JCIT, Muzaffarnagar v. M/s. N.S. Committee, Muzaffarnagar

ITA 20/DEL/2012 | 2008-2009
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 2020114 RSA 2012
Assessee PAN AAALN0299A
Bench Delhi
Appeal Number ITA 20/DEL/2012
Duration Of Justice 2 month(s) 27 day(s)
Appellant JCIT, Muzaffarnagar
Respondent M/s. N.S. Committee, Muzaffarnagar
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 30-03-2012
Date Of Final Hearing 06-03-2012
Next Hearing Date 06-03-2012
Assessment Year 2008-2009
Appeal Filed On 03-01-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E: NEW DELHI BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI K.D. RANJAN ACCOUNTANT MEMBER I.T. A. NO.20/DEL/2012 ASSESSMENT YEAR : 2008-09 JOINT COMMISSIONER OF INCOME-TAX M/S. N.S. COMMIT TEE RANGE-2 NEW DELHI. VS. THANA BHAWAN DISTT. MUZAFFARNAGAR. PAN: AAALN0299A (APPELLANT) (RESPONDEN T) APPELLANT BY : MRS. RENU JAUHRI CIT(OSD) RESPONDENT BY: NONE. O R D E R PER K.D. RANJAN ACCOUNTAT MEMBER: THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 2008 -09 ARISES OUT OF THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APP EALS) MUZAFFARNAGAR. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE REP RODUCED AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED IN LAW BY DECLARING THE ASSESSMENT MADE BY THE A.O. AS NULL VOID BY OBSERVING THAT THE NOTICES UNDER SECTION 143(2)/142(1) WERE NOT ISSUED IN THE STATUS OF ARTI FICIAL JURIDICAL PERSON WITHOUT APPRECIATING THE FACT THAT THE PROFORMA OF NOTICES UNDER SECTION 143(2)/142(1) ARE PRESCRIBED AND THERE IS NO COLUMN IN THESE NOTICES WHERE THE S TATUS OF THE ASSESSEE CAN BE MENTIONED. 2. THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF AO BE RESTORED. 2 2. NONE ATTENDED ON BEHALF OF THE ASSESSEE WHEN APP EAL CAME UP FOR HEARING. HAVING REGARD TO THE ISSUE INVOLVED APPE AL IS DECIDED AFTER HEARING THE LEARNED CIT-DR. 3. THE ONLY ISSUE FOR CONSIDERATION RELATES TO ASSU MPTION OF JURISDICTION UNDER SEC. 143(2)/142(1) OF THE ACT. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE THE CANE DEVELOPMENT COUNCIL (GA NNA VIKAS PARISHAD) IS A BODY ESTABLISHED FOR DEVELOPMENT OF THE RESERVED ZONE FALLING WITHIN THE TERRITORIAL JURISDICTION OF SUCH COUNCIL. THE ASSE SSEE FILED RETURN OF INCOME IN THE STATUS OF LOCAL AUTHORITY AND CLAIMED EXEMPTION OF INCOME UNDER SEC. 2(15) OF THE ACT. THE ASSESSING OFFICER ISSUED NOT ICE U/S 143(2)/142(1). IN RESPONSE THERETO THE ASSESSEES REPRESENTATIVE ATTE NDED FROM TIME TO TIME. THE ASSESSING OFFICER AFTER HEARING THE ASSESSEE C OMPLETED THE ASSESSMENT IN THE STATUS OF ARTIFICIAL JURIDICAL PERSON. 4. BEFORE THE CIT(A) THE ASSESSEE TOOK A GROUND THA T ORDER PASSED UNDER SEC. 143(3) IS ILLEGAL; THAT HE HAS TAKEN STATUS OF THE ASSESSEE AS ARTIFICIAL JURIDICAL PERSON WHEREAS THE ASSESSEE IS A LOCAL AU THORITY; AND NO SHOW CAUSE NOTICE BEFORE TAKING STATUS AS THAT OF ARTIFI CIAL JURIDICAL PERSON HAS BEEN GIVEN. IT WAS ALSO CONTENDED THAT NOTICE UNDE R SEC. 143(2) WAS NOT ISSUED IN THE STATUS OF ARTIFICIAL JURIDICAL PERSON AND THEREFORE ASSESSMENT WAS BAD IN LAW. THE LEARNED CIT(A) AFTER CONSIDERI NG THE SUBMISSIONS MADE 3 BY THE ASSESSEE HELD THAT THE STATUS OF THE CANE DE VELOPMENT COUNCIL WAS THAT OF AN ARTIFICIAL JURIDICAL PERSON AND NOT THAT OF LOCAL AUTHORITY. SINCE THE ASSESSING OFFICER HAD NOT ADOPTED THE PROPER CO URSE AND HAD CHANGED THE STATUS OF THE ASSESSEE IN ASSESSMENT ORDER UNDE R SEC. 143(3) OF THE ACT WHICH WAS LEGALLY UNTENABLE AND THEREFORE THE ORDE R PASSED UNDER SEC. 143(3) DATED 16.12.2010 WAS NULL AND VOID. THE LE ARNED CIT(A) THEREFORE ANNULLED THE ASSESSMENT. HOWEVER HE DIRECTED THE ASSESSING OFFICER TO TAKE REMEDIAL ACTION UNDER SEC. 150 OF THE ACT IN THE CA SE OF THE ASSESSEE FOR ASSESSMENT YEAR 2008-09 IN THE STATUS OF ARTIFICIAL JURIDICAL PERSON. 5. BEFORE US THE LEARNED CIT-DR SUBMITTED THAT NOT ICE ISSUED IN THE NAME OF THE ASSESSEE UNDER SEC. 143(2) WAS PROPER. THE ASSESSING OFFICER HAD DECIDED THE STATUS AS ARTIFICIAL JURIDICAL PERS ON. THEREFORE THE ISSUE OF NOTICE UNDER SEC. 143(2) CANNOT BE SAID TO BE BAD I N LAW. 6. WE HAVE HEARD THE LEARNED CIT-DR AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAD FILED RETURN OF INCOME IN THE STATUS OF LOCAL AUTHORITY. SEC. 2(31) OF THE INCOME-TAX ACT DEFINES THE PERSON AND INCLUDES THE FOLLOWING:- (I) AN INDIVIDUAL (II) A HINDU UNDIVIDED FAMILY (III) A COMPANY (IV) A FIRM (V) AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS WHETHER INCORPORATED OR NOT 4 (VI) A LOCAL AUTHORITY AND (VII) EVERY ARTIFICIAL JURIDICAL PERSON NOT FALLING WITH IN ANY OF THE PRECEDING SUB-CLAUSES. THEREFORE AS PER THE DEFINITION OF PERSON FOR TH E PURPOSE OF ASSESSMENT A LOCAL AUTHORITY AND ARTIFICIAL JURIDICAL PERSON ARE TWO DIFFERENT PERSONS. INCOME OF LOCAL AUTHORITY IS EXEMPT FROM TAX UNDER SEC. 10(20) OF THE ACT. THE EXPLANATION TO SEC. 10(20) DEFINES THE EXPRESSI ON LOCAL AUTHORITY AND MEANS (I) PANCHAYAT AS REFERRED TO IN CLAUSE (D) OF ARTICLE 243 OF THE CONSTITUTION; OR (II) MUNICIPALITY AS REFERRED TO I N CLAUSE (E) OF ARTICLE 243P OF THE CONSTITUTION; OR (III) MUNICIPAL COMMITTEE A ND DISTRICT BOARD LEGALLY ENTITLED TO OR ENTRUSTED BY THE GOVERNMENT WITH T HE CONTROL OR MANAGEMENT OF A MUNICIPAL OR LOCAL FUND; OR (IV) CANTONMENT BO ARD AS DEFINED IN SECTION 3 OF THE CANTONMENTS ACT 1924 (2 OF 1924). SEEN I N THE LIGHT OF DEFINITION OF LOCAL AUTHORITY THE CANE DEVELOPMENT COUNCIL DO ES NOT FALL IN THE DEFINITION OF LOCAL AUTHORITY WITHIN THE MEANING OF SEC. 10(20) OF THE ACT. THEREFORE THE STATUS OF ASSESSEE CANNOT BE TAKEN A S LOCAL AUTHORITY. 7. THE ASSESSING OFFICER ON THE BASIS OF RETURN FIL ED BY THE ASSESSEE HAD ISSUED NOTICE UNDER SEC. 143(2) FOR VERIFICATION OF THE RETURN FILED BY IT. WHEN THE ASSESSING OFFICER HAD ISSUED NOTICE U/S 14 3(2) IN THE NAME OF THE ASSESSEE AS LOCAL AUTHORITY AS INDICATED IN THE RET URN OF INCOME ASSESSMENT CAN NOT BE FRAMED IN THE STATUS OF ARTIFICIAL JURID ICAL PERSON. THE LEARNED 5 CIT(A) HAS PLACED RELIANCE ON THE DECISION OF ITAT IN THE CASE OF ITO VS. KAMALCHAND 22 TTJ (ALL.) 11 FOR ASSESSMENT YEAR 19 78-79. IN THIS CASE THE REVENUE SOUGHT TO CHANGE THE STATUS FROM INDIVI DUAL TO HUF AND THE AO HAD NO JURISDICTION TO ASSESS THE ASSESSEE HUF ON T HE GROUND THAT HE HAD NOT ISSUED NOTICE UNDER SEC. 147/148 OF THE ACT. IT WA S HELD THAT DEFECT OF JURISDICTION COULD NOT BE CURED BY OBTAINING CONSEN T OF THE ASSESSEE. THE FACTS OF THE CASE UNDER CONSIDERATION ARE SIMILAR T O THAT OF THE FACTS OF THE CASE OF KAMALCHAND (SUPRA). IN OUR CONSIDERED OPIN ION THE ASSESSING OFFICER COULD NOT HAVE CHANGED THE STATUS FROM LOCA L AUTHORITY TO ARTIFICIAL JURIDICAL PERSON. WE THEREFORE DO NOT FIND ANY IN FIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) IN CANCELLING THE ASSESSMENT. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. 9. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH 2012. SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH MARCH 2012. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.