M/s Bassi Mubarikpur Truck Operators Union, Dera Bassi V. ITO, Mohali

ITA 994/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81101 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 18-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 994/CHD/2013 ASSESSMENT YEAR: 2009-10 BASSI MUBARIKPUR TRUCK , VS. THE ITO OPERATOR UNION WARD 6(4) AMBALA CHANDIGARH ROAD MOHALI OPP DAV HIGH SCHOOL DERA BASSI PAN NO.AAAAB4162F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI. S.K. MITTAL DATE OF HEARING : 16/12/2014 DATE OF PRONOUNCEMENT : 23/12/2014 ORDER PER T.R.SOOD, A.M. THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER PASSED BY THE LD. CIT(A), CHANDIGARH ON 26/06 /2012 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING GROUNDS 1. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE FRAMIN G OF EX-PARTE ASSESSMENT UNDER THE PROVISIONS OF SECTION 144 OF T HE INCOME TAX ACT 1961 WHICH IS ARBITRARY AND UNJUSTIFIED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) A ND ASSESSING OFFICER HAVE FAILED TO APPRECIATE THE FAC T THAT THE ASSESSEE TRUCK UNION IS A MUTUAL CONCERN WORKING ON BEHALF OF VARIOUS TRUCK OWNERS AND AS SUCH THE INCOME IS EXEM PT ON THE PRINCIPALS OF MUTUALITY. 3. THAT WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN UPHOLD ING THE ADDITION OF RS. 27,28,933/- (RS. 31,94,892/- MINUS RS. 4,65, 959/- AS DECLARED) MADE BY APPLYING NET PROFIT RATE OF 2% ON GROSS REC EIPTS OF RS. 15,97,44,592/- WHICH IS ARBITRARY AND UNJUSTIFIED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FURTHER ERRED IN UPHOLDING THE CHARGING OF INTEREST UNDER SECTION 234-A & 234-B OF THE ACT WHICH IS NOT CHARGEABLE IN THE FACTS OF THE CASE. 2. THE APPEAL HAS BEEN FILED LATE BY 395 DAYS. THE ASSESSEE HAS MOVED A CONDONATION APPLICATION ALONGWITH THE AFFI DAVIT. 3. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE CO NDONATION APPLICATION AND POINTED OUT THAT LOTS OF LITIGATION WAS GOING ON REGARDING ELECTION OF MANAGEMENT COMMITTEE AND ULTIMATELY PRO PER MANAGEMENT COMMITTEE WAS APPOINTED AFTER THE INTERVENTION OF H ONBLE PUNJAB & HARYANA HIGH COURT THEREFORE, ASSESSEE HAS REASONAB LE CAUSE AND DELAY SHOULD BE CONDONED. 4. ON THE OTHER HAND LD. DR OPPOSE THE SUBMISSIONS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY IN THE CONDONATION APPLICATION THE FOLLOWING REASONS HAVE BEEN GIVEN FOR FILING APPEAL LATE. 1. THAT THE BASSI MUBARIKPUR TRUCK OPERATORS UNION (BM TOU), DERA BASSI, DISTRICT AJITGARH, PUNJAB (HEREIN REFERRED T O AS TRUCK UNION) IS A REGISTERED SOCIETY UNDER THE 1860 ACT, WITH THE OFF ICE OF REGISTRAR OF FIRMS & SOCITIES, PUNJAB AT CHANDIGARH. COPY OF THE CERTI FICATE IS ANNEXED HEREWITH AT PAGE 1 OF THE COMPILATION FILED ALONGWI TH APPLICATION FILED ON 21.01.2014. 2. THAT THE MANAGEMENT BODY/ COMMITTEE OF THE SAID TRU CK UNION IS CONSTITUTED EITHER THROUGH ELECTIONS CONDUCTED BY T HE ELECTORAL COLLEGE COMPRISING OF THE TRUCK OPERATORS OR THE GENERAL BO DY MEMBERS OF TRUCK UNION OR THROUGH UNANIMOUS CONSENSUS OF ALL THE GEN ERAL BODY MEMBERS / TRUCK OPERATORS OF THE SAID TRUCK UNION. 3. THAT 2004 ONWARDS TILL 15.06.2013, NEITHER ANY ELEC TION HAD BEEN CONDUCTED NOR ANY UNANIMOUS DECISIONS WERE TAKEN BY THE GENERAL BODY MEMBERS OF TRUCK UNION. HOWEVER, THE RULING POLITIC AL PARTIES USED TO PLACE THEIR REPRESENTATIVES AS SELF-STYLED MANAGEMENT COM MITTEE. IF THE TRUCK OPERATORS TRIED TO OPPOSED SUCH SELF STYLED MANAGEM ENTS, THEY WERE SUPPRESSED BY THE CIVIL AND POLICE ADMINISTRATION U NDER THE INFLUENCE OF RULING POLITICAL ESTABLISHMENTS. 4. THAT TO COUNTER THE PRACTICE, A COMPLAINT WAS LODGE D IN WRITING BEFORE THE SDM DERABASSI, ON 23.07.2012 DULY SIGNED BY MORE THAN 150 OPERATORS/MEMBERS OF BMTOU. COPY OF THE SAID LETTER IS PLACED AT PAGES 2-14 OF THE COMPILATION FILED ALONGWITH APPLICATION FILED ON 21.01.2014OF THE COMPILATION. THE OPERATORS / MEMBERS, MOT OF WH OM ARE ILLITERATE, WERE NEVER APPRISED OF THE OPERATIONS AND WORKING O F THE ORGANIZATION BEING RUN BY THE SO CALLED SELF-STYLED POLITICALLY BACKED OFFICE BEARERS. THESE OPERATORS WERE NOT MADE AWARE ABOUT THE ROUTI NE OPERATIONS OF THE TRUCK UNION INCLUDING MINUTES, ACCOUNTS, ETC. 5. DURING FINANCIAL YEARS 2007-08 AND 2008-09, SOME TD S AMOUNT WAS DEDUCTED BY THE PARTIES WHO WERE USING THE TRANSPOR T SERVICES, UPON VERY FREIGHT PAD TO THE MEMBERS/OPERATORS. SINCE THE TRU CKS USED TO BE OPERATED UNDER THE BANNER OF M/S BASSI MUBARIKPUR TRUCK OPERATORS UNION, THE TDS AMOUNT WAS DEDUCTED UPON PAN NO. A AAAB4162F OF TRUCK UNION. THIS AMOUNT WAS SUPPOSED TO BE DISBURS ED AMONG THE RESPECTIVE INDIVIDUAL TRUCK OPERATORS / MEMBERS PRO PORTIONATELY TO THEIR RESPECTIVE DEDUCTIONS. UNFORTUNATELY, THE DE-FACTO MANAGEMENTS FAILED TO MAINTAIN AND PRODUCE ANY RECORD OF THE SAID TDS REFUND AMOUNT, WHICH WAS SUBSTANTIAL. THE MEMBERS/OPERATORS OF TRU CK UNION BECAUSE APPREHENSIVE THAT THE TDS REFUND AMOUNT HAS BEEN MI SAPPROPRIATED OR EMBEZZLED BY SUCH SELF STYLED MANAGEMENT OF THE TRU CK UNION. THE REPEATED REQUESTS OF THE OPERATORS FELL ON DEAF EAR S WHICH FORCED THE OPERATORS TO FILE A WRITTEN ON 23.07.2012 AS MENTIO NED IN PARA 3 ABOVE. 6. THAT NO ACTION WAS TAKEN BY THE SDM ON THIS WRITTEN REQUEST AND THEREAFTER A REMINDER WAS AGAIN GIVEN VIDE LETTER D ATED 14.08.2012. SAME IS PLACED AT PAGE 15-16 OF THE COMPILATION FILED AL ONGWITH APPLICATION FILED ON 21.01.2014. 7. THAT SINCE NO ACTION WAS TAKEN BY THE SDM, THE GENE RAL BODY MEMBERS / TRUCK OPERATORS OF TRUCK UNION DELEGATED THEIR AUTHORITY TO SEVEN MEMBERS VIDE RESOLUTION DATED 13 TH AUGUST 2012, PLACED AT PAGES 17-48 OF THE COMPILATION FILED ALONGWITH APPLICATIO N FILED ON 21.01.2014 TO CONTEST THE MATTER IN HONBLE HIGH COURT FOR JUSTIC E. 8. THESE DELEGATED SEVEN INDIVIDUALS FILED A WRIT PETI TION BEFORE HONBLE PUNJAB & HARYANA HIGH COURT, CHANDIGARH VID E CWP NO. 16447 OF 2012. COPY IS PLACED AT PAGES 49-77 OF TH E COMPILATION FILED ALONGWITH APPLICATION FILED ON 21.01.2014. ON THE B ASIS OF THIS WRIT PETITION, THE HONBLE HIGH COURT VIDE ORDER DATED 27.08.2012 DIRECTED THE CIVIL ADMINISTRATION (DC & SDM) TO CONSIDER AND DECIDE TH E CLAIM OF THE PETITIONERS. COPY OF THE ORDER IS PLACED AT PAGES 7 8-83 OF THE COMPILATION FILED ALONGWITH APPLICATION FILED ON 21.01.2014. 9. THAT THE TRUCK OPERATORS/GENERAL BODY MEMBERS OF TR UCK UNION CONVEYED THE ORDER OF HONBLE HIGH COURT TO THE SDM VIDE THEIR LETTER DATED 04.09.2012. COPY PLACED AT PAGE 84-85 OF THE COMPILATION FILED ALONGWITH APPLICATION FILED ON 21.01.2014. EVEN AFT ER THAT, NO ACTION WAS TAKEN BY THE SDM AND DC. 10. THAT THEREAFTER ,THE TRUCK UNION SERVED A LEGAL NOT ICE DATED 16.01.2013 PLACED AT PAGES 86-89 OF THE COMPILATION FILED ALONGWITH APPLICATION FILED ON 21.01.2014 ON THE DC AND SDM, BEFORE FILING CONTEMPT OF COURT PETITION IN THE HONBLE HIGH COUR T. 11. THAT AFTER REPEATED NON-ACTION BY BOTH DC AND SDM, THE TRUCK OPERATORS FILED A CONTEMPT OF COURT PETITION BEFORE HC VIDE C.O.C.P NO. 695 OF 2013 BEFORE THE HONBLE HIGH COURT. THE SAME IS PLACED AT PAGES 90-119 OF THE COMPILATION FILED ALONGWITH APPLICATI ON FILED ON 21.01.2014. 12. THAT ON 31.05.2013, THE DEPUTY COMMISSIONER, MOHALI FILED AN AFFIDAVIT BEFORE THE HONBLE HIGH COURT NARRATING T HEREIN THAT A LETTER DATED 30.05.2013 HAD BEEN ISSUED TO THE SDM TO COND UCT THE ELECTIONS OF TRUCK UNION ON 15.06.2013 AND TO FREEZED THE CONCER NED ACCOUNTS/RECORD OF TRUCK UNION REGARDING TDS. COPY OF THE AFFIDAVIT IS AT PAGES 120-122 OF THE COMPILATION FILED ALONGWITH APPLICATION FILED O N 21.01.2014. 13. THAT, FINALLY ON 15.06.2013 FRESH ELECTIONS WERE CO NDUCTED BY THE CIVIL ADMINISTRATION, DERABASSI AND A NEW DULY ELEC TED MANAGEMENT COMMITTEE CAME INTO EXISTENCE. COPY IS PLACED AT PA GES 123-126 AND ENGLISH TRANSLATION FUNDS PLACE AT PAGES 127-130 OF THE COMPILATION FILED ALONGWITH APPLICATION FILED ON 21.01.2014. 14. THAT THERE WAS NO OLD MANAGEMENT TO HAND OVER ANY C HARGE, ANY RECORDS ETC. 15. THAT MEANWHILE THE NEW MANAGEMENT CAME TO KNOW ABOU T SOME CASES BEING PENDING IN WARD 6(4) MOHALI. 16. THAT THE NEW MANAGEMENT CONTACTED LD. LD. CIT(A) TA RANJEET SINGH AND AUTHORIZED HIM TO REPRESENT THE TRUCK UNI ON IN RESPECT OF THEIR INCOME TAX CASES. HE ASKED FOR SOME BASIC DOCUMENTS LIKE RETURNS, COMPUTATIONS ETC FOR PURSUING THE MATTERS BUT THE N EW MANAGEMENT WAS TOTALLY IGNORANT AND WAS UNABLE TO PROVIDE ANY DOC UMENTS AS ASKED FOR. CA TARANJEET SINGH ADVISED THE TRUCK UNION TO OBTA IN THE COPIES FROM THE INCOME TAX DEPARTMENT. CERTIFIED COPIES OF THE DOCU MENTS WERE OBTAINED FROM THE RECORD OF THE DEPARTMENT AFTER DE POSITING THE REQUISITE FEE ON 10.09.2013 PERTAINING TO AY 2008-09 AND 2009 -10 AS IT WAS INTIMATED THAT PENALTY PROCEEDINGS WERE PENDING IN THESE CASE S. THE ITO WARD 6(4) ISSUED CERTIFIED COPIES FOR AY 2008-09 ON 11.10.201 3 AND FOR AY 2009-10 ON 19.09.2013. COPY OF THE RECEIPT OF CERTIFIED DOCUME NTS FOR AY 2008-09 IS PLACED AT PAGE 133 OF THE COMPILATION FILED ALONGWI TH APPLICATION FILED ON 21.01.2014 WHILE FOR AY 2009-10 IS PLACE AT PAGE 13 9 OF THE COMPILATION FILED ALONGWITH APPLICATION FLEDON 21.01.2014. ON P ERUSAL OF THE DOCUMENTS, IT WAS SEEN THAT THE ASSESSMENT FOR BOTH THESE YEARS WAS FRAMED U/S 144 ON 01.12.2011 AND 30.11.2011 AND SEP ARATE APPEALS FOR BOTH AY WERE FILED ON 25.12.2011 BEFORE CIT(APPEALS ). IT WAS ONLY ON PERUSAL OF THE SAID DOCUMENTS, IT TRANSPIRED THAT O NE APPEAL PERTAINING TO AY 2009-10 HAD BEEN DECIDED AGAINST THE TRUCK UNION , WAY BACK IN JUNE 2012. LD. CA TARANJIT SINGH CONTACTED THE OFFICE OF CIT(A) AND WAS INFORMED THAT ORDER HAD ALREADY BEEN DISPATCHED IN JULY 2012 AND RECEIVED THROUGH SPEED POST ON 20.07.2012. CA TARAN JEET SINGH CONTACTED SH. TEJ MOHAN SINGH ADVOCATE ON 15.10.201 3 AND AN APPEAL WAS PREFERRED THOUGH DELAYED. 17. THAT KEEPING INTO VIEW THE EXTRAORDINARY CIRCUMSTAN CES AS EXPLAINED SUPRA AND THERE BEING NO MALA FIDE INTENT ION OF NOT FILING THE APPEAL IN TIME, IT IS PRAYED THAT THE DELAY BE COND ONED. THE ABOVE CLEARLY SHOWS THAT ASSESSEE HAD SUFFICIEN T CAUSE FOR FILING THE APPEAL LATE AND WE ARE SATISFIED WITH THE SAME AND CONDONE THE DELAY. 6. AS FAR AS ISSUES ON MERIT ARE CONCERNED SINCE AS SESSEE COULD NOT AVAIL THE OPPORTUNITY GIVEN BY THE AO BECAUSE OF TH E ABOVE MENTIONED REASONS AND THEREFORE ASSESSMENT WAS COMPLETED ON E X-PARTE BASIS. EVEN PROPER REPRESENTATION COULD NOT BE MADE BEFORE THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO WITH A DIRECTION TO COMPLETE THE ASSESSMENT ON DE-NOVO BASIS AFTER PROVIDING THE ADE QUATE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/12/2014 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23/12/2014 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR