Cane Development Council, Bulandshahar, Gorakhpur V. Addl. CIT, Uttar Pradesh

ITA 6709/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3775 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR RAM SAMUJH
• Keywords: Validity of assessment; Competent authority
• Section: 143(3)

Judgement Text

ITA NO.6709/DEL/2014 ASSESSMENT YEAR: 2011 - 12 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B BENCH NEW DELHI) BEFORE SHRI P.K. BANSAL , VICE PRESIDENT & SHRI AMIT SHUKLA, JUDICIAL MEMBER IN ITA NO. 67 09 /DEL/2014 ASSESSMENT YEARS: 20 11 - 12 CANE DEVELOPMENT COUNCIL , BULANDSHAHAR, C/O D.S. KOHLI ADVOCATE, F - 06, 1 ST FLOOR, NARAYAN TOWER, GANDHI ASHRAM LANE, GOLGHAR, GORAKHPUR VS. ADDL.C . I . T . RANGE - BULANDSHAHAR, DISTT. BULANDSHAHAR, UTTAR PRADESH. (APPLICANT) (RESPONDENT) (PAN: A A BTC0537B ) ASSESSEE BY: DR. RAM SAMUJH, ADVOCATE REVENUE BY: SHRI ANSHU PRAKASH, SR. DR DATE OF HEARING 2 1 /09/2017 DATE OF PRONOUNCEMENT 31 / 1 0 /2017 ORDER PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 1 6 . 1 0.2014, PASSED BY THE LD. CIT (APPEALS), MEERUT FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE A.Y. 20 11 - 12 . IN THE GROUNDS OF APPEAL , ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1. THAT THE, ORDER UNDER APPEAL IS CONTRARY TO LAW AND FACTS OF THE CAS E. 2. THAT ON THE WHOLE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE L D. CIT(A) IS WITHOUT ALLOWING PROPER AND SUFFICIENT OPPORTUNITY OF BEING'; HEARD. PAGE 2 OF 6 3. THAT ON THE WHOLE FACTS AND CIRCUMSTANCES OF THE CASE AND MATERIALS ON RECORD, THE L D. 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 EXERCISED THE POWERS AND FUNCTIONS OF AN 'ASSESSING OFFICER' IN THE CASE WHEN HE IS NOT AN 'ASSESSING OFF ICER' IN THE CASE W I THIN THE MEANING OF SECTION 2(7A) OF THE IT ACT'1961, HENCE THE L D.CIT(A) IS NOT JUSTIFIED AND CORRECT IN DISMISSING THE APPEAL REJECTING THE GROUND TAKEN BY THE APPELLANT IN THIS RESPECT. 5. THAT THE REJECTION OF THE GROUND RELATING T O ASSUMPTION OF JURISDICTION OVER THE CASE, BY THE L D. 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 R ECORD, THE L D. 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 REGARD 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 L D. 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, UNJUST IFIED AND INCORRECT, HENCE THE L D. CIT (A) IS NOT JUSTIFIED AND 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. PAGE 3 OF 6 2. THE ASSESSEE IS A CANE DEVELOPMENT COUNCIL , WHICH IS COMPLETELY A GOVERNMENT BODY, ESTABLISHED U/S 5 OF UP SUGAR CANE (REGULATION OF SUPPLY & PURCHASE) AC T 1953 , BY THE ORDER OF CANE COMMISSIONER OF THE STATE OF U.P. UNDER RULE 8 OF U.P. SUGAR CANE (REGULATION OF SUPPLY & PURCHASE) RULES 1954. THE ASSESSEE ONLY CARRIES OUT ACTIVITIES IN THE AREA ASSIGNED BY THE CANE COMMISSIONER OF U.P. GOVERNMENT , WHICH IS CONSTRUCTION OF ROADS, CULVERTS , ETC . ON THE GOVERNMENT LAND AND THE CONSTRUCTED ROAD BELONGS TO THE STATE GOVERNMENT . THE ASSESSEE IS MAINLY A FUND MANAGEMENT BODY FOR THE FUNDS PLACED AT THEIR DISPOSAL FOR THE DEVELOPMENT OF THE SUGAR CANE AREA AND IT H AS NOT BEEN ESTABLISHED WITH ANY PROFIT E ARNING MOTIVE. THE FUND REQUIRED FOR EXECUTION OF FUND DEVELOPMENT WORK IS EITHER FROM THE GRANT GIVEN BY THE CENTRAL GOVERNMENT OR BY THE STATE GOVERNMENT CON TRIBUTION OR ANSHDAN FROM THE S UGAR M ILL OR THE C ANE GRO WERS COOPERATIVE S OCIETIES. THE ASSESSEE HAD SOUGHT EXEMPTION U/S 10(20) BEING GOVERNMENT BODY AND HAVING ADMINISTRATIVE CONTROL OF U.P. STATE. HOWEVER THE LD. ASSESSING OFFICER HELD THAT THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION U/S 10(20) , BECAUSE OF T HE E XPLANATION INSERTED WITH EFFECT FROM 1.4.2013 ; AND ACCORDINGLY , HE TAX ED THE SURPLUS OF RS. 65,69,560/ - . 3. BEFORE THE LD . CIT (APPEALS) THE ASSESSEE CHALLENGED THE JURISDICTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE JOINT COMMISSIONER OF INCOME TAX, RANGE BULANDSHAHAR HAS PASSED THE ASSESSMENT , WHO HAS NEITHER ISSUED ANY NOTICE U/S 143(2) NOR WAS EMPOWERED IN TERMS OF SE CTION 120(4) , TO ACT AS AN ASSESSING OFFICER IN ASSESSEE S CASE . THE LEARNED CIT (APPEALS) HAS REJECTED THE ASSESSEE S CONTENTION ON THE GROUND THAT THE ASSESSEE SHOULD HAVE CHALLENGED THE JURISDICTION WITHIN THE SCOPE AND TIME LIMIT OF SECTION 124(3)(A) ; AND SINCE THE ASSESSEE HAS NOT RAISED THE ISSUE OF JURISDICTION AT THE PAGE 4 OF 6 APPROPRIATE TIME, THEREFORE, THE ASSESSEE CANNOT RAISED THE ISSUE OF JURISDICTION AT THE FIRST APPELLATE STAGE. 4. BEFORE US THE ASSESSEE HAS FILED DETAILED WRITTEN SUBMISSIONS N OT ONLY ON THE ISSUE OF JURISDICTION BUT ALSO STRONGLY CONTENDING THAT THE LD . CIT(APPEALS) HAS NOT ADJUDICATED THE OTHER MATERIAL GROUNDS RAISED BEFORE HIM , BEING GROUND NO. 4, 5, 6, 7 AND 8 , W HEREBY THE ASSESSEE HAS CHALLENGED THE MERITS OF THE ADDITION. 4. ON THE OTHER HAND THE LD. DR STRONGLY RELIED UPON THE ORDER OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. MEGA CORPORATION LTD. IN ITA NO. 128/DEL/2016 JUDGMENT DATED 23.2.2017 , WHEREIN THE HON'BLE HIGH COURT HELD THAT THE ISSUE OF CHALLENGING THE JURISDICTION IN TERMS OF SECTION 120(4) SHOULD HAVE BEEN RAISED WITHIN THE STATUTORY TIME LIMIT PROVIDED U/S 124(3)(A) WHICH IS ONE MONTH FROM THE DATE OF SERVICE OF NOTICE. BESIDES THI S RELIANCE WAS ALSO PLACED UPON THE JUDGMENT OF HON'BLE M.P. HIGH COURT IN THE CASE OF SITA RATHOR VS. CIT , REPORTED IN 77 TAXMANN.COM 265. 5. WE HAVE HEARD THE LD. DR AND ALSO PERUSED THE RELEVANT MATERIAL REFERRED TO BEFORE US. HERE IN THIS CASE WE FIND THAT THE L D . CIT (APPEALS) HAS MERELY CONFINED HIS FINDING ON THE LEGAL ISSUE OF JURISDICTION OF JT. CIT TO ACT AS AN ASSESSING OFFICER AND NOT ON THE MERITS OF THE ADDITIONS MADE IN THE ASSESSMENT ORDER . HE HAS OBSERVED THAT THE ASSESSEE HAD NOT OFFERED ANY COMMENTS ON OTHER GROUNDS OF APPEAL AND THEREFORE , HE HAS ONLY ADJUDICATED THE GROUND RELATING TO CHALLENG E OF JURISDICTION OF THE ASSESSING OFFICER THAT HE WAS NOT AUTHORIZED TO ACT AS AN ASSESSING OFFICER BY THE COMPETENT AUTHORITY U/S 12 0(4). HOWEVER, BEFORE US THE ASSESSEE NOW IN THE WRITTEN SUBMISSION HAS SUBMITTED THAT THE ASSESSEE HAS NOT ONLY CHALLENGED THE VALIDITY OF ASSESSMENT BUT ALSO THE ISSUE RELATING TO MERITS OF THE PAGE 5 OF 6 ADDITION MADE BY THE ASSESSING OFFICER . WE ARE OF THE OPINIO N THAT IN THE INTEREST OF JUSTICE , THE ENTIRE MATTER SHOULD GO BACK TO THE FILE OF THE LD . CIT (APPEALS) WHO SHALL DECIDE ALL THE ISSUE AFRESH AFTER TAKING INTO CONSIDERATION ALL THE LEGAL ISSUES RAISED IN LIGHT OF THE JUDGMENT OF THE HON'BLE DELHI HIGH CO URT IN THE CASE OF PR. CIT VS. MEGA CORPORATION LTD. (SUPRA) AS RELIED UPON BY THE LD. SR. DR AND ALSO UPON MERITS OF THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, WE ARE SETTING ASIDE THE ENTIRE MATTER TO THE FILE OF THE LD . CIT (APPEALS) FOR A FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW AFTER GIVING DUE AND EFFECTIVE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CASE. 6 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 . 10 .2017. S D / - S D / - ( P.K. BANSAL ) (AMIT SHUKLA) VICE PRESIDENT JUDICIAL MEMBER DATED: 3 1 / 10 /2016 NARENDER COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI PAGE 6 OF 6 DATE 1. DRAFT DICTATED ON 26 .9.2017 2. DRAFT PLACED BEFORE AUTHOR 03 . 10 .2017 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 3 1 . 1 0 . 2 0 1 7 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 1 . 1 1 . 2 0 1 7 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.