SLUM REHABUILITATION AUTHORITY, MUMBAI V. DDIT (E) 1(2), MUMBAI

ITA 5600/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0487 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 05-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Keywords: Opportunity of being heard
• Section: 143(3); 10B; 263; 63; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH, MUMBAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO. 5600 / MUM/ 201 4 ( / ASSESSMENT YEAR: 2010 - 11 ) M/S SLUM REHABILITATION - AUTHORITY, FINANCE CONTROLLER, SRA ADMINISTRATIVE BUILDING, BEHIND HDIL TOWERS, ANANT KANEKAR MARG, BANDRA (E), MUMBAI - 400051 VS. THE DY. DIRECTOR OF INCOME TAX - (EXEMPTION) - 1(2), ROOM NO. 504, 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400012 ./ ./ PAN/GIR NO. : AAAJS 1094 A ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI HITEN CHANDE (AR) /REVENUE BY : SHRI MANJUNATHA SWAMY ( CIT DR) / DATE OF HEARING : 30 /05 /2017 / DATE OF PRONOUNCEMENT : 31 /05 /2017 / O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSE E AGAINST ORDER DATED 31/07 /2014 PASSED BY THE LD. CIT (A ) - 1 , MUMBAI , PERTAI NIN G TO THE ASSESSMENT YEAR 2010 - 11 , WHEREBY THE LD. CIT (A) HAS DISMISSED T H E APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 14 3 (3) OF THE INCOME TAX ACT, 1961 ( FOR SHORT THE ACT) . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 11 IN FORM NO. 10B DECLA RING THE TOTAL INCOME 2 ITA NO. 5600 /MUM/2014 ASSESSMENT YEAR: 2010 - 11 AS NIL. THE ASSESSEE TRUST IS REGISTERED AS A CHARITABLE ORGANIZATION WITH DIT (E), MUMBAI U/S 12A. THE RETURN WAS PROCESSED AND AFTER SCRUTINY ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS PASSED DETERMINING THE TOTAL INCOME OF RS. 1,71 ,29,90,270/ - AFTER DISALLOWING OF EXEMPTION U/S 11 OF THE I.T. ACT. FE E LING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE CIT (A). IN THE MEANTIME T HE DIRECTOR OF INCOME TAX (EXEMPTION), DIT (E) BY INVOKING SECTION 263 S ET ASIDE THE ASSESSMENT ORDER ON THE GROUND THAT THE SAME IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND DIRECTED THE AO TO PASS THE ASSESSMENT ORDER AFRESH CONSIDERING THE PROVISO TO SECTION 2 ( 15 ) OF THE ACT. THE ASSESSEE ALSO CHALLENGED THE REVISIONAL ORDER PASSED BY THE LD. DIT (E) BEFORE THE TRIBUNAL. THE CO - ORDINATE BENCH OF THE TRIBUNAL SET ASIDE THE ORDER PASSED BY THE LD. DIT (E) FOLLOWING THE ORDER PASSED BY THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE FOR THE A.Y. 2009 - 10. ON THE OTHE R HAND, T HE LD. CIT (A) DISMISSED THE QUANTUM APPEAL FILED BY THE ASSESSEE HOLDING THAT SINCE THE ITAT HAS SET ASIDE THE ORDER PASSED BY THE DIT(E) U/S 263 OF THE ACT. , THE CAUSE OF ACTION FOR THE PRESENT APPEAL HAS COME TO AN END. 3. AGGRIEVED BY THE ORD ER OF LD. CIT (APPEAL S ), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUNDS: - 1. APPELLANT DENIED EXEMPTION UNDER S. 11 THE LEARNED CIT (A) ERRED ON FACTS AND IN LAW IN NOT CONSIDERING ALL THE GROUNDS OF APPEAL BEFO RE HIM AND PARTICULARLY THE CLAIM OF THE APPELLANT THAT IT BE ALLOWED THE BENEFITS OF S. 11 OF THE I.T. ACT, 1961, AND BE ACCORDINGLY GRANTED EXEMPTION UNDER S. 11. RELIEF CLAIMED : THE CIT (A) BE DIRECTED TO DISPOSE OF ALL THE GROUNDS OF APPEAL BEFORE HI M. 2. APPEAL NOT DECIDED ON MERITS 3 ITA NO. 5600 /MUM/2014 ASSESSMENT YEAR: 2010 - 11 THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING MERITS OF THE CASE WHILE DISPOSING OF THE APPEAL. RELIEF CLAIMED: THE APPEAL MAY BE DECIDED ON MERITS 3. APPEAL WRONGLY DISPOSED OF AS BEING NON - EST THE LEARN ED CIT (A) FAILED IN HOLDING THAT IF THE ASSESSMENT ORDER FROM WHICH THE APPEAL IS FLOWING HAS BEEN THE SUBJECT MATTER OF REVISION BY DIT (E) UNDER S. 263 OF THE INCOME TAX ACT, 1961, AND SET ASIDE BY DIT (E), THE APPEAL BECOMES NON - EST, IN DISREGARD OF TH E FACT THAT THE AO HAD NOT PASSED ANY ORDER OF ASSESSMENT PURSUANT TO THE DIRECTION OF THE DIT (E) AND THE ORDER APPEALED AGAINST WAS THE ONLY SURVIVING ASSESSMENT ORDER. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS W RONGLY DISMISSED THE APPEAL HOLDING THE SAME AS NON - EST . THE ASSESSMENT ORDER WAS REVISED BY TH E LD DIT(E) ON THE GROUND THAT THE AO HAS NOT TAKEN INTO CONSIDERATION THE PROVISIONS OF SECTION 2(15) OF THE ACT WHILE PASSING ASSESSMENT ORDER AND DIRECTED THE AO TO PASS THE ASSESSMENT ORDER AFRESH IN ACCORDANCE WITH THE PROVISO TO SECTION 2(15) OF THE ACT. BUT THE TRIBUNAL HAS SET ASIDE THE ORDER PASSED BY THE DIT (E) U/S 263 OF THE ACT HOLDING THAT THE ORDER PASSED BY THE AO IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNDER THESE CIRCUMSTANCES, THE LD. CIT(A) HAS WRONGLY DISMISSED THE APPEAL HOLDING THAT SINCE THE ORDER UNDER CHALLENGE HAS BEEN SET ASIDE BY THE DIT(E), NO CAUSE OF ACTION REMAINS TO SURVIVE THE APPEAL. THE LD. COUNSEL FURTHER SUBMITTED T HAT IN CASE THE APPEAL IS NOT DECIDED ON MERITS, THE INITIAL ASSESSMENT ORDER PASSED BY THE AO WILL BECOME FINAL AND ABSOLUTE AND GROSS INJUSTICE WOULD BE CAUSED TO THE ASSESSEE. 5. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THA T SINCE, THE APPEAL FILED BY THE ASSESSEE AGAINST ORDER PASSED U/S 263 WAS 4 ITA NO. 5600 /MUM/2014 ASSESSMENT YEAR: 2010 - 11 PENDING DISPOSAL , WHILE DECIDING THE QUANTUM APPEAL, THE LD,. CIT(A) HAD NO OPTION BUT TO DISMISS THE APPEAL FILED BY THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO GONE THROUGH THE MATERIAL PLACED BEFORE US. THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE HOLDING AS UNDER: - 6 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE APPEALED ORDER HAS BEEN SET ASIDE BY THE ABOVE REFERRED ORDER U/S 2 63 OF THE I.T. ACT, 1961 BY LEARNED DIT (E), MUMBAI, THE RELEVANT PART OF WHICH HAS BEEN REPRODUCED ABOVE, THE PRESENT APPEAL IS RENDERED LACKING IN CAUSE OF ACTION AND BECOMES NON - EST BECAUSE OF BEING DEPENDENT AND FLOWING FROM THE ASSESSMENT ORDER WHICH IS SET ASIDE AND NON - EST AS OF NOW. THUS, FOR THE REASONS AS ABOVE, THE APPEAL IS DISMISSED AS BEING DEVOID OF CAUSE OF ACTION AND BEING NON - EST. 7. WE FURTHER NOTICE THAT THE CIT(A) HAS DISMISSED THE ASSESSEE S APPEAL ON 31.7.2014 WHER E AS , THE ORDER OF THE TRIBUNAL CAME ON 6.11. 20 16. SO , THE APPEAL AGAINST THE ORDER PASSED U/S 263 WAS PENDING BEFORE THE TRIBUNAL WHEN THE CIT(A) PASSED THE IMPUGNED ORDER. NOW AFTER SETTING ASIDE OF THE REVISIONAL ORDER PASSED BY THE DIT(E) , THE ASSESSMENT ORDER PASSED BY THE AO HAS ATTAINED ITS ORIGINAL STATUS . UNDER THESE CIRCUMSTANCES, THE ACTION OF THE LD. CIT(A) HAS CERTAINLY CAUSED PREJUDICE TO THE ASSESSEE AS THE ASSESSEE HAS CHALLENGED THE SAME ASSESSMENT ORDER IN APPEAL. WE FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE, THE AO HAS NOT PASSED ANY ORDER OF ASSESSMENT IN PURSUANT TO THE ORDER OF THE DIT(E), IT IS NECESSARY TO DECIDE THE APPEAL ON MERIT. SO, IN OUR CONSIDERED OPINION, THE APPEAL OF THE ASSESSEE IS REQUIRED TO BE DECIDED ON MERITS BY THE LD. CIT(A) . HENCE, IN THE INTEREST OF JUSTICE WE SET ASIDE THE IMPUGNED ORDER AND RESTORE 5 ITA NO. 5600 /MUM/2014 ASSESSMENT YEAR: 2010 - 11 THE MATTER BACK TO THE FILE OF LD. CIT(A) TO DECIDE THE APPEAL AFRESH AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 2011 IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY , 2017 . SD/ - SD/ - ( RAJENDRA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 31 / 0 5 / 2017 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE A PPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUM BAI