Rajkot Commodity Exchange Ltd., RAJKOT-GUJARAT V. The Income Tax Officer (CPC), Bangalore

ITA 581/RJT/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0048 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 26-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M J RANPURA C A
• Keywords: Additional evidence
• Section: 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NOS. 580 & 581/RJT/2015 ASSESSMENT YEAR : 2009-10 & 2010-11 RESPECTIVELY RAJKOT COMMODITY EXCHANGE LTD, COMMERCIAL CHAMBERS, SATTA BAZAR, DANAPITH, RAJKOT PAN : AACCT 0242 Q VS INCOME-TAX OFFICER (CPC), BANGALORE / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M.J. RANPURA,CA REVENUE BY : SHRI YOGESH PANDE, DR / DATE OF HEARING : 23/11/2016 / DATE OF PRONOUNCEMENT: 20/12/2016 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER :- THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEARS 2 009-10 AND 2010-11 ARISE AGAINST CIT(A)-2, RAJKOTS SEPARATE O RDERS, BOTH DATED 20.09.2015 IN CASE NO.CIT(A)-2/008/11-12 AND CIT(A) -2/0035/12-13, IN PROCEEDINGS U/S 143(1) AND SECTION 154 OF THE IN COME-TAX ACT, 1961; IN SHORT THE ACT; RESPECTIVELY. 2. THE ASSESSEE RAISES FOLLOWING IDENTICAL SUBSTANT IVE GROUNDS IN ITS APPEALS. 2.0 THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2, RAJKOT (HEREINAFTER REFERRED TO AS THE CIT(A)) ERRED ON FA CTS AS ALSO IN LAW IN DISMISSING APPEAL IN TOTAL DISREGARDS TO THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT. ITA NOS. 580 & 581/RJT/2015 RAJKOT COMMODITY EXCHANGE LTD VS. ITO AYS 2009-10 & 2010-11 2 3.0 THE LD. CIT(A) ERRED ON FACT AS ALSO IN LAW IN TREATING THE STATUS OF THE APPELLANT AS NORMAL COMPANY THOUGH SINCE INCEPT ION APPELLANT IS BEING ASSESSED BY THE DEPARTMENT AS NON-PROFIT ASSO CIATION. THE AO BE DIRECTED TO TREAT THE COMPANY AS NON-PROFIT ORGANIZ ATION. 3. BOTH THE LD. COUNSELS ARE AD IDEM AT THE OUTSET THAT THESE TWO APPEALS INVOLVE IDENTICAL FACTS IN RAISING THE ABOV E SUBSTANTIVE GROUNDS. WE THUS TAKE UP ITA NO.580/RJT/2015 AS TH E LEAD CASE. 4. THIS ASSESSEE/COMPANY IS AN ASSOCIATION CONSTITU TED ON 25.04.1951. BOTH THE LEARNED REPRESENTATIVES DULY AGREE THAT IT IS A NON-PROFIT MAKING ORGANIZATION SET UP TO PROMOTE AN D DEVELOP TRADE/BUSINESS AND TO FACILITATE ITS MEMBERS ACTIV ITIES. THE ASSESSEE IS BEING ASSESSED FOR ITS INCOME ON THE PRINCIPLE OF M UTUALITY. ITS INCOME IS ALSO STATED TO BE MAINLY IN THE FORM OF FEES AND SUBSCRIPTIONS COLLECTED FROM MEMBERS. 5. WE COME TO THE ISSUE IN QUESTION NOW. THE ASSES SEE FILED ITS RETURN ON 30.09.2009 STATING NIL INCOME. THE CPC PROCESSED THE SAME U/S 143(1) ON 18.12.2010 TREATING THE ASSESSEE AS A NORMAL COMPANY THEREBY COMPUTING MAT U/S 115JB OF THE AC T, AMOUNTING TO RS.17,24,616/-. 6. THE ASSESSEE FILED APPEAL CHALLENGING THE ABOVE MAT ASSESSMENT. THE CIT(A) UPHOLDS THE SAID ASSESSMENT AS FOLLOWS:- 5.2 IN GROUND NO.2 & 3, THE ASSESSEE HAS CHALLENGE D THE ASSESSMENT OF TOTAL INCOME AT RS.17,24,616/- BY INVOKING PROVISIO NS OF S.115JB OF THE ACT AS AGAINST RETURNED INCOME OF RS.NIL BY THE A.O . ITA NOS. 580 & 581/RJT/2015 RAJKOT COMMODITY EXCHANGE LTD VS. ITO AYS 2009-10 & 2010-11 3 5.3 THE APPELLANT HAS FILED ITS RETURN OF INCOME IN THE STATUS OF 'COMPANY' U/S.139(1) OF THE ACT FOR A.Y. 2009-10 ON LINE ELECTRONICALLY, VIDE E-FILING ACK. NO.96875441300909 ON DT.30/9/200 9. THE RETURN WAS ELECTRONICALLY PROCESSED AND ORDER PASSED U/S.1 43(1) BY THE ITO (CPC), BANGALORE ON 18/9/2010. IT IS PERUSED FROM T HE ORDER THAT INCOME HAS BEEN COMPUTED AS PER THE DETAILS GIVEN U NDER THE VARIOUS HEADS OF INCOME AND EXPENDITURE AND RELIEF CLAIMED BY THE ASSESSEE IN THE DIFFERENT SCHEDULES OF THE E-FILING FORMAT OF T HE RETURN OF INCOME. 5.4 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R PASSED U/S. 143(1) BY THE ITO (CPC) AND THE SUBMISSION OF THE APPELLAN T. THE ORDER PASSED U/S. 143(1) BY THE ITO (CPC) IS BASED ON THE INFORMATION FURNISHED BY THE ASSESSEE IN THE ELECTRONIC FORMAT OF E-FILING OF THE INCOME TAX RETURN UNDER VARIOUS SCHEDULES GIVEN FOR THE CLAIM OF DEDUCTIONS AND EXEMPTIONS UNDER DIFFERENT HEADS. TH E APPELLANT'S CONTENTION, THAT IT MAINTAINS REGULAR BOOKS OF ACCO UNTS WHICH ARE SUPPORTED BY BILLS AND VOUCHERS AND DULY AUDITED AS PER THE COMPANY ACT, HAS NOTHING TO DO WITH THE INFORMATION FILED I N ELECTRONIC FORMAT OF E-FILING IN THE RETURN OF INCOME UNDER THE YEAR OF APPEAL. 5.5 IN THIS CASE, A REMAND REPORT HAS BEEN CALLED F OR BY MY PREDECESSOR FROM THE A.O. VIDE LETTER DT. 4/6/2014 & 11/11/2014 . IN FACT, THE REMAND REPORT WAS NOT REQUIRED TO BE CALLED FOR AS PER RULE 46A SINCE THERE WAS NO ADDITIONAL EVIDENCES WHICH CAN BE ADMI TTED IN SUCH CASES OF ELECTRONIC PROCESSING OF RETURN OF INCOME BECAUS E ALL INFORMATION FILLED IN THE RETURN OF INCOME FILED ELECTRONICALLY ARE CONSIDERED WHILE PROCESSING THE RETURN U/S. 143(1) BY THE CPC. BANGA LORE. WHILE PROCESSING THE ELECTRONICALLY E-FILED RETURNS, THE ITO (CPC), BANGALORE, USES THE INFORMATION WHATEVER FILLED IN BY THE ASSE SSEE IN THE E-FILED RETURNS OF INCOME IN VARIOUS SCHEDULES AND BASED ON THE INFORMATION THEREIN, THE STATUS OF THE APPELLANT HAS BEEN TREAT ED AS NORMAL COMPANY AND ASSESSED THE BOOK PROFIT U/S.115JB OF THE ACT A T RS.17,24,616/-. UNDER THESE CIRCUMSTANCES, NO INTERFERENCE IS CALLE D FOR IN THE ORDER PASSED U/S. 143(1) BY THE ITO (CPC), BANGALORE. GRO UND NO.2 & 3 ARE THUS DISMISSED. 7. WE HAVE HEARD BOTH THE SIDES. LD. COUNSEL FIRS T OF ALL SUBMITS THAT THE DEPARTMENT HAS BEEN TREATING THE ASSESSEE AS A MUTUAL ORGANIZATION THROUGHOUT IN PRECEDING AND SUCCEEDING ASSESSMENT ITA NOS. 580 & 581/RJT/2015 RAJKOT COMMODITY EXCHANGE LTD VS. ITO AYS 2009-10 & 2010-11 4 YEARS. HE FILES BEFORE US A COPY OF SIMILAR REGULA R ASSESSMENT TREATING THE ASSESSEE AS A MUTUALLY FUNCTIONING ORGANIZATION IN ASSESSMENT YEAR 2012-13 AS WELL. LEARNED DEPARTMENTAL REPRESENTATI VE DOES NOT DISPUTE THIS FACTUAL POSITION. HIS ONLY ARGUMENT I N SUPPORT OF THE ABOVE MAT ASSESSMENT IS THAT THE SAME IS DONE ONL Y ON THE BASIS OF DISCLOSURES MADE AT ASSESSEES BEHEST. WE FAIL TO CONCUR WITH THIS ARGUMENT. IT HAS ALREADY COME ON RECORD THAT THE ASSESSEE HAS MAINTAINED ALL HIS BOOKS AND RELEVANT DETAILS TO TH E EFFECT OF HAVING BEEN FUNCTIONING AS A MUTUAL BODY WITHOUT ANY PROFI T MAKING. WE OBSERVE IN THIS BACKDROP THAT THE MERE FACT THAT IT FILLED UP ITS STATUS AS A COMPANY IN THE ABOVE RETURN WOULD NOT ENTITLE THE REVENUE TO ASSESS IT UNDER MAT ASSESSMENT IN COMPLETE DISREGARD OF ALL THE OTHER MATERIAL ON RECORD AS INDICATED HEREINABOVE. WE TH US ACCEPT ASSESSEES CONTENTIONS AND CONCLUDE THAT THE AUTHOR ITIES BELOW HAVE ERRED IN ASSESSING IT UNDER THE ABOVE MAT PROVISION U/S 115JB OF THE ACT. THE ASSESSING OFFICER SHALL NOW FINALIZE CONS EQUENTIAL ASSESSMENT AS PER LAW IN VIEW OF OUR FINDINGS HEREI NABOVE. ITA NO.580/RJT/2015 SUCCEEDS. 8. SAME ORDER TO FOLLOW IN ITA NO.581/RJT/2015. T HESE TWO ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 20 TH DECEMBER, 2016 AT AHMEDABAD. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER AHMEDABAD; DATED 20/12/2016 *BT ITA NOS. 580 & 581/RJT/2015 RAJKOT COMMODITY EXCHANGE LTD VS. ITO AYS 2009-10 & 2010-11 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. , / DR, ITAT, RAJKOT 6. & / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ' #, / ITAT, RAJKOT