Shri Maganbhai Shankarbhai Patel Education Trust, Baroda V. The Income tax Officer,Ward-2(3), Baroda

ITA 641/AHD/2008

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85743 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-01-2015
• Assessment Year: 1999-2000
• Appeal Filed On: 19-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMALENDU VERMA; SONIA KUMAR
• Assessee Lawyers: M K PATEL
• Keywords: Reopening of assessment; Opportunity of being heard; Audit objection; Reason to believe; Reassessment proceedings
• Section: 5(2); 147; 148; 12; 144; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER ITA NO S . 3903 , 3904, 3905 / AHD/2007 A. Y .1998 - 99 , 1999 - 00, 2000 - 01 ITO, WARD 2(3), BARODA. VS MAGANBHAI S HANKARBHAI PATEL, EDUCATION TRUST ELEMPCO SAYAJIGUNJ, BARODA. (APPELLANT) (RESPONDENT) ITA NOS. 4439 /AHD/2007 & 640, 641 , 642, 191, 192 /AHD/2008 A.Y S .1998 - 99 & 1999 - 00 , 2000 - 01 MAGANBHAI SHANKARBHAI PATEL, EDUCATION TRUST ELEMPCO SAYAJIGUNJ , BARODA. VS ITO, WARD 2(3), BARODA. (APPELLANT) (RESPONDENT) ITA NOS.2369/AHD/2009 & 2585, 2586, 2587 /AHD/20 10 A.Y S. 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 MAGANBHAI SHANKARBHAI PATEL, EDUCATION TRUST ELEMPCO SAYAJIGUNJ, BARODA. VS ITO, WARD 2(3 ), BARODA. (APPELLANT) (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR , SR.D.R. & SHRI VIMALENDU VERMA, CIT - DR. ASSESSEE(S) BY : SHRI M.K. PATEL , A.R. / DATE OF HEARING : 28 / 0 1 /201 5 / DATE OF PRONOUNCEMENT: 26 / 0 2 /201 5 ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 2 - / O R D E R PER BENCH IN ALL THESE APPEALS THE APPELLANT HAS CHALLENGED THE VALIDITY OF THE JURISDICTION INVOKED U/S.148 OF IT ACT. AN ASSESSMENT WAS MADE BY THE AO FOR A.Y.1998 - 99 U/S.144 R.W.S. 148 OF IT ACT VIDE ORDER DATED 29.03.2006 ; ACCORDING TO WHICH THE TRUST AOP HAS INFRINGED THE PROVISIONS BY ADVANCING A SUM OF RS.3,05,00,000/ - TO THE PERSONS ALLEGED TO BE THE PE RSONS SPECIFIED IN SUB SECTION 3 OF SECTION 13 OF IT ACT. BECAUSE OF THE SAID INFRINGEMENT THE EXEMPTION CLAIMED WAS NOT ALLOWED. SINCE, IT WAS A CASE WHERE THE PROVISIONS OF SECTION 147/148 WERE INVOKED THEREFORE THE REOPENING WAS CONTESTED BEFORE FIRST A PPELLATE AUTHORITY. LEARNED CIT(A) HAS EXAMINED THE ARGUMENT AND THEREUPON REJECTED THE CONTENTION OF THE ASSESSEE AS UNDER: 2.3. I HAVE CONSIDERED THE SUBMISSIONS OF THE ID . COUNSEL AND FACTS OF THE CASE. THE OBJECTION TAKEN BY THE APPELLANT IS THAT NOT IC E U/S.148 WAS ISSUED BY ITO,WD.5(L), BARODA. APA R T FROM THIS NO OBJECTION TO THE ISSUE OF NOTICE U/S. 148 WAS SUBMITTED, IN THE REASON RECORDED BY ITO, WD.5(1), IT IS CLEARLY MENTIONED THAT THE FUNDS ACCUMULATED FOR THE PURPOSE OF OBJECTS HAVE BEEN ADV ANCED TO THE TRUSTEES AND NO WORK HAS BEEN DONE EVEN AFTER THREE YEARS. ASSESSING OFFICER MENTIONED THAT NON - UTILISATION OF ACCUMULATED FUND FOR THE PURPOSE OF THE OBJECTS OF THE TRUST IS LIABLE TO BE TAXED AND HENCE TAXABLE INCOME HAS ESCAPED ASSESSMENT. THE REASONS RECORDED CLEARLY GIVES INDICATION OF ESCAPEMENT OF INCOME. IT ALSO MENTIONS THE AMOUNT OF RS.7,19,896/ - WHICH IS MORE THAN THE MINIMUM TAXABLE INCOME ESCAPED NECESSARY FOR REOPENING. THE REOPENING WAS ALSO DONE AFTER OBTAINING APPROVAL FROM ADD L. CIT, RAN GE - 5 , BARODA, WHO IS COMPETENT TO GRANT APPROVAL UNDER THE REQUIRED PROVISIONS. CONSIDERING THIS A LL THE CONDITIONS MENTIONED FOR REOPENING OF THE ASSESSMENT UNDER SECTION 147 ARE SATISFIED. AS ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 3 - REGARDS ISSUE OF NOTICE BY 1TO, WD . 5(L), THE APPELL ANT HAS SUBMITTED RETURN IN RESPONSE TO THE NOTICE ISSUED BY HIM AND THE JURISDICTION WAS NOT CHALLENGED TILL THE ASSESSMENT WAS FINALIZED. THEREFORE, AS PER SECTION 124 OF I .T. ACT, APPELLANT I S NOT ENTITLED TO QUESTION THE JURISDICTION AND AS SUCH THE OB JECTION TAKEN BY THE APPELLANT IS REJECTED. 2. FROM THE SIDE OF THE APPELLANT, LEARNED A.R., MR. M.K. PATEL APPEARED AND REITERATED THE OBJECTION THAT NOTICE U/S.148 WAS ISSUED BY ITO WARD - 5(1), BARODA. HE HAS INFORMED THAT THE R EASONS HAVE ALSO BEEN REC ORDED BY ITO, WARD - 5(1) WHEREIN IT WAS CLEARLY MENTIONED THAT THE FUNDS ACCUMULATED FOR THE PURPOSE OF THE OBJECT OF THE TRUST HAVE BEEN ADVANCED TO THE TRUSTEES BUT NO WORK HAD BEEN DONE , CONTENTS OF THE SAME ARE REPRODUCED BELOW: NAME AND ADDRESS OF THE ASSESSEE : MAGANBHAI SHANKARBHAI PATEL EDUCATION ASSESSMENT YEAR : 1998 - 99 STATUS : AOP REASON FOR REOPENING THE ASSESSMENT U/S.147 OF THE IT ACT. THE ASSESSEE HAS SURPLUS OF RS.7,19,896/ - AS PER COMPUTATION OF INCOME FILED ALONG WITH THE RETURN OF INCOME & CLAIMED THE SAME AS EXEMPT U/S. 11 OF THE ACT IN VIEW OF FORM 10 FILED ON 10.1.94 FOR ACCUMULATION OF INCOME OF THE TRUST. THE PURPOSE OF THE ACCUMULATION WAS STATED TO BE FOR CONSTRUCTION OF A LIBRARY. THE CONTRACTORS TO WHOM THE FUNDS HAD BEE N ADVANCED BY THE ASSESSEE ON THIS ACCOUNT WERE THE MAIN TRUSTEES. FURTHER, THE WORK OF CONSTRUCTION HAS NOT BEEN COMPLETED EVEN AFTER THREE YEARS. ALSO, THE CONSTRUCTION OF A LIBRARY & GIVING THE SAME ON RENT CANNOT BE CONSTRUED AS UTILIZATION FOR THE OBJ ECT OF THE TRUST I.E. ADVANCEMENT OF EDUCATION. THUS, THE ASSESSEE HAS NOT UTILIZED THE ACCUMULATED FUNDS FOR THE PURPOSE OF BUSINESS & HENCE IS LIABLE TO BE TAXED AS PER THE PROVISIONS OF SECTION 11(2) OF THE ACT. THEREFORE, I HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. (MANISHA DESAI) INCOME TAX OFFICER WARD - 5(1), BARODA ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 4 - 2.1 LEARNED AR HAS DRAWN OUR ATTENTION ON THE ENTRIES OF THE ORDER SHEE T OF THE ASSESSEE TO POINT OUT THAT THE SAME REMAINED UNSIGNED UPT O THE DATE RECORDED THEREIN AS 24.02.2006 AND ONLY ON THAT DATE THE INCOME TAX OFFICER HAD SIGNED THE ORDER SHEET AND NOT O N THE PREVIOUS DATES. ACCORDING TO HIM, THE JURISDICTION OF THE ASS ESSING OFFICERS OF BARODA CHARGE WAS DULY PUBLISHED AND IN SUPPORT HE HAS FURNISHED THE JURISDICTION CHART AS COMPILED BY THE CA ASSOCIATION. AS PER THIS CHART , RANGE - 2 UNDER CIT - I, BARODA HAD JURISDICTION OF ALL PERSONS INCLUDING TRUST HAVING INCOME/LOSS BELOW RS.5LACS. AS PER THIS COMPILATION WARD - 2(3) WAS AS SIGNED WITH THE CASES FALLING IN ALPHABETS A TO M . ON THE OTHER HAND, RANGE - 5 WAS HAVING A DISTINCT TERRITORIAL JURISDICTION . HE HAS INFORMED THAT WARD5(1) WAS IN RESPECT OF ALL THE ALPHABETS ; BUT THE TERRITORIAL JURISDICTION WAS INCLUSIVE OF THE AREA KNOWN AS WADI. AS PER THIS JURISDICTION CHART WARD - 5(2) HAS THE JURISDICTION ON ALL THE ALPHABETS INCLUDING THE AREA FALLING UNDER AMDAWADI POLE . THE IMPUGNED ASSESSMENT WAS MADE BY ITO WARD - 2(3) WH ICH ACCORDING TO HIS ARGUMENT WAS BEYOND JURISDICTION. LEARNED AR HAS PLACED RELIANCE ON AN ORDER OF ITAT LUCKNOW BENCH PRONOUNCED IN THE CASE OF MI BUILDERS (P) LTD. REPORTED AS 117 TTJ 42 (LUCKNOW) WHEREIN IT WAS HELD THAT THE RE - ASSESSMENT PROCEEDING HA VING BEEN INITIATED BY THE AO WHO DID NOT HAVE JURISDICTION OVER THE ASSESSEE WAS AN INVALID JUDGMENT IN THE EYES OF LAW. HE HAS SUMMARIZED THAT WHEN THE NOTICE U/S.148 WAS ISSUED BY ITO WARD - 5(1) BARODA AND THE REASONS FOR REOPENING OF THE ASSESSMENT WAS RECORDED BY ITO WARD - 5, BARODA THEN WHY THE ASSESSMENT WAS MADE BY ITO WARD - 2(3) BARODA. ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 5 - 3. FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., MRS. SONIA KUMAR AND LEARNED CIT - DR, MR. VIMALENDU VERMA APPEARED AND PLACE D RELIANCE ON A PAPER BOOK FILED FROM T HE SIDE OF THE REVENUE DEPARTMENT . LD. DR HAS DRAWN OUR ATTENTION ON A LETTER DATED 2/4/2007, RELEVANT PORTION REPRODUCED BELOW: NO.BRD/WD.2(3)/RR/MSPET/06 - 07 OFFICE OF THE INCOME TAX OFFICER, WARD - 2(3) BARODA. DATE : 02/04/2007 T HE COMMISSIONER OF INCOME - TAX (APPEALS) - II, BARODA. (THROUGH: THE ADDL.CIT, RANGE - 2, BARODA) SIR, SUB: APPELLATE PROCEEDINGS IN THE CASE OF M.S. PATEL EDUCATION TRUST ASSESSMENT YEAR 1998 - 99 - APPEAL NO.CAB/II - 140/06 - 07 REPORT REGARDING KINDLY REF ER TO YOUR LETTER NO.BRD/C IT (A) - II/REM.REPORT/2006 - 2007 DATED 22/02/2007 ON THE ABOVE SUBJECT. 2. IN THE ABOVE CASE, RETURN OF INCOME WAS FILED ON 31/10/1998 DECLARING NIL INCOME CLAIMING EXEMPTION U/S. 11 AND 12 OF THE ACT. THE SAME WAS PROCESSED U/S.143(1)(A) AND REFUND OF 5,12,640/ - WAS ISSUED ON 15/3/1999. THE CASE WAS RE - OPENED U/S 147 AS A RESULT OF REVENUE AUDIT OBJECTION. NOTICE U/S. 148 WAS ISSUED AND SERVED UPON THE ASSESSEE ON 18/08/2004 AFTER RECORDING REASONS FOR THE SAME WHICH WAS DULY APPROVED BY THE ADDL.CIT, RANGE - 5, BARODA U/S .1 51(2). IN RESPONSE TO THE NOTICE U/S. 148, RETURN OF INCOME WAS FILED ON 31/01/2006 DECLARING TOTAL INCOME AT RS.NIL. THEREAFTER, NOTICES U/S.142(1) CALLING FOR CERTAIN DETAILS WAS ISSUED ON 14/11/2005 AND 16 /11/2006 BUT THE ASSESSEE DID NOT COMPLY WITH THE SAME. ANOTHER NOTICE U/S. 1 42(L) WAS ISSUED ON 24/02/2006 BUT ONCE AGAIN NOBODY ATTENDED NOR ANY ADJOURNMENT WAS SOUGHT. ONE MORE NOTICE U/S.142(1) WAS ISSUED ON 09/03/2007 BUT AGAIN THE ASSESSEE DID NOT ATT END. AT LAST, SINCE THE MATTER WAS GETTING TIME BARRED, SHOW - CAUSE NOTICE FOR ASSESSMENT U/S.144 WAS ISSUED ON 17/03/2006 FIXING HEARING ON 21/3/2006. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUESTED TO PRODUCE BOOKS OF ACCOUNT BUT THE ASSESSEE FAILED TO PRODUCE THE SAME. HENCE THE ASSESSMENT WAS FINALIZED U/S. 144 OF THE ACT. ? ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 6 - 2.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS HELD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR EXEMPTION AVAILABLE U/S. 11 AND 12 OF THE ACT AS THE AS SESSEE TRUST WAS HELD TO HAVE ADVANCED AN AMOUNT OF RS.3,05,11,293/ - WITHOUT ADEQUATE SECURITY OR ADEQUATE INTEREST TO SHRI ANUJ PATEL , HARSH PATEL AND UTKARSH PATEL, WHO WERE THE GRAND SONS' OF THE AUTHOR/FOUNDER OF THE TRUST - SHRI MAGANBHAI SHANKARBHAI PA TEL, AND WHO WERE THE PERSONS; COVERED BY PROVISIONS OF THE SECTION 13(3) OF THE ACT. ACCORDINGLY, THE ASSESSEE TRUST WAS HELD TO HAVE VIOLATED THE PROVISIONS OF SECTION 13(2)(A) OF THE ACT HENCE, THE ASSESSEE TRUST WAS HELD NOT TO BE ELIGIBLE FOR THE EXEM PTION U/S. 11 AND 12 OF THE ACT AND ENTIRE INCOME OF THE ASSESSEE TRUST WAS LIABLE FOR TAX IN TERMS OF PROVISIONS OF SECTION 13( 1 )(D) . ACCORDINGLY, ASSESSMENT U/S. 144 R.W.S.148 WAS COMPLETED DETERMINING TOTAL INCOME AT RS.3,21,17,440/ - . HOWEVER , THROUGH O VERSIGHT THE EXPENDITURE AS PER THE INCOME AND EXPENDITURE ACCOUNT OF RS.17,04,024/ - WAS DEDUCTED FROM THE TOTAL INCOME OF THE ASSESSEE THOUGH IN THE BODY OF THE ORDER IT WAS CLEARLY HELD THAT THE ASSESSEE TRUST WAS NOT ELIGIBLE FOR EXEMPTION U/S.11 AND 12 OF THE ACT SINCE IT WAS A MISTAKE APPARENT FROM THE RECORDS, THE SAME WAS RECTIFIED BY PASSING ORDER U/S.154 DETERMINING TOTAL INCOME AT RS.3,38,21,563/ - AFTER GIVING AN OPPORTUNITY OF BEING HEARD. 3. THE FIRST GROUND OF APPEAL IS REGARDING ISSUANCE OF N OTICE U/S.148 BY THE ITO, WARD - 5(L) WITHOUT JURISDICTION. IN THIS REGARD IT IS SUBMITTED THAT THE ASSESSEE TRUST HAS FILED ITS RETURN OF INCOME FOR THE AY 1998 - 99 WITH THE ERSTWHILE ITO, WARD - 2(L), BARODA ON 31/10/1998. AFTER RESTRUCTURING OF THE DEPARTMEN T, THE JURISDICTION OF THE ERSTWHILE RANGE - 2, BARODA WAS RE - DESIGNATED AS JURISDICTION OF RANGE - 5, BARODA. BEFORE RESTRUCTURING, THE JURISDICTION OF THE TRUST ASSESSEES WERE LYING EXCLUSIVELY WITH RANGE - 2, BARODA. AFTER RESTRUCTURING, IN THE INITIAL PERIOD OF FEW YEARS, THE SAME CONTINUED WITH RANGE - 2, BARODA UNDER THE PRESUMPTION THAT THE TRUST ASSESSEES WERE STILL HAVING CENTRALIZED JURISDICTION IN RANGE - 2, BARODA, ALTHOUGH SUCH TRUST CASES WERE HAVING DIFFERENT TERRITORIAL JURISDICTION. SINCE, JURISDICTI ON ORDER AFTER RESTRUCTURING DID NOT MENTION ANYTHING ABOUT CENTRALIZED JURISDICTION OF TRUST CASES, THE JURISDICTION OF TRUST CASES AUTOMATICALLY RESTS WITH THE CONCERNED TERRITORIAL ASSESSING OFFICER. ACCORDINGLY, AFTER ISSUE OF NOTICE U/S.148 OF THE ACT , THE CASE OF THE ASSESSEE TRUST WAS TRANSFERRED TO THE ITO, WD - 2(3), BARODA WHO WAS HAVING TERRITORIAL JURISDICTION OVER THE CASE. 3.1 MOREOVER, IT IS SIGNIFICANT TO MENTION HERE THAT THE ASSESSEE DID NOT TAKE ANY OBJECTION TO THE ISSUANCE OF NOTIC E U/S.148 BY THE ITO WARD - 5(L), BARODA AND HAD FILED THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.148 IN THE OFFICE OF THE ADDL.CIT, RANGE - 5, BARODA. ALSO, NO OBJECTION WAS RAISED EVEN AGAINST THE REASSESSMENT PROCEEDINGS BY THE ITO, WARD - 2(3), BARODA DURING THE COURSE OF THE REASSESSMENT PROCEEDINGS. IN VIEW OF THE ABOVE, THE ASSESSE'S ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 7 - PLEA THAT THE ISSUANCE OF NOTICE U/S.148 OF THE ACT, BY THE ITO, WARD - 5(L), BARODA WAS WITHOUT JURISDICTION IS AN AFTERTHOUGHT AND THEREFORE UNTENABLE. SUBMIT TED FOR KIND PERUSAL YOURS FAITHFULLY, SD/ - (RAKESH RANA) INCOME - TAX OFFICER, WARD - 2(3) BARODA. 3.1 OUR ATTENTION H A S A LSO BEEN DRAWN ON A LETTER DATED 14.11.2011, AND THE RELEVANT PORTION IS REPRODUCED BELOW: OFFICE OF THE INCOME - TAX OFFICE R , WARD - 2(3 ) ROOM NO.206, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA PHONE : [phone] NO.BRD/ITO/WD.2()3) - MAGANBHAI SANKARBHAI PATEL/2011 - 12 DATE : 14/11/2011 TO, THE ADDL.COMMISSIONER OF INCOME - TAX, RANGE - 2, BARODA. SIR, SUB: - APPEAL IN THE CASE OF MAGANBHAI SANKARBHAI PATEL EDUCATION TRUST, - A.Y.1998 - 99 - ITA NO. 4439/AHD/ 2007 - REG. - REF: - LETTER OF THE CIT - IV, ITAT, D - BENCH, A'BAD VIDE NO. CIT(ITAT) - IV/ MAGANBHAI SANKARBHAI PATEL/ 2011 - 12 DATE: 11/10/2011 PLEASE REFER TO THE ABOVE. 2. IT IS VERIFIED FROM THE CASE RECORDS THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR THE A.Y. 1998 - 99 ON 31.10.1998/ VIDE ACK. NO.03375 AND PROCESSED U/S.143(L)(A) ON 15.11.1999 BY THE ITO, WARD - 2(L), BARODA PRIOR TO CADRE RE - STRUCTURING OF THE INCOME - TAX DEPARTMENT. TH ERE AFTER THE CASE WAS TRANSFER TO THE ITO, WARD - 5(1), BARODA NO TRANSFER MEMO IS AVAILABLE BECAUSE MATTER IS VERY OLD. ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 8 - 3. THE CASE WAS REVIEWED BY THE AG AUDIT PARTY FOR THE REVIEW OF ASSETS, OF PVT. SCHOOL/COLLEGE/COACHING CLASSES VIDE HM NO. ITRA/REV/ ED. INST/48 DATED 26.02.2003 ISSUED TO THE ITO, WD. 5(1), BARODA (COPY ENCLOSED). 4. THE ITO WARD - 5(L), BARODA HAS REQUESTED TO THE ADDL.CIT, RANGE - 5, BARODA FOR THE APPROVAL U/S.!51(2) OF THE IT ACT. IN THIS CASE VIDE HIS LETTER NO. BRD/WD.5(L)/151/04 - 05 DATED 22.06.2004 ALONG WITH ITNS 10 AND REFERENCE OF THE LETTER OF THE CIT - III, BARODA HAS APPROVED THE REMEDIAL ACTION U/S.147 OF THE ACT. DATED 18.06.2004, AND RETURN INCOME FOR THE SAME WAS FILED ON DATED 31.01.2006 TO THE ITO, WARD - 5(L), BARODA VIDE A CK. NO. 3512010678. (COPY ENCLOSED) 5. THE ADDL.CIT, RANGE - 5, BARODA HAS APPROVED THE ABOVE SAID PROPOSAL OF THE ITO, WARD - 5(L), BARODA VIDE HIS LETTER NO. BRD/ADDL.CIT/R - 5/APPR. U/S.151(2)/04 - 05 DATED 18.08.2004(COPY ENCLOSED). ACCORDINGLY NOTICE U/S.14 8 OF THE IT ACT. ISSUED BY THE ITO, WARD - 5(1), BARODA ON 18.08.2004 AND STARTED THE ASSESSMENT PROCEEDINGS AND CASE RECORDS TRANSFERRED TO THE ITO, WARD - 2(3), BARODA HAVING THE CURRENT JURISDICTION OF THE ASSESSEE. SUBMITTED FOR KIND PERUSAL. YOURS FAITHFULLY, SD/ - (H.M. MEENA) INCOME - TAX OFFICER, WARD - 2(3) BARODA. 3.2 LEARNED SR.D.R. HAS ALSO PLACED BEFORE US A JURISDICTION CHART IN THE FORM OF AN OFFICE O RDER DATED 19 TH AUGUST, 2001 ACCORDING TO WHICH THE ASSESSEE S CASE WAS WITH OLD WARD - 2(1) BU T LATER ON IT WAS DECLARED AS WARD - 5(1), BARODA AS PER THE ORDER OF THE CONCERNED OFFICER. HE HAS VEHEMENTLY PLEADED THAT A S PER THE SAID ORDER THE JURISDICTION OF WARD - 2(1) HAD BECOME THE JURISDICTION OF WARD - 5(1). LIKEWISE OLD WARD - 2(3) HAS BEEN DESIGNAT ED AS WARD - 5(3), BARODA JURISDICTION ORDER U/S.120 DATED 1.8.2001 IS ALSO PLACED BEFORE US, AS UNDER: NO.BRD/ ADDL.CIT/R - 2/JURIS/2001 - 2002/01 OFFICE OF THE ADDL.COMMISSIONER OF INCOME TAX BARODA, RANGE - 2, BARODA. ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 9 - DATE : 0 1 /0 8 /200 1 JURISDICTION ORDER UNDER SECTION 120 OF THE INCOME - TAX ACT. 1961. IN EXERCISE OF THE POWERS CONFERRED BY SUB - SECTIONS (1) AND (5) OF SECTION 120 OF THE INCOME - TAX ACT, 1961 (43 OF L961) AND IN TERMS OF NOTIFICATION S.O.NO.732(E) NOTIFICATION NO. 228 F. NO.187/5/2001 - ITA - I/ 405) DATED 31.7.2001 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES UNDER SUB - SECTIONS (1) AND (2) OF SECTION 120 OF THE I.T. ACT, 1961 AND IN TERMS OF ORDER NO. 01 OF 2001 - 2002 DATED 31.7.2001 ISSUED BY THE CHIEF COMMISSIONERS OF INCOME - TAX OF GUJARAT REGION AND THE DIRECTOR GENERAL OF INCOME - TAX (INVESTIGATION), GUJARAT, AHMEDABAD AND ORDER NO. BRD/CIT - I/2001 - 02/1 DATED 1.8.2001 ISSUED BY THE COMMISSIONER OF INCOME - TAX, BARODA - 1, BARODA UNDER SUB - SECTION (1) OF SECTION 120 OF THE INCOME - TAX ACT, 1961, IN THIS BEHALF AND IN SUPERSESSION OF ALL PREVIOUS ORDERS/NOTIFICATIONS ON THIS SUBJECT EXCLUDING ORDERS U/S 127 OF THE INCOME - TAX ACT, 1961, ASSIGNING JURISDICTION OVER ANY CASE TO CENTRAL CIRCLES, I, THE ADDITIONAL/JOINT COMMISSIONER OF IN COME - TAX, | BARODA RANGE - X BARODA HEREBY DIRECT MAT THE DEPUTY/ASSISTANT COMMISSIONER OF INCOME - TAX, INCOME - TAX F OFFICERS AND! TAX RECOVERY OFFICERS WITH HEADQUARTERS MENTIONED IN COLUMN NOS. 2 AND 3 RESPECTIVELY OF THE | SCHEDULE ATTACHED HEREWITH SHALL EXERCISE AND PERFORM, CONCURRENTLY ALL THE POWERS AND FUNCTIONS OF ASSESSING OFFICER UNDER THE INCOME - TAX ACT, 1961 (43 OF 1961) IN RESPECT OF SUCH AREAS, PERSONS OR CLASSES OF PERSONS, CASES OR CLASSES OF CASES FOR WHICH I HAVE BEEN AUTHORISED TO EXERCISE TILE POWERS AND TO PERFORM THE FUNCTIONS AS SPECIFIED IN THE ENTRIES IN COLUMN NOS. 3, 4 & 3 RESPECTIVELY OF THE SCHEDULE TO THE ORDER NO. BRD/CIT - I/2001 - 02/1 DATED 1 - 8 - 2001 ISSUED BY THE COMM ISSIONER OF INCOME - TAX, BARODA - 1, BARODA AND IN RESPECT OF JI LL INCOMES OR CLASSES OF INCOME EXCEPT IN RESPECT OF SUCH CASES ASSESSED/ASSESSABLE UNDER THE JURISDICTION OF DIRECTOR OF INCOME - TAX (EXEMPTION )/ COMMISSIONER OF INCOME - TAX (CIB) OR SUCH CASES, AS ARE HEREAFTER ASSIGNED UNDER SECTION 127 OF THE INCOME - TAX A CT, 1961, TO ANY OTHER INCOME - TAX AUTHORITY, AND FURTHER DIRECT THAT THE TAX RECOVERY OFFICER MENTIONED IN COLUMN 2 OF THE SCHEDULE SHALL ALSO EXERCISE POWERS OF THE TAX RECOVERY OFFICER AS PER CHAPTER XVIID OF THE INCOME - TAX ACT, 1961 READ WITH SECOND SC HEDULE THERETO IN RESPECT OF ALL PERSONS OR CLASSES OF PERSONS, CASES OR CLASSES OF CASES FALLING WITHIN MY JURISDICTION. ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 10 - THIS ORDER SHALL TAKE EFFECT FROM 01 - 08 - 2001. SD/ - (ASHA AGARWAL) ADDL.COMMISISONER OF INCOME - TAX BARODA RANGE - 2, BARODA. BECAUSE OF THE CHANGE IN THE JURISDICTION THE NOTICES WERE EARLIER ISSUED BY ITO, WARD - 5(1) BUT THE ASSESSMENT WAS MADE BY ITO, WARD - 2(3) , BARODA . HE HAS THEREFORE CONTESTED THAT THERE WAS NO BASIS TO CHALLENGE THE JURISDICTION BY THE ASSESSEE. LEARNED SR.D.R. HA S ALSO RAISED DOUBT ABOUT THE AUTHENTICITY OF THE JURISDICTION CHART FILED BY THE ASSESSEE. ACCORDING TO HIM, THE JURISDICTION CHART AS FURNISHED FROM THE SIDE OF THE REVENUE DEPTT. I S AN AUTHENTIC DOCUMENT FILED IN THE COMPILATION, WHICH SHOULD BE GIVEN C REDENCE. 4. BEFORE WE PROCEED HEREINBELOW TO DECIDE THE ISSUE INVOLVED IT IS WORTH TO MENTION THAT ALL THESE APPEALS ARE VERY OLD APPEALS PENDING SINCE 2007. ON THE QUESTION OF JURISDICTION WE HAVE NOTED THAT SINCE PAST SO MANY YEARS BOTH THE SIDES ARE RAISING RIVAL CONTENTIONS CHALLENGING THE RESPECTIVE EVIDENCES PRODUCED BY THEM. THEREFORE, WE ARE OF THE VIEW THAT SUFFICIENT OPPORTUNITIES HAVE ALREADY BEEN GRANTED AND NOW THE TIME HAS COME TO TAKE A DECISION ON THE BASIS OF THE EVIDENCES ON RECORD. 4. 1 WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. A SERIOUS QUESTION HAS BEEN RAISED THAT WHY THE REASONS WERE RECORDED AND NOTICE FOR REOPENING U/S.148 WERE ISSUED BY ITO, WARD - 5(1), BARODA, BUT THE ASSESSMENT WAS MADE U/S.144/148 BY ITO, WARD - 2(3), BARODA. WE HAVE ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 11 - PERUSED THE JURISDICTION CHART S AS PLACED BY BOTH THE SIDES. THESE TWO JURISDICTION CHARTS HAVE TWO DISTINCT JURISDICTION IN RESPECT OF THE TAX PAYERS FALLING WITHIN THE TERRITORY AS ASSIGNED IN THOSE CHARGES . A CCORDING TO US IT IS NOT POSSIBLE TH AT FOR ONE PARTICULAR TERRITORIAL JURISDICTION TWO REVENUE OFFICERS COULD HAVE THE JURISDICTION TO ASSESS THOSE TAX PAYERS. OUT OF THESE TWO CONFLICTING JURISDICTION CHARTS ONLY ONE SHOULD BE CORRECT. WHEN WE HAVE RAISED THIS QUESTION DURING THE COURSE OF HEARING THEN A PROBABILITY WAS EXPRESSED THAT THE PERIOD OF IMPLEMENTATION OF THE JURISDICTION CHART COULD BE DIFFERENT. HOWEVER, SPECIFIC PERIOD OF IMPLEMENTATION OF THE JURISDICTION WAS NOT INFORMED TO US. THERE IS ONE MORE QUESTION WHICH WAS RAISED ABOU T CORRECTNESS AND VERACITY OF THE JURISDICTION CHART FURNISHED BY THE ASSESSEE. LEARNED A.R. HAS MENTIONED THAT THE SAME WAS ISSUED BY THE CHARTERED ACCOUNTANT ASSOCIATION. THE BENCH WANTED TO SEE THE ORIGINAL COPY OF THE SAID COMPILATION OF JURISDICTION B UT THAT WAS NOT PRODUCED. WE, THEREFORE, CONSIDER IT NECESSARY THAT THE AUTHENTICITY OF THE JURISDICTION CHART AS RELIED UPON BY THE ASSESSEE SHOULD BE VERIFIED. SIDE BY SIDE THE DETAILS IN RESPECT OF JURISDICTION AS FURNISHED BY LEARNED D R CAN ALSO BE VER IFIED FROM THE RECORD AVAILABLE WITH THE REVENUE DEPARTMENT. SINCE, BEFORE US TWO CONTRADICTING STATEMENT S HAVE BEEN MADE ABOUT THE AREA OF JURISDICTION AND THE NAME OF THE ASSESSING OFFICER OF THIS ASSESSEE, THEREFORE, THIS CONTRADICTION CAN BE RESOLVED B Y EXAMINING THE OFFICE RECORDS OF THE REVENUE DEPARTMENT. THIS EXERCISE CAN BE UNDERTAKEN BY LEARNED CIT(A) BY SUMMONING THE JURISDICTION RECORDED OF THE REVENUE DEPARTMENT. IF HE FINDS THAT THE NOTICES FOR REOPENING AND THE REASONS FOR THE REOPENING WERE NOT IN LINE WITH THE OFFICER WHO HAS FINALLY PASSED THE ASSESSMENT ORDER THEN HE IS AT LIBERTY TO ACCEPT THE CLAIM OF THE ASSESSEE FOLLOWING ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 12 - THE CASE LAWS CITED HEREINABOVE. DUE TO THIS REASON, WE HEREBY RESTORE THIS LEGAL GROUND TO THE FILE OF THE LEARNED CIT(A) TO DECIDE AS DISCUSSED ABOVE. 5. REST OF THE GROUNDS ARE IN RESPECT OF QUANTUM ADDITION MADE AFTER REJECTING THE CLAIM OF EXEMPTION OF THIS TRUST. HOWEVER, WE REFRAIN TO DECIDE THE MERITS OF THE CASE BECAUSE IN ONE OF THE DECISION OF RESPECTED SPE CIAL BENCH PRONOUNCED IN THE CASE OF RAHUL KUMAR BAJAJ, 69 ITD 1, IT WAS HELD THAT IF AN ORDER IS HELD AS BAD IN LAW PASSED U/S.147/148 THEN THERE IS NO NECESSITY TO DECIDE THE REST OF THE GROUNDS ON MERITS ; HELD PORTION REPRODUCED BELOW: THE PURPOSE OF THE TRIBUNAL IS TO RENDER JUSTICE AND NOT TO NEGATE IT. IN THE INSTANT CASE IT WAS TRUE THAT THREE ISSUES WERE BEFORE THE TRIBUNAL. THE FIRST ISSUE, I.E., REOPENING OF ASSESSMENT, WAS THE PARAMOUNT/NODAL ISSUE AND THE OTHER TWO ISSUES WERE SUBSIDIARY/ALTER NATIVE ISSUES. THE FIRST ISSUE WAS ADMITTEDLY DECIDED BY THE TRIB8UNAL IN FAVOUR OF THE ASSESSEE. ONCE THE JURISDICTIONAL ISSUES WERE DECIDED IN FAVOUR OF THE ASSESSEE, THERE WAS NO REQUIREMENT/NECESSITY TO DECIDE THE OTHER ISSUES. EVEN OTHERWISE, THE TRIB UNAL HAD PROCEEDED TO DECIDE THE ALTERNATE ISSUE WITHOUT REFERRING TO THE WRITTEN SUBMISSIONS OF THE ASSESSEE. HAD THESE BEEN CONSIDERED PERHAPS THE ORDER OF THE TRIBUNAL WOULD HAVE BEEN DIFFERENT. 5.2 T HEREFORE WE DEEM IT PROPER NOT TO PROCEED TO DECIDE THE MERITS OF THE CASE UNLESS AND UNTIL THE ISSUE OF THE VALIDITY OF THE ORDER IN QUESTION IS RESOLVED. WITH THESE OBSERVATIONS, WE HEREBY RESTORED THE MATTER BACK TO THE FILE OF LEARNED CIT(A) TO BE DECIDED AS PER LAW. THESE BUNCH OF APPEALS HAVE THREE T YPES OF PROCEEDINGS INVOLVED. IN ONE SET OF APPEALS THE REOPENING PROCEEDINGS HAVE BEEN CHALLENGED. IN SECOND SET OF APPEALS THE PROCEEDINGS U/S.154 HAVE BEEN CHALLENGED. IN THE THIRD SET OF APPEALS THE PROCEEDINGS U/S.263 HAVE BEEN CHALLENGED. SINCE, WE A RE RESTORING THE REOPENING ISSUE BACK TO THE FILE OF THE FIRST APPELLATE ITA NO S . 3903, 3904, 3905/AHD/2007 & 4439/AHD/2007 & 640, 641, 642, 191 , 192/AHD/2008 & 2369/AHD/2009 & 2585, 2586, 2587/AHD/2010 MAGANBHAI SHANKARBHAI PATEL, FOR A.Y. A.Y.1998 - 99, 1999 - 00, 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05 2000 - 01 - 13 - AUTHORITY, THEREFORE, ACCORDING TO US REST OF THE APPEALS BEING EMANATED FROM REOPENING PROCEEDINGS ARE CONSEQUENTIAL IN NATURE TO BE DECIDED THEREAFTER. ONCE THE QUESTION OF THE JURI SDICTION IS RESOLVED THEN REST OF THE APPEALS SHALL BE DECIDED ACCORDINGLY AS PER LAW. 6. IN THE RESULT, ALL THE APPEALS EITHER FILED BY THE ASSESSEE OR BY THE REVENUE DEPARTMENT MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSE ONLY. SD/ - S D/ - ( ANIL CHATURV EDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 26 / 0 2 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD