M/S. MUMBAI PORT TRUST, MUMBAI v. ADDL.CIT, RANGE-12(1), MUMBAI

ITA 6765/MUM/2008 | 2004-2005
Pronouncement Date: 27-01-2011 | Result: Allowed

Appeal Details

RSA Number 676519914 RSA 2008
Assessee PAN AAATM5001D
Bench Mumbai
Appeal Number ITA 6765/MUM/2008
Duration Of Justice 2 year(s) 2 month(s) 3 day(s)
Appellant M/S. MUMBAI PORT TRUST, MUMBAI
Respondent ADDL.CIT, RANGE-12(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 27-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 27-01-2011
Date Of Final Hearing 27-01-2011
Next Hearing Date 27-01-2011
Assessment Year 2004-2005
Appeal Filed On 24-11-2008
Judgment Text
I.T.A NOS.6765 & 6791/ MUM/2008 MUMBAI PORT TRUST 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH MUMBAI. [ CORAM: D.MANMOHAN V.P. AND PRAMOD KUMAR AM ] I.T.A NOS.: 6765 & 6791/ MUM/2008 ASSESSMENT YEARS: 2004-2005 & 2005-06 MUMBAI PORT TRUST .. APPELLANT FINANCIAL ADVISOR AND CHIEF ACCOUNTS OFFICER MUMBAI PORT TRUST PORT BHAVAN SHOORJI VALLABHDAS MARG BALLARD PIER MUMBAI PAN : AAATM5001 D VS ADDL. CIT RANGE 12(1) . RESPONDEN T AAYAKAR BHAVAN M.K. ROAD MUMBAI-20. APPEARANCES: H.K.PANDA FOR THE APPELLANT HARI GOVIND SINGH FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THESE TWO APPEALS THE ASSESSEE HAS CALLED I NTO QUESTION CORRECTNESS OF CIT(A)S ORDERS DATED 29.8.2008 AND 1.9.2008 IN THE MATTER OF ASSESSMENTS UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 RESPECTIVELY. AS THE ISSUES REQUIRING OUR ADJUD ICATION IN THIS APPEAL ARE COMMON AS THESE ISSUES ARISE OUT OF COMMON FACTS AND AS T HESE TWO APPEALS WERE HEARD TOGETHER WE PROCEED TO DISPOSE OF THESE TWO APP EALS BY WAY OF THIS CONSOLIDATED ORDER. I.T.A NOS.6765 & 6791/ MUM/2008 MUMBAI PORT TRUST 2 2. THE ASSESSEE HAS DULY OBTAINED PERMISSION OF THE COMMIT TEE ON DISPUTES (CABINET SECRETARIAT) VIDE ORDER DATED 18 TH JANUARY 2011 TO PURSUE THIS LITIGATION BEFORE US IN TERMS OF HONBLE SUPREME COURTS JUDGMEN T IN THE CASE OF ONGC VS COLLECTOR OF CENTRAL EXCISE & CUSTOMS (104 CTR 31). A COPY OF WHICH IS PLACED ON RECORD. 3. ALTHOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPE AL IN THE MEMORANDUM OF APPEAL LEARNED COUNSEL URGES US TO DEAL WITH THE COMMON ADDITIONAL GROUND OF APPEAL FIRST. HE SUBMITS THAT THIS IS A PURELY LEGAL ISSUE WHICH DOES NOT REQUIRE ANY INVESTIGATION OF FACTS AND THAT IN THE E VENT OF THIS GROUND OF APPEAL BEING DECIDED IN FAVOUR OF THE ASSESSEE ALL OTHER GROUNDS OF APPEAL WILL BE RENDERED INFRUCTUOUS AND ACADEMIC NOT REQUIRING ANY ADJUDIC ATION BY US. HAVING HEARD THE RIVAL CONTENTIONS ON ADMISSION OF ADDITIONAL GROUND OF APPEAL AND HAVING PERUSED THE MATERIAL ON RECORD WE DEEM IT FIT AND PROPER T O ADMIT THE ADDITIONAL GROUND OF APPEAL AND PROCEED TO TAKE UP THE SAME. 4. THE ADDITIONAL GROUND RAISED IN BOTH THE APPEALS I S AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD AO ERRED IN NOT ALLOWING EXEMPTION EVEN THOUGH THE APPELLANTS INCOM E IS EXEMPT U/S.11 OF THE INCOME TAX ACT. 5. TO ADJUDICATE ON THIS GRIEVANCE ONLY A FEW MAT ERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE IS A MAJOR PORT TRUST SET UP UND ER THE MAJOR PORT TRUST ACT 1963. TILL ASST. YR. 2002-03 THE ASSESSEE WAS ELIGIBLE FO R EXEMPTION UNDER S. 10(20) OF THE ACT AS IT WAS COVERED BY THE DEFINITION OF L OCAL AUTHORITY FOR THAT PURPOSE. HOWEVER THE DEFINITION OF LOCAL AUTHORITY WAS CO NSIDERABLY NARROWED DOWN BY THE LEGISLATIVE AMENDMENT IN S. 10(20) W.E.F. 1ST APRIL 2 003 AND THE ASSESSEE WAS ALSO HIT BY THE SAID AMENDMENT. EXEMPTION UNDER S. 10(20) WAS NO LONGER AVAILABLE TO THE ASSESSEE. THATS WHERE THE TROUBLES STARTED FOR THE ASSE SSEE BUT FINALLY AFTER SEVERAL ROUND OF APPEALS THE ASSESSEE WAS ABLE TO GET RE GISTRATION UNDER S. 12AA W.E.F. 1ST APRIL 2003. IN THE MEANTIME HOWEVER TH E ASSESSEE HAD FILED THE IT I.T.A NOS.6765 & 6791/ MUM/2008 MUMBAI PORT TRUST 3 RETURNS WITHOUT CLAIMING THE BENEFIT OF SCHEME OF TAX ATION UNDER SS. 11 TO 13 TO WHICH THE ASSESSEE IS NOW ENTITLED BY THE VIRTUE OF INT ER ALIA REGISTRATION UNDER S. 12AA. 6. LEARNED COUNSEL FOR THE ASSESSEE PRAYS THAT THE MATTER BE RESTORED TO THE FILE OF THE AO SO THAT HE CAN EXAMINE THE MATTER AFRESH IN THE LIGHT OF THE REGISTRATION UNDER S. 12AA NOW AVAILABLE TO THE ASSESSEE. HE POINTS OU T THAT THE REQUISITE AUDIT REPORTS AND OTHER DOCUMENTS WERE NOT BEFORE THE AO A T THE STAGE OF ORIGINAL PROCEEDINGS AS AT THAT POINT OF TIME THE ASSESSEE WAS NOT GRANTED THE REGISTRATION AND WAS ACCORDINGLY NOT ELIGIBLE FOR BENEFIT TO ASSE SSMENT AS A CHARITABLE INSTITUTION. LEARNED COUNSEL SUBMITS THAT ON THESE FA CTS THE MATTER SHOULD BE RESTORED TO THE FILE OF THE AO FOR ADJUDICATION DE N OVO AS PER THE LEGAL POSITION NOW PREVAILING AND AFTER GIVING THE ASSESSEE AN OPPORTUNITY TO COMPLY WITH THE PROCEDURAL REQUIREMENTS FOR GRANTING THE RELIEF AS A CHARITABLE INSTITUTION. OUR ATTENTION IS ALSO INVITED TO ORDER DATED 30 TH SEPTEMBER 2010 PASSED BY A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF JAWAHAR LAL NEH RU PORT TRUST VS DCIT (133 TTJ 761) WHEREIN ON MATERIALLY IDENTICAL FACTS THE MAT TER WAS REMITTED TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE ON MERITS CLAIM OF TAX E XEMPTION AS A RESULT OF REGISTRATION UNDER SECTION 12AA AND IN THE LIGHT OF T HE CORRECT LEGAL POSITION. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ACCEPTS TH AT THE ISSUE IS COVERED BY TRIBUNALS ORDER IN THE CASE OF JAWAHAR LAL NEHRU POR T TRUST (SUPRA) BUT RATHER DUTIFULLY RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE FIND THAT IN JAWHAR LAL NEHRU PORT TRUSTS CASE (SUPRA) A COORDINATE BENCH OF THE TRIBUNAL HAS INTER ALIA OBSERVED AS FOL LOWS: 8. WE FIND THAT A LARGE NUMBER OF ASSESSES WHO WE RE COVERED BY THE WIDER DEFINITION OF THE EXPRESSION LOCAL AUTHORITY BEF ORE THE SCOPE OF SECTION 10(22) WAS NARROWED DOWN WITH EFFECT FROM 1 ST APRIL 2003 HAVE FACED THE SAME PROBLEM. THESE WERE THE CASES IN WHICH REGISTRATION UNDER SECTION 12A WAS NEVER SOUGHT EARLIER BECAUSE THE ASSESSEES WERE EXEM PT FROM TAX ANYWAY UNDER I.T.A NOS.6765 & 6791/ MUM/2008 MUMBAI PORT TRUST 4 SECTION 10(22) AND BY THE TIME THE REGISTRATION UN DER SECTION 12AA WAS OBTAINED DUE TO THE NECESSITY CAUSED BY THIS CHANG E IN LAW THE ASSESSEES HAD ALREADY FILED THE INCOME TAX RETURNS WITHOUT COMPLYI NG WITH THE PROCEDURAL REQUIREMENTS NECESSARY TO AVAIL BENEFIT OF TAX EXEMPT ION UNDER SECTION 11 BY THE VIRTUE OF REGISTRATION UNDER SECTION 12AA. AS T O WHAT SHOULD BE DONE IN SUCH SITUATIONS WE FIND GUIDANCE FROM HONBLE SUPREME C OURTS JUDGMENT IN THE CASE OF CIT VS UP FOREST CORPORATION (230 ITR 945) . ON MATERIALLY SIMILAR SET OF FACTS THEIR LORDSHIPS INTER ALIA OBSERVED THA T INASMUCH AS THE RESPONDENT CANNOT IN OUR OPINION BE REGARDED AS A LOCAL AUTHORITY INTEREST OF JUSTICE WOULD DEMAND THAT THE QUESTION AS TO WHETHER ITS INCOME IS LIABLE TO BE EXEMPTED UNDER SECTION 11(1) OF THE ACT SHOULD BE INVESTIGATED AND EXAMINED BY A PROPER FORUM UNDER T HE ACT . IN OUR VIEW THEREFORE THE PRAYER OF THE ASSESSEE IS QUITE IN H ARMONY WITH THE INTEREST OF JUSTICE AS VIEWED BY HONBLE SUPREME COURT. 9. THE FETTERS ON THE POWERS OF THE ASSESSING OFFIC ER AS PERCEIVED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE DONOT RESTRICT THE SCOPE OF POWERS OF THE TRIBUNAL IN GIVING APPROPRIATE DIRECTIONS WHILE REM ITTING THE MATTER TO THE FILE OF THE ASSESSING OFFICER NOR THERE IS ANYTHING IN THE LAW WHICH RESTRICTS THE ASSESSING OFFICER FROM IMPLEMENTING AN ORDER PASSED UNDER SECTION 254(1). THE RESTRICTIONS ON THE POWERS OF THE ASSESSING OFFICER THEREFORE DONOT AFFECT OUR POWERS TO ISSUE APPROPRIATE DIRECTIONS TO THE ASSES SING OFFICER IN THE INTEREST OF JUSTICE. IN VIEW OF THE FOREGOING DISCUSSIONS AND RESPECTFULLY FOLLOWING THE GUIDANCE OF HONBLE SUPREME COURT IN UP FOREST CORP ORATION CASE (SUPRA) WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE F ILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE MATTER ON MERITS FOR ELIGIBILITY TO TAX EXEMPTION AS A RESULT OF THE REGISTRATION UNDER SECT ION 12 AA NOW AVAILABLE TO THE ASSESSEE AND IN THE LIGHT OF THE REQUISITE AUDI T REPORT AND OTHER DOCUMENTS NOW FILED BY THE ASSESSEE. WHILE DOING SO THE ASSE SSING OFFICER SHALL DECIDE THE MATTER BY WAY OF A SPEAKING ORDER IN ACCORDANCE WI TH THE LAW AND AFTER GIVING A FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE. I.T.A NOS.6765 & 6791/ MUM/2008 MUMBAI PORT TRUST 5 10. HAVING HELD SO WE MAY ALSO MENTION THAT WE A RE SOMEWHAT SURPRISED BY THE HYPER TECHNICAL AND PEDANTIC STAND TAKEN BY THE LEARNED DEPARTMENTAL REPRESENTATIVE WHICH IS IN SHARP CONTRAST TO VERY FAIR AND REASONABLE STAND OF THE CBDT REPRESENTATIVE BEFORE THE CABINET SECRETAR IAT. WHILE THE CBDT IS OF THE VIEW THAT THE RELIEF CAN PERHAPS BE GIVEN EVEN BY WAY OF A RECTIFICATION ORDER THE FIELD AUTHORITIES ARE FIGHTING TOOTH AND NAIL ON PROCEDURAL ISSUES FOR EVEN EXAMINING THE CLAIM OF THE ASSESSEE ON MERITS THAT TOO AGAINST A PUBLIC SECTOR UNDERTAKING WHICH IS FULLY OWNED BY THE GOVE RNMENT OF INDIA AND WHEN THERE IS A DIRECT SUPREME COURT DECISION HOLDING TH AT INTEREST OF JUSTICE REQUIRES SUCH MATTERS TO BE EXAMINED AND INVESTIGATED BY A P ROPER FORUM UNDER THE INCOME TAX ACT. SUCH AN APPROACH OF THE FIELD AUTHO RITIES IS CERTAINLY CONTRARY TO THE SPIRIT IN WHICH COMMITTEE ON DISPUTES IN CAB INET SECRETARIAT WAS FORMED UNDER DIRECTIONS OF HONBLE SUPREME COURT IN THE CA SE OF OIL AND NATURAL GAS COMMISSION (SUPRA). ONE CAN NOT HAVE SUCH A PEDANT IC APPROACH SO AS TO LOSE SIGHT OF THE VERY OBJECTIVE OF THE CONSTITUTION OF COMMITTEE ON DISPUTES. THAT DEFEATS THE VERY PURPOSE OF THE COMMITTEE AND BELIT TLES THE STAND TAKEN BEFORE THE COMMITTEE BY SENIOR FUNCTIONARIES OF THE GOVERN MENT. WE HOPE THAT FIELD AUTHORITIES WILL TAKE NOTE OF THE BACKDROP IN WHICH COD FUNCTIONS AND MAKE GENUINE EFFORTS TO REDUCE THE UNPRODUCTIVE LITIGATI ON WHICH IS SO MUCH DEPRECATED BY HONBLE SUPREME COURT FROM TIME TO TI ME. WE LEAVE IT AT THAT. 9. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE M ATTER THAN THE VIEW SO TAKEN BY THE CO-ORDINATE BENCH. WE THEREFORE REST ORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR BOTH THE ASSESSMENT YEARS BEFORE US T O DECIDE THE MATTER BY WAY OF A SPEAKING ORDER IN THE LIGHT OF THE DIRECTI ONS GIVEN IN THE CASE OF JAWAHAR LAL NEHRU PORT TRUST (SUPRA) WHICH WILL APPLY MUTATIS MUTANDI ON THESE MATTERS AS WELL AND IN ACCORDANCE WITH LAW AND AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. 10. IN VIEW OF THE FACT THE MATTER HAS BEEN REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION OTHER GRIEVANCES RAISE D BY THE ASSESSEE WHICH DEAL I.T.A NOS.6765 & 6791/ MUM/2008 MUMBAI PORT TRUST 6 WITH THE MERITS OF THE CASE DO NOT CALL FOR ANY ADJU DICATION BY US AT THIS STAGE. THESE GROUNDS OF APPEAL ARE THEREFORE DISMISSED AS INFRUCTUO US. 11. IN THE RESULT APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON 27 TH JANUARY 2011. PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARIN G I.E. ON 27 TH JANUARY 2011 SD/- (D.MANMOHAN ) (VICE PRESIDENT) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI DATED 27 TH JANUARY 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)XII MUMBAI 4. COMMISSIONER OF INCOME TAX XII MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI