Indian Red Cross Society, Bhubaneswar V. ACIT(OSD), Bhubaneswar

ITA 60/CTK/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4492 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2011
• Court: TRIBUNAL
• Department Lawyers: S K DASH
• Assessee Lawyers: S C BHADRA
• Keywords: Principle of natural justice; Set aside
• Section: 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 060/CTK/2011 / ASSESSMENT YEAR 2006 - 07 INDIAN RED CROSS SOCIETY, ORISSA STATE BRANCH, RED CROSS BHAWAN, BHUBANESWAR 751 022 PAN: AAATI 5127 J - - - VERSUS - ASST.COMMISSION ER OF INCOME - TAX (OSD),RANGE 2, BHUBANESWAR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI S.C.BHADRA, AR / FOR THE RESPONDENT: / SHRI S.K.DASH, DR / ORDER . . . , , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) DT. 26.11.2010 RAISING THE FOLLOWING TWO ISSUES. 1 . THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S.144 OF THE INCOME - TAX ACT,1961 IS UNSUSTAINABLE UNDER THE LAW AS IT WAS PASSED WITHOUT GIVING PROPER OPPORTUNITY FOR VERIFICATION OF ACCOUNTS. 2 . THE LEARNED CIT(A)S ORDER IS NOT SUSTAINABLE FOR LEGAL SCRUTINY AS THE PRAYER OF T HE ASSESSEE TO RESTORE THE MATTER TO THE AO FOR FRESH ASSESSMENT IS NOT NEGATIVE ON MERITS. 2. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. 3. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE AS SESSEE SUBMITTED THAT THE ACTION OF THE ASSESSING OFFICER IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IN NOT GIVING REASONABLE AND PROPER OPPORTUNITY TO THE ASSESSEE TO VERIFY THE RECORDS AS SUBMITTED BEFORE HIM. THE REASON GIVEN BY THE ASSESSING OFFI CER THAT THE ASSESSEE COULD NOT COMPLY WITH THE QUESTIONER DT.18.12.2008 IS ONLY TO INVOKE JURISDICTION U/S.144 OF THE I.T.ACT. IT IS TIME AND AGAIN REQUEST BY THE ASSESSEE BEFORE THE AO TO GRANT SUFFICIENT TIME TO VERIFY THE ACCOUNTS AND ANSWER OF QUESTI ONER ISSUED BY HIM. BUT WITHOUT CONSIDERING THAT THE ASSESSING OFFICER HAS I.T.A.NO. 060/CTK/2011 2 PASSED THE ASSESSMENT ORDER BY INVOKING THE POWERS U/S.144 OF THE I.T.ACT. IN FIRST APPEAL, THE LEARNED CIT(A) HAS ALSO NOT PROPERLY CONSIDERED THE CONTENTION OF THE ASSESSEE THAT T HE ASSESSEE IS HAVING REGISTRATION U/S.12AA OF THE ACT AND THE ACCOUNTS ALL OVER INDIA ARE INCORPORATED IN THE ACCOUNTS MAINTAINED BY THE HEADQUARTERS AT DELHI. THEREFORE, THE FILING OF RETURN BY THE ASSESSEE ITSELF IS ERRONEOUS. THE DEPARTMENTAL AUTHORITI ES HAVE FAILED TO TAKE JUDICIAL NOTICE OF THE REGISTRATION GRANTED TO THE ASSESSEE U/S.12AA AND INSISTED UPON FOR PRODUCTION OF THE SAID CERTIFICATE. THE DEPARTMENT HAS ALSO REFUSED TO TAKE JUDICIAL NOTICE OF THE FACT THAT THE ASSESSEE IS ESTABLISHED U/S.8 (1) OF THE INDIAN RED CROSS SOCIETY ACT,1920 AND ITS OBJECTS ARE TO RENDER HUMANITARIAN SERVICES THROUGH ITS NETWORK OF DISTRICT BRANCHES ALL OVER THE STATE OF ORISSA. IT COMES TO THE RESCUE OF THE VULNERABLE PEOPLE IN ANY TIME IN CASE A DISASTER STRIKE O R PEOPLE SUFFER FOR ANY REASON. VIDE SERVICES TO THE PEOPLE OF THE STATE, THE ASSESSEE HAS ESTABLISHED CONFIDENCE AMONG THE PEOPLE AND ALSO COMPLEMENTING & SUPPLEMENTING THE EFFORTS BY THE GOVERNMENT IN DIFFERENT DEVELOPMENT AND DISASTER MANAGEMENT PROGRAM MES IN THE STATE OF ORISSA. THE ASSESSEE HAS PRODUCED CASH BOOK, LEDGER AND BANK ACCOUNTS BEFORE THE ASSESSING OFFICER AND ALSO AGREED TO PRODUCE THE VOUCHERS AT RANDOM BASIS AS THEY ARE VOLUMINOUS IN NATURE AND IMPRACTICABLE FOR PRODUCTION AS A TOTAL. BUT THE AO HAS NOT PROPERLY CONSIDERED THIS REQUEST OF THE ASSESSEE. ALL OF A SUDDEN, THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER BY INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. THE LEARNED CIT(A) HAS OBSERVED IN THE IMPUGNED ORDER THAT HE HAS NO POWER TO REMAND THE CASE TO THE ASSESSING OFFICER W.E.DF.1.4.2001.THERFORE, HE DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT EVEN ADJUDICATING THE ISSUES RAISED BEFORE HIM. THEREFORE, IN THAT VIEW OF THE MATTER, THE IMPUGNED ORDER IS UNTENABLE FOR LEGAL SCR UTINY AND REQUIRES TO BE SET ASIDE. HE FURTHER SUBMITTED THAT THE ASSESSEE IS NOW READY AND WILLING TO PRODUCE BEFORE THE ASSESSING OFFICER ALL THE RECORDS AND ALL THE NECESSARY DOCUMENTS. IT SHOWS THAT THE ASSESSEE IS NOT ASSESSABLE AT BHUBANESWAR AS IT I S THE STATE BRANCH OF THE RED CROSS SOCIETY WHOSE ACCOUNTS ARE INCORPORATED IN THE ACCOUNTS OF HEADQUARTERS AT DELHI I.T.A.NO. 060/CTK/2011 3 AND THEY ARE FILING CONSOLIDATED RETURN. ACCORDINGLY, HE PRAYED FOR ALLOWING THE APPEAL OF THE ASSESSEE BY SETTING ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A). 4. CONTRARY TO THIS, THE LEARNED DR HAS SUPPORTED THE IMPUGNED ORDERS AND SOUGHT FOR DISMISSAL OF THE APPEAL OF THE ASSESSEE. 5. ON CAREFUL ANALYSIS OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL IN THE LIGHT OF RIVAL SUBMISSIONS OF THE PARTIES, IT IS FOUND THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AS THE AO HAS NOT GIVEN PROPER AND REASONABLE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE VOUCHERS AS REQUIRED BY HIM, S INCE THEY ARE VOLUMINOUS IN NATURE AND REQUIRED TO BE PRODUCED IN FULL . THE LEARNED CIT(A) IN THE IMPUGNED ORDER HAS OBSERVED THAT SINCE HE IS NOT HAVING POWERS TO REMAND THE MATTER TO THE ASSESSING OFFICER W.E.F. 1.4.2001, HE PASSED THE IMPUGNED ORDER BY REJE CTING THE PRAYER OF THE ASSESSEE. THE REASON GIVEN BY THE LEARNED CIT(A) THAT THE ASSESSEE IS NOT ABLE TO PROVE THAT HIS ACCOUNTS ARE INCORPORATED IN THE FINAL ACCOUNTS MAINTAINED BY ITS HEADQUARTERS AT NEW DELHI AND THEREBY IT CANNOT BE SAID THAT RETURN I S FILED ERRONEOUSLY. THUS OBSERVING THE LEARNED CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 6. OF LATE, THE ASSESSEE HAS AGREED TO PRODUCE THE NECESSARY RECORDS/DOCUMENTS SUPPORTING ITS CONTENTION. THEREFORE, WE DEEM IT FIT AND PROPER TO RESTORE THE M ATTER TO THE FILE OF THE ASSESSING OFFICER FOR MAKING ASSESSMENT DE NOVO AS PER LAW STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE THE NECESSARY DOCUMENTS/RECORDS TO SUBSTANTIATE ITS CLAIMS AND COOPERATE WITH THE ASSESSING OFFICER FOR EARLY DISPOSAL OF THE MATTER. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 4 TH APRIL, 2011 S D/ - S D/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER. ( ) DATE: 4 TH APRIL, 2011 I.T.A.NO. 060/CTK/2011 4 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : INDIAN RED CROSS SOCIETY, ORISSA STATE BRANCH, RED CROSS BHAWAN, BHUBANESWAR 751 022 2 / THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX (OS D),RANGE 2, BHUBANESWAR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.