ITO, CHENNAI V. M/s. Tamil Nadu Urban Development Fund, CHENNAI

MA 247/CHNY/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 5748 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S NATARAJA
• Assessee Lawyers: PUSHYA SEETHARAMAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI ... , . !' , # $ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER %% / M.P. NOS.246 & 247/CHNY/2017 (IN I.T.A. NOS.2316 & 2317/MDS/2016) & '& / ASSESSMENT YEARS : 2008-09 & 2009-10 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 2, CHENNAI. V. M/S TAMILNADU URBAN DEVELOPMENT FUND, NO.19, T.P. SCHEME ROAD, RAJA STREET EXTENSION, R.A. PURAM, CHENNAI-28 PAN : AAATT 0859 N ()*& /PETITIONER) ()+*,/ RESPONDENT) )*& . / /PETITIONER BY : SHRI S. NATARAJA, JCIT )+*, . / / RESPONDENT BY : SMT. PUSHYA SEETHARAMAN, SR. ADVOCATE 0 . 1# / DATE OF HEARING : 16.02.2018 2!' . 1# / DATE OF PRONOUNCEMENT : 22.02.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE REVENUE HAS FILED THE PRESENT MISCELLANEOUS P ETITIONS. 2. SHRI S. NATARAJA, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THIS TRIBUNAL FOUND THAT THE TRUST IS A REVOCA BLE TRUST AND INCOME 2 M.P. NOS.246 & 247/CHNY/17 DERIVED BY THE ASSESSEE REQUIRED TO BE TAXED IN THE HANDS OF THE BENEFICIARIES IN ACCORDANCE WITH PROVISIONS OF SECT ION 61 AND 161(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). REF ERRING TO THE COPY OF THE TRUST DEED AVAILABLE ON RECORD, MORE PARTICULARLY C LAUSE 29, THE LD. D.R. POINTED OUT THAT THE TRUST, AS PER THE TRUST DEED, IS IRREVOCABLE TRUST, THEREFORE, THE OBSERVATION MADE BY THE TRIBUNAL THA T THE TRUST IS REVOCABLE ONE IS CONTRARY TO TRUST DEED ITSELF, THEREFORE, TH ERE IS AN ERROR IN THE ORDER OF THIS TRIBUNAL DATED 23 RD MARCH, 2017. 3. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBM ITTED THAT WHEN THE TRUST DEED EXPRESSLY STATED THAT IT IS NOT A RE VOCABLE ONE AND THE TRUST WOULD COME TO AN END ONLY WHEN ALL THE CONTRIBUTORS AS A WHOLE DECIDE TO PUT AN END TO IT, THE TRUST WOULD CONTINUE, THEREFO RE, THE FINDING RECORDED BY THIS TRIBUNAL THAT THE TRUST IS A REVOCABLE ONE IS NOT A CORRECT. THIS NEEDS TO BE RECTIFIED. 4. ON THE CONTRARY, SMT. PUSHYA SEETHARAMAN, LD. SR . COUNSEL, SUBMITTED THAT THIS TRIBUNAL, AFTER CONSIDERING THE TRUST DEED AND CONTRIBUTORS AGREEMENT, FOUND THAT THE BENEFICIARIE S ARE IDENTIFIABLE, SHARES ARE DETERMINED BY THE CONTRIBUTORS AGREEMENT AND THE CONTRIBUTORS ARE FREE TO CALL UPON THE TRUST TO CAN CEL ANY UNITS HELD BY THEM AND RETURN THE VALUE. THEREFORE, ACCORDING TO LD. SR. COUNSEL, THIS TRIBUNAL FOUND THAT IT IS A REVOCABLE TRUST UNDER S ECTION 61 OF THE ACT. WHEN THE TRIBUNAL, AFTER CONSIDERING THE TRUST DEED AND CONTRIBUTORS 3 M.P. NOS.246 & 247/CHNY/17 AGREEMENT CAME TO A CONCLUSION THAT IT IS A REVOCAB LE TRUST IN VIEW OF SECTION 61 OF THE ACT, IT CANNOT BE SAID THAT THE D ECISION TAKEN BY THE TRIBUNAL IS AN ERROR ON THE FACE OF THE RECORD. TH IS TRIBUNAL HAS ALSO PLACED ITS RELIANCE ON THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN DCIT V. INDIA ADVANTAGE FUND-VII (2014) 36 ITR (TRI B) 304. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THIS TRIBUNAL, AFTER CONSIDERING THE TRUST DEED, CONTRIBUTORS AGREEMENT AND THE PROVISIONS OF SECTION 61 AND 161 OF THE ACT, FOUND THAT THE BENEF ICIARIES OF THE TRUST ARE IDENTIFIABLE AND SHARES ARE DETERMINED. IT WAS ALS O FOUND THAT THE CONTRIBUTORS TO THE ASSESSEE-FUND ARE FREE TO CALL UPON THE TRUST TO CANCEL ANY UNIT HELD BY THEM AND RETURN THE VALUE. WHEN T HIS TRIBUNAL EXAMINED THE MATERIAL AVAILABLE ON RECORD AND STATUTORY PROV ISIONS AND RECORDED A CATEGORICAL FINDING THAT THE TRUST IS A REVOCABLE O NE, IT CANNOT BE SAID THAT THERE IS AN ERROR IN THE ORDER OF THIS TRIBUNAL. 6. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 254(2) OF THE ACT. SECTION 254(2) OF THE ACT ENABLES THE TRIBUNAL TO RECTIFY AN ERROR WHICH IS PRIMA FACIE ON THE RECORD OF THE TRIBUNAL. THE CLAIM NOW MADE BY THE REVENUE IS THAT THE TRUST IS A REVOCABL E ONE IS NOT A PRIMA FACIE ERROR ARISING OUT OF THE ORDER OF THIS TRIBUNAL. AT THE BEST, WE MAY SAY THAT THE ORDER OF THIS TRIBUNAL WAS NOT CORRECT . HOWEVER, THIS TRIBUNAL HAS NO JURISDICTION TO REVIEW ITS OWN ORDER. UNDER SECTION 254(2) OF THE 4 M.P. NOS.246 & 247/CHNY/17 ACT WHAT CAN THIS TRIBUNAL DO IS TO RECTIFY AN ERRO R WHICH IS PRIMA FACIE ON RECORD AND NOT REVIEW OF THE ORDER. THE REVENUE, I N THE GUISE OF RECTIFICATION, CLAIMS A REVIEW OF THE ORDER BEFORE THIS TRIBUNAL, WHICH IS NOT PERMISSIBLE UNDER THE SCHEME OF THE INCOME-TAX ACT. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY MERIT IN THE MISCELLANEOUS PETITIONS FILED BY THE ASSESSEE. 7. IN THE RESULT, BOTH THE MISCELLANEOUS PETITIONS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED COURT ON 22 ND FEBRUARY, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( ... ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 22 ND FEBRUARY, 2018. KRI. . )15% 6%'1 /COPY TO: 1. )*& /PETITIONER 2. )+*, /RESPONDENT 3. 0 71 () /CIT(A) 4. 0 71 /CIT 5. %8 )1 /DR 6. 9& : /GF.