M/s Thuraiyur Taluk Pawn Brokers Association, Thuraiyur v. ACIT, Trichy

ITA 1512/CHNY/2006 | misc
Pronouncement Date: 22-10-2010

Appeal Details

RSA Number 151221714 RSA 2006
Assessee PAN AAATT6265E
Bench Chennai
Appeal Number ITA 1512/CHNY/2006
Duration Of Justice 40 year(s) 9 month(s) 21 day(s)
Appellant M/s Thuraiyur Taluk Pawn Brokers Association, Thuraiyur
Respondent ACIT, Trichy
Appeal Type Income Tax Appeal
Pronouncement Date 22-10-2010
Appeal Filed By Assessee
Assessment Year misc
Appeal Filed On 01-01-1970
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH D : CHENNAI [BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE ACCOUNTANT MEMBER] I.T.A.NOS.1512 & 1513/MDS/2006 ASSESSMENT YEARS : 2000-01 & 2001-02 M/S THURAIYUR TALUK PAWN BROKERS ASSOCIATION NO.23 HOSPITAL ROAD THURAIYUR VS THE ACIT COMPANY CIRCLE II TRICHY [PAN - AAATT6265E ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR RESPONDENT BY : SHRI TAPAS KUMAR DUTTA O R D E R PER HARI OM MARATHA JM: THESE TWO APPEALS PERTAINING TO ASSE SSMENT YEARS 2000-01 AND 2001-02 HAVE BEEN FILED BY THE ASSESSEE AGAINS T SEPARATE ORDERS OF THE LD. CIT(A) TIRUCHIRAPPALLI BUT PASSED ON T HE SAME DATE 18.3.2006 FOR THE SAKE OF CONVENIENCE AND BREVITY WE PROCEED TO DECIDE THEM BY A COMMON ORDER. 2. THE GROUNDS TAKEN IN THESE APPEALS ARE ALMOST I DENTICAL BUT FOR READY REFERENCE THESE ARE BEING EXTRACTED HERE IN AS UNDER: ITA 1512 & 1513/06 :- 2 -: ASSESSMENT YEAR - 2000-01 : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) TIRUCHIRAPALLI IN ITA.NO.318/03-04 DATED 18-3-2006 FOR THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER UPON REJECTING THE GROUNDS CHALLE NGING THE VALIDITY AND THE PROCEDURE ADOPTED IN RE-OPENING TH E ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE REASONS RECORDED FOR RE-OPENING WAS NOT FURNISHED TO THE AP PELLANT IN SPITE OF THE SPECIFIC REQUEST IN WRITING MADE BEFO RE THE ASSESSING OFFICER. 4. THE CIT (APPEALS) FAILED TO APPRECIATE THAT ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE IS N ULLITY IN LAW. 5. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ORDER OF RE- ASSESSMENT UNDER CONSIDERATION WAS PASSED OUT OF TI ME WITHOUT JURISDICTION AND NOT SUSTAINABLE BOTH ON TH E GROUND OF RE- OPENING AS WELL AS ON THE GROUNDS CHALLENGING THE A DDITIONS MADE THEREIN. 6. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE FINDINGS IN THIS REGARD GIVEN IN PARAGRAPH 4.1 OF THE IMPUGNED ORDER WERE INCORRECT INVALID UNJUSTIFIED AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW. 7. THE CIT (APPEALS) ERRED IN SUSTAINING THE DISALL OWANCE OF THE EXPENSES INCURRED ON THE COMMITTEE MEETINGS PARTLY IN AS MUCH AS THE EXPENSES TO THE TUNE OF RS.18 596/- WAS INCURRE D FOR ACHIEVING AND IN FURTHERANCE OF THE OBJECTS OF THE APPELLANT. 8. THE CIT(APPEALS) ERRED IN SUSTAINING THE DISALL OWANCE OF OUR PROGRAMME EXPENSES PARTLY AND HAVING APPRECIATED TH E PURPOSE AND THE LIVE NEXUS OF THE EXPENSES UNDER CONSIDERAT ION WITH THE OBJECTS OF THE APPELLANT IT WAS WRONG TO PARTLY SUS TAIN THE DISALLOWANCE IN AS MUCH AS THE EXPENSES INCURRED CO ULD BE ITA 1512 & 1513/06 :- 3 -: CONSIDERED WHOLLY FOR THE PURPOSES OF DEVELOPMENT O F TRADE AND COMMERCE AND FOR PROMOTING THE PAWN BROKERS ACTIVIT IES. 9 . THE CIT (APPEALS) ERRED IN SUSTAINING THE DISALLOWA NCE OF C L A IM O F EXPENSES RELATING TO LICENCE RENEWAL FEE WITHOUT AS SIGNING PROPE R A ND VALID REASONS FOR THE SAME AND FINDINGS IN THIS REG ARD RECORDED IN PARARAGRAPH 6 . 4 OF THE IMPUGNED ORDER WERE NOT CORRECT UNJUST I F I E D I NVALID AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW . 10 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE NAT URE OF THE EXPENSES INCURRED WITH REFERENCE TO THE OBJECTS AND GROUND NO . 4 RAISED BEFORE HIM WERE TOTALLY OVERLOOKED IN THE OR DER UNDER APPEA L . 11 . THE CIT (APPEALS) ERRED IN SUSTAINING THE DISALLOWA NCE OF EXPENSES CLAIMED ON SEAL OF THE MEMBERS WITHOUT ASS IGNING PROPE R AND VAL I D REASONS AND FINDINGS IN THIS REGARD RECORDED I N PARAG R AP H 6 . 5 OF THE IMPUGNED ORDER WERE NOT CORRECT UNJUSTIFIED INVALID AND NOT SUSTAINABLE BOTH ON FACTS AND IN LA W. 1 2 . THE CIT (APPEALS ) FAILED TO APPRECIATE THAT THE GROUND NO . 5 R AISED BEFORE HIM WAS OVERLOOKED WHILE GIVING DECISI ON ON THE ABOVE I SSUE . 1 3 . THE CIT (APPEALS) ERRED IN SUSTAINING THE TAXATION OF RS . 16 53 000/- ARISING ON ACCOUNT OF SALE OF LAND UPON FURTHER CONFIRMING THE REJECTION OF THE REASON FOR ACCUMULA TION/APPLICATION O F THE SAID CAPITAL GAINS . 14 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PRO VISIONS OF SECTION 11 (2) READ WITH FORM NO.1 0 OF THE ACT WER E DULY COMPLIED WITH AND THE REASONS FOR ACCUMULATION WAS FOR THE PURPOSE OF THE OBJECTS OF THE APPE L LANT . 15 . THE CIT (APPEA L S) FAILED TO APPRECIATE THAT SUSTENANCE OF THE TAXAT I ON OF CAPITAL GAINS WAS WRONG INCORRECT UNJUSTIFIED AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW . 1 6 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE REL EVANT RESOLUT I O N PASSED I N THIS REGARD WAS TOTALLY OVERLOOKED AND THE INCOME IN THE FORM OF CAPITAL GAINS WAS CORRECTLY ITA 1512 & 1513/06 :- 4 -: ACCUMULATED/APPLIED . 17 . THE CIT (APPEALS ) FAILED TO APPRECIATE THAT THE FINDINGS ON THIS I SSUE R ECORDED IN PARAGRAPH 6 . 7 OF THE IMPUGNED ORDER WERE NOT CORRECT UNJUSTIFIED I NVAL I D AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW . 18 . T HE CIT (APPEALS ) FAI L ED TO APPRECIATE THAT THE GROUND NO .13 RAISED BEFORE HIM WAS NOT CONSIDERED BEFORE SUSTAIN ING THE ACTION TO T AX THE CAP I TA L GAINS UNDER CONSIDERATION . 1 9 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT IN ANY EVENT THE C OMPUTAT I ON OF CAPITAL GAINS WAS WRONG I NCORRECT I NVALID AND NO T SUSTA I NABLE ON FACTS WH I LE BRINGING TO TAX I N THE ORDER OF ASSESSMEN T . 20 . T HE APPEL L ANT CRAVES LEAVE TO F I LE ADD I TIONAL GROUNDS/ARGUMEN T S AT THE TIME OF HEARING . ASSESSMENT YEAR - 2001-02 1. THE ORDER OF THE COMM I SSIONER OF INCOME TAX ( APPEALS ) TIRUCHIRAPALLI IN ITA . NO . 319/03-04 DATED 18-3-2006 FOR THE ABOVE ASSESSMENT YEAR I S CONTRA R Y TO LAW FACTS AND IN THE CIRC UMSTANC ES O F THE CASE . 2 . T HE CIT ( APPEALS) ERRED IN CONFIRMING THE ORDER OF THE ASSESS I N G OF FI CE R UPON REJECTING THE GROUNDS CHALLENG I NG THE VALIDITY AND THE PROCEDURE ADOPTED IN RE-OPENING TH E ASSESSMENT FOR THE ASSESS M E NT Y EA R U N DER CONSIDERATION . 3. T HE CI T ( APPEALS ) FAILED TO APPREC I ATE THAT THE REASONS RECO R DE D F OR RE-OPENING WAS NOT FURNISHED TO THE APPELLANT IN SPITE OF THE S PECIFIC R EQUEST IN WRITING MADE BEFORE THE ASSESSING OFF I CE R. 4. T HE CIT ( APPEA L S ) FA I LED TO APPRECIATE THAT ANY O R DER PASSED IN VI O L AT I O N OF THE PRINCIPLES OF NATURAL JUSTICE IS NULLITY IN LAW . 5. T HE CIT ( APPEALS ) FAILED TO APPRECIATE THAT THE ORDER OF RE - ASSESSMENT UNDE R CONS I DERATION WAS PASSED OUT OF T I ME W I T H O U T J UR I SDICT I ON AND NOT SUSTAINABLE BOTH ON THE GROUND OF RE - OPEN I NG A S WE LL AS O N THE GROUNDS CHALLENGING THE ADDITIONS MADE THERE I N . ITA 1512 & 1513/06 :- 5 -: 6. T HE C IT ( APPEALS ) FAILED TO APPRECIATE THAT THE FIND I NGS IN T H I S R EGARD GIVEN IN PARAGRAPH 4 . 1 OF THE IMPUGNED ORDE R WERE I NCO RR EC T I NVA L ID U NJUSTIFIED AND NOT SUSTAINABLE BOTH ON FACTS AND IN L AW . 7. TH E CI T ( APPEA L S ) ER R ED I N SUSTAINING THE DISALLOWANCE OF T H E E XPENSES I NCURRED ON THE COMMITTEE MEETINGS PARTLY IN A S MUC H A S TH E EXPE N SES TO THE TUNE OF RS . 14 538/ - WAS INCUR R ED FO R ACH I EV I NG AND I N FURTHERANCE OF THE OBJECTS OF THE APPELLANT. 8 . THE CIT (APPEALS) ERRED IN SUSTAINING THE D I SALLOWANCE OF TOU R PROGRAMME EXPENSES PARTLY AND HAVING APPRECIATED TH E PURPOSE A ND THE L IVE NEXUS OF THE EXPENSES UNDER CONS I DERATION WITH THE OBJECTS O F THE APPELLANT IT WAS WRONG TO PARTLY SUSTAIN THE DISALLOWANCE I N AS MUCH AS THE EXPENSES I NCURRED COULD BE CONSIDERED WHOLLY FOR THE PURPOSES OF DEVELOPMENT O F TRADE AND COMMERCE AND FOR PROMOTING T HE PAWN B R OKE R S A C T IV IT I ES . 9 . TH E CIT (A PPEA L S ) ERRED IN SUSTAINING THE DISALLOWANCE O F CL A IM OF EXPENSES R E L ATING TO LICENCE RENEWAL FEE WITHOUT ASSIGNING PROPER A ND VA LI D R EASONS FOR THE SAME AND FINDINGS IN THIS REGARD RECORDED IN P A R A R AGRAPH 6 . 5 OF THE IMPUGNED ORDER WERE NOT CORRECT UNJUSTIFIED INV A LI D AND NOT SUSTA I NABLE BOTH ON FACTS AND IN LAW . 10 . T HE CIT ( APPEALS ) FAILED TO APPRECIATE THAT THE NATURE OF T HE EX PENSES I NCURRED WITH REFERENCE TO THE OBJECTS AND GROUND NO . 8 R A I SED BEFORE H I M WERE TOTALLY OVERLOOKED I N THE ORDER UNDER APPEA L . 11 . THE CIT ( APPEALS ) ERRED IN CONFIRMING THE DISALLOWANCE O F EX PENSES R ELATING TO PRESENTS GIVEN TO THE MEMBERS OF THE APPE LL AN T T O THE EXTENT OF RS . 12500/- AND EXPENSES ON CALENDAR TO THE EXTEN T OF RS . 3000 / -. 12 . T HE APPELLANT C R AVES L EAVE TO FILE ADDITIONAL G R OUNDS / A R GU M E NT S AT THE T I ME OF HEARING . 3. AT THE VERY OUTSET OF THE HEARING IT WAS NOTICED THAT THE ASSESSEE-SOCIETY HAD CLAIMED EXEMPTION U/S 11 WHICH WAS INITIALLY ALLOWED BUT WHEN SUBSEQUENTLY IT WAS NOTICED BY THE ASSESSING OFFICER ITA 1512 & 1513/06 :- 6 -: THAT THE APPLICATION OF INCOME WAS FOR THE BENEFITS OF THE MEMBERS ONLY AND NOT TOWARDS ANY CHARITABLE ACTIVITY AS DEF INED IN SECTION 2(15) OF THE I.T. ACT WITH A VIEW TO WITHDRAW THE SAME RE-ASSESSMENT PROCEEDINGS U/S 147 R.W.S 148 WERE INITIATED. THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE WAS NOT PROVIDED A CO PY OF REASONS RECORDED IN SPITE OF SPECIFIC REQUEST HAVING BEEN M ADE IN WRITING BEFORE THE ASSESSING OFFICER. IT WAS FURTHER SUBMI TTED THAT SECTION 11(3)(C) HAS TO BE READ TOGETHER HARMONIOUSLY AND T HE WORD UTILIZATION IN SUB-SECTION (C) MEANS APPLICATION AS IN SUB-CLAUSE(A). IN SUCH CIRCUMSTANCES RELIANCE WAS PLACED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS M.C T. MUTHIAH CHETTIAR FAMILY TRUST AND OTHERS 245 ITR 400. 4. AFTER HEARING BOTH SIDES AND GOING THROUGH THE RECO RDS IT WAS FOUND THAT THE ASSESSEE HAD MADE A REQUEST FOR GETT ING THE REASONS RECORDED FOR REOPENING OF THE ALREADY ACCEPTED RETU RNS WHICH WAS ADMITTEDLY NOT PROVIDED TO THE ASSESSEE. MOREOVER THE DECISION OF THE HON'BLE MADRAS HIGH COURT AND OTHER DECISIONS OF TH E TRIBUNAL IN THIS REGARD ON WHICH RELIANCE WAS PLACED COULD NOT BE P LACED BEFORE THE ASSESSING OFFICER IN THE ABSENCE OF REASONS BEING P ROVIDED TO THE ASSESSEE. THEREFORE IT WAS FELT APT REASONABLE A ND JUSTIFIABLE TO RESTORE THE ENTIRE ISSUE TO THE FILE OF THE ASSESSI NG OFFICER AFTER SETTING ITA 1512 & 1513/06 :- 7 -: ASIDE THE APPELLATE ORDERS WHICH ACCORDING TO US W OULD MEET THE ENDS OF JUSTICE IN BOTH THESE CASES. ACCORDINGLY WE RE STORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME DE NOVO AFTER HEARING THE ASSESSEE ON THE REASONS FOR REOPENING OBVIOUSL Y AFTER SUPPLYING THE COPIES THEREOF AND AS PER LAW SUBJECT OF-COURS E TO POINT OF LIMITATION. 5. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STA TISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 29.9.2010. SD/- SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 29 TH SEPTEMBER 10 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR