ERAS KHADI GRAMODYOG UTPAKAK SAHAKARI SAMITI, Jaipur V. ITO, Jaipur

ITA 833/JPR/2013

• Counselvise Citation: 83323114 RSA 2013
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: S L PODDAR
• Keywords: Opportunity of being heard; Onus to prove; Capital expenditure
• Section: 144

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 833/JP/2013 (A.Y. 2009-10) PAN NO. AAATE 2105 L M/S. ERAS KHADI GRAMODYOG VS. THE ITO, WARD-6( 3), UTPADAK SAHAKARI SAMITI, JAIPUR. D-1/2, SARASWATI COLONY, TONK ROAD, JAIPUR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.L. PODDAR DEPARTMENT BY : SHRI D.C. SHARMA - D.R. DATE OF HEARING : 30/01/2014. DATE OF PRONOUNCEMENT : 31/01/2014. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 23/08/2013 OF LD. CIT(A) II, JAIPUR. THE FOLLOWIN G GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE ORDER PASSED BY THE LEARNED ASSESSING OFFICER U/S 144 OF THE INCOME 2 TAX ACT, 1961 IS BAD IN LAW VOID AB-INITO DESERVES TO BE QUASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LE ARNED ASSESSING OFFICER IN DISALLOWING EXEMPTION U/S 10(2 3B) OF THE INCOME TAX ACT, 1961 WITHOUT CONSIDERING THE SUBMIS SION OF THE ASSESSEE. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS. 21,7 3,046/- BY DISALLOWING THE CAPITAL EXPENDITURE ALLOWABLE TO A KHADI INDUSTRIES. 4. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. 2 DURING THE COURSE OF HEARING, GROUND NO.1 WAS NOT PRESSED. ACCORDINGLY IT IS DISMISSED AS NOT PRESSED. THE REM AINING GROUNDS RELATE TO THE DISALLOWANCE OF EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 10(23B) OF THE I.T. ACT, 1961 (HEREIN AFTER REFERRED TO AS ACT, IN SHORT). 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED E RETURN OF INCOME DECLARING NIL INCOME ON 30/09/2009 . LATER ON, CASE WAS SELECTED FOR SCRUTINY. SINCE THE ASSESSEE ACTED IN UTTER DISREGARD OF ITS STATUTORY APPLICATION BY NOT ATTEN DING IN THE ASSESSMENT PROCEEDINGS DESPITE OF SERVICE OF NOTICE UNDER SECTION 143(2)/142(1) OF THE ACT, THEREFORE, THE AO FRAMED THE 3 ASSESSMENT UNDER SECTION 144 OF THE ACT AND ASSESSE D INCOME AT RS. 27,27,740/- IN THE FOLLOWING MANNER:- NP AS PER FORM NO. 3CB AND RETURN RS. 1,41,802/- ADD: INTEREST ON FDR AS DISCUSSED RS. 4,12,889/- EXP. OF CAPITAL NATURE DISALLOWED RS. 21,73,046/- ---------------- RS. 27,27,737/- TOTAL INCOME R/O RS. 27,27,740/- ------------------ 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A), WHO ALSO CONFIRMED THE ACTION OF THE AO BY OBSERVING IN PARA 2.5 OF THE IMPUGNED ORDER AS UNDER:- 2.5 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSE SSMENT ORDER AND APPELLANTS WRITTEN SUBMISSION. ASSESSIN G OFFICER DID NOT ALLOW EXEMPTION UNDER SECTION 10(23B) OF THE GROUND THAT THE BOOKS OF ACCOUNT AND DETAILS HAVE NOT BEEN PRODUCED FOR VERIFICATION DESPITE SPECIFIC REQUIREMENT MADE AND OPPORTUNITIES GIVEN. IT IS ALSO MENTIONED BY THE AO THAT IT HAS NOT BEEN FEASIBLE TO VERIFY WHETHER THE CONDITIONS PRESCRIBED IN SEC. 10(23B) ARE FULFILLED BY THE ASSESSEE OR NOT. IT HAS NOT BEEN POSSIBLE TO VERIFY WHETHER THE INSTITUTION IS EXISTING SOLELY FOR DEVE LOPMENT OF KHADI OR VILLAGE INDUSTRIES AND NOT FOR PURPOSE OF PROFIT . IT IS ALSO NOT CLEAR WHETHER THE KHADI AND VILLAGE INDUSTRIES COMM ISSION HAD GRANTED APPROVAL TO THE INSTITUTION FOR THE PURPOSE OF SEC. 10(23B) AND WHEN IT WAS GRANTED AND FOR WHICH PERIOD IT WAS GRANTED AND WHETHER ANY SUCH APPROVAL HAS BEEN WITHDRAWN BY THE COMMISSION. CONSIDERING ALL THESE FACTS ASSESSING OFFICER DID NOT ALLOW THE EXEMPTION CLAIMED BY THE APPELLANT. 4 THE SUBMISSIONS RECEIVED FROM THE APPELLANT DURING APPEAL PROCEEDINGS WERE FORWARDED TO THE AO FOR REMAND REP ORT. IN THE REMAND REPORT ALSO ASSESSING OFFICER MENTIONED THAT APPELLANT FAILED TO PRODUCE BOOKS OF ACCOUNT AND DETAILS FOR VERIFICATION AND THEREFORE IT COULD NOT BE VERIFIED BY THE AO WHETHE R APPELLANT IS ENTITLED FOR THE EXEMPTION. IN THE REJOINDER, APPE LLANT ONLY SUBMITTED THAT ASSESSING OFFICER DID NOT SPECIFICAL LY DISALLOW THE EXEMPTION AND THAT AO COULD HAVE CALLED FOR THE AUT HORIZED PERSON FOR VERIFICATION OF BOOKS. CONSIDERING ALL THESE F ACTS, IT IS CLEAR THAT APPELLANT DID NOT DISCHARGE ITS ONUS TO PROVE THAT IT WAS ELIGIBLE FOR EXEMPTION UNDER SECTION 10(23B). WHEN ANY ASSESSEE CLAIMS ANY EXEMPTION, ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THAT ALL THE CONDITIONS AND REQUIREMENTS FOR SUCH EXEMPTION ARE FULFILLED. SINCE APPELLANT DID NOT MEET THE OBJECTIONS RAISED BY THE ASSESSING OFFICER, IT IS NOT ENTITLED FOR EXEMPTION. ACCORDI NGLY THE ASSESSING OFFICER IS JUSTIFIED IN NOT ALLOWING THE CLAIM OF E XEMPTION UNDER SECTION 10(23B). THIS GROUND IS ACCORDINGLY DISMIS SED. NOW THE ASSESSEE IS IN APPEAL. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NE ITHER AO NOR LD. CIT(A) HAD APPRECIATED THE FACTS IN RIGHT P ERSPECTIVE WHILE DISALLOWING THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 10(23B) OF THE ACT. 6 . IN HIS RIVAL SUBMISSIONS, LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE EXEMPTION CLA IMED BY THE ASSESSEE UNDER SECTION 10(23B) OF THE ACT WAS NOT G RANTED BY THE 5 AO FOR THE REASONS THAT THE BOOKS OF ACCOUNTS FOR V ERIFICATION OF THE INCOME WERE NOT PRODUCED BY THE ASSESSEE, THE L D. CIT(A) ALSO CONFIRMED THE ACTION OF THE AO FOR THE SAME REASONI NG. THE CLAIM OF THE ASSESSEE WAS THAT THE AO DID NOT CALL FOR AN Y AUTHORIZED PERSON FOR VERIFICATION OF BOOKS OF ACCOUNTS. WE, T HEREFORE, DEEM IT APPROPRIATE TO REMAND THIS ISSUE BACK TO THE FIL E OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 31 ST JANUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST JANUARY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R BY ORDER ASSISTANT REGISTRAR, ITAT, JAIPUR.