Ahmedabad Urban Development Authority (AUDA), Ahmedabad V. The CIT (Exemption), Ahmedabad

ITA 978/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0796 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-10-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Principle of natural justice; Set aside
• Section: 143(3); 12AA; 201; 48; 13; 263; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ./ ITA NO. 978 /AHD/2017 / ASSTT. YEAR: 2012 - 2013 AHMEDABAD URBAN DEVELOPMENT AUTHORITY , SARDAR VALLABHBHAI PATEL BHAVAN, , ASHRAM ROA D, USMANPURA, AHMEDABAD - 380014 . PAN : AAALA0233B VS. C . I . T(EXEMPTION) , AHMEDABAD . (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI S.N. SOPARKAR , & SHRI BANDISH SOPARKAR , A.R S REVENUE BY : SHRI O.P. SHARMA CIT . D.R / DATE OF HEARING : 09 / 10 / 201 9 / DATE OF PRONOUNCEMENT: 16 / 12 /201 9 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMM ISSIONER OF INCOME TAX, AHMEDABAD DATED 10/03 /2017 ( IN SHORT LD.CIT(A) ) ARISING IN THE MATTER OF A SSESSMENT ORDER PASSED UNDER S.263 OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DT.16 / 03/2016 RELEVANT TO THE ASSESSMENT YEAR 2012 - 20 13 . ITA NO.978 /AHD/2017 ASSTT. YEAR 2012 - 13 2 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. LD. CIT ERRED IN LAW AND ON FACTS INVOKING PROVISIONS OF SEC. 263 OF THE ACT SEEKING TO REVISE ORDER PASSED U/S 143 (3) OF THE ACT HOLDING IT AS ERRONEOUS & PREJUDICIAL TO THE INTEREST OF REVENUE. THE ORDER OF CIT DIRECTING AO.TO MAKE DENOVO ASSESSMENT IN THE CASE OF THE APPELLANT IS UNJUST, UNTENABLE & AGAINST PRINCIPLES O F NATURAL JUSTICE. 2. LD. CIT ERRED IN LAW AND ON FACTS DIRECTING AO TO FRAME FRESH ASSESSMENT BY SETTING ASIDE SCRUTINY ASSESSMENT ORDER GRANTING ADJUSTMENT OF EXCESS OF EXPENDITURE AGAINST INCOME OF SUCCEEDING YEARS IS ERRONEOUS & UNLAWFUL. 3. LD. CIT ERRED IN LAW AND ON FACTS TO HOLD THE ASSESSMENT ORDER ERRONEOUS & PREJUDICIAL TO THE INTEREST OF REVENUE IGNORING BINDING JURISDICTIONAL HIGH COURT AS WELL CBDT CIRCULAR BUT OPTING TO FOLLOW DECISION OF DELHI ITAT. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALT ER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE TIME OF OR BEFORE THE HEARING OF THE APPEAL . 2. T HE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT ERRED IN HOLDING THE ASSE SSMENT FRAMED UNDER SECTION 143( 3 ) OF THE ACT AS ERRONEOUS INSOFAR PREJUDICIAL TO THE INTEREST OF REVENUE. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A TRUST AND AUTONOMOUS BODY GOVERNED UNDER THE PROVISIONS OF THE GUJARAT TOWN PLANNING AND URBAN D EVELOPMENT ACT 1976. THE ASSESSEE IS ENGAGED IN INFRASTRUCTURE ACTIVITIES SUCH AS CONSTRUCTION OF ROADS, BRIDGES, DRAINAGE SYSTEM, WATER CONNECTION ETC. FOR THE BENEFIT OF PUBLIC AT LARGE. THE ASSESSEE IS ALSO REGISTERED UNDER SECTION 12AA OF THE ACT. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS. NIL DATED 18 SEPTEMBER 2012. SUBSEQUENTLY THE CASE OF THE ASSESSEE WAS SELECTED UNDER SCRUTINY AND ACCORDINGLY THE ASSESSMENT W AS FRAMED UNDER SECTION 143( 3 ) OF TH E ACT AT THE TOTAL INCOME OF 1, 98 , 48 , 79 , 000.00 3.1 SUBSEQUENTLY, THE LEARNED CIT OBSERVED THAT THE AO IN THE ASSESSMENT ORDER MADE THE DISALLOWANCE OF THE CARRY FORWARD LOSSES TO THE TUNE OF 2 , 77 , 29 , 078 .00 BUT THE SAME REMAIN ED TO BE ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDIN GLY THE LEARNED CIT PROPOSED THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE BY ISSUING SHO W CAUSE NOTICE TO THE ASSESSEE V IDE LETTER DATED 2 MARCH 2017. ITA NO.978 /AHD/2017 ASSTT. YEAR 2012 - 13 3 4. HOWEVER, THE LEARNED AR FOR THE ASSESSEE AT THE TIME OF HEARING BEFO RE US SUBMITTED THAT THE ASSESSMENT ORDER FRA MED BY THE AO UNDER SECTION 143(3) OF THE ACT DATED 16 MARCH 2015 HAS BEEN SET ASIDE BY THIS TRIBUNAL TO THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW VI DE ITA NO. 1422/AHD/2017 ORDER DATED 9 OCTOBER 2017. 4.1 ACCORDINGLY, THE LEARNED AR BEFORE US CLAIMED THAT THE ORDER FRAMED UNDER SECTION 263 OF THE ACT HOLDING THE ASSESSMENT ORDER AS ERRONEOUS INSOFAR PREJUDICIAL TO THE INTEREST OF REVENUE BECOMES INFRUCTUOUS. 5. ON THE OTHER HAND, THE LEARNED D R AGREED WITH THE CONTENTION OF THE LEARNED AR FOR THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSMENT ORDER FRAMED UNDER SECTION 143( 3 ) OF THE ACT DATED 16 MA RCH 2015 HAS BEEN SET ASIDE TO THE FILE OF THE AO FOR RE - ADJUDICATION AS PER THE PROVISIONS OF LAW AS SUBMITTED BY THE LEARNED AR FOR THE ASSESSEE AS DISCUSSED ABOVE. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDER: 4. WE HAVE DULY CONSIDERED RIVAL CONTENTION S AND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT THE HON'BLE HIGH COURT HAS REVERSED THE ORDER OF THE TRIBUNAL PASSED IN EARLIER ASSESSMENT YEARS. HON'BLE HIGH COURT HAS HELD THAT PROVISO TO SECTION 2(15) OF THE ACT WILL NOT APPLICABL E UPON THE ASSESSEE AND THUS ENTITLES THE ASSESSEE FOR EXEMPTION UNDER SECTION 11 OF THE ACT. THE CONCLUDING PARAGRAPH OF THE HON'BLE HIGH COURT'S DECISION READS AS UNDER: '15.1 APPLYING THE AFORESAID DECISION TO THE FACTS OF THE CASE ON HAND AND THE OBJE CT AND PURPOSE FOR WHICH THE ASSESSEE IS ESTABLISHED/CONSTI TUTED UNDER THE PROVISIONS OF THE GUJARAT TOWN PLANNING ACT AND COLLECTION OF FEES AND CESS IS INCIDENTAL TO THE OBJECT AND PURPOSE OF THE ACT, EVEN THE CASE WOULD NOT FALL UNDER THE SECOND PART O F PROVISO TO SECTION 2(15) OF THE ACT. 15.2 CONSIDERING THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF OPINION THAT THE LEARNED TRIBUNAL HAS COMMITTED A GRAVE ERROR IN HOLDING THE ACTIVITIES OF THE ASSESSEE IN THE NATURE OF TRADE, COMMERCE O R BUSINESS AND CONSEQUENTLY HOLDING THAT THE PROVISO TO SECTION 2(15) OF THE ACT SHALL BE APPLICABLE AND THEREFORE, THE ASSESSEE IS NOT ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. FOR THE REASONS STATED ABOVE, IT IS HELD THAT THE PROVISO TO SECTION ITA NO.978 /AHD/2017 ASSTT. YEAR 2012 - 13 4 2(15) OF THE ACT SHALL NOT BE APPLICABLE SO FAR AS THE ASSESSEE - AUDA IS CONCERNED AND AS THE ACTIVITIES OF THE ASSESSEE CAN BE SAID TO BE PROVIDING GENERAL PUBLIC UTILITY SERVICES, THE ASSESSEE IS ENTITLE TO EXEMPTION UNDER SECTION 11 OF THE ACT. BOTH THE QUESTIONS ARE THEREFO RE, ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN VIEW OF THE ABOVE AND FOR THE REASONS STATED ABOVE, THE IMPUGNED ORDER PASSED BY THE LEARNED TRIBUNAL IN RESPECTIVE APPEALS FOR DIFFER ASSESSMENT YEAR ARE HEREBY QUASHED AND SET ASIDE. ACCORDINGLY, ALL THESE APPEALS ARE ALLOWED AND ANSWERED BOTH THE QUESTIONS IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE. RESPECTFULLY FOLLOWING DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT, WE ALLOW THESE APPEALS O F THE ASSESSEE AND SET ASIDE ORDERS OF THE REVENUE AUTHORITIES BELOW. WE RESTORE ALL THESE ISSUES TO THE FILE OF THE AO FOR RE - ADJUDICATION IN ACCORDANCE WITH LAW. THE ID.AO SHALL KEEP IN MIND THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN ASSESS EE ! S OWN CASE IN EARLIER YEARS CITED SUPRA. HE SHALL FOLLOW THIS JUDGMENT IN THE MANNER, AS IS BEING FOLLOWED IN EARLIER YEARS I.E. ASSTT.YEAR 2010 - 11 AND 2011 - 12. 6. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 6.1 I N OUR CONSIDERED VIEW , THE ISSUE INVOLVED IN THE ORDER OF LEARNED CIT UNDER SECTION 263 OF THE ACT IS DEPENDENT ON THE ASSESSMENT ORDER TO BE FRAMED BY THE AO IN ACCORDANCE TO THE DIRECTION PROVIDED BY THE ITAT AS DISCUSSED ABOVE. THEREFORE, WE HOLD THAT THE IMPUGNED ORDER UNDER SECTION 263 OF THE ACT DOES NOT REQUIRE ANY SEPARATE ADJUDICATION AT THIS STAGE. ACCORDINGLY, WE CONCLUDE THAT THE ORDER FRAMED UNDER SECTION 263 OF THE ACT IS INFRUCTUOUS. 7. HENCE, THE APPEAL OF THE ASSESSEE IS DISPOSED OF IN T ERMS OF THE ABOVE. O RDER PRONOUNCED IN THE COURT ON 16 /12 / 2019 AT AHMEDABAD. - SD - - SD - (MAHAVIR PRASAD ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 16 / 12 /2019 MANISH