Income Tax Appellate Tribunal - Delhi
Cane Developement Council Khatauli,, ... vs Assessee on 20 April, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "B" NEW DELHI
BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 4587/Del/2011
A.Y. : 2006-07
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Shamli,
MZN
(PAN/GIR NO. : AAALC0276E)
Cross Objection No. 382/Del/2011
(IN ITA NO. 4587/DEL/2011)
A.Y. : 2006-07
Cane Development Council, Shamli, vs. Joint Commissioner of Income
Vill. & PO, Shamli, Tax, Range-2,
Distt. Muzaffarnagar (UP) Muzaffarnagar (UP)
I.T.A. No. 4588/Del/2011
A.Y. : 2006-07
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Titawi,
MZN
(PAN/GIR NO. : AAALC0173E)
Cross Objection No. 387/Del/2011
(IN ITA NO. 4588/DEL/2011)
A.Y. : 2006-07
Cane Development Council, Titawi, vs. Joint Commissioner of Income
Muzaffarnagar Railway Station Tax, Range-2,
Road, Muzaffarnagar (UP)
Muzaffarnagar, Distt. Muzaffarnagar
(UP)
I.T.A. No. 4589/Del/2011
A.Y. : 2006-07
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Rohana Kalan, MZN
1
(PAN/GIR NO. : AAALC0277F)
Cross Objection No. 400/Del/2011
(IN ITA NO. 4589/DEL/2011)
A.Y. : 2006-07
Cane Development Council, vs. Joint Commissioner of Income
Rohanakala, Vill. & PO Tax, Range-2,
Rohanakalan, Distt. Muzaffarnagar Muzaffarnagar (UP)
(UP)
I.T.A. No. 4590/Del/2011
A.Y. : 2006-07
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Mansurpur,
MZN
(PAN/GIR NO. : AAALC0282C)
Cross Objection No. 380/Del/2011
(IN ITA NO. 4590/DEL/2011)
A.Y. : 2006-07
Cane Development Council, vs. Joint Commissioner of Income
Mansoorpur, Vill & PO Mansoorpur, Tax, Range-2,
Distt. Muzaffarnagar (UP) Muzaffarnagar (UP)
I.T.A. No. 4591/Del/2011
A.Y. : 2006-07
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Khatauli,
MZN
(PAN/GIR NO. : AAALC0278L)
Cross Objection No. 390/Del/2011
(IN ITA NO. 4591/DEL/2011)
A.Y. : 2006-07
Cane Development Council vs. Joint Commissioner of Income Tax,
Khatauli, Vill & PO Khatuali, Distt. Range -2 Muzaffarnagar
Muzaffarnagar (UP)
(PAN/GIR NO. : AAALC0278L)
2
I.T.A. No. 5688/Del/2011
A.Y. : 2008-09
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Mansurpur, Distt. Muzaffarnagar
(PAN/GIR NO. : AAALC0282C)
Cross Objection No. 53/Del/2012
(IN ITA NO. 5688/DEL/2011)
A.Y. : 2008-09
Cane Development Council, vs. Joint Commissioner of Income
Mansoorpur, Vill & PO Mansoorpur, Tax, Range-2,
Distt. Muzaffarnagar (UP) Muzaffarnagar (UP)
I.T.A. No. 5689/Del/2011
A.Y. : 2008-09
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Titawi,
MZN
(PAN/GIR NO. : AAALC0173E)
Cross Objection No. 54/Del/2012
(IN ITA NO. 5689/DEL/2011)
A.Y. : 2008-09
Cane Development Council, Titawi, vs. Joint Commissioner of Income
Muzaffarnagar Railway Station Tax, Range-2,
Road, Muzaffarnagar (UP)
Muzaffarnagar, Distt. Muzaffarnagar
(UP)
I.T.A. No. 5690/Del/2011
A.Y. : 2008-09
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Khatauli,
MZN
(PAN/GIR NO. : AAALC0278L)
3
Cross Objection No. 55/Del/2012
(I.T.A. No. 5690/Del/2011)
A.Y. : 2008-09
Cane Development Council vs. Joint Commissioner of Income Tax,
Khatauli, Vill & PO Khatuali, Distt. Range -2 Muzaffarnagar
Muzaffarnagar (UP)
(PAN/GIR NO. : AAALC0278L)
I.T.A. No. 5691/Del/2011
A.Y. : 2008-09
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Rohana Kalan,
Muzzaffarnagar
(PAN/GIR NO. : AAALC0277F)
I.T.A. No. 5692/Del/2011
A.Y. : 2008-09
Joint Commissioner of Income Tax, vs. Cane Development Council
Range-2, Muzaffarnaqar Shamli, Distt. Muzaffarnagar
PAN/GIR NO. : AAALC0276E)
Cross Objection No. 56/Del/2012
(IN ITA NO. 5692/DEL/2011)
A.Y. : 2008-09
Cane Development Council, Shamli, vs. Joint Commissioner of Income
Vill. & PO, Shamli, Tax, Range-2,
Distt. Muzaffarnagar (UP) Muzaffarnagar (UP)
(Appellant) (Respondent)
Assessee by : None (Written Submission)
Department by : Sh. J.S. Ahlawat, Sr. D.R.
ORDER
PER BENCH These appeals by the Revenue and Cross Objections by the Assessees emanate out of separate orders of Ld. 4 Commissioner of Income Tax (A) orders for separate assessees and for separate assessment years.
2. The common issue raised in the Revenue appeals read as under:-
"On the facts and in the circumstances of the case the Ld. Commissioner of Income Tax (A) erred in law and the facts by declaring the assessment made by the Assessing Officer as null and void by observing that the notices u/s. 143(2) / 142(1) were not issued in the status of Artificial Juridicial Person without appreciating the fact that the proforma of notices u/s. 143(2)1/4291) are prescribed and there is no claim in these notices where the status of the assessee can be mentioned."
3. In the cross objections the assessees had contended that Ld. Commissioner of Income Tax (A) has failed to consider the specific and material grounds raised in the grounds of appeals challenging additions and estimate of total income made by the Assessing Officer.
4. It has further been claimed that assessment of different amount in these cases is wrong and illegal. It has further been claimed that estimate of any income in the hands of the assessee is not justified. Lastly, it has been claimed that assessee deserves to be declared non- taxable sustaining the order of the Ld. Commissioner of Income Tax (A).
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5. We have heard the Ld. Departmental Representative. None appeared on behalf of the assessee. However, assessee has filed written submission. We have carefully considered the same. We find that in all these cases the concluding paragraph of the Ld. Commissioner of Income Tax (A) is as under:-
"From the above it is clear that the appellant status is that of "Artificial Juridical Person" and not that of "Local Authority" and admittedly its income is taxable under the Income Tax Act, 1961 as discussed above.
As per the appellant the assessment was framed in the status of "Artificial Juridical Person" however, no notice u/s. 143(2)/142(1) of the Act was issued by the Assessing Officer in said status. Thus it has been contended that the assessment order passed u/s. 143(3)/254 is bad in law. Without prejudice to the above, it is observed that admittedly the appellant had filed return of income for relevant accounting period in the status of "Local Authority" the Assessing Officer cannot frame assessment in any other status other than the one declared in the return of income. Thus the assessment framed in the status of "Artificial Juridical Person" without giving any notice or even an indication to the appellant that its claim for assessment in the status of 'Local Authority' was not going to be accepted, the order of the assessment is 6 held as bad in law. Reliance is placed on the following decisions of the Hon'ble Courts:-
(a) AAC vs. Appaiah Naidu (Late) (B) (172) 84 ITR 258 (SC) (b) Karuna Rani Jain vs. C.I.T. (1989) 178 ITR 32 (P&H) (c) C.I.T. vs. Suresh Chandra Gupta (1988) 183 ITR 407 (Raj.). (d) Surendranath (N) vs. C.I.T. 91993) 203 ITR 419 (Ker.).
It is further observed that even if the Assessing Officer was doubting the status of the appellant it was for him to initiate action u/s. 147 by recording the reasons in respect of the status of the appellant as that of "Artificial Juridical Person" and could have issued notice u/s. 148 of the Act in the said status. However, the Assessing Officer has not adopted the proper course and has changed the status of the appellant in the assessment order passed u/s. 143(3)/254 of the Act which is legally untenable. Thus the order passed u/s. 143(3)/254 dated 20.4.2010 is rendered as null and void. However, Assessing Officer is issued specific directions u/s. 150 of the Act to take remedial action in the case of the appellant for A.Y. 2006-07 in the status of an "Artificial Juridical Person". Ground of appeal is allowed with the above directions."7
6. For other assessment years Ld. Commissioner of Income Tax(A) has followed the aforesaid order and annulled the assessment and has given similar directions as above for those assessment years.
7. Against the above order the Revenue has filed appeals and Assessees have filed cross objections.
8. We have carefully considered the submissions and perused the records. We find that Ld. Commissioner of Income Tax (A) has noted that assessee's contention that assessment was framed in the status "Artificial Juridical Person", however, no notice u/s. 143(2)/142(1) was issued by the Assessing Officer in the said status. Thus, it was contended that assessment order passed in these cases is bad in law. It has further been claimed that as the assessee has filed return of income for the relevant accounting period in the status of 'Local Authority', the Assessing Officer cannot frame assessment in any other status other than the one declared in the return of income. Thus, the assessment farmed in the status of "Artificial Juridical Persons" without giving any notice or even an indication to the assessee that its claim for assessment in the status of 'Local Authority' was not going to be accepted, the order of the assessment is held as bad in law.
8.1 Ld. Commissioner of Income Tax (A) has further observed that even if the Assessing Officer was doubting the status of the assessee it was for him to initiate action u/s. 147 by recording the reasons in respect of the status of the assessee as that of 'Artificial Juridical Person' and could have issued notice u/s. 148 of the Act in the said status. Ld. Commissioner of Income Tax (A) further observed that however, Assessing Officer has not adopted the proper course and has 8 changed the status of the assessee in the assessment order passed u/s. 143(3)/254 of the Act which is legally untenable. Thus, Ld. Commissioner of Income Tax (A) held that order passed by the Assessing Officer is null and void.
8.2 Furthermore, Ld. Commissioner of Income Tax (A) issued a specific directions u/s. 150 of the Act to take remedial action in the case of the assessee for A.Y. 2006-07 in the status of an "Artificial Juridical Person". In this regard, we find that assessee has contended that directions given by the Ld. Commissioner of Income Tax (A) is illegal being without authority of law as the Ld. Commissioner of Income Tax (A) is not empowered to give any direction, in the order passed u/s. 251. The powers of the Ld. Commissioner of Income Tax (A) have been clearly laid down u/s. 251(1) according to which Ld. Commissioner of Income Tax (A), while disposing of an appeal has, in an appeal against an order of assessment, has power to confirm, reduce, enhance or annul the assessment. It has further been claimed that it is no where mentioned in section 251 that he may also give any direction in disposing of an appeal against an order of assessment. In the present case, the appeal has been against an order of assessment, hence, the Ld. Commissioner of Income Tax (A) has wrongly given said direction in its order, hence, it deserves to be deleted.
9 8.3 We further note that it has been one of the grounds raised before the Ld. Commissioner of Income Tax (A) by the assessee that proper opportunity of hearing was not granted to the assessee. 8.4 Upon careful consideration, in our considered opinion, on the facts and circumstances of the case, Ld. Commissioner of Income Tax (A) was not correct in holding that assessment is null and void. The defect in issuance of notice and assessment noted by the Ld. Commissioner of Income Tax (A) was not fatal so as to render the assessment null and void. It was curable defect. Further, there is cogency in the assessee's submission that Ld. Commissioner of Income Tax (A) cannot give any direction, as the same is beyond his appellate jurisdiction as per section 251(1).
8.5 In our considered opinion, upon careful consideration, we find that interest of justice will be served, if the matter is remitted to the file of the Assessing Officer, to consider all the issue raised therein afresh, after giving the assessees proper opportunity of being heard. Ld. Departmental Representative fairly accepted this proposition that the issues may be remitted to the file of the Assessing Officer to consider the issue afresh.
8.6 In this regard, we draw support from the Apex Court decision in the case of Kapurchand Shrimal Vs. CIT, 131 ITR 451, wherein it was held that the appellate authority has jurisdiction as well as the duty to 10 correct the errors in the proceedings under appeal and issue proper direction as necessary.
8.7 Since we are remitting the issues to the file of the Assessing Officer to consider the issues de nova, the Revenue appeals and Cross Objections filed by the assessee are allowed for statistical purposes.
9. In the result, all the appeals filed by the Revenue and Cross objections filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 03/7/2012, upon conclusion of hearing.
Sd/-
Sd/- Sd/-
Sd/-
[U.B.S. BEDI]
BEDI] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 03/7/2012
SRBHATNAGAR
SRBHATNAGAR
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4.CIT (A) 5.DR, ITAT
TRUE COPY
By Order,
Deputy Registrar, ITAT, Delhi Benches
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