M/s. Cane Development Council, Agauta, Uttar Pradesh V. Addl.CIT, Bulandshahr

ITA 6301/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4752 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR RAM SAMUJH
• Section: 143(3); 148; 144; 10

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6301/DEL/2014 (ASSESSMENT YEAR: 2011 - 12 ) CANE DEVELOPMENT COUNCIL, AGAUTA, C/O. DS KOHIL, ADVOCATE, F - 06, 1 ST FLOOR, NARAYAN TOWER, GANDHI LANE, GOLGHAR, GORAKHPUR, UTTAR PRADESH PAN:AAALC0405H VS. ADDL. CIT, RANGE, BULANSHAHR (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAM SAMUJH, ADV REVENUE BY: SHRI ANSHU PRAKASH, SR. DR DATE OF HEARING 04/09 / 2017 DATE OF PRONOUNCEMENT 13 / 09 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A), MEERUT DATED 16.10.2014 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE, ORDER UNDER APPEAL IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THAT ON THE WHOLE FACTS AND CIRCUMSTANCES OF THE CA SE, THE ORDER PASSED BY THE ID. CIT(A) IS WITHOUT ALLOWING PROPER AND SUFFICIENT OPPORTUNITY OF BEING' HEARD. 3. THAT ON THE WHOLE FACTS AND CIRCUMSTANCES OF THE CASE AND MATERIALS ON RECORD, THE ID. C.I.T. (A) IS NOT JUSTIFIED AND CORRECT IN DISMISSING THE APPEAL WHEN THE NOTICE ISSUED U/S 143(2) AND THE RELEVANT ASSESSMENT ORDER PASSED BY THE ADDL. CIT, RANGE - BULANDSHAHAR IN THE CASE ON THIS BASIS IS ILLEGAL AND WITHOUT JURISDICTION. 4. THAT THE ADDL. CIT, RANGE - BULANDSHAHAR ISSUING JURISDICTIONAL NOTICE U/S 143(2) AND PASSING THE RELEVANT ASSESSMENT ORDER U/S* 143(3) ON THIS BASIS HAS WRONGLY EXERC ISED THE POWERS AND FUNCTIONS OF AN 'ASSESSING OFFICER' IN THE CASE WHEN HE IS NOT AN 'ASSESSING OFFICER' IN THE CASE WITHIN THE MEANING OF SECTION 2(7A) OF THE IT ACT'1961, HENCE THE ID.CIT(A) IS NOT JUSTIFIED AND CORRECT IN DISMISSING THE APPEAL REJECTIN G THE GROUND TAKEN BY THE APPELLANT IN THIS RESPECT. PAGE 2 OF 5 5. THAT THE REJECTION OF THE GROUND RELATING TO ASSUMPTION OF JURISDICTION OVER THE CASE, BY THE ID. CIT (A) ON THE BASIS OF PROVISION U/S 124(3)(A) IS NOT JUSTIFIED AND CORRECT WHEN THIS PROVISION DOES NOT APPLY IN THE CASE. 6. THAT ON THE WHOLE FACTS AND CIRCUMSTANCES OF THE CASE AND MATERIALS ON RECORD, THE ID.CIT(A) IS NOT JUSTIFIED AND CORRECT IN TREATING AN APPLICATION FILED FOR SUMMONING THE COPY OF ORDER/DIRECTION PASSED U/S 2(7A), IF ANY, WITH RE GARD TO THE APPELLANT'S CASE AND REQUESTING FOR ADJOURNMENT OF HEARING OF APPEAL FIXED ON 15.10.14 AS A 'WRITTEN SUBMISSION' IN THE APPEAL AND IN DECIDING THE APPEAL MERELY ON THIS BASIS. 7. THAT ON THE WHOLE FACTS AND CIRCUMSTANCES OF THE CASE, THE ID.CIT (A) IS NOT JUSTIFIED AND CORRECT IN NOT ADJUDICATING UPON THE MATERIAL .GROUNDS OF APPEAL OTHER THAN THE GROUND RELATING TO JURISDICTION. 8. THAT THE ADDITION MADE BY THE ID.AO IS ILLEGAL, UNJUSTIFIED AND INCORRECT, HENCE THE ID. CIT(A) IS NOT JUSTIFIED AN D CORRECT IN DISMISSING THE APPEAL. 9. THAT ON THE WHOLE FACTS AND CIRCUMSTANCES OF THE CASE AND MATERIALS ON' RECORD, THE ADDITION MADE DESERVES TO BE DELETED. 3. ASSESSEE IS A CANE DEVELOPMENT COUNCIL ESTABL ISHED UNDER SECTION 5 OF THE UP CANE REGULATIO N OF SUPPLY AND PURCHASE ACT 1953 BY THE ORDER PASSED BY THE CANE COMMISSIONER OF THE STATE OF U P UNDER RULE 8 OF THE U P CANE REGULATION OF SUPPLY AND PURCHASE RULES, 1954. THE ASSESSEE FILED ITS RETURN OF INCOME ON 29/03/2012, S H OWING TAXABLE INCOME OF RS . NIL CLAIMING EXEMPTION UNDER SECTION 10 (20) OF THE INCOME TAX ACT, 1961. THE LD. ASSESSING OFFICER EXAMINED THE EXEMPTION CLAIMED BY THE ASSESSEE AND HELD THAT THE EXPLANATION OF THE ASSESSEE IS NOT SATISFACTORY AS IT HAS SURPLUS AVAILABLE TO ITS DISPOSAL AN D HAS ALSO RECEIVED GOVERNMENT GRANT AS WELL AS GRANT FROM SUGAR MILLS. THEREFORE, THE LD. ASSESSING OFFICER CHARGED TO TAX THE EXCESS OF INCOME OR EXPENDITURE AS SHOWN IN THE INCOME A ND EXPENDITURE ACCOUNT OF RS. 5 6 , 02 , 222/ - V IDE ASSESSMENT ORDER DATED 31 /01/2014. 4. THE ASSESSEE AGGRIEVED WITH THE ORDER OF THE LD. ASSESSING OFFICER HAS PREFERRED AN APPEAL BEFORE THE LD. CIT (A) WHO VIDE ORDER DATED 16/10/2014 DISMISSED THE APPEAL OF THE ASSESSEE. THE MAIN CONTENTION RAISED BY THE ASSESSEE BEFORE THE LD. CIT APPEAL WAS THAT THERE WAS NO JURISDICTION AVAILABLE WITH THE ASSESSING OFFICER TO PASS THE RELEVANT ASSESSMENT ORDER. ACCORDING TO THE ASSESSEE FROM THE RECORD IT IS SEEN THAT THE ASSESSMENT ORDER THAT IS APPEALED AGAINST IS PASSED BY THE ADDITIONAL CIT, R ANGE BULANDSHAHR. ACCORDING TO THE ASSESSEE, THE ASSESSMENT ORDER IS PASSED BY PAGE 3 OF 5 THE ADDITIONAL COMMISSIONER OF INCOME TAX, WHEREAS THE NOTICES WERE ISSUED BY THE JOINT COMMISSIONER OF INCOME TAX, WHO WAS THE ASSESSING OFFICER OF THE ASSESSEE. THE LD. CIT A PPEAL REJECTED THE CONTENTION OF THE ASSESSEE AS THE ASSESSEE HA S IGNORED THE PROVISIONS OF SUBSECTION 3 OF SECTION 124 OF THE INCOME TAX ACT , A CCORDING TO WHICH IT HAS BEEN PROVIDED THAT NO PERSON SHALL BE ENTITLED TO CALL IN QUESTION JURISDICTION OF AN A SSESS ING OFFICER WHEN HE HAS MADE A RETURN UNDER SUBSECTION 1 OF SECTION 139, AFTER THE EXPIRY OF ONE MONTH FROM THE DATE ON WHICH HE WAS SERVED WITH A NOTICE UNDER SUBSECTION (1) OF SECTION 142, OR SUBSECTION (2) OF SECTION 143 OR AFTER THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER. AS THE LD. AUTHORIZED REPRESENTATIVE THE ASSESSEE HA S NOT RAISED ANY SUCH ISSUE BEFORE THE LD. ASSESSING OFFICER THE ABOVE ISSUE OF THE JURISDICTION CANNOT BE RAISED NOW. HENCE, THE APPEAL OF THE ASSESSEE WAS DISMISSE D BY THE LD. CIT A. HOWEVER THE LD CIT (A) DID NOT DECIDE THE ISSUE ON MERITS OF THE CASE AS NOTHING WAS SUBMITTED BEFORE HIM. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT A, THE ASSESSEE IS IN APPEAL BEFORE US AND REITERATED THE SAME ARGUMENTS B EFORE US. T HE LD. A R FURTHER RELIED UPON THE ORDER OF THE HONBLE DELHI HIGH COURT IN CASE OF MAKE CORPORATION LIMITED ITA NO. 128 OF 2016 DATED 23/02/2017. 6. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE CONTENTION OF THE ASSESSEE IS THAT THE NOTICE HAS BEEN ISSUED BY THE JOINT COMMISSIONER OF INCOME TAX, BUT THE ASSESSMENT ORDER HAS BEEN PASSED BY T HE ADDITIONAL COMMISSIONER OF INCOME TAX OF THE SAME CITY , IT IS WITHOUT JURISDICTION. IN THE PRESENT CASE A DMITTEDLY, THE EARLIER NOTICES WERE ISSUED BY THE INCOME T AX O FFICER, WARD 1, BULANDSHAR ON 24/09/2012 , ON 01/05/2013 BY THE JOINT COMMISSIO NER OF INCOME TAX AND ON 26/06/2013 AND 01/07/2013 BY THE ADDITIONAL COMMISSIONER OF INCOME TAX. ALL OTHER SUBSEQUENT NOTICES WERE ALSO ISSUED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX. THE ASSESSMENT UNDER SECTION 143 ( 3 ) WAS ALSO MADE BY THE ADDITION AL COMMISSIONER OF INCOME TAX . ACCORDING TO THE PROVISIONS OF SECTION 2 (7A) OF THE ACT , AS PER THE DEFINITION OF THE ASSESSING OFFICE IT INCLUDES JOINT COMMISSIONER AS WELL PAGE 4 OF 5 AS THE ADDITIONAL COMMISSI ONER. FURTHER, P ROVISIONS OF SECTION 120 (3) PROVIDES THAT : - 3) NO PERSON SHALL BE ENTITLED TO CALL IN QUESTION THE JURISDICTION OF AN ASSESSING OFFICER (A) WHERE HE HAS MADE A RETURN UNDER SUB - SECTION (1) OF SECTION 115WD OR UNDER SUB - SECTION (1) OF SECTION 139, AFTER THE EXPIRY OF ONE MONTH FROM THE DATE ON WHICH HE WAS SERVED WITH A NOTICE UNDER SUB - SECTION (1) OF SECTION 142 OR SUB - SECTION (2) OF SECTION 115WE OR SUB - SECTION (2) OF SECTION 143 OR AFTER THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER ; (B) WHERE HE HAS MADE NO S UCH RETURN, AFTER THE EXPIRY OF THE TIME ALLOWED BY THE NOTICE UNDER SUB - SECTION (2) OF SECTION 115WD OR SUB - SECTION (1) OF SECTION 142 OR UNDER SUB - SECTION (1) OF SECTION 115WH OR UNDER SECTION 148 FOR THE MAKING OF THE RETURN OR BY THE NOTICE UNDER THE F IRST PROVISO TO SECTION 115WF OR UNDER THE FIRST PROVISO TO SECTION 144 TO SHOW CAUSE WHY THE ASSESSMENT SHOULD NOT BE COMPLETED TO THE BEST OF THE JUDGMENT OF THE ASSESSING OFFICER, WHICHEVER IS EARLIER. THEREFORE ACCORDINGLY ASSESSEE HAS FAILED TO RAI SE ANY OBJECTION BEFORE THE AO BEFORE COMPLETION OF ASSESSMENT . FURTHER WE ALSO DO NOT FIND ANY INFIRMITY IN THE JUSRIDCITION ASSUMED BY THE ADDL COMMISSIONER OF INCOME TAX OF BULANDSHAHAR. IN VIEW OF THIS, WE DISMISS THE APPEAL OF THE ASSESSEE ON THE ISSUE OF JURISDICTION. HENCE, GROUND NO 1 TO 6 OF THE APPEAL OF THE ASSESSEE ARE DISMISSED . 8. FURTHER, THE APPEAL OF THE ASSESSEE WAS NOT DECIDED ON MERITS OF THE CASE BY LD CIT (A) AS THE GROUND NO 5 OF THE APPEAL OF THE ASSESSEE IN FORM NO 35 FILED BEFOR E LD CIT (A) WAS CHALLENGING THE ADDITION ON MERITS OF THE CASE REMAINS UNDECIDED. THIS WAS ALSO CHALLENGED BEFORE US VIDE GROUND 7. NEITHER BEFORE C IT (A) NOR BEFORE US THE ASSESSEE HAS PLACED ANYTHING ON THE MERITS OF THE COMPUTATION OF TOTAL INCOME MAD E BY THE AO. THOUGH THIS PRACTICE ADOPTED BY THE ASSESSEE IS DEPLORABLE, HOWEVER IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ISSUE ON MERITS OF THE ADDITION OF RS. 56,02,225/ - BACK TO THE FILE OF THE LD CIT (A) FOR ADJUDICATION ON AD DITIONS/ DISALLOWAN CE. THE ASSESSEE IS FURTHER DIRECTED TO APPEAR BEFORE LD CIT (A) WITHIN 1 MONTH OF THE DATE OF RECEIPT OF THIS ORDER BEFORE LD CIT (A) AND FILE ITS WRITTEN SUBMISSION ON MERITS AND AFTER THAT LD CIT (A) SHALL GRANT AN OPPORTUNITY OF HEARING TO TH E ASSESSEE. ON FAILURE ON PART OF THE ASSESSEE, LD CIT (A) WILL BE FREE TO DECIDE THE ISSUE ON MERITS OF THE CASE AS PER INFORMATION PAGE 5 OF 5 AVAILABLE ON RECORD BEFORE HIM. IN THE RESULT GROUND NO 7 OF THE APPEAL OF THE ASSESSEE IS ALLOWED WITH ABOVE DIRECTI ON. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSED ON THE ISSUE OF JURISDICTION BUT ALLOWED FOR STATISTICAL PURPOSES ON MERITS OF THE ISSUES INVOLVED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 1 3 / 0 9 / 2017 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 0 9 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI