State Pollution Control Board, Bhubaneswar V. ITO, Ward-5(2), Bhubaneswar

ITA 8/CTK/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4846 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-12-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 08-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K AGRAWALLA
• Keywords: Application of stay; Additional evidence; Benefit of exemption; Capital expenditure; Set aside
• Section: 143(3); 142(1); 40(a)(ia); 201; 143(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG , J M & SHRI L.P. SAHU, A M . / ITA NO.08/CTK/2018 AND . /STAY APPLICATION NO.12/CTK/2018 (ARISING OUT OF ITA NO.08/CT K/2018) ( / ASSESSMENT YEAR : 2014 - 2015 ) STATE POLLUTION CONTROL BOARD, PLOT NO.A - 118,PARIBESH BHAWAN , NILAKANTHA NAGAR, UNIT - VIII, NAYAPALLI, BHUBANESWAR - 751012 VS. ITO, WARD - 5(2), BHUBANESWAR - 751007 ./ PANNO. : A A ALS 2490 J ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI S.K.AGRAWALLA, AR /REVENUE BY : SHRI SUBHENDU DUTTA , DR / DATE OF HEARING : 25 /09/2019 / DATE OF PRONOUNCEMENT : 30 / 10 /2019 / O R D E R PER L.P.SAHU , A M : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2 , BHUBANESWAR , DATED 31.10.2017 FOR THE ASSESSMENT YEAR 2014 - 2015. THE ASSESSEE HAS ALSO FILED STAY PETITION SEEKING STAY OF OUTSTAN DING DEMAND OF RS. 20,74,92,600/ - . 2. LD. AR, AT THE OUTSET, SUBMITTED THAT APPEAL MAY BE HEARD AND DECIDED ALONG WITH THE STAY PETITION. ON THE OTHER HAND, LD. DR HAS NO OBJECTION TO THE ABOVE CONTENTION OF LD. AR. ACCORDINGLY, WITH THE CONSENT OF BOTH THE PARTIES APPEAL IS HEARD FINALLY. ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 2 3 . THE ASSESSEE IN ITS APPEAL HAS RAISED THE FOLLOWING GROUNDS : - 1. THAT, THE ASSESSMENT ORDER PASSED U/S 143(3) IS NOT SUSTAINABLE IN VIEW OF THE FACT THAT THE NOTICE U/S 143(2) WAS NOT ISSUED BY THE LD. ASSESSING O FFICER WHO HOLDS THE JURISDICTION OVER THE APPELLANT. THEREFORE THE ASSESSMENT ORDER IS LIABLE TO BE QUASHED. 2. THAT, THE LD. AUTHORITIES BELOW ARE NOT CORRECT IN TAXING THE AMOUNT OF RS.49,84,95,459 IN VIEW OF THE FACT THAT THE APPELLANT ENJOYS THE TA X BENEFITS U/S 10(46) OF THE ACT, MOREOVER THE TOTAL RECEIPTS OF RS.49,84,95,459 DOES NOT RELATES TO THE IMPUGNED ASSESSMENT YEAR. 3. THAT, THE LD. FORUMS BELOW HAS COMMITTED AN ERROR OF LAW IN MAKING ADDITIONS OF RS.2,00,00,000 U/S 40(A)(IA) OF THE ACT IN VIEW OF THE FACT THAT THE ADVANCES OF RS.2,00,00,000 GIVEN TO IDCO FOR CAPITAL EXPENDITURE, THEREFORE THE ADDITIONS OF RS.2,00,00,000 IS LIABLE TO BE DELETED. 4. THAT, THE APPELLANT CRAVES TO ALTER, AMEND, MODIFY OR ADD ANY OTHER GROUND THAT MAY BE CONSIDERED NECESSARY IN THE COURSE OF APPEAL PROCEEDING. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , ODISHA STATE PREVENTION AND CONTROL OF POLLUTION BOARD WAS CONSTITUTED IN PURSUANCE OF SUB - SECTION(L) OF SECTION - 4 OF THE WATER ( PREVENTION AND CONTROL OF POLLUTION) (AMENDMENT) ACT, 1974 VIDE NOTIFICATION NO.1481 - V II - HI - 11/83(VOL.LL) - S.T.E DTD. 15.07.1983 ISSUED BY DEPARTMENT OF SCIENCE, TECHNOLOGY AND ENVIRONMENT, GOVERNMENT OF ORISSA. THEREAFTER, THE BOARD WAS RE - DESIGNATED AS STATE POLLUTION C ONTROL BOARD, ODISHA VIDE NOTIFICATION NO.ENV - E(F)/8/89/1882.F & E DTD. 16.07.1999. THE FILED THE RETURN OF INCOME ON 27.03.2016 FOR THE ASSESSMENT YEAR 2014 - 2015 WITH TOTAL INCOME AT RS.NIL. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NO TICES U/S.143(2) AND 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE. IN COMPLIANCE THE AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND THE CASE WAS DISCUSSED. ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 3 ON PERUSAL OF THE RETURN OF INCOME, IT WAS SEEN BY THE AO THAT THE ASSESSEE AT COL. 5 (C) OF SCH EDULE - BP (COMPUTATION OF INCOME FROM BUSINESS OR PROFESSION) HAS CLAIMED EXEMPTION U/S.10(2) OF THE I. T. ACT, 1961 AMOUNTING TO RS.49,84,95,459/ - CONSIDERING IT AS A LOCAL AUTHORITY. THE AO ASKED THE ASSESSEE TO FURNISH THE EVIDENCE IN SUPPORT OF CLAIM O F EXEMPTION U/S.10(2) OF THE I. T. ACT, 1961. THE ASSESSEE VIDE REPLY DTD. 07.12.2016 STATED THAT EXEMPTION APPLICATION FILED BEFORE THE CIT, BHUBANESWAR U/S.10(46) OF THE ACT WHICH WAS PENDING AND THE ASSESSEE - STATE POLLUTION CONTROL BOARD IS A STATE GOVE RNMENT ORGANIZATION , WHICH IS NOT LIABLE FOR UNION TAXATION . THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT AFTER MAKING VARIOUS ADDITION S AND PASSED ORDER DATED 15.12.2016 . 5 . FEELING AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE APPEALED BEFORE THE CT(A) AND THE CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FINDINGS OF AO HAS DISMISSED THE APPEAL OF THE ASSESSEE. 6 . FURTHER FEELING AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL B EFORE THE INCOME TAX APPELLATE TRIBUNAL. 7 . LD. AR SUBMITTED ON THE GROUND NO.1 THAT THE CONCERNED ASSESSING OFFICER HAS NOT ISSUED NOTICE U/S.143(2) AND DOES NOT HOLD JURISDICTION ON THE ASSESSEE BEFORE HIM AS THE ASSESSEE - STATE POLLUTION CONTROL BOARD IS IN BHUBANESWAR . THEREFORE, THE ORDER PASSED BY THE ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 4 AO IS NOT TENABLE AND PRAYED FOR QUASHING THE ASSESSMENT ORDER. IN SUPPORT OF THE SAME, LD. AR RELIED ON THE FOLLOWING DECISIONS : - I. SH. RAM KUMAR VS. ITO, ITA NO.785/DEL/2016, ORDER DATED 17.02.2017 (DE LH TRIBUNAL) ; AND II. KALINGA INSTITUTE OF INDUSTRIAL TECHNOLOGY(KIT) VS. DCIT, W.P.(C)NO.898/2017, DATED 06.03.2019 (ODISHA HIGH COURT) IN RESPECT OF GROUND NO.2, LD. AR SUBMITTED THAT THE ASSESSEE COMPANY ENJOYS THE BENEFIT OF EXEMPTION U/S.10(46) OF THE ACT IN RESPECT OF RECEIPTS OF THE INSTITUTION AND ALSO IN THE PRESENT CASE THE RECEIPT DOES NOT RELATE TO IMPUGNED ASSESSMENT YEAR. LD. AR ALSO ARGUED THAT THE ASSESSING AUTHORITY HAS MADE ADDITION OF RS.2,00,00,000/ - IN RESPECT OF ADVANCES GIVEN TO ID CO TOWARDS CAPITAL EXPENDITURE AND WAS DISCLOSED AND ALSO FILED AN APPLICATION WITH A PRAYER FOR ADMISSION OF ADDITIONAL EVIDENCES FILED BEFORE US. 8 . ON THE OTHER HAND, LD. D R VEHEMENTLY OPPOSED TO THE ADMISSION OF ADDITIONAL EVIDENCES AS THEY ARE BEING F ILED FOR THE FIRST TIME BEFORE THE TRIBUNAL AND THE AO WAS DEPRIVED TO VERIFY THE SAME. LD. DR FURTHER SUBMITTED THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS ON 19.09.2016 FOR THE ASSESSMENT YEAR 2014 - 2015 AND THE JURISDICTIONAL ASSES SING OFFICER AT THAT TIME AS PER DATA BASE OF THE INCOME TAX DEPARTMENT WAS SHRI NIRANJAN BEHERA, ITO WARD - BHADRAK, BHADRAK. THEREAFTER THE ASSESSEE HIMSELF MADE APPLICATION BEARING NO.14620/I/ACCTS/38/2015 - 16, DATED 28.09.2016 FOR ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 5 TRANSFERRING THE CASE ST ATING THEREIN THAT THE ASSESSEE - STATE POLLUTION CONTROL BOARD, ODISHA, WHICH IS LOCATED AT PARIBESH BHAWAN, A/118, NILAKANTHA NAGAR, UNIT - VII, BHUBANESWAR - 751012 HAVING PANAAALS2490J IS UNDER THE CATEGORY OF LOCAL AUTHORITY , WHICH WAS RECEIVED BY THE INCOM E TAX DEPARTMENT ON 29.09.2016. THEREAFTER THE CASE WAS BEEN TRANSFERRED TO ITO, WARD - 5(2), BHUBANESWAR VIDE TRANSFER ORDER NO.200000213847, DATED 25.10.2016. IN THIS REGARD, LD.DR PLACED ON RECORD A SYSTEM GENERATED JURISDICTION HISTORY DETAILS. LD. DR A LSO SUBMITTED THAT THE ASSESSEE PARTICIPATED IN THE ASSESSMENT PROCEEDINGS AND DID NOT RAISE ANY QUESTION REGARDING JURISDICTION FOR ISSUING NOTICE U/S.143(2) OF THE ACT, EVEN IN THE APPE LLATE PROCEEDINGS NO GRIEVANCE WAS ALSO SOUGHT ON THIS GROUND , THEREF ORE, THE ASSESSEE IS NOT ENTITLED TO RAISE THIS ISSUE BEFORE THE TRIBUNAL. IN SUPPORT OF THIS, LD. DR RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. JAI PRAKASH SINGH [1996] 219 ITR 737 (SC) AND IN THE CASE OF CR FOODS (INDIA) (P.) LTD. VS. ITO [2012] 26 TAXMANN.COM 241 (ALL) . LD. DR ALSO SUBMITTED THAT THE CASE LAWS RELIED ON BY THE LD. AR OF THE ASSESSEE IS NOT APPLICABLE IN THE PRESENT CASE BECAUSE THERE WAS JURISDICTION OF ITO, BHADRAK WARD AT THE TIME OF ISSUANCE OF NOTICE U/S.1 43(2) OF THE ACT AS IS EVIDENT FROM THE SYSTEM DATA BASE OF THE INCOME TAX DEPARTMENT. EVEN IN RESPECT OF EXEMPTION U/S.10(46) THE ASSESSEE HAS MADE AN APPLICATION BEFORE THE CIT(A), BHUBANESWAR, WHICH RELATES TO ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 6 SUBSEQUENT YEARS, THEREFORE, THE ASSESSEES CASE DOES NOT HAVE ANY MERIT AND LIABLE TO BE DISMISSED. 9 . AFTER HEARING BOTH THE SIDES AND CAREFULLY PERUSING THE ENTIRE MATERIALS AVAILABLE ON RECORD AND THE ORDERS OF AUTHORITIES BELOW , PRIMA FACIE , O N THE GROUND OF NON - ISSUANCE OF NOTICE U/S.143(2) OF THE ACT , WHO HOLDS THE JURISDICTION OVER THE ASSESSEE AS ARGUED BY LD. AR, WE FIND THAT THE ASSESSEE IS A GOVERNMENT OF ODISHA UNDERTAKING NAMELY STATE POLLUTION CONTROL BOARD BEARING PAN NO.AAALS2490J, WHEREIN THE ADDRESS IS GIVEN AS STATE POLLUTION C ONTROL BOARD, PLOT NO.A - 118, PARIBESH BHAWAN, NILAKANTHA NAGAR, UNIT - VIII, NAYAPALLI, BHUBANESWAR - 751012 AND FILED RETURN OF INCOME FOR A.Y.2014 - 2015 ELECTRONICALLY SHOWING TOTAL INCOME AS NIL. FROM THE PAN DETAILS, IT IS CLEAR THAT THE JURISDICTIONAL AO O F THE ASSESSEE IS ITO, BHUBANESWAR. HOWEVER, WHEN THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY, THE ITO, BHADRAK WARD, BHADRAK ISSUED NOTICES U/S.143(2) & 142(1)OF THE ACT, DATED 19.09.2016. THEREAFTER ON REQUEST OF THE ASSESSEE THAT THE ITO BHADRAK WARD BHADRAK IS NOT THE JURISDICTIONAL AO OF THE ASSESSEE, THEREFORE, THE ITO BHADRAK VIDE LETTER DATED 17.10.2016 TRANSFERRED THE CASE STATING THAT THE JURISDICTION OF THE ASSESSEE LIES WITH THE ITO WARD - 5(2), BHUBANESWAR. DURING THE COURSE OF HEARING, WE ASKED THE LD.DR FOR FILING BASIC DATA OF THE ASSESSEE AT THE TIME OF FILING OF THE PAN. IN ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 7 REPLY, THE LD. DR PRODUCED CBN PAN DATA, WHICH IS PLACED ON RECORD AND THE SAME IS REPRODUCED AS UNDER : - 10. FROM THE ABOVE SCANNED DATA, IT IS CLEAR THAT WHILE APPLYING FOR PAN, THE ASSESSEE HAD MENTIONED CLEARLY HIS ADDRESS AS NOTED ABOVE OF BHUBANESWAR, THEREFORE, THE INCOME TAX DEPARTMENT HAS ALSO NOTED ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 8 THIS ADDRESS IN THE DATA BASE AND ALLOTTED PAN ACCORDINGLY. WE ALSO OBSERVE THAT THE LD. DR ALSO FILED DATA SUMMARY GENERATED FROM THE INCOME TAX WEBSITE IN WHICH THE JURISDICTION OF THE ASSESSEE HAS BEEN MENTIONED AS INCOME TAX OFFICER, BHADRAK AND THE NOTICE U/S.143(2) OF THE ACT HAS BEEN ISSUED BY THE ITO BHADRAK AT THE ADDRESS GIVEN IN THE PAN DATA. THE N OTICE ISSUED BY THE ITO BHADRAK READS AS UNDER : - ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 9 FURTHER WE NOTICED THAT WHEN THE ASSESSEE ASKED THE ITO BHADRAK WARD BHADRAK FOR TRANSFERRING THE CASE TO CONCERNED ITO BHUBANESWAR, THEN THE ITO BHADRAK HAS TRANSFERRED THE CASE OF THE ASSESSEE , COPY OF WHICH IS PLACED AT PAGER BOOK AT PAGE 23, STATING AS UNDER : - ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 10 11. FROM THE ABOVE IT IS CLEAR THAT THE ITO, BHADRAK WHEN ISSUED NOTICE TO THE ASSESSEE U/S.143(2) OF THE ACT ON 19.09.2016, THE ASSESSEE HE SHOULD HAVE TAKEN IN HIS COGNIZANCE THAT IF THE A DDRESS MENTIONED AT BHUBANESWAR WHICH IS NOT THE JURISDICTION OF THE ITO BHARDAK, HE SHOULD HAVE IMMEDIATELY INFORMED TO THE JURISDICTIONAL AO OF THE ASSESSEE RATHER ISSUING NOTICE U/S.143(2) & 142(1) OF THE ACT TO THE ASSESSEE. 12. IN THE TOTALITY OF FA CTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE OPINION THAT, THE INCOME TAX DATA BASE IS SHOWING THE JURISDICTIONAL AO OF THE ASSESSEE AT BHADRAK, HOWEVER, FROM THE PAN DATA BASE SHOWN BY ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 11 THE DEPARTMENT, THE JURISDICTIONAL AO OF THE ASSESSEE IS AT BHUBA NESWAR IN THE PAN DATA BASE WHICH IS PRIMARY INTERACTION WITH THE INCOME TAX DEPARTMENT . THEREFORE, WHY THE ASSESSEE SHOULD SUFFER THE MISTAKE OCCURRED ON THE PART OF THE INCOME TAX DEPARTMENT IN SPITE OF GIVING FULL AND TRUE INFORMATION TO THE DEPARTMENT. CONSIDERING THE ABOVE AND AS PER THE DATA OF THE INCOME TAX DEPARTMENT NOTICE MUST BE ISSUED BY THE JURISDICTIONAL AO BUT NOT BY THE ITO BHADRAK. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE CASE LAW RELIED ON BY THE LD.DR IS NOT APPLICABLE IN THE CASE IN HAND. THEREFORE, THE NOTICE ISSUED U/S.143(2) OF THE ACT IS BEYOND JURISDICTION OF THE AO, WHICH IS NOT SUSTAINABLE IN LAW AND, CONSEQUENTLY, THE ASSESSMENT ORDER PASSED BY THE AO IS HEREBY QUASHED. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE CIT(A) AND QUASHED THE ASSESSMENT ORDER DATED 15.12.2016 . THUS, THE LEGAL GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 13. AS WE HAVE DECIDED THE LEGAL GROUND RAISED BY THE ASSESSEE HOLDING THAT THE NOTICE U/S.143(2) OF THE ACT ISSUED BY THE AO, WHO DOES NOT HOLD THE JURISDICTION OVER THE ASSESSEE IS NOT SUSTAINABLE AND CONSEQUENTLY QUASHED THE ASSESSMENT ORDER PASSED BY THE AO, THEREFORE, OTHER GROUNDS RAISED BY THE ASSESSEE ON MERITS ARE NOT REQUIRED TO BE ADJUDICATED UPON BY US. ITA NO.08/CTK/2018 & SA NO.12/CTK/2018 12 14. THE AS SESSEE HAS FILED STAY PETITION FOR STAY OF DEMAND. AS WE HAVE HEARD AND DECIDED THE APPEAL OF THE ASSESSEE, THE STAY PETITION OF THE ASSESSEE HAS BECOME INFRUCTUOUS AND ACCORDINGLY IT IS DISMISSED. 15 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND S TAY PETITION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 / 10 / 201 9 . SD/ - ( C.M.GARG ) S D/ - ( L.P.SAHU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 30 / 10 /201 9 PRAKASH KUMAR MISHRA, SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - STATE POLLUTION CONTROL BOARD, PLOT NO.A - 118,PARIBESH BHAWAN NILAKANTHA NAGAR, UNIT - VIII, NAYAPALLI, BHUBANESWAR - 751 012 2. / THE RESPONDENT - ITO, WARD - 5(2), BHUBANESWAR - 751007 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY //