Prathyusha Educational Trust, CHENNAI V. Principal CIT, CHENNAI

MA 186/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4155 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 05-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDIPCIT
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Principle of natural justice
• Section: 12AA; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , BEFORE SHRI DUVVURU RL REDDY , JUDICIAL MEMBER AND SHRI S.JAYARAMAN, ACCOUNTANT MEMBER MISCELLANEOUS PETITION NOS.186 TO 188/CHNY/2018 ( IN ITA NOS. 370,637 & 638/CHNY/2017) /ASSESSMENT YEARS : NIL, 2010-11 & 2011-12 PRATHYUSHA EDUCATIONAL TRUST, 3 RD FLOOR, OLD NO.8, NEW NO.18, 12 TH CROSS STREET, INDIRA NAGAR, CHENNAI-600 020. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(3), CHENNAI. PAN: AAATP5521H ( /PETITIONER) ( /RESPONDENT) /PETITIONER BY : MR. R.VIJAYARAGHAVAN, ADVOCATE /RESPONDENT BY : MR. SAILENDRA MAMIDI, PCIT /DATE OF HEARING : 26.02.2019 /DATE OF PRONOUNCEMENT : 13.03.2019 / O R D E R PER S.JAYARAMAN, AM: THE ASSESSEE FILED THESE MISCELLANEOUS PETITIONS N O. 186, 187 & 188/CHNY/2018 AGAINST THE ORDERS PASSED BY THIS TR IBUNAL IN ITA NOS.370 ,637 & 638/CHNY/2017 DATED 19.06.2018. 2. THE LD. AR SUBMITTED CERTAIN GROUNDS RAISED BY T HE ASSESSEE IN THESE APPEALS WERE NOT DISPOSED AND HENCE, THE ASSE SSEE FILED THESE MISCELLANEOUS PETITIONS. PER CONTRA, THE LD.DR SU BMITTED THAT THE 2 M.P NOS. 186 TO 188/CHNY/2018 ASSESSEE HAS NOT ARGUED THESE GROUNDS AT THE TIME O F HEARING AND HENCE, THERE ARE NO ERRORS IN THE IMPUGNED ORDERS. 3. WE HEARD THE RIVAL SUBMISSIONS. THOUGH THE ASSESSEE HAS NOT ARGUED THE FOLLOWING GROUNDS, SINCE THESE GROUNDS ARE THERE IN THE GROUNDS OF THE RESPECTIVE APPEALS, ON WHICH THE D ECISION OF THE TRIBUNAL WAS NOT RENDERED, THE FOLLOWING ISSUES ARE TO BE DECIDED TO THAT EXTENT , THEREFORE, THE IMPUGNED ORDERS DATED 19.06.2018 ARE RECALLED. IT IS MADE CLEAR THAT THE DECISION OF THI S TRIBUNAL STAND UNAFFECTED OR UNMODIFIED IN RESPECT OF ALL OTHER I SSUES IN THE RESPECTIVE APPEALS. ITA NO.370/CHNY/2017: 1. THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOM E TAX, CENTRAL 2, CHENNAI, CANCELLING THE REGISTRATION OF THE APPELLA NT UNDER SECTION 12AA OF THE ACT, IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE, AGAINST THE LAW AND THE PRINCIPLES OF EQUITY AND NATURAL JU STICE. 2. THE ENTIRE PROCEEDING FOR CANCELLATION OF REGIST RATION UNDER SECTIONL2AA IS INVALID. THE PCIT ERRED IN ISSUING T HE SHOW CAUSE NOTICE ON THE VERY ISSUE WHICH HAD ATTAINED FINALITY BASED ON THE REPLY GIVEN BY THE APPELLANT. THE SCN ISSUED IN THE IMPUGNED PROCE EDINGS IS MERE REPRODUCTION OF THE EARLIER SCN. 3. THE PCIT ERRED IN PROCEEDING WITH THE CANCELLATI ON OF REGISTRATION AFTER NEARLY 3 YEARS THE DATE OF THE ORIGINAL SCN A ND THE REPLY OF THE APPELLANT. THE PCIT OUGHT TO HAVE APPRECIATED THAT ANY PROCEEDING INITIATED SHOULD BE COMPLETED WITHIN A REASONABLE T IME, EVEN IF THE LAW DOES NOT PRESCRIBE ANY TIME LIMIT. ACCORDINGLY, THE PROCEEDING INITIATED FOR CANCELLATION IN 2013 ON WHICH THE APPELLANT HAS GIVEN REPLY WITHOUT ANY DELAY CANNOT BE GIVEN LIFE WITH A FRESH NOTICE. 3 M.P NOS. 186 TO 188/CHNY/2018 ITA NOS.637 & 638/CHNY/2017: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS)-18, CHENNAI IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE, AGAINST THE LAW AND THE PRINCIPLES OF EQUITY AND NATURAL JUSTICE. 2. THE CIT (A) ERRED IN CONFIRMING THE CONTENTS OF THE ASST ORDER PASSED BY AO WHICH HAS OVERLOOKED THE PROVISIONS OF SEC 11 AND SEC 10(23C)(VI) WHICH WERE DULY AVAILABLE AT THE TIME O F PASSING OF ASST ORDER. THE CIT(A) OUGHT TO HAVE APPRECIATED THAT TH E AO DOES NOT HAVE JURISDICTION TO IGNORE THE PROVISIONS OF SEC 11 AND SEC 10(23C)(VI), THEREFORE, THE ASST ORDER IS VOID-AB-INITIO. 3. THE ENTIRE FIRST APPELLATE PROCEEDINGS TOOK ALMO ST FOUR YEARS TO COMPLETE FROM THE DATE OF INSTITUTION OF APPEAL AND DELAYED INTENTIONALLY TO ALLOW THE PROCEEDINGS BY DGIT(INV.) ON THE CANCE LLATION OF SEC 10(23C)(VI) RETROSPECTIVELY AND FOR THE CANCELLATI ON OF SEC 12A(A) BY PCIT TO COMPLETE THUS THE RELIEF UNDER BOTH SECTION S CAN BE DENIED WHICH IS MOST CLANDESTINE WAY DISCHARGING A JUDICIA L AUTHORITY VESTED IN CITA. THE CIT(A) OUGHT TO HAVE APPRECIATED THAT ANY PROCEEDING INITIATED SHOULD BE COMPLETED WITHIN A REASONABLE T IME, EVEN IF THE LAW DOES NOT PRESCRIBE ANY TIME LIMIT. 5. THE LEARNED CIT(A) ERRED IN PLACING RELIANCE ON THE CANCELLATION ORDER PASSED BY DGIT(INV.) WHICH ITSELF WAS PASSED OVERLO OKING THE FUNDAMENTAL FACTS AND THE PROVISIONS OF LAW AND UNA UTHORIZED IN TERMS OF ITS VALIDITY AS THE CANCELLATION WAS RETROSPECTI VE WHICH THE LAW DOES NOT EXPLICITLY PERMIT. 6. THE LEARNED CIT(A) ERRED IN PLACING RELIANCE ON THE CANCELLATION ORDER OF SEC 12A(A) BY THE PR. CIT WHICH ITSELF WAS PASSE D OVERLOOKING THE FUNDAMENTAL FACTS AND THE PROVISIONS OF LAW AND UNA UTHORIZED IN TERMS OF ITS VALIDITY AS THE CANCELLATION WAS RETROSPECTI VE WHICH THE LAW DOES NOT EXPLICITLY PERMIT. 7. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THE CORRIGENDUM IS ONLY AN AFTERTHOUGHT ISSUED AFTER THE JUDICIAL P ROCEEDINGS TAKEN BY THE ASSESSEE TRUST AND TO COVER UP THE LACK OF JURI SDICTION THE ASSESSING OFFICER IN DENYING THE BENEFIT U/S.10(23C)(VI). 4 M.P NOS. 186 TO 188/CHNY/2018 14. THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE D ISALLOWANCE U/S.40(A)(IA) PRIOR PERIOD EXPENSE, DEPOSIT REFUND , SALARY PAID TO MANAGING TRUSTEE WERE MADE CONTRARY TO THE FACTS O F THE CASE AND AGAINST THE PRINCIPLES OF LAW. 4. THE REGISTRY IS DIRECTED TO POST THE ABOVE APPEA LS IN DUE COURSE. 5. IN THE RESULT, THE ABOVE MISCELLANEOUS PETITIONS ARE ALLOWED TO THE ABOVE EXTENT. ORDER PRONOUNCED ON 13 TH MARCH, 2019. SD/- SD/- ( . . ) ( . ) (DUVVURU RL REDDY) ( S. JAYARAMAN ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER /CHENNAI, ! /DATED 13 TH MARCH,, 2019. SOMU %& )& /COPY TO: 1. APPELLANT 2. RESPONDENT 3. * () /CIT(A) 4. * /CIT 5. & / /DR 6. 2 /GF