Ramjee Yubak Sangha, Sadiapali V. ACIT , National E-Assessment Center, Delhi, Delhi

ITA 51/CTK/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7314 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 17-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER Ramjee Yubak Sangha, 65, Sadaipali, PO: Sadaipali, Dist: Balangir PAN/GIR No. (Appellant Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC) No.ITBA/NFAC/S/250/2021 2018-19. 2. Shri P.K.Mishra, ld AR appeared for the assessee and Shri S.C.Mohanty, ld Sr DR appeared for the revenue. 3. It was submitted benefit of 12AA and IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.51/CTK/2022 Assessment Year : 2018-19 Ramjee Yubak Sangha, 65, Sadaipali, PO: Sadaipali, Dist: Balangir Vs. ACIT, National E Assessment Centre, Delhi PAN/GIR No.AAAAR 4201 M (Appellant) .. ( Respondent Assessee by : Shri P.K.Mishra, AR Revenue by : Shri S.C.Mohanty, Sr. Date of Hearing : 14 /9 Date of Pronouncement : 14/9 O R D E R This is an appeal filed by the assessee against the order of the ld , National Faceless Appeal Centre (NFAC) dated /NFAC/S/250/2021-22/1040679395(1) for the assessment year Shri P.K.Mishra, ld AR appeared for the assessee and Shri S.C.Mohanty, ld Sr DR appeared for the revenue. It was submitted by ld AR that the assessee is an AOP, enjoying the of 12AA and 10(23C)(vi) of the Act. It was the submission that the Page1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER ACIT, National E- Assessment Centre, Delhi Respondent) P.K.Mishra, AR : Shri S.C.Mohanty, Sr. DR 9/2022 9/2022 This is an appeal filed by the assessee against the order of the ld dated 14.3.2022 in Appeal for the assessment year Shri P.K.Mishra, ld AR appeared for the assessee and Shri is an AOP, enjoying the 10(23C)(vi) of the Act. It was the submission that the ITA No.51/CTK/2022 Assessment Year : 2018-19 Page2 | 5 assessee had filed its return of income declaring Nil income. The return came to be processed and the Assessing officer, in respect of one Shri Om Prakash Mishra, who is a specified person and who was Chairman of the Sangha, disallowed the salary paid by invoking the provisions of section 13(2)(c) of the Act. It was submitted that the assessee claimed salary payment of Rs.5,76,000/- to Shri Om prakash Mishra, who was having intermediate qualification but having vast experience in the administration of School and College and also expert in Nursery and plantation and because of his hard work, the Organisation has received Prakurti Mitra award from Govt. of Odisha. The Assessing Officer held that the prevailing market rate for the work done by Shri Om Prakash Mishra should not be more than Rs.9000/- per month and in view of that, he allowed payment of salary of Rs.1,08,000/- and disallowed the amount of Rs.4,68,000/-. It was the submission that no comparative case has been brought by the Assessing Officer for making the disallowance. It was the submission that in the immediately preceding assessment year, no disallowance has been made though the assessment was completed u/s.143(1) of the Act and for the subsequent assessment year, the assessment had been completed u/s.143(3) and no disallowance had been made on this count. It was the prayer that the salary paid to Shri Om Prakash Mishra is liable to be allowed in full and no disallowance was called for in the hands of the assessee. ITA No.51/CTK/2022 Assessment Year : 2018-19 Page3 | 5 4. In reply, ld Sr DR submitted that the said Shri Om Prakash Mishra was only an intermediate pass and for such qualification, the Assessing Officer had allowed salary payment of Rs.9000/ per month. It was submitted that the principle of res-judicata does not apply to income tax proceedings and each assessment year was separate and independent. For this proposition, he placed reliance on the decision of Hon’ble Supreme Court in the case of C.K. Gangadharan & Anr vs Commnr. Of Income Tax, Cochin, 304 ITR 61 (SC). It was the submission that the disallowance as made by the Assessing Officer and confirmed by the ld CIT(A) is liable to be upheld. 5. In reply, ld AR submitted that though the principle of res- judicata are not applicable to income tax proceedings but it has been held by the Hon’ble Supreme Court in the case of RADHASOAMI SATSANG vs. COMMISSIONER OF INCOME TAX, 193 ITR 321 (SC) that where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. It was submitted that the principle of consistency should be considered. ITA No.51/CTK/2022 Assessment Year : 2018-19 Page4 | 5 6. We have considered the rival submissions. At the outset, we are of the view that when the disallowance has been made u/s.13(2)(c) of the Act, it is required of a comparative study. Admittedly, the Assessing Officer mentions that at the prevailing market rate should not be more than Rs.9000/-. This is nothing but an estimate and not comparative. In fact, the salary of an MTS, who is 10 th pass in the Government office, was drawing salary more than Rs.27,000/- per month during the relevant period. This itself shows that the comparative study as proposed by the AO at Rs.9000/- per month is totally erroneous. Further, the fact that no disallowance has been made in the subsequent assessment year when the scrutiny assessment u/s.143(3) was completed support the case of the assessee insofar as when the facts are identical, the comparison can be made with the subsequent assessment year also. Thus, in view of the principles laid down by the Hon’ble Supreme Court in the case of RADHASOAMI SATSANG(supra) that the consistency should be followed, we are of the view that the salary paid to Shri Om Prakash Mishra does not call for any disallowance u/s.13(2)(c) of the Act. The disallowance as made by the AO and confirmed by the ld CIT(A) stands deleted. ITA No.51/CTK/2022 Assessment Year : 2018-19 Page5 | 5 7. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 14/9/2022. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 14/9/2022 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Ramjee Yubak Sangha, 65, Sadaipali, PO: Sadaipali, Dist: Balangir 2. The Respondent: ACIT, National E- Assessment Centre, Delhi 3. The CIT(A)-, NFAC, Delhi 4. Pr.CIT-, 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//