M/S PUDA, MOHALI V. CIT, CHANDIGARH

ITA/122/2010

AI Insights

The case involves the Punjab Urban Planning and Development Authority (appellant) contesting an order by the Income Tax Appellate Tribunal, which had dismissed their appeal regarding a tax assessment and subsequent refund issues for the assessment year 2002-2003. The primary contention was the unauthorized concession made by the appellant's counsel, which led to the dismissal of their appeal. The appellant argued that the counsel was not authorized to make such concessions, and thus the appeal should not have been dismissed on these grounds. The High Court agreed to remand the case for a fresh examination on merits, emphasizing the need for a fair assessment based on substantive legal rights rather than procedural oversights.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 756169 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 22-09-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: URVASHI DHUGGA
• Assessee Lawyers: VISHAL GUPTA
• Keywords: Delay condonation; Income Tax; Rectification; TDS; Unauthorized concession
• Section: 143(3); 154; 234B; 260A; 271B; 234C; 10(20A); 155

Judgement Text

"ITA No. 122 of 2010 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 122 of 2010 (O&M) Date of Decision: 22.9.2010 M/s Punjab Urban Planning and Development Authority ....Appellant. Versus The Commissioner of Income Tax and others ...Respondents. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Vishal Gupta, Advocate for the appellant. Ms. Urvashi Dhugga, Advocate for the respondents. AJAY KUMAR MITTAL, J. 1. In the instant appeal filed by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order of the Income Tax Appellate Tribunal, Chandigarh Bench “B”, Chandigarh (hereinafter referred to as “the Tribunal”) dated 22.5.2009 passed in ITA No. 837/CHD/2008, for the assessment year 2002-2003, the following substantial question of law has been claimed:- “Whether on the facts and in the circumstances of the case, the Ld. ITAT was right in taking into consideration the unauthorized concession given by the counsel and also the fact that the factum of concession given by the counsel in the earlier ITA No. 122 of 2010 (O&M) -2- proceedings was not in the knowledge of the appellant in spite of fact that the counsel was never authorized to make such concession on behalf of the appellant?” 2. The facts as narrated in the appeal are that the assessee filed its return on 31.10.2002 declaring nil income and claimed Rs.27,31,92,259/- as exempt under Section 10(20A) of the Act. Thereafter, the assessee filed revised return on 28.7.2003 along with statutory audit report and audited accounts. The case was taken up for scrutiny. The Assistant Commissioner of Income Tax vide order dated 12.11.2003 assessed the total income at Rs.13,10,23,980/- and further ordered for initiation of penalty under Section 271B and interest under Sections 234B and 234C. Feeling aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [in short “the CIT (A)”] who vide order dated 9.8.2004 while allowing the appeal of the assessee, deleted the additions made by the Assessing Officer. The assessee in the meanwhile filed a return and claimed refund of tax deducted at source (TDS) to the tune of Rs.25.66 lacs. The Assessing Officer initiated proceedings under Sections 154/155 of Act, observing that the assessment was completed on 28.2.2003 and a refund of Rs.25.66 lacs was allowed to the assessee but as the TDS certificate did not bear the signatures of the issuing authority or related to some other assessment period, he vide order dated 25.8.2003 rectified his earlier order and assessed the total refundable tax at Rs.1,09,690/-. Thereafter, the assessee vide letter dated 12.3.2007 asked for refund of the TDS amount and for rectification under Section 155(14) of the Act. ITA No. 122 of 2010 (O&M) -3- The Assessing Officer vide letter dated 22.5.2007 informed the assessee that the application for assessment year 2002-03 could not be accepted as the same was time barred. The assessee filed an appeal before the CIT (A) along with an application for condonation of delay in filing the appeal. It was urged on behalf of the assessee before the CIT (A) that the order under Section 154 of the Act dated 25.8.2003 was never served on the assessee and, therefore, the appeal was within limitation. On the other hand, it was submitted by the Assessing Officer that the counsel for the assessee had given 'no objection' on the said order, though, inadvertently he forgot to sign the receipt of the order. The CIT (A) observed that the calculations which had been made in the order under Section 154 got merged in the order under Section 143(3) of the Act which was served on the assessee on 14.11.2003. The delay was, thus, not condoned. The issue was also held against the assessee on merits. The CIT (A) vide order dated 21.7.2008 dismissed the appeal of the assessee. On further appeal by the assessee, it was contended before the Tribunal that the order passed under Section 154 of the Act was never served on the assessee and the counsel for the assessee was never authorized to give no objection without the formal consent of the assessee. It was further pointed out that there is no receipt on record whereby the counsel had given 'no objection' for rectification. The Tribunal vide order dated 22.5.2009 dismissed the appeal. Hence, the present appeal. 3. We have heard learned counsel for the parties and perused the record. 4. Learned counsel for the assessee-appellant submitted that ITA No. 122 of 2010 (O&M) -4- the alleged concession made by the counsel for the appellant is not borne out from the record; a complaint was also submitted to the Institute of Chartered Accountant of India wherein the professional misconduct committed by the Chartered Accountant firm- M/s Kumar Nohria & Co. in giving no objection for rectification without the consent of the assessee was made vide Annexure A-5; and the CIT (A) and the Tribunal has erroneously dismissed the appeal. An application bearing CM No. 24238-CII of 2010 along with Forms 16A has been filed. It was further argued that the Tribunal has erred and it is against the record as Form 16A attached with the application clearly shows that tax was deducted at source (TDS) in respect of payments which were made to the assessee. According to the counsel once TDS was there, the benefit had to be granted to the assessee and retaining the same by the department amounts to undue enrichment on their part. He also laid stress that the appellant being a government organization, there was no ulterior motive which can be attributed in the present case and the benefit of TDS which is legally available to the assessee should not be denied to it on the basis of technicality especially when there was no written or express authority to the counsel to make concession. 5. Controverting the aforesaid submissions, learned counsel for the revenue argued that once the concession had been given, the appellant could not now urge otherwise and claim benefit. However, learned counsel could not dispute that in case TDS was in respect of the income which was paid to the appellant, the benefit had to be given to it. 6. After giving our thoughtful consideration to the respective ITA No. 122 of 2010 (O&M) -5- submissions of learned counsel for the parties, keeping in view totality of peculiar facts and circumstances of the case and in the interest of justice and more particularly in the absence of any legal authorization to the Chartered Accountant to give 'no objection' for rectification, the matter deserved to be decided on merits after condoning the delay. Further, in the light of the documents filed along with the application, we are of the opinion that the matter requires to be remanded to the Tribunal to decide afresh on merits after examining the evidence available on record and which might be produced by the assessee, if permissible under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 by way of additional evidence. 7. Ordered accordingly. 8. The appeal stands disposed of. 9. The assessee shall appear before the Tribunal on 29.11.2010 for further proceedings in accordance with law. (AJAY KUMAR MITTAL) JUDGE September 22, 2010 (ADARSH KUMAR GOEL) gbs JUDGE "