GMDC Science & Research Centre, Ahmedabad V. The Income Tax Officer (Exemption), Palanpur

MA 2/AHD/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4173 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 05-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: J P SHAH
• Section: 148; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER MA NO.02/AHD/2016 IN ./ ITA.NO.956/AHD/2015 ASSTT.YEAR : 2006-07 GMDC SCIENCE & RESEARCH CENTRE C/O.GMDC LTD. KHANIJ BHAVAN UNIVERSITY ROAD 132 FT. RING ROAD, AHMEDABAD. VS THE ITO (EXEMPTION) PALANPUR. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI J.P. SHAH REVENUE BY : SHRI NARENDRA SINGH, SR.DR / DATE OF HEARING : 18/03/2016 / DATE OF PRONOUNCEMENT: 25/04/2016 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT MA IS DIRECTED AT THE INSTANCE OF THE A SSESSEE POINTING OUT APPARENT ERROR IN THE ORDER OF THE TRIBUNAL DATED 3 .12.2015 PASSED IN ITA NO.956/AHD/2015. 2. IT IS PLEADED IN THE APPLICATION THAT THE ASSESS EE HAS RAISED TWO FOLD OF SUBMISSIONS IN ITS APPEAL. IN THE FIRST FOLD OF SU BMISSION, IT HAS CHALLENGED REOPENING OF THE ASSESSMENT AS BAD IN LAW, AND IN T HE SECOND FOLD SUBMISSION, THE ISSUE INVOLVED WAS THAT THE ASSESSEE HAS A SUM OF RS.9,80,09,759/- WHICH MA NO.02/AHD/2016 2 WAS UNSPENT ACCUMULATED FUND. THE ASSESSEE HAS INC LUDED THIS AMOUNT IN THE TOTAL AMOUNT OF RS.11,65,16,622/- FOR CLAIMING STAT UTORY EXEMPTION AT 15% UNDER SECTION 11 OF THE INCOME TAX ACT. THE AO HAS DISALLOWED THIS CLAIM OF THE ASSESSEE. ACCORDING TO THE ASSESSEE, ONLY ISSU E RELATING TO THE REOPENING WAS AGITATED BEFORE THE TRIBUNAL, AND NO ARGUMENTS WERE ADVANCED ON MERIT. THE TRIBUNAL HAS ALLOWED THE GROUND OF APPEAL WITH REGARD TO CHALLENGE TO THE REOPENING, BUT DECIDED THE ISSUE ON MERIT ALSO AGAI NST THE ASSESSEE. SHRI J.P. SHAH, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THA T WITH REGARD TO GROUND NO.2, NO ARGUMENTS WERE ADVANCED, AND THEREFORE, AN APPARENT ERROR HAS CREPT IN THE ORDER OF THE TRIBUNAL. ON THE STRENGTH OF T HE HONBLE GUJARAT HIGH COURTS DECISION RENDERED IN THE CASE OF DEVENDRA S OMABHAI NAIK VS. ACIT, 377 ITR 402 (GUJ), HE CONTENDED THAT WHEN REOPENING WAS NOT JUSTIFIED, THEN, THE TRIBUNAL IS NOT REQUIRED TO GO INTO MERITS OF T HE CLAIM. HE CONTENDED THAT THERE IS NO QUESTION TO CONSIDER THE ISSUE ON MERIT . 3. ON THE OTHER HAND, THE LD.DR CONTENDED THAT THER E IS NO APPARENT ERROR IN THE ORDER OF THE TRIBUNAL. THE TRIBUNAL HAS ADJ UDICATED THE GROUNDS RAISED BY THE ASSESSEE. 4. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE POWER OF RECTIFICATION UNDER SECTIO N 254(2) OF THE INCOME TAX ACT CAN BE EXERCISED ONLY WHEN THE MISTAKE, WHICH I S SOUGHT TO BE RECTIFIED, IS AN OBVIOUS AND PATENT MISTAKE, WHICH IS APPARENT FR OM THE RECORD AND NOT A MISTAKE, WHICH IS REQUIRED TO BE ESTABLISHED BY ARG UMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. THE CLAIM OF THE ASSESSEE THAT NO ARGUME NTS WERE ADVANCED ON GROUND NO.2 IS CONCERNED, WE FIND THAT, IT IS WRONG TO SUGGEST THAT THE TRIBUNAL WITHOUT CONSIDERING THE ARGUMENTS OF THE ASSESSEE H AS DECIDED THE ISSUE. THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. MA NO.02/AHD/2016 3 NATWARLAL CHOWDHURY CHARITY TRUST, 189 ITR 656 (CAL ) WAS CITED BY THE ASSESSEE IN SUPPORT OF ITS CONTENTION ON GROUND NO. 2. WE HAVE NOTED THAT THIS JUDGMENT WAS CITED ON MERIT. COPY OF THIS JUDGMENT HAS BEEN PLACED BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE SUBMISSIONS MADE BEFORE THE CIT(A) WHERE THIS JUDGMENT HAS BEEN EXTENSIVELY DEALT WITH. HAD THIS JUDGMENT WAS NOT CITED, THEN, THERE COULD BE NO OCCASION FOR THE LD.DR TO CITE JUDGMENT IN FAVOUR OF THE REVENUE. C OPY OF THIS JUDGMENT IS ALSO AVAILABLE ON RECORD AND NOTED BY THE BENCH AS UNDER: BY THE REVENUE AS FAR AS THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DEVENDRA SOMABHAI NAIK (SUPRA) REFERRED TO BY THE L D.COUNSEL FOR THE ASSESSEE TO BUTTRESS HIS ARGUMENTS THAT ONCE REOPENING WAS N OT UPHELD, THEN, THERE SHOULD NOT BE ANY QUESTION TO DECIDE THE ISSUE ON M ERIT IS CONCERNED, FACTS IN THE CASE ARE TOTALLY DIFFERENT, AND THIS OBSERVATIO N WAS IN A DIFFERENT BACKGROUND. IN THAT CASE, IT EMERGES OUT THAT IN T HE CASE OF DEVREKHA ENGINEERS P.LTD. FOR THE ASSTT.YEAR 2005-06, THE AS SESSMENT WAS SOUGHT TO BE REOPENED BEYOND THE PERIOD OF FOUR YEARS AND THE QU ESTION AROSE, WHETHER AN AMOUNT OF RS.1,46,00,000/- ALLEGED TO HAVE BEEN RE CEIVED BY THE SAID ASSESSEE AS LONG TERM CAPITAL GAIN WAS TO BE ADDED TO THE INCOME OF THE SAID FIRM OR NOT ? THE LD.AO HAS MADE AN ADDITION OF THE ABOVE AMOUNT AFTER REOPENING THE ASSESSMENT. THE DISPUTE WAS TAKEN TO THE CIT(A). THE LD.CIT(A) HAS OBSERVED THAT ACTION IN THE CASE OF T HE ASSESSEE I.E. DEVENDRA SOMABHAI NAIK DESERVES TO BE TAKEN UNDER SECTION 14 8 OF THE ACT. IN THE CASE OF DEVREKHA ENGINEERS DISPUTE TRAVELLED TO THE TRIB UNAL. THE TRIBUNAL QUASHED REOPENING AND DELETED THE DISALLOWANCE. TH E REVENUE SOUGHT TO ARGUE IN THE CASE OF DEVANDRA SOMABHAI NAIK THAT RE OPENING HAS BEEN MADE IN ORDER TO GIVE EFFECT THE DIRECTIONS ISSUED UNDER SECTION 150 OF THE INCOME MA NO.02/AHD/2016 4 TAX ACT BY THE LD.CIT(A) IN THE CASE OF DEVREKHA EN GINEERS. IN THAT BACKGROUND, THE HONBLE HIGH COURT HAS OBSERVED THA T ONCE APPEAL OF DEVREKHA ENGINEERS WAS ALLOWED, AND THE DIRECTIONS OF THE CIT(A) HAS BEEN VACATED, THEN, THERE IS NOTHING WHICH CAN BE GIVEN EFFECT WITH THE HELP OF SECTION 150. IN THIS BACKGROUND, THE HONBLE HIGH COURT HAS JUST NOTICED THE ARGUMENTS OF THE LD.COUNSEL FOR THE REVENUE AND MAD E OBSERVATIONS THAT UNLESS AND UNTIL, IT IS FOUND THAT ASSUMPTION OF JU RISDICTION FOR REOPENING IS JUSTIFIED OR PERMISSIBLE, THE HONBLE HIGH COURT IS NOT REQUIRED TO GO INTO THE MERIT OF THE CLAIMS/CASE AT ALL. IN OTHER WORDS, T HE DIRECTION ISSUED UNDER SECTION 150 CAN ONLY HELP THE REVENUE TO JUSTIFY TH E REOPENING OF DEVENDRA SOMABHAI NAIK (SUPRA) IN CASE THOSE DIRECTIONS WERE SUSTAINED IN THE CASE OF DEVREKHA ENGINEERS P.LTD. ONCE THE DIRECTIONS WERE VACATED, THERE IS NO LEG TO STAND THAT REASSESSMENT WAS MADE FOR GIVING EFFE CT THE DIRECTIONS. THE JUDGMENT NOWHERE LAID DOWN THE PROPOSITION THAT APP ELLATE TRIBUNAL WAS NOT REQUIRED TO ADJUDICATE THE ISSUE RAISED ON MERITS I N CASE REOPENING WAS QUASHED. NO DOUBT, ON A NUMBER OF OCCASIONS, THE T RIBUNAL DID NOT DEAL WITH THE ISSUES ON MERIT, BECAUSE REOPENING HAS BEEN QUA SHED, BUT WHILE DEALING WITH THE PRESENT CASE, WE HAVE OBSERVED THAT SUBSTA NTIAL AMOUNTS HAVE BEEN ADDED IN THE TAXABLE INCOME, AND THE DISPUTE MAY TR AVEL TO THE HIGHER APPELLATE FORUM, THEREFORE, THE GROUNDS RAISED ON M ERIT ALSO DESERVES TO BE ADJUDICATED. WE HAVE CONSCIOUSLY ADJUDICATED THE GROUND ON MERIT. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY APPARENT MISTAKE I N THE ORDER OF THE TRIBUNAL, AND ACCORDINGLY, DISMISS THE MISC. APPLICATION FILE D BY THE ASSESSEE. 5. IN THE RESULT, MISC. APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 25 TH APRIL, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 25/04/2016