NOBLE ELECTRIC CO., MUMBAI V. ITO 20(2)(3), MUMBAI

ITA 5985/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9313 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 13-12-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 26-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K SHUKLA
• Assessee Lawyers: S C TIWARI MS NATASHA MANGAT
• Keywords: Cost of acquisition; Right to appeal; Condonation of delay
• Section: 142(1); 144

Judgement Text

ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL 'I' BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.5985/MUM/2011 (ASSESSMENT YEAR: 2001-02) NOBLE ELECTRIC CO. C/O SHRI BALRAJ RAJANI, MAKHAN DHAM, PLOT NO.725, FLAT NO.602, 11 TH ROAD, KHAR (W) MUMBAI 400052 PAN: AACFN 4427 C VS. INCOME TAX OFFICER 20(2) (3) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI S.C. TIWARI/ MS.NATASHA MANGAT DEPARTMENT BY: SHRI P.K. SHUKLA, CIT(DR) DATE OF HEARING: 13/12/2012 DATE OF PRONOUNCEMENT: 31/12/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL IS PREFERRED BY SHRI BALRAJ RAJANI, FO R M/S NOBLE ELECTRIC CO. VIDE THE APPEAL MEMO DATED 25.08.2011 AGAINST THE ORDER OF THE CIT (A)-XX, MUMBAI DATED 24.03.2005. A LONGWITH THE APPEAL MEMO IN FORM NO.36, ASSESSEE HAS ATTACHED A NOTE WHICH IS AS UNDER: NOTE ATTACHED TO FORM NO.36 A PARTNERSHIP FIRM IN THE NAME AND STYLE OF M/ S. NOBLE ELECTRIC COMPANY COMPRISED OF PARTNERS BALRAJ H RAJANI, PRAKASH H RAJANI, RAJESH B RAJANI AND VISHA L P RAJANI, IN TERMS OF PARTNERSHIP DEED DATED 15 TH APRIL 19,83 AS MODIFIED FROM TIME TO TIME AND WAS CARRYIN G ON THE BUSINESS OF MANUFACTURING HOUSEHOLD COOKING APPLIANCES ETC., FROM THE PREMISES KNOWN AS COOKVEL L ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 2 OF 11 HOUSE, PLOT NO.D-6, STREET N020, MIDC, ANDHERI (E), MUMBAI- 400 093. SOMETIME IN 1995 THE AFORESAID PARTNERS WERE PERSUADED TO ADMIT NOMINEES OF REPL GROUP AS PARTNERS OF THE AFORESAID FIRM NOBLE ELECT RIC COMPANY WITH THE CLEAR UNDERSTANDING THAT THE ERSTWHILE PARTNERS (RAJANI) WOULD RETIRE FROM THE N EW FIRM SO THAT THE BUSINESS AND ASSETS OF NOBLE ELECT RIC COMPANY ARE ACQUIRED BY REPL GROUP. ACCORDINGLY, A FRESH PARTNERSHIP DEED WAS ENTERED INTO ON 1 ST APRIL 1995 WHEREBY THE AFORESAID FIRM WAS RECONSTITUTED W.E.F. 1 ST APRIL 1995 HAVING THE FOLLOWING PARTNERS IN THE FOLLOWING RATIO: SHRI BALRAJ HEMRAJ RAJANI 13% SHRI PRAKASH HEMRAJ RAJANI 13% SHRI RAJESH BALRAJ RAJANI 13% SHRI VISHAL PRAKASH RAJANI 12% M/S . REPL ENTERPRISES LTD. 13% M/S. H.L.ROCHAT ENGINEERING P. LTD. 12% M/S. LORANCE INVESTMENT & TRADING PVT. LTD. 12% M/S. ELMOT COMMUTATORS & MOTORS PVT. LTD 12% 100% SOON AFTER, THE DEED OF RETIREMENT WAS SIGNED BY AL L THE PARTNERS ON 14TH JUNE 1995 WHEREBY THE ERSTWHILE PARTNERS VIZ. BALRAJ H RAJANI, PRAKASH H RAJANI, RAJESH B RAJANI AND VISHAL P RAJANI RETIRED FROM THE FIRM NOBLE ELECTRIC COMPANY AND THE DEED O F PARTNERSHIP DATED 1 ST APRIL 1995 WAS MODIFIED AND IT WAS STATED BAT THE PARTNERS FROM REPL GROUP SHALL B E THE CONTINUING PARTNERS. 2. THE CONTINUING PARTNERS SOLD THE PROPERTY COOKVELL BUILDING AS ABOVEMENTIONED TO M/ S. GLOBAL MACHINE MANUFACTURING TECHNOLOGIES PRIVATE LIMITED FOR A CONSIDERATION OF ` .2,60,00,000 FOR WHICH PURPOSE THE CONTINUING PARTNERS OBTAINED FROM THEIR INCOMET AX OFFICER, WARD 22(5), MUMBAI, A CERTIFICATE U/S 230A (1) ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 3 OF 11 0N 10 TH MAY2000. BEFORE THAT THE CONTINUING PARTNERS HAD OBTAINED NO OBJECTION CERTIFICATE U/S 269UL(3) FROM APPROPRIATE AUTHORITY, INCOME TAX DEPARTMENT, MUMBAI ON 12TH JULY 1999. THE PROPERTY WAS EVENTUALLY SOLD ON 28 TH SEPTEMBER 2000 BY THE CONTINUING PARTNERS BUT, BECAUSE THE PROPERTY HAD STILL CONTINUED IN THE RECORDS OF MIDC TO BE IN THE NAME OF ERSTWHILE PARTNERS, THE ERSTWHILE PARTNERS (RAJANI) SIGNED THE DOCUMENTS OF TRANSFER IN GOOD F AITH AND AT THE BEHEST OF THE CONTINUING PARTNERS. 3. A NOTICE UNDER SECTION 142(1) WAS ISSUED ON 24 TH DECEMBER 2001 BY ITO WARD 20(2)- 3, MUMBAI, CALLING FOR RETURN OF INCOME FOR A.Y. 2001-02 MENTIONING TH E ADDRESS OF M/ S. NOBLE ELECTRIC COMPANY AS COOKVELL BUILDING NO.D-6, ROAD NO.20, MIDC, ANDHERI (E), MUMBAI- 400 093. WHEN THE ERSTWHILE PARTNERS CAME T O KNOW ABOUT THIS NOTICE MR. BALRAJ H RAJANI FILED TH E LETTER WITH ITO WARD 20(2)-3, MUMBAI, ON 10 TH JANUARY 2002, MENTIONING ALL THE FACTS AS STATED HEREINABOV E. MR. BALRAJ RAJANI, INTER ALIA, STATED THAT RAJANI H AD CEASED TO BE PARTNERS FROM 1 ST APRIL 1995 AND, THEREFORE, THE ASSESSING OFFICER SHOULD PROCEED AGA INST THE CONTINUING PARTNERS. MR. BALRAJ RAJANI MENTIONE D ALSO THAT HE HAD RETAINED A SUM OF ` 1,47,OO,OOO SO THAT THE TAX CAN BE PAID AND HE WAS WILLING TO PAY THE AMOUNT AS INCOME TAX WITH THE CONSENT OF THE CONTINUING PARTNERS. 4. SUBSEQUENTLY, ITO WARD 20(2)-3, MUMBAI, IN THE ABSENCE OF ANY RETURN OF INCOME, MADE AN ASSESSMENT ORDER U/S. 144 ON 24TH MARCH 2004. HE ASSESSED SHOR T TERM CAPITAL GAINS U/S. 50 OF THE ACT AT ` 24,563,227 AFTER REDUCING THE SALE CONSIDERATION OF COOKVELL H OUSE ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 4 OF 11 OF ` 2,6O,OO,OOO BY THE WRITTEN DOWN VALUE OF ` .14,36,773. THIS ASSESSMENT ORDER WAS NOT SERVED ON ANY OF THE ERSTWHILE PARTNERS AND IT APPEARS THAT T HE SAME WAS SERVED ON THE CONTINUING PARTNERS. AGGRIEV ED BY THIS ASSESSMENT ORDER THE CONTINUING PARTNERS PROSECUTED AN APPEAL BEFORE CIT(A)-XX, MUMBAI, BEARING APPEAL NO.CIT(A)XX/IT-139/ITO- 20(2)(3)/ 2004-05 FILED ON 21 ST APRIL 2004. SHRI PRADEEP KAPASI, CA, APPEARED BEFORE CIT(A) ON BEHALF OF THE CONTINUING PARTNERS. THIS APPEAL WAS DISMISSED BY CIT(A) -XX, MUMBAI, VIDE ORDER DATED 24TH MARCH 2005. THE CONTINUING PARTNERS TOOK THE MATTER FURTHER IN APPE AL BEFORE IT AT 'D' BENCH, MUMBAI, BEARING ITA NO.4297/MUM/2005. THE SAID APPEAL WAS DISMISSED BY THE ORDER OF IT AT DATED 26 TH AUGUST 2008. 5. SUBSEQUENTLY, VARIOUS INCOME TAX AUTHORITIES STARTED PRESSING THE ERSTWHILE PARTNERS (RAJANI) VE RY HARD FOR RECOVERY OF OUTSTANDING DEMAND RAISED BY ASSESSMENT ORDER U/S 144 DATED 24TH MARCH 2004. THE ASSESSING OFFICER PASSED ON 30 TH MARCH 2006 AN ORDER OF PENALTY U/ S. 271(1)(C) ALSO IMPOSING PENA LTY OF RS.18,135,071. ON INQUIRIES MADE BY THE ERSTWHIL E PARTNERS WITH VARIOUS INCOME TAX AUTHORITIES, THEY WERE ORALLY INFORMED THAT THE PEOPLE CONNECTED WITH REPL GROUP WERE ABSCONDING AND THE DEPARTMENT COULD NOT FIND AND CONTACT THEM FOR RECOVERY OF THE HUGE DEMAND RAISED BY WAY OF EX-PARTE ORDER U/S. 144 AND PENALTY ORDER U/S. 271(1)(C). 6. IT IS SUBMITTED THAT VARIOUS AUTHORITIES IN INCO ME TAX DEPARTMENT HAVE BEEN PRESSURIZING THE ERSTWHILE PARTNERS (RAJANI) FOR RECOVERY OF THE OUTSTANDING ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 5 OF 11 DEMAND INSPITE OF THE REPRESENTATION BY THEM THAT THEY HAVE CEASED TO BE THE PARTNERS OF NOBLE ELECTR IC COMPANY W.E.F. 1 ST APRIL 1995. BECAUSE THE ERSTWHILE PARTNERS HAVE RETAINED A SUM OF ` 1,47,00,000 HOLDING THE SAME IN TRUST FOR SETTLEMENT OF INCOME TAX DUES, THE ERSTWHILE PARTNERS HAVE MADE PAYMENT TO INCOME TAX DEPARTMENT FROM TIME TO TIME AND AS ON DATE SUCH PAYMENTS AGGREGATE TO ` .. 7. FURTHER, REALIZING THAT THE COMBINED IMPACT OF THE EX-PARTE ASSESSMENT ORDER U/S. 144 AND PENALTY ORDER U/S. 271(1)(C) ALONG WITH INTEREST AND OTHER CHARGE S WOULD BE MUCH MORE THAN THE SUM OF ` 1,47,00,000 RETAINED BY THE ERSTWHILE PARTNERS (RAJANI) AND REA LIZING THAT THE INCOME TAX DEPARTMENT WOULD PRESSURIZE ERSTWHILE PARTNERS ALONE ON ACCOUNT OF THE PERSONS RELATING TO REPL GROUP NOT BEING TRACEABLE, THE ERSTWHILE PARTNERS HAVE TAKEN IT UPON THEMSELVES TO PROSECUTE THE MATTERS RELATING TO A.Y. 2001-02. BE THAT AS IT MAY, ITAT 'D' BENCH MUMBAI HAS, VIDE ITS ORDE R DATED 26 TH AUGUST 2008 ALREADY HELD THAT IN RELATION TO A.Y. 2001-02, IT IS RAJANIS WHO HAVE TO PROSECUTE T HE APPEALS AND NOT THE EMBERS OF REPL GROUP. IN THIS V IEW OF THE MATTER, THE ERSTWHILE PARTNERS (RAJANI) FILE D AN APPEAL BEFORE CIT(A) AGAINST THE ORDER OF PENALTY U NDER SECTION 271(1)(C) AND BEING UNSUCCESSFUL AT THE HAN DS OF CIT(A), THEY FILED APPEAL BEFORE ITAT 'B' BENCH, MU MBAI, BEARING ITA NO.1655/MUM/2007. WHILE PROSECUTING THAT APPEAL, THE ERSTWHILE PARTNERS (RAJANI) CAME T O KNOW OF THE ORDER OF ITAT 'D' BENCH, MUMBAI, IN THE QUANTUM APPEAL BEARING IT A NO.4297/MUM/2005. A CERTIFIED TRUE COPY OF THAT ORDER HAS BEEN OBTAINED BY ERSTWHILE PARTNERS (RAJANI) ON 30 TH DECEMBER 2010. ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 6 OF 11 8. COMING TO THE TERMS WITH THE FACT THAT INCOME TA X DEPARTMENT SHALL KEEP ON PRESSURING THEM TILL THE OUTSTANDING DEMAND IN RELATION TO A.Y. 2001-02 ALONG WITH INTERES T AND OTHER CHARGES ARE FULLY PAID AND HAVING REGARD TO THE ADVERSE FINDING GIVEN BY ITAT 'D' BENCH, MUMBAI, IN THE QUANTUM APPEAL, THE ERSTWHILE PARTNERS (RAJANI) APPROACHED CIT(A)-XXXI, MUMBAI, F OR A COPY OF THE IMPUGNED ORDER SO THAT THE MATTER MAY BE PURSUED BEFORE ITAT. THE LEARNED CIT(A) HAS BEEN PLEASED, TO FURNISH A CERTIFIED COPY OF THE IMPUGNE D ORDER TO THE ERSTWHILE PARTNERS VIDE ITS LETTER DAT ED 10 TH AUGUST 2011. 9. THUS, THE DATE OF RECEIPT OF THE IMPUGNED ORDER BY THE APPELLANT IS 10 TH AUGUST 2011 A ND THIS APPEAL IS BEING FILED WITHIN TIME. IF, HOWEVER, IT IS HELD TH AT THIS APPEAL IS OUT OF TIME THE APPELLANT FERVENTLY PRAYS FOR CONDONATION OF DELAY BECAUSE ON THE PECULIAR FACTS AND IN THE PECULIAR CIRCUMSTANCES OF THIS CASE RAJA NI COULD NOT HAVE FILED THE APPEAL BEFORE THE ORDER OF CIT(A) WAS FORMALLY RECEIVED BY THEM MORE SO WHEN AN APPEAL HAD ALREADY BEEN FILED BY THE OTHER SET O F PARTNERS. SUBMITTED FOR KIND CONSIDERATION. I 2. ASSESSEE ALONG WITH THE APPEAL MEMO, RAISED THE FOL LOWING TWO GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE APPELLANTS CASE AND IN LAW THE LEARNED CIT (A) HAS ERRED IN NOT DIRECTING AO TO EXCLUDE THE LAND FROM ASSESS MENT UNDER SECTION 50 AND INSTEAD ASSESS IT SEPARATELY A S LONG TERM CAPITAL GAINS AFTER INDEXATION OF COST OF ACQUISITION OF LAND. ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 7 OF 11 3. THAT THE APPELLANT RESERVES AND PRAYS FOR LIBERTY T O ADD TO OR ALTER OR MODIFY THE ABOVE ENUMERATED GROUND OF APPEAL AT ANY TIME BEFORE THE DISPOSAL OF THE APPELLANTS APPEAL BY THE HON'BLE INCOME TAX APPELLATE TRIBUNAL. 4. AT THE OUTSET THE LEARNED DR OBJECTED TO ASSESSEES PREFERRING THE APPEALS ON TWO REASONS. (A) THE APPEAL IS BELAT ED AND (B) THE ITAT HAS ALREADY DISMISSED THE APPEAL PREFERRED ON THE CIT (A) ORDER DATED 24.03.2005. THEREFORE, THE PRESENT APPE AL BY THE OTHER PARTY IS NOT VALID AND SHOULD BE DISMISSED AB INITIO. 5. THE LEARNED COUNSEL HOWEVER, SUBMITTED THAT CONSEQU ENT TO THE ORDERS OF THE ITAT WHEREIN IT UPHELD THE OBSERV ATIONS OF THE CIT (A), ASSESSEE PREFERRED THE APPEAL AND THEREFORE, T HE APPEAL IS MAINTAINABLE. HE FURTHER SUBMITTED THAT THE ITAT HA S POWERS TO GIVE NECESSARY DIRECTIONS AND PLACED ON RECORD THE DECIS ION OF THE HON'BLE SUPREME COURT IN THE CASE OF KAPURCHAND SHR IMAL. VS. CIT, 131 ITR 451 (SC) AND SUBMITTED THAT THE CALCULATION OF CAPITAL GAIN IS NOT CORRECT PLACING ARGUMENTS ON MERITS, SO THAT ASSESSEE CAN GET RELIEF ON THE COMPUTATION OF INCOME ITSELF. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE OPINION THAT THE APPEAL IS NOT MAINTAINABLE BY THIS FORUM. FIRST OF ALL, WHEN THE ASSESSMENT ORDER WAS PASSED BY AO AS AN EX-PARTE ORDER UNDER SECTION 144 AND SERVED ON THE PERSONS, AN APPEAL WA S PREFERRED BEFORE THE CIT (A) IN FORM NO.35 BY (1) M/S NOBLE E LECTRIC CO. (1995), (2) REPL ENTERPRISES LTD, (3) H.L. ROCHAT E NGINEERING LTD, (4) LORANCE INVT & TRADING PVT. LTD AND (5) ELMOT C OMMUTATORS & MOTORS PVT. LTD., ALL REPRESENTING AS APPELLANTS WI TH THE ADDRESS PLOT NO:112, ROAD NO.13, ANDHERI (E) MUMBAI 400093 . THE LEARNED CIT (A) DISMISSED THE APPEAL ON THE REASON THAT THE APPELLANTS CANNOT HAVE ANY LOCUS STANDI TO FILE AN APPEAL BY THE ABOVE SAID PERSONS. ON APPEAL, THE ITAT ON THE SAID ORDER OF T HE CIT (A) VIDE ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 8 OF 11 ORDER DATED 20.01.2008 IN ITA NO.4297/MUM/2005 ITAT UPHELD THE DISMISSAL OF APPEAL AS NOT MAINTAINABLE AND HEL D AS UNDER: 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. THE ISSUE RAISED IS REGARDIN G MAINTAINABILITY OF APPEAL JOINTLY FILED BY FIVE PAR TIES AGAINST THE ORDER DATED 24.3.2004 PASSED BY AO IN CASE OF N OBLE ELECTRIC COMPANY CONSTITUTED BY RAJNANI AS PARTNERS . THE FIVE PARTIES WHO HAVE SIGNED THE MEMORANDUM OF APPEAL AR E AS UNDER: (1) M/S NOBLE ELECTRIC CO. (1995), (2) (2) REPL ENTERPRISES LTD, (3) H.L. ROCHAT ENGINEERING LTD, (4) LORANCE INVT & TRADING PVT. LTD AND (5) ELMOT COMMUTATORS & MOTORS PVT. LTD. ON BEHALF OF THE NOBLE ELECTRIC CO. (1995) THE MEMORANDUM OF APPEAL HAS BEEN SIGNED BY THE DIRECTO R OF ELMOT COMMUTATORS PVT LTD. NOBLE ELECTRIC CO. IS STATED TO BE AN AOP/BOI CONSISTING OF THE FOUR COMPANIES MENTIONED ABOVE AS MEMBERS. 4.1 A PARTNERSHIP FIRM IN THE NAME OF NOBLE EL ECTRIC CO. HAD BEEN CONSTITUTED IN THE YEAR 1993 WITH MR. BALRAJ H . RAJANI AND THREE OTHER MEMBERS OF RAJANI FAMILY. THE FIRM HAD TAKEN ON LEASE LAND FROM MIDC IN 1975 FOR ` .1,40,100/- AND SUBSEQUENTLY CONSTRUCTED A FACTORY BUILDING THEREON . AO RECEIVED INFORMATION THAT FIRM REPRESENTED BY RAJAN I AS PARTNERS HAD SOLD THE FACTORY PREMISES VIDE AGREEME NT DATED 28.9.2000 TO M/S GLOBAL MACHINE MANUFACTURING TRADI NG PVT. LTD. IN THE SAID AGREEMENT WHICH HAS BEEN REPRODUCE D IN THE BODY OF ASSESSMENT ORDER, IT IS CLEARLY MENTIONED T HAT M/S NOBLE ELECTRIC CO. WAS A PARTNERSHIP FIRM DULY REGI STERED UNDER THE PROVISIONS OF INDIAN PARTNERSHIP ACT AND THE AG REEMENT HAD BEEN SIGNED BY RAJANIS AS PARTNERS. THERE IS NO DISPUTE ABOUT EXISTENCE OF SUCH AGREEMENT. AO STARTED ASSES SMENT PROCEEDINGS IN RESPECT OF THE FIRM WITH RAJANIS AS PARTNERS IN ORDER TO ASSESS THE INCOME FROM TRANSFER OF FACTORY PREMISES. SHRI BALRAJ H. RAJANI WHO APPEARED DURING THE ASSES SMENT PROCEEDINGS CLAIMED THAT THE RAJANIS HAD RETIRED FR OM THE PARTNERSHIP FIRM WITH EFFECT FROM 1.4.95 BUT NO PRO PER RETIREMENT DEED WAS FILED. THE RETIREMENT DEED FILE D DID NOT CONTAIN ANY DATE. RAJANI ADMITTED HAVING RECEIVED P ART OF SALE CONSIDERATION AMOUNTING TO ` .1.47 CRORES. THOUGH, IT WAS CLAIMED THAT THE FOUR CORPORATE ENTITIES HAD BEEN A DMITTED AS PARTNERS OF THE FIRM FROM 1.4.95 AND HAD PURCHASED THE FACTORY ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 9 OF 11 PREMISES FOR A SUM OF ` .2.35 CRORES, THERE IS NO EVIDENCE THAT A NEW PARTNERSHIP HAD BEEN CONSTITUTED WITH THE FOUR CORPORATE ENTITIES AS PARTNERS. THERE IS ALSO NO EVIDENCE THA T THE CONVEYANCE IN RESPECT OF PROPERTY IN THEIR NAME HAS BEEN EXECUTED. ADMITTEDLY, IN THE RECORDS OF REGISTRAR O F FIRMS, MIDC RECORDS AND INCOME-TAX RECORDS, THE FIRM IN THE NAM E OF NOBLE ELECTRIC CONSTITUTED BY RAJANI AS PARTNERS WAS STIL L IN EXISTENCE. THE FACTORY PREMISES HAD ALSO BE SOLD BY THE SAID FIRM AND THE SALE AGREEMENT HAD BEEN DULY SIGNED BY RAJANI AS PARTNERS. UNDER THESE CIRCUMSTANCES, DECISION OF AO TO ASSESS THE INCOME TRANSFER OF FACTORY PREMISES IN T HE NAME OF FIRM CONSTITUTED BY RAJANI AS PARTNERS IS QUITE JUS TIFIED. THE ISSUE IS WHETHER AGAINST THE SAID ORDER OF AO, APPE AL FILED BY THE FOUR CORPORATE ENTITIES INDIVIDUALLY OR AS AOP/ BOI IN THE NAME OF NOBLE ELECTRIC CO. IS MAINTAINABLE. 4.2 THE CLAIM OF PRESENT APPELLANTS IS T HAT THEY HAD ACQUIRED THE FACTORY PREMISES OF ASSESSEE AND THEY SHOULD THEREFORE BE ASSESSED AS AOP/BOI. BUT THERE IS NO E VIDENCE ON RECORD TO SHOW THAT THEY WERE THE OWNER OF FACTORY PREMISES SOLD DURING THE YEAR. THE FIRM REPRESENTED BY RAJAN IS AS PARTNERS CONTINUED TO OWN THE PREMISES. ADMITTEDLY, NO NEW PARTNERSHIP WITH THE CORPORATE ENTITIES AS PARTNERS HAD ALSO BEEN CONSTITUTED. THEY HAVE THEMSELVES HAVE CLAIMED THAT NO PARTNERSHIP HAD BEEN FORMED AND THAT THEY SHOULD BE ASSESSED AS AOP/BOI. THE APPEAL HAS BEEN FILED ON T HE GROUND THAT THEY ARE AFFECTED BY THE ORDER OF AO. I T HAS BEEN CLAIMED THAT ANY BODY AFFECTED BY ANY ORDER HAS THE RIGHT TO FILE AN APPEAL. IT HAS BEEN ARGUED THAT THE I.T. AC T AGAINST THE CORPORATE ENTITIES AND THEREFORE THEY ARE AFFECTED PARTIES HAVING RIGHT TO FILE APPEAL UNDER SECTION 246A(1) O F THE I.T. ACT. WE ARE HOWEVER, UNABLE TO ACCEPT THE ARGUMENT OF LE ARNED AR. APPEAL CANNOT BE FILED BY A PERSON AGAINST AN ASSES SMENT ORDER ON THE GROUND THAT HE IS AGGRIEVED BY THE REC OVERY PROCEEDINGS UNDER SECTION 188A. AN APPEAL CAN BE FI LED AGAINST THE ASSESSMENT ORDER BY THE PERSON IN WHOSE NAME THE ORDER HAS BEEN PASSED. RIGHT OF APPEAL IS STATU TORY RIGHT AND CAN BE EXERCISED ONLY IN THE MANNER PROVIDED IN THE STATUTE. UNDER SECTION 246A A PERSON AGGRIEVED WITH CERTAIN ORDERS CAN FILE APPEAL TO THE APPELLATE AUTHORITY. THESE ORDERS ARE SPECIFIED IN SECTION 246A(1) ITSELF AND INCLUDE ORDERS PASSED BY AO UNDER SECTION 143(3), 144, 147, 163, 2 01 ETC. AN ORDER UNDER SECTION 188A IS NOT ONE OF THE ORDERS S PECIFIED IN SECTION 246A(1) WHICH CAN BE APPEALED AGAINST. THER EFORE, IF ASSESSEE IS AGGRIEVED BY AN ORDER UNDER SECTION 188 A, HE CAN EITHER TAKE UP THE MATTER WITH THE ADMINISTRATIVE A UTHORITIES OR CAN CHALLENGE THE ORDER BEFORE HIGH COURT BY WAY OF A WRIT PETITION. ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 10 OF 11 4.3 IN SO FAR AS THE ASSESSMENT ORDER PASSED BY AO UNDER SECTION 144 IS CONCERNED IN THIS CASE, THE APPEAL C AN BE FILED BY ASSESSEE IN WHOSE NAME THE ASSESSMENT ORDER HAS BEEN PASSED. AO HAS PASSED THE ASSESSMENT ORDER IN THE NAME OF M/S NOBLE ELECTRIC CO CONSTITUTED BY RAJANI AS PART NERS. THEREFORE, APPEAL IF ANY CAN BE FILED BY THE SAID F IRM REPRESENTED BY RAJANI. FOUR CORPORATE ENTITIES ARE ADMITTEDLY NOT THE PARTNERS OF THE SAID FIRM AND THEREFORE, TH EY CANNOT BE AGGRIEVED BY THE ASSESSMENT ORDER PASSED IN THE NAM E OF THE FIRM CONSTITUTED BY RAJANI AS PARTNERS. THEY CAN BE AGGRIEVED IF THE ASSESSMENT HAS BEEN MADE EITHER IN THEIR NAM E OR IN THE NAME OF A AOP/BOI CONSTITUTED BY THEM AS MEMBERS WH ICH IS NOT SO IN THIS CASE. IT HAS BEEN ARGUED THAT THEY C AN FILE APPEAL AS PARTNERS UNDER SECTION 247. BUT THE SAID SECTION WHICH AUTHORIZES APPEAL BY PARTNERS HAS BEEN OMITTED W.E. F. 1.4.1993. MOREOVER THEY ARE NOT THE PARTNERS OF THE ASSESSMENT FIRM. THEIR CLAIM THAT THEY ARE OWNERS O F THE PREMISES SOLD IS ALSO NOT SUPPORTED BY AN EVIDENCE, IN CASE, THEY WERE OWNERS, THEY COULD HAVE FILED THE RETURN OF INCOME DECLARING THE INCOME ARISING FROM THE SALE OF THE P ROPERTY. BUT NO RETURN OF INCOME HAD BEEN FILED BY THEM. IN FACT , AS IS CLEAR FROM PARA 11 OF THE ASSESSMENT ORDER, AO HAD SPECIF ICALLY SERVED NOTICES ON THE CORPORATE ENTITIES ASKING THE M TO FILE RETURN OF INCOME BUT THERE WAS NO COMPLIANCE. THE A PPLICANTS THEREFORE, CANNOT AGITATE AGAINST THE ORDER PASSED BY AO IN CASE THE FIRM CONSTITUTED BY RAJANIS AS PARTNERS. W E, THEREFORE, SEE NO INFIRMITY IN THE ORDER OF CIT(A) HOLDING THA T THESE CORPORATE ENTITIES HAVE NO LOCUS STANDI IN THE MATT ER AND THE APPEAL BY THEM IS NOT MAINTAINABLE. THE ORDER OF CI T (A) IS ACCORDINGLY UPHELD. 7. AS CAN BE SEEN FROM THE ABOVE, IN PARTICULAR IN PAR A 4.3, THE ITAT OBSERVED THAT THE APPEAL CAN BE FILED BY ASSES SEE IN WHOSE NAME THE ASSESSMENT ORDER HAS BEEN PASSED AND APPEL LANTS THEREFORE, CANNOT AGITATE AGAINST THE ORDER PASSED BY AO IN CASE OF THE FIRM. THE ITAT HAS SEEN NO INFIRMITY IN THE ORD ER OF THE CIT (A) HOLDING THAT THE APPEAL IS NOT MAINTAINABLE. THEREF ORE, THE APPEAL ON AOS ORDER BEFORE THE CIT (A) BY THE PERSONS WHO HAS NO LOCUS STANDI WAS HELD TO BE NOT MAINTAINABLE. HOWEVER, TH E ORDER OF ITAT DID NOT PERMIT PREFERRING APPEAL AGAIN ON THE SAME ORDER, BY THE OTHER PERSONS WHO DID NOT CHALLENGE THE AOS ORDER BEFORE CIT(A). SINCE THE PRESENT PERSON WHO PREFERRED THIS APPEAL IS NOT A PARTY ITA NO.5985 OF 2011 NOBLE ELECTRONIC CO MUMBAI PAGE 11 OF 11 BEFORE THE CIT(A) AND AS THERE IS NO CHALLENGE TO A OS ORDER BY THE ASSESSEE IN WHOSE NAME THE ORDER WAS PASSED, NO APP EAL CAN BE PREFERRED BEFORE THE ITAT AT PRESENT. SINCE THERE I S NO ORDER IN THIS CASE BY THE CIT(A)TO BE CHALLENGED AFRESH, WE CANNO T ENTERTAIN ANY APPEAL ON THE SAME ORDER WHICH WAS SUBJECT MATTER O F APPEAL BEFORE ITAT EARLIER AND ADJUDICATED ALREADY. 8. EVEN THOUGH THE LEARNED COUNSEL SUBMITTED THAT THE ITAT HAS WIDE POWERS TO DIRECT THE AUTHORITIES EVEN ON MERIT S AND RELIED ON THE HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF K APURCHAND SHRIMAL. VS. CIT, 131 ITR 451 (SC), WE ARE OF THE O PINION THAT THE POWERS CAN BE EXERCISED ONLY IN THE EVENT THE APPEA L IS PROPER AND MAINTAINABLE. IN VIEW OF THIS, WE DISMISS ASSESSEE S APPEAL AS NOT MAINTAINABLE. 9. IN THE RESULT, APPEAL FILED BY ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2012. SD/- SD/- ( D.K. AGARWAL ) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 31 ST DECEMBER, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI