Income Tax Appellate Tribunal - Jaipur
Bijaynagr Kraya Vikrya Sahakari Samiti ... vs Income Tax Officer, Beawar on 23 April, 2019
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES "SMC", JAIPUR
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BEFORE: SHRI RAMESH C SHARMA, AM
vk;dj vihy la-@ITA No. 177/JP/2018
fu/kZkj.k o"kZ@Assessment Year :2012-13
vk;dj vihy la-@ITA No. 178/JP/2018
fu/kZkj.k o"kZ@Assessment Year :2013-14
vk;dj vihy la-@ITA No. 179/JP/2018
fu/kZkj.k o"kZ@Assessment Year :2014-15
M/s. Bijaynagar Kraya Vikrya Sahakari Vs. I.T.O, Ward-1, Beawar
Samiti Ltd.
C/o Mahendra Gargieya & Associates,
Advocates & Tax Consultants, 537-538,
5th Floor, Mahima's Trinity, Near Jyoti
Rao Phule College, New Sanganer Road,
Jaipur-302019.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAAAB0505A
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by: Shri Mahendra Gargieya, Advocate, ld.AR
jktLo dh vksj ls@ Revenue by : Smt. Roshanta Meena, JCIT, ld.DR
lquokbZ dh rkjh[k@ Date of Hearing : 15/04/2019
mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 23/04/2019
vkns'k@ ORDER
These are the appeals filed by the assessee against the separate orders of ld.CIT(A), Ajmer dated 28/11/2017 for the A.Ys. 2012-13, 2013- 14 and 2014-15 in the matter of orders passed u/s. 143(3)/143(3) r.w.s 263 of the Income Tax Act, 1961 (in short the Act).
ITA Nos. 177, 178 & 179/JP/2018 2 A.Ys 2012-13, ' 13-14 & '14-15 M/s.Bijaynagar Kraya Vikrya Sahakari Samiti Ltd.
2. Rival contentions have been heard and record perused.
3. The facts in brief are that the assessee is a co-operative society registered u/s. 11(2) of Rajasthan Sahakari Society Act, 2001. The assessee society is engaged in the business of purchase and sale of agricultural produce i.e. pesticides, seeds, fertilizers, cereals, pulses and other rational commodities provided by State Govt. through Raj. Fed on rate fixed by such Govt. authorities. The Society is governed by its by- laws and the society is established for the benefit of General Public Consumers. The assessee Society e-filed its ROI for A.Y 2013-14 at Rs. 50,980/- after claiming deduction u/s. 80P of the Act of Rs. 21,79,181/- in the status of cooperative society on 28.09.2013. The assessee society shown GP of Rs.38,21,796/- and NP of Rs. 24,65,052/- on total turnover of Rs.14,65,59,007/-. The transactions are certified by the Local Audit and assessed by Sales Tax Authorities as per VAT annual return. During the assessment proceedings it was noticed that a sum of Rs. 6,16,263/- has been transferred to Reserve fund and Rs. 24,650/- to Education Fund. When asked, the assessee vide letter dated 16.04.2015 submitted that as per bye laws of society, it is obligatory to create reserve fund of 25% out of its profit to meet out the losses and the same should be allowed u/s. 40A(9) of the I.T. Act, 1961. However, dissatisfied with the reply, the AO finally disallowed the General reserve and Education reserve totaling to Rs.6,40,913/- debited in P & L Account vide order dated 23.03.2016.
ITA Nos. 177, 178 & 179/JP/2018 3 A.Ys 2012-13, ' 13-14 & '14-15 M/s.Bijaynagar Kraya Vikrya Sahakari Samiti Ltd.
4. By the impugned ex- parte orders of the ld. CIT(A), the ld.CIT(A) dismissed the appeals of assessee.
5. It was contended by the ld.AR of the assessee that on different dates as and when the matter was fixed, the A/R of the assessee did sent request for adjournment through e-mails. Our attention was invited to the adjournment letters and the proof of sending the same on mail (PB 19-24). However, the ld. CIT(A) has not at all mentioned this fact. It was only when some genuine inability of the A/R, adjournment was sought i.e. on some occasions, the A/R was to appear before the Hon'ble Rajasthan High Court. On some occasions, the details and clarifications were not forthcoming from the appellant/assessee society. Thereafter, the assessee had filed a miscellaneous application in MA No. 118/JP/2018 against the order u/s. 263 in the base year 2012-13, however, the order of the Hon'ble ITAT in the MA was pending when the matters were being listed before the ld. CIT(A), Ajmer. Such order could be received by the assessee only on 05.02.2018. Therefore, the A/R was also waiting for the order of the MA, which was having a bearing over the ITAT order passed i.r.t s. 263 and was going to have the direct bearing over the issues involved in the subjected years. Thus, it was not a case of complete non- compliance on the part of the assessee.
6. The ld. AR further contended that the ld. CIT(A) did not send any notice giving final opportunity nor any other communication was made to the assessee and of the fact of non-compliance. The ld. AR also ITA Nos. 177, 178 & 179/JP/2018 4 A.Ys 2012-13, ' 13-14 & '14-15 M/s.Bijaynagar Kraya Vikrya Sahakari Samiti Ltd. contended that assessee was never in receipt of any such notice. Thus, no real and adequate opportunity of being heard was ever provided by the ld.CIT(A). Therefore, deciding the appeal ex-parte, this way, was a violation of the principles of natural justice.
7. On the other hand, the ld. DR supported the orders passed by the lower authorities.
8. I have considered the rival contentions and carefully gone through the orders of the authorities below and found that non-appearance of the ld. AR of the assessee before the ld. CIT(A) was on reasonable ground. From the record, I found that the controversy with regard to the subjected disallowances made by the AO and confirmed by the ld. CIT(A) ex-parte, in the above matters, first time arose in A.Y 2012-13, when the ld. CIT by passing an order u/s. 263 dated 14.03.2016, set aside the assessment order to the AO giving direction to pass fresh assessment order, in terms of / as indicated in the revisionary order. Thereafter, when the assessee challenged the said order, the Hon'ble ITAT vide its order dated 05.02.2018 (assessee's own case) in ITA No. 330/JP/16 modified those directions/observations given in the revisionary order, holding as under:-
"15. Regarding the arguments of the ld AR on merit regarding allowability under section 40A(9), section 37(1) and diversion by overriding title, we believe that the same can be examined by the AO and the assessee shall be free to raise the same before the AO. To this extent, we modify the directions of the ld Pr CIT and the same should be read to the effect that claim of the assessee regarding the claim of the deduction towards the transfer to ITA Nos. 177, 178 & 179/JP/2018 5 A.Ys 2012-13, ' 13-14 & '14-15 M/s.Bijaynagar Kraya Vikrya Sahakari Samiti Ltd. general reserve, education reserve and the provisions for gratuity should be examined afresh as per law after providing reasonable opportunity to the assessee."
9. Since all the issues/the grounds raised, are the same and identical facts are involved in as much as the AO has repeated the additions/disallowances following the order u/s. 263 and/or the re- assessment order passed by the then AO u/s. 143(3)/263 in A.Y 2012-13, hence the said order of the Hon'ble ITAT shall be having a direct bearing over the present appeals.
10. After going through the said order of the Tribunal ( in assessee's own case), I found that the Hon'ble ITAT has now directed the AO to consider the claim of the assessee on merits as regards allowability thereof u/s. 40A(9), sec. 37(1), diversion of income by overriding title.
11. I also found that recently the AO i.e ITO, Ward-1, Beawar, in the- re-assessment order passed u/s. 143(3) r/w/s 254 & 263 of the Act, pursuant to the direction of the Hon'ble ITAT, has again repeated the disallowances i.e addition/disallowance made on account of transfer of the General Reserve, amounts transferred to the Education Reserves and the provision of gratuity in A.Y 2012-13 but without applying his mind on the specific directions given by this Hon'ble Bench to the AO in its order dated 05.02.2018.
12. In all fairness, I hereby set aside the impugned ex-party orders of the ld. CIT(A) and the matter is restored back to him for deciding/considering the said decision matter afresh and the claim of ITA Nos. 177, 178 & 179/JP/2018 6 A.Ys 2012-13, ' 13-14 & '14-15 M/s.Bijaynagar Kraya Vikrya Sahakari Samiti Ltd. assessee on merits as regards allowability thereof u/s. 40A(9)/37(1), diversion of income by overriding title. We direct accordingly.
13. Since the facts and circumstances in all the other years under consideration are same, therefore, these are also restored back to the file of the ld.CIT(A) with the same direction. The assessee is also directed to appear before the ld. CIT(A) within a period of 60 days from the receipt of this tribunal order. We direct accordingly.
14. In the result, all the appeals of assessee are allowed for statistical purpose.
Order pronounced in the open court on 23 April, 2019.
Sd/-
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(RAMESH C SHARMA)
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Tk;iqj@Jaipur
fnukad@Dated:- 23 April, 2019
ITA Nos. 177, 178 & 179/JP/2018
7 A.Ys 2012-13, ' 13-14 & '14-15
M/s.Bijaynagar Kraya Vikrya Sahakari Samiti Ltd. *PP/SPS vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- M/s. Bijaynagar Kraya Vikrya Sahakari Samiti Ltd.C/o Mahendra Gargieya & Associates, Advocates & Tax Consultants, 537-538, 5th Floor, Mahima's Trinity, Near Jyoti Rao Phule College, New Sanganer Road, Jaipur-302019.
2. izR;FkhZ@ The Respondent- The I.T.O, Ward-1, Beawar.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA Nos. 177,178 & 179/JP/2018) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar