M/s. Cuddalore Market Committee, CHENNAI V. ITO, Cuddalore

ITA 887/CHNY/2012

• Counselvise Citation: 88721714 RSA 2012
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-07-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 20-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: S SRIDHAR
• Keywords: Retrospective amendment; Tangible material
• Section: 12AA; 263; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NOS. 887, 888, 889 & 890/MDS/2012 (ASSESSMENT YEARS : 2003-04 TO 2006-07) M/S CUDDALORE MARKET COMMITTEE, 1, JUDGE BUNGALOW ROAD, POST BOX NO.3, CUDDALORE DISTRICT - 607 001. PAN : AAAAC1620K (APPELLANT) V. THE INCOME TAX OFFICER, WARD I(1), CUDDALORE. (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE RESPONDENT BY : SHRI S. DASGUPTA, JCIT DATE OF HEARING : 26.07.2012 DATE OF PRONOUNCEMENT : 26.07.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THESE APPEALS FILED BY THE ASSESSEE, DIRECTED AGAINST A CONSOLIDATED ORDER DATED 31.1.2012 OF COMMISSIONER OF INCOME TAX (APPEALS)-XII, CHENNAI, ITS MAIN GRIEVANCE IS THAT THE CIT(APPEALS) HELD THE ASSESSEE TO BE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P AND/OR SECTION 12AA OF INCOME-TAX ACT, 1961 (IN SHO RT 'THE ACT'), FOR I.T.A. NOS. 887 TO 890/MDS/12 2 ASSESSMENT YEARS 2003-04 TO 2005-06. ASSESSEE IS A LSO AGGRIEVED ON THE RE-ASSESSMENT PROCEEDINGS, WHICH ACCORDING T O IT, WERE INITIATED WITHOUT ANY TANGIBLE MATERIAL. 2. LEARNED A.R., AT THE OUTSET, SUBMITTED THAT THER E WAS AN APPLICATION FILED BY THE ASSESSEE BEFORE CIT FOR GR ANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT ON 3.2.2006. LEARNED A.R. ALSO FILED A COPY OF THE LETTER DATED 16.6.2006 ISSUED BY INCOME TAX OFFICER (HEADQUARTERS), PONDICHERRY, WHICH REQUIRED THE ASS ESSEE TO EXPLAIN HOW IT BECAME ELIGIBLE FOR REGISTRATION UNDER SECTI ON 12AA OF THE ACT WITH REFERENCE TO APPLICATION FILED BY IT. LEARNED A.R. SUBMITTED THAT THIS APPLICATION WAS STILL PENDING. NEVERTHELESS, ACCORDING TO HIM, IN VIEW OF SUB-SECTION (2) TO SECTION 12AA OF THE ACT, CIT WAS DUTY BOUND TO PASS AN ORDER ON SUCH AN APPLICATION WITHI N SIX MONTHS FROM THE DATE OF THE APPLICATION AND IN VIEW OF THE DECI SION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF BHAGWAD SWARU P SHRI SHRI DEVRAHA BABA MEMORIAL SHRI HARI PARMARTH DHAM TRUST V. CIT (111 ITD 175), REGISTRATION HAD TO BE DEEMED AS GRANTED. AS FOR ASSESSEES CLAIM UNDER SECTION 10(20) OF THE ACT, I T WAS ADMITTED BY THE LEARNED A.R. THAT SUCH CLAIM WAS NOT TENABLE SI NCE IT COULD NOT BE TREATED AS A LOCAL AUTHORITY IN VIEW OF EXPLANATION TO SECTION 10(20) I.T.A. NOS. 887 TO 890/MDS/12 3 ADDED BY FINANCE ACT, 2002 WITH EFFECT FROM 1.4.200 3. HOWEVER, ACCORDING TO HIM, ASSESSING OFFICER AS WELL AS CIT( APPEALS) FAILED TO CONSIDER ITS CLAIM UNDER SECTIONS 11 AND 12 OF THE ACT, THOUGH IT HAD FILED AN APPLICATION UNDER SECTION 12AA IN FORM NO. 10A AS EARLY AS 3.2.2006. IF ASSESSEE WAS NOT ELIGIBLE FOR EXEMPTI ON UNDER SECTION 10(20) OF THE ACT, IT COULD CLAIM BENEFIT OF SECTIO NS 11 AND 12 OF THE ACT AND THIS ASPECT WAS NEVER CONSIDERED BY THE AUT HORITIES BELOW. FURTHER, ACCORDING TO HIM, ASSESSEE WAS ALSO ELIGIB LE FOR DEDUCTION UNDER SECTION 80P OF THE ACT. 3. PER CONTRA, LEARNED D.R., SUPPORTING THE ORDERS OF AUTHORITIES BELOW, SUBMITTED THAT ASSESSEE HAD MADE A WRONG CLA IM UNDER SECTION 10(20) OF THE ACT EVEN THOUGH THERE WAS AN AMENDMENT ALREADY IN PLACE WITH EFFECT FROM 1.4.2003, WHEREIN IT WAS CLEARLY SPECIFIED THAT MARKET COMMITTEES WERE NOT LOCAL AUT HORITIES. FOR THIS REASON, ASSESSMENT WAS REOPENED FOR ASSESSMENT YEAR 2003-04. AS FOR ASSESSMENT YEAR 2004-05, JURISDICTIONAL CIT HAD REVISED THE ORIGINAL ORDER PASSED BY THE ASSESSING OFFICER, UND ER SECTION 263 OF THE ACT FOR THE SAME REASON, SINCE ASSESSING OFFICE R HAD GIVEN EXEMPTION UNDER SECTION 10(20) OF THE ACT, DESPITE ASSESSEE NOT BEING A LOCAL AUTHORITY. AS FOR ASSESSMENT YEAR 20 05-06, LEARNED I.T.A. NOS. 887 TO 890/MDS/12 4 D.R. POINTED OUT THAT ASSESSEE HAD CLAIMED DEDUCTIO N UNDER SECTION 80P OF THE ACT, BUT, ASSESSEE NOT BEING A CO-OPERAT IVE SOCIETY, THE LOWER AUTHORITIES RIGHTLY DENIED SUCH DEDUCTION CLA IMED BY THE ASSESSEE. 4. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE CAN BE NO DISPUTE THAT ASSESSEE WAS NOT ELIGI BLE FOR EXEMPTION UNDER SECTION 10(20) OF THE ACT SINCE EXPLANATION T O SECTION 10(20) OF THE ACT, INTRODUCED BY THE FINANCE ACT, 2002 WIT H EFFECT FROM 1.4.2003, CLEARLY EXCLUDED MARKET COMMITTEES FROM T HE SCOPE OF A LOCAL AUTHORITY. ADMITTEDLY, ASSESSEE WAS A MARKET COMMITTEE. FURTHER, ASSESSEE WAS NOT A CO-OPERATIVE SOCIETY AN D THEREFORE, THE VIEW OF THE LOWER AUTHORITIES THAT ASSESSEE WAS NOT ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 80P OF THE ACT WAS ALSO JUSTIFIED. CO-OPERATIVE SOCIETY HAS BEEN DEFINED IN SECTION 2(19) OF THE ACT AND A SOCIETY HAS TO BE REGISTERED UNDER CO-OPERATI VE SOCIETIES ACT, 1912 OR UNDER ANY OTHER STATE STATUTE ENABLING REGI STRATION OF CO- OPERATIVE SOCIETY FOR BEING CONSIDERED SO. NEVERTH ELESS, ASSESSEE HAD CLEARLY POINTED OUT TO THE CIT(APPEALS) THAT IT HAD MADE AN APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT IN PROPER FORM NO.10A ON 3.2.2006 AND THE FATE OF THE APPLICA TION WAS STILL NOT I.T.A. NOS. 887 TO 890/MDS/12 5 KNOWN. CIT ALSO HAD POWER TO CONDONE DELAY IN MAKI NG SUCH APPLICATION SINCE SAID APPLICATION WAS FILED BEFORE FIRST DAY OF JUNE, 2007. WITHOUT GOING INTO THE MERITS OF THE APPLICA TION, WHAT WE NOTICE IS THAT THE CIT WAS OBLIGED TO DISPOSE SUCH AN APPL ICATION MADE BY THE ASSESSEE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, BEFORE THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH APPLICATION WAS FILED VIDE SUB-SECTION (2) OF SECTI ON 12AA OF THE ACT. LETTER DATED 16.6.2006 OF INCOME TAX OFFICER (HEADQ UARTERS), PONDICHERRY, CLEARLY SHOWS THAT THE ASSESSEE HAD IN DEED FILED AN APPLICATION UNDER SECTION 12AA OF THE ACT ON 3.2.20 06. IF SUCH AN APPLICATION HAS NOT BEEN DISPOSED OF BY CIT WITHIN THE TIME STATUTORY ALLOWED, THEN IN VIEW OF THE DECISION OF SPECIAL BE NCH OF THIS TRIBUNAL IN THE CASE OF BHAGWAD SWARUP SHRI SHRI DEVRAHA BAB A MEMORIAL SHRI HARI PARMARTH DHAM TRUST (SUPRA), SUCH REGISTR ATION HAS TO BE DEEMED AS GRANTED. THESE ASPECTS HAVE NOT BEEN CON SIDERED BY THE AUTHORITIES BELOW. WHETHER SUCH DEEMED GRANTING OF REGISTRATION CAN HAVE RETROSPECTIVE EFFECT IS ALSO AN IMPORTANT POIN T TO BE CONSIDERED. NO DOUBT, EVEN IF REGISTRATION UNDER SECTION 12AA O F THE ACT IS DEEMED AS GRANTED TO THE ASSESSEE, IT WILL STILL HA VE TO SHOW THAT IT WAS RIGHTFULLY CLAIMING EXEMPTION IN ACCORDANCE WIT H THE PROVISIONS OF THE ACT. IN SUCH A SITUATION, WE ARE OF THE OPINIO N THAT THE MATTER I.T.A. NOS. 887 TO 890/MDS/12 6 REQUIRES A RE-VISIT BY THE A.O. WE, THEREFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND REMIT THE ISSUE BACK TO THE A SSESSING OFFICER FOR CONSIDERING AFRESH THE CLAIM OF THE ASSESSEE TH AT IT WAS ELIGIBLE FOR EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT WITH REGARD TO ITS INCOME FOR THE IMPUGNED ASSESSMENT YEARS. ASSESSIN G OFFICER SHALL PROCEED IN ACCORDANCE WITH LAW. 5. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE COURT ON THURSDAY, THE 26 TH OF JULY, 2012, AT CHENNAI. SD/- SD/- (S.S. GODARA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 26 TH JULY, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-XII, CHENNAI-34 (4) CIT, PONDICHERRY (5) D.R. (6) GUARD FILE