF THE INCOME TAX ACT, 1961 WHILE COMPUTING THE TOTAL INCOME OF THE APPELLATE TRUST. 4. UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), KOTA HAS ERRED IN NOT ALLOWING THE VARIOUS EXPENDITU RES INCURRED BY THE APPELLATE TRUST IN ENTIRETY. 5. UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), KOTA HAS ERRED IN NOT ALLOWING CARRY FORWARD AND SET OFF OF LOSSES FOR COMPUTATION OF THE TOTAL INCOME OF TH E APPELLANT TRUST. 6. UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), KOTA HAS ERRED IN SUSTAINING THE CHARGING OF INTERE ST 5 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO UNDER SECTIONS 234A AND 234B OF THE INCOME TAX ACT, 1961 AS CHARGED BY THE LD INCOME-TAX OFFICER, WARD 1(2), KOTA. SIMILAR IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE AS SESSEE IN ALL THE ASSESSMENT YEARS I.E. FOR A.Y. 2006-07 TO 2009-10. GROUNDS OF ITA NO. 403/JP/2014 (REVENUES APPEAL) ( A.Y. 2006- 07) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN:- (I) TREATING THE RENTAL INCOME OF RS. 33.13 LAKHS A SSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS INC OME FROM BUSINESS; (II) ALLOWING THE EXPENSES OF RS. 576.13 LAKHS BY TR EATING THE SAME AS REVENUE EXPENDITURE; (III) ALLOWING THE DEDUCTION OF RS. 791.53 LAKHS BY HOLDING THAT GROUND RENT, CONVERSION CHARGES, TRANSFER FEE ETC. COLLECTED BY THE ASSESSEE ALSO CONSTITUTED THE SHAR ES OF STATE GOVERNMENT AND MUNICIPAL BODIES AND WERE NEVER PART OF ASSESSEES INCOME; GROUNDS OF ITA NO. 404/JP/2014 (REVENUES APPEAL) ( A.Y. 2007- 08) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN:- (I) TREATING THE RENTAL INCOME OF RS. 34.35 LAKHS A SSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS INC OME FROM BUSINESS; (II) ALLOWING THE EXPENSES OF RS. 1673.46 LAKHS BY T REATING THE SAME AS REVENUE EXPENDITURE; 6 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO (III) ALLOWING THE DEDUCTION OF RS. 721.05 LAKHS BY HOLDING THAT GROUND RENT, CONVERSION CHARGES, TRANSFER FEE ETC. COLLECTED BY THE ASSESSEE ALSO CONSTITUTED THE SHAR ES OF STATE GOVERNMENT AND MUNICIPAL BODIES AND WERE NEVER PART OF ASSESSEES INCOME; GROUNDS OF ITA NO. 405/JP/2014 (REVENUES APPEAL) ( A.Y. 2008- 09) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN:- (I) TREATING THE RENTAL INCOME OF RS. 30.16 LAKHS A SSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS INC OME FROM BUSINESS; (II) ALLOWING THE EXPENSES OF RS. 3662.54 LAKHS BY T REATING THE SAME AS REVENUE EXPENDITURE; (III) ALLOWING THE DEDUCTION OF RS. 1617.59 LAKHS BY HOLDING THAT GROUND RENT, CONVERSION CHARGES, TRANSFER FEE ETC. COLLECTED BY THE ASSESSEE ALSO CONSTITUTED THE SHAR ES OF STATE GOVERNMENT AND MUNICIPAL BODIES AND WERE NEVER PART OF ASSESSEES INCOME; (IV) ALLOWING EXPENSES OF RS. 1111.08 LAKHS OUT OF T OTAL EXPENSES CLAIMED AT RS. 1567.79 LAKHS UNDER THE HEA D OTHER MISCELLANEOUS EXPENSES AND DISALLOWED BY THE A.O. GROUNDS OF ITA NO. 406/JP/2014 (REVENUES APPEAL) ( A.Y. 2009- 10) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN:- (I) TREATING THE RENTAL INCOME OF RS. 31.99 LAKHS A SSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS INC OME FROM BUSINESS; 7 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO (II) ALLOWING THE EXPENSES OF RS. 6110.00 LAKHS BY T REATING THE SAME AS REVENUE EXPENDITURE; (III) ALLOWING THE DEDUCTION OF RS. 721.05 LAKHS BY HOLDING THAT GROUND RENT, CONVERSION CHARGES, TRANSFER FEE ETC. COLLECTED BY THE ASSESSEE ALSO CONSTITUTED THE SHAR ES OF STATE GOVERNMENT AND MUNICIPAL BODIES AND WERE NEVER PART OF ASSESSEES INCOME; 2. GROUNDS NO. 1 AND 2 OF ALL THE ASSESSEES APPEAL S ARE THE LEGAL GROUNDS. THE ITAT VIDE ITS ORDER IN ITA NO. 366 & 367 /JP/2010 ORDER DATED 18/3/2011 FOR THE ASSESSMENT YEAR 2003-04 AND 2004- 05 HELD THAT THE ASSESSEE IS NOT EXEMPTED FROM INCOME TAX U/S 10(20) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT). THEREFO RE, THE INCOME OF THE ASSESSEE IS TAXABLE BUT AS THE ASSESSEE HAS NOT FIL ED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THEREFORE, NOTICE WAS ISSUE TO THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 ON 13/10/2 011 THEREBY CALLING UPON IT TO FILE REPLY WITHIN 30 DAYS ON ACCOUNT OF ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. SIMILA R, NOTICES WERE ALSO ISSUED FOR THE A.Y. 2006-07 DATED 13/10/2011, FOR A .Y. 2007-08 DATED 07/10/2011, FOR A.Y. 2008-09 DATED 07/10/2011, FOR A.Y. 2009-10 DATED 07/10/2011, FOR A.Y. 2010-11 DATED 07/10/2011 BY TH E LD ASSESSING OFFICER. THE APPELLANT/ASSESSEE TRUST FILED SEPARATE WRIT PETIT ION BEFORE THE HONBLE JURISDICTIONAL HIGH COURT CHALLENGING THE ISSUANCE OF NOTICE ISSUED BY THE 8 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO REVENUE. IN ONE OF THE WRIT PETITION BEARING NO. 107 06/2011, THE HON'BLE HIGH COURT, AFTER REFERRING TO THE JUDGMENT OF HON' BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS INCOME-TAX OFFICER AND OTHERS [2003] 259 ITR 19 (SC) HAS DIRECTED IN RESPEC T OF ASSESSMENT YEAR 2010-11 AS UNDER:- HAVING HEARD LEARNED COUNSEL FOR THE PARTIES. I AM OF THE VIEW THAT THE PRESENT PETITION SHOULD BE DISPOSED OF WITH A DIRECTION TO THE INCOME TAX OFFICER, WARD 1(2), KOTA TO SUPPLY THE REASONS FOR ISSUING NOTICE UNDER SECTION 148 OF THE 1961 ACT TO THE PETITION TRUST WITHIN A PERIOD OF FOU R WEEKS FROM TODAY. THERE UPON THE PETITION TRUST SHOULD FIL E ITS OBJECTIONS TO THE NOTICE U/S 148 OF THE 1961 ACT IN CLUDING THE OBJECTION THAT THE PETITION TRUST PROHIBITED IN LAW F ROM GENERATING INCOME IS NOT EXIGIBLE TO ANY TAXABLE IN COME NOR THUS REQUIRED UNDER THE 1961 ACT TO FILE RETURN OF INCOME. IN THE EVEN SUCH OBJECTIONS AS TO LACK OF JURISDICTION OF THE INCOME TAX OFFICER ARE FILED BY THE PETITIONER TRUST, IT IS DIRECTED THAT THE SAID OBJECTIONS SHALL BE DECIDED AS A PRELIMINARY ISSUE BY A REASONED AND SPEAKING ORDER. IN THE EVENT THE PETITION TRUST IS AGGRIEVED OF THE DECISION OF ITS PRELIMINARY OBJECTIONS BY THE INCOM E TAX OFFICER, WARD 1(2), KOTA, THE PETITIONER TRUST WOULD BE FREE TO AVAIL OF ITS ALL REMEDY AVAILABLE IN LAW, INCLUDI NG APPROACHING THIS COURT BY WAY OF WRIT PETITION. 9 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO DURING THE COURSE OF ARGUMENT, THE LD COUNSEL FOR T HE ASSESSEE WAS ASKED BY THE BENCH WHETHER THE SIMILAR DIRECTIONS ISSUED B Y THE HON'BLE HIGH COURT IN RESPECT OF A.Y. 2005-06 TO 2009-10 IN THE WRIT PETITIONS FILED BY THE ASSESSEE OR NOT. IN REPLY TO THE QUERY, THE LD COUN SEL HAS SUBMITTED NO SUCH DIRECTION WERE ISSUED IN RESPECT OF ASSESSMENT YEAR 2005-06 TO 2009- 10 . IT WAS SUBMITTED THAT AS THE PETITIONS BECAME I NFRUCTUOUS IN VIEW OF THE ORDER PASSED BY THE HON'BLE HIGH COURT FOR THE ASSESSMENT YEAR 2010- 11 , THEREFORE IT WERE NOT PRESSED BEFORE THE HON 'BLE HIGH COURT. AS THE CASE MAY BE, THE REVENUE IN COMPLIANCE OF THE ORDER OF THE HON'BLE HIGH COURT DATED 16/10/2012 HAVE FORWARDED THE REASONS FO R ISSUING THE NOTICE U/S 148 OF THE ACT FOR THE AY 2010-11. AFTER RECEIV ING THE REASONS FOR ISSUING NOTICE U/S 148, THE ASSESSEE HAD FILED REPL Y ON 13/10/2012 AND HAS SUBMITTED THAT THE CASE OF THE ASSESSEE DO NOT FALL WITHIN THE REALM OF SECTION 147 OF THE ACT, THEREFORE, ISSUANCE OF NOTI CE IS NOT PERMITTED AND ISSUANCE OF NOTICE PER SE ILLEGAL AND WITHOUT JURISD ICTION. 3. THE OFFICER OF THE REVENUE VIDE REASONED ORDER DA TED 12/2/2013 HAVE DISPOSED OF THE OBJECTION WITH FOLLOWING OBSERVATIONS :- FURTHER, YOU HAVE MADE SUBMISSION ON NATURE OF FUNCTIONING/ACTIVITIES UNDER TAKEN BY THE UIT BY WAY OF VARIOUS RULES OF RAJASTHAN URBAN IMPROVEMENT TRUST R ULES OF 1959 AND DETAILS OF IMPROVEMENT FUND. BUT THESE HAVE 10 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO NO RELEVANCE AS FAR AS FILING OF RETURN OF INCOME I S CONCERNED IN VIEW OF THE ORDER OF THE HONBLE ITAT. YOU HAVE SUBMITTED THAT IN ABSENCE OF EXEMPTION, A N ASSESSEE MAY NOT HAVE ANY INCOME ON THE BASIS THAT NONE OF THE PROVISIONS OF THE ACT, 1959 PERMIT THE ASSESSEE TRUST TO GENERATE INCOME. BUT NO EXEMPTION IS AVAILABLE U/S 10(20) OF IT ACT, 1961 AND AS PER EXPLANATION TO SECTION 2( 31) OF I.T. ACT, AN ASSOCIATION OF PERSONS OR A BODY OF IND IVIDUALS OR A LOCAL AUTHORITY OR AN ARTIFICIAL JURIDICAL PERSON SHALL BE DEEMED TO BE A PERSON, WHETHER OR NOT SUCH PERSON OR BODY OR AUTHORITY OR JURIDICAL PERSON WAS FORMED OR ESTAB LISHED OR INCORPORATED WITH THE OBJECT OF DERIVING INCOME, PRO FIT OR GAINS. LOOKING TO THE ABOVE, YOUR OBJECTIONS AGAINST ISSU E NOTICE U/S 148 ARE NOT TENABLE AND THE ISSUE OF NOT ICE U/S 148 IS LEGALLY VALID AS PER THE PROVISIONS OF I.T. A CT, 1961. THEREFORE, YOUR OBJECTIONS STANDS DISPOSED OFF ACCOR DINGLY. THEREAFTER, THE LD ASSESSING OFFICER HAS CALLED UPON THE ASSESSEE TO FILE REPLY, ACCORDINGLY, THE ASSESSEE HAS FILED REPLY AN D THE AR OF THE ASSESSEE APPEARED BEFORE THE LD ASSESSING OFFICER AND HAS SU BMITTED COPY OF RECEIPT AND PAYMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERA TION. THE LD ASSESSING OFFICER HAD CALLED UPON THE ASSESSEE TO F ILE RETURN OF INCOME IN PURSUANCE TO THE NOTICE U/S 142(1) OF THE ACT. HOWEV ER, THE ASSESSEE HAS NOT FILED RETURN OF INCOME ,IN CONSEQUENCE THEREOF , THE ASSESSING OFFICER 11 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO HAS HELD THAT SINCE THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME AND HAS FURTHER NOT SUBMITTED COMPLETE DETAILS DURING THE A SSESSMENT PROCEEDINGS, THEREFORE, THE ASSESSMENTS WERE MADE AS PER PROVISIO NS OF SECTION 144 OF THE ACT ON THE BASIS OF INFORMATION/DETAILS AVAILAB LE ON THE RECORD AND ON THE BASIS OF THAT THE PROFIT AND GAIN FROM THE BU SINESS OF THE ASSESSEE WAS CALCULATED BY APPLYING THE PROVISIONS OF SECTION 145 OF THE ACT VIDE ORDER DATED 18/02/2013. THE LD AR OF THE ASSESSEE ,FOR THE APPEALS UNDER CON SIDERATIONS , HAS SUBMITTED THAT THE ORDERS PASSED BY THE ASSESSING O FFICER QUA THE GROUND NOS. 1 AND 2 ARE BAD IN LAW AS THE ASSESSEE WAS NOT S UBJECTED TO FILE THE INCOME TAX RETURN AND IS EXEMPTED U/S 10(20) OF THE ACT AND IT IS FURTHER THE CASE OF THE ASSESSEE THAT THE REVENUE HAS NOT C OMPLIED WITH THE PROVISIONS OF THE ACT BY SUPPLYING THE REASONS AND HAS NOT COMPLIED THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF GK N DRIVESHAFTS (INDIA) LTD. VS INCOME-TAX OFFICER AND OTHERS [2003] 259 ITR 19 (SC) AND THEREFORE ON THE BASIS OF ABOVE, IT IS SUB MITTED THAT THE ASSESSMENT CARRIED OUT BY THE REVENUE IS BAD IN LAW. 4. ON THE OTHER HAND, THE LD CIT DR HAS SUBMITTED TH AT THERE IS NO ORDER OF THE HONBLE HIGH COURT WHICH CALLED UPON TH E REVENUE TO SUPPLY THE ORDER AS IS AVAILABLE IN THE ASSESSMENT YEAR 20 10-11, THEREFORE, THE 12 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO REVENUE HAS NOT SUPPLIED THE REASONS AS DEMANDED BY THE ASSESSEE. HENCE THE ASSESSMENT PROCEEDINGS CARRIED OUT BY THE REVEN UE IS IN ACCORDANCE WITH LAW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE V IDE LETTER DATED 30/08/2012 HAS SPECIFICALLY ASKED THE REVENUE TO PR OVIDE THE REASONS U/S 148 OF THE ACT. THE APPLICATION OF THE ASSESSEE PRO VIDES AS UNDER:- SUB:- DECISION OF HONBLE HIGH COURT IN WRIT PETITIO N FILED BY UIT KOTA FOR THE A.Y. 2010-11 WITH REFERENCE TO THE ABOVE FOLLOWING ARE OUR HUMBLE SUBMISSIONS. IN THE MATTER OF NOTICE ISSUED BY YOUR GOODSELF DAT ED 07/10/2011 U/S 148 OF IT ACT 1961 FOR THE A.Y. 2010- 11, THE HONBLE RAJASTHAN HIGH COURT HAS PASSED ORDER ON DA TE 18/8/2012 TO FOLLOW THE DIRECTORS AS FOLLOWS:- * FIRST TO SUPPLY THE REASONS BEFORE FILING OF RET URN, WITHIN A PERIOD OF FOUR WEEKS TO THE UIT, KOTA. * THEREUPON UIT KOTA SHOULD FILE ITS OBJECTIONS INCLU DING THE OBJECTION THAT ITS INCOME IS NOT TAXABLE AND IT NOT REQUIRED TO FILE THE RETURN. * SUCH OBJECTIONS SHALL BE DECIDED AS PRELIMINARY I SSUE BY REASONED AND SPEAKING ORDER TO BE PASSED BY YOU. THIS ORDER IS FOR THE A.Y. 2010-11, BUT IN THE LIGHT OF THE ABOVE CASE YOUR HONOUR IS REQUESTED TO FOLLOW THE 13 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO SAME DIRECTIONS NOT ONLY FOR THE A.Y. 2010-11 BUT ALSO FOR THE ALL A.Y. 2005-06 TO 2009-10 ALSO. ( SUPPLIED BY US) DESPITE ASSESSSEE ASKING THE REVENUE TO SUPPLY THE REASONS BEFORE FILING THE RETURN, THE REVENUE HAS NOT SUPPLIED THE REASON S AND HAS ONLY SUPPLIED THE REASONS IN RESPECT OF ASSESSMENT YEAR 2010-11, WE ARE AT LOSS AS TO WHY THE REASONS FOR INITIATING THE PROCEEDINGS U/S 1 48 HAVE NOT BEEN SUPPLIED DESPITE RECEIPT OF THE SPECIFIC REQUEST BY THE ASSESSEE BY THE ASSESSING OFFICE . WE WOULD LIKE TO REPRODUCE THE JU DGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS INCOME-TAX OFFICER AND OTHERS [2003] 259 ITR 19 (SC), WHICH HELD AS UNDER:- WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER UNDER CHALLENGE. HOWEVER, WE CLARIFY THAT WHEN A NOTICE UND ER SECTION 148 OF THE INCOME-TAX ACT IS ISSUED, THE PR OPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE A RETURN AND I F HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS OWNERS OF THE INSTANT CASE, AS TH E REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, THE ASSES SING OFFICER HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMEN T IN RESPECT OF THE ABOVESAID FIVE ASSESSMENT YEARS. 14 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO IN SO FAR AS THE APPEALS FILED AGAINST THE ORDER OF ASSESSMENT BEFORE THE COMMISSIONER (APPEALS), WE DIRECT THE APP ELLATE AUTHORITY TO DISPOSE OF THE SAME, EXPEDITIOUSLY. WITH THE ABOVE OBSERVATIONS, THE CIVIL APPEALS ARE DISMISSED. 6. IN VIEW THEREOF, WE ARE OF THE OPINION THAT THE LD ASSESSING OFFICER WAS DUTY BOUND TO FURNISH THE REASONS WITHIN THE REAS ONABLE TIME ON RECEIPT OF THE REQUEST FROM THE ASSESSEE, SINCE THE LD ASSESSING OFFICER HAS FAILED TO PROVIDE THE REASONS FOR ISSUING THE NOTIC E WITHIN REASONABLE TIME, THEREFORE, WE ARE LEFT WITH NO OTHER OPTION BUT TO SE T ASIDE THE PROCEEDINGS TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO PROVIDE REASONS FOR ISSUING NOTICE U/S 148 TO THE ASSESSEE WITHIN FOUR WE EKS FROM THE DATE OF RECEIPT OF THE ORDER IN RESPECT OF A.Y. 2005-06 TO 2009-10. THEREAFTER THE ASSESSEE SHALL FIND THE OBJECTIONS TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER SHALL PASS A SPEAKING ORDER IN ACCORDANCE WI TH LAW IN THAT THE REASONABLE PERIOD DECIDING THE OBJECTIONS OF THE AS SESSEE WHICH MAY BE FILED AGAINST NOTICE UNDER SECTION 148. THEREFORE WE HEREBY SET ASIDE THE ORDERS PASSED BY THE AUTHORITIES BELOW AND ALLOW THE APPEALS OF THE ASSESSEE FOR STATISTICAL PURPOSES ONLY. 7. SINCE WE HAVE SET ASIDE THE ORDER PASSED IN RESPE CT OF THE ASSESSMENT YEAR 2005-06 TO 2009-10 AS THE ASSESSING OFFICER HAS NOT 15 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO PROVIDED THE REASONS U/S 148 OF THE ACT, THEREFORE, THE APPEALS OF THE REVENUE ARISING OUT OF THE ORDER PASSED BY THE LD C IT(A) IN RESPECT OF THE ASSESSMENT YEAR 2005-06 TO 2009-10 ARE ALSO SET ASI DE WITH THE DIRECTION TO THE ASSESSING OFFICER TO PASS FRESH ORDER AFTER PROVIDING THE REASONS TO THE ASSESSEE AND AFTER DECIDING THE OBJECTIONS IF A NY IN TERMS OF THE JUDGMENT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS INCOME-TAX OFFICER AND OTHERS [2003] 259 ITR 19 (SC). IN LIGHT OF ABOVE, ALL THE APPEALS OF THE ASSESSEE AS WELL AS REVENUE ARE SET A SIDE TO THE FILE OF THE ASSESSING OFFICER FOR THE STATISTICAL PURPOSES. 8. IN THE RESULT, THE ALL THE ASSESSEES AS WELL A S REVENUES APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 08/06/2016. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08 TH JUNE, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- URBAN IMPROVEMENT TRUST, KOTA 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 1(2), KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 16 ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 40 6/JP/2014 URBAN IMPROVEMENT TRUST VS. ITO 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 452, 453, 403, 454, 404, 455, 405, 456 & 406/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR