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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM
आयकर अपीऱीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM आयकर अपीऱ सं./ITA No.08/CTK/2018 AND रोक आवेदन सं./Stay Application No.12/CTK/2018 (Arising out of ITA No.08/CTK/2018) (ननिाारण वषा / Assessment Year :2014-2015) State Pollution Control Board, Vs. ITO, Ward-5(2), Bhubaneswar- Plot No.A-118,Paribesh 751007 Bhawan, Nilakantha Nagar, Unit-VIII, Nayapalli, Bhubaneswar-751012 स्थायी लेखा सं./PANNo. : AAALS 2490 J (अऩीलाथी /Appellant) (प्रत्यथी / Respondent) .. ननधाारिती की ओर से /Assessee by : Shri S.K.Agrawalla, AR िाजस्व की ओर से /Revenue by : Shri Subhendu Dutta, DR सुनवाई की तािीख / Date of Hearing : 25/09/2019 घोषणा की तािीख/Date of Pronouncement : 30/10/2019 आदेश / O R D E R Per L.P.Sahu, AM: This is an appeal filed by the assessee against the order of CIT(A)-2, Bhubaneswar, dated 31.10.2017 for the assessment year 2014-2015. The assessee has also filed stay petition seeking stay of outstanding demand of Rs.20,74,92,600/-. 2. Ld. AR, at the outset, submitted that appeal may be heard and decided along with the stay petition. On the other hand, ld. DR has no objection to the above contention of ld. AR. Accordingly, with the consent of both the parties appeal is heard finally.
2 ITA No.08/CTK/2018 & SA No.12/CTK/2018 3. The assessee in its appeal has raised the following grounds :- 1. That, the assessment order passed u/s 143(3) is not sustainable in view of the fact that the notice u/s 143(2) was not issued by the Ld. Assessing Officer who holds the jurisdiction over the appellant. Therefore the assessment order is liable to be quashed. 2. That, the Ld. Authorities Below are not correct in taxing the amount of Rs.49,84,95,459 in view of the fact that the appellant enjoys the tax benefits u/s 10(46) of the Act, moreover the total receipts of Rs.49,84,95,459 does not relates to the impugned assessment year. 3. That, the Ld. Forums Below has committed an error of law in making additions of Rs.2,00,00,000 u/s 40(a)(ia) of the Act in view of the fact that the advances of Rs.2,00,00,000 given to IDCO for capital expenditure, therefore the additions of Rs.2,00,00,000 is liable to be deleted. 4. That, the appellant craves to alter, amend, modify or add any other ground that may be considered necessary in the course of appeal proceeding.
Brief facts of the case are that the assessee, Odisha State
Prevention and Control of Pollution Board was constituted in
pursuance of Sub-section(l) of Section-4 of the Water ( Prevention and
Control of Pollution) (Amendment) Act, 1974 vide notification
No.1481-VII-HI-11/83(Vol.ll)-S.T.E dtd. 15.07.1983 issued by
Department of Science, Technology and Environment, Government of
Orissa. Thereafter, the Board was re-designated as State Pollution
Control Board, Odisha vide notification No.Env-E(F)/8/89/1882.F&E
dtd. 16.07.1999. The filed the return of income on 27.03.2016 for the
assessment year 2014-2015 with total income at Rs.Nil. Subsequently,
the case was selected for scrutiny under CASS and notices u/s.143(2)
and 142(1) of the Act were issued to the assessee. In compliance the AR
of the assessee appeared from time to time and the case was discussed.
3 ITA No.08/CTK/2018 & SA No.12/CTK/2018 On perusal of the return of income, it was seen by the AO that the
assessee at Col. 5 (c) of Schedule-BP (computation of income from
Business or Profession) has claimed exemption u/s.10(2) of the I. T.
Act, 1961 amounting to Rs.49,84,95,459/- considering it as a local
authority. The AO asked the assessee to furnish the evidence in
support of claim of exemption u/s.10(2) of the I. T. Act, 1961. The
assessee vide reply dtd. 07.12.2016 stated that exemption application
filed before the CIT, Bhubaneswar u/s.10(46) of the Act which was
pending and the assessee-State Pollution Control Board is a State
Government Organization, which is not liable for Union Taxation. The
AO did not accept the explanation of the assessee and completed the
assessment u/s.143(3) of the Act after making various additions and
passed order dated 15.12.2016.
Feeling aggrieved by the order of AO, the assessee appealed
before the CT(A) and the CIT(A) considering the submissions of the
assessee and findings of AO has dismissed the appeal of the assessee.
Further feeling aggrieved by the order of CIT(A), the assessee is
in appeal before the Income Tax Appellate Tribunal.
Ld. AR submitted on the ground No.1 that the concerned
Assessing Officer has not issued notice u/s.143(2) and does not hold
jurisdiction on the assessee before him as the assessee-State Pollution
Control Board is in Bhubaneswar. Therefore, the order passed by the
4 ITA No.08/CTK/2018 & SA No.12/CTK/2018 AO is not tenable and prayed for quashing the assessment order. In
support of the same, ld. AR relied on the following decisions :-
i. Sh. Ram Kumar Vs. ITO, ITA No.785/Del/2016, order dated 17.02.2017(Delh Tribunal); and ii. Kalinga Institute of Industrial Technology(KIT) Vs. DCIT, W.P.(C)No.898/2017, dated 06.03.2019 (Odisha High Court)
In respect of ground No.2, ld. AR submitted that the assessee company
enjoys the benefit of exemption u/s.10(46) of the Act in respect of
receipts of the institution and also in the present case the receipt does
not relate to impugned assessment year. Ld. AR also argued that the
Assessing Authority has made addition of Rs.2,00,00,000/- in respect of
advances given to IDCO towards capital expenditure and was disclosed
and also filed an application with a prayer for admission of additional
evidences filed before us.
On the other hand, ld. DR vehemently opposed to the admission
of additional evidences as they are being filed for the first time before
the Tribunal and the AO was deprived to verify the same. Ld. DR
further submitted that the case of the assessee was selected for
scrutiny under CASS on 19.09.2016 for the assessment year 2014-2015
and the jurisdictional Assessing Officer at that time as per data base of
the Income Tax Department was Shri Niranjan Behera, ITO Ward-
Bhadrak, Bhadrak. Thereafter the assessee himself made application
bearing No.14620/I/Accts/38/2015-16, dated 28.09.2016 for
5 ITA No.08/CTK/2018 & SA No.12/CTK/2018 transferring the case stating therein that the assessee-State Pollution
Control Board, Odisha, which is located at Paribesh Bhawan, A/118,
Nilakantha Nagar, Unit-VII, Bhubaneswar-751012 having
PANAAALS2490J is under the category of Local Authority, which was
received by the Income Tax Department on 29.09.2016. Thereafter the
case was been transferred to ITO, Ward-5(2), Bhubaneswar vide
transfer order No.200000213847, dated 25.10.2016. In this regard,
ld.DR placed on record a system generated jurisdiction history details.
Ld. DR also submitted that the assessee participated in the assessment
proceedings and did not raise any question regarding jurisdiction for
issuing notice u/s.143(2) of the Act, even in the appellate proceedings
no grievance was also sought on this ground, therefore, the assessee is
not entitled to raise this issue before the Tribunal. In support of this, ld.
DR relied on the decision of Hon’ble Supreme Court in the case of CIT
Vs. Jai Prakash Singh [1996] 219 ITR 737 (SC) and in the case of CR
Foods (India) (P.) Ltd. Vs. ITO [2012] 26 taxmann.com 241 (All). Ld. DR
also submitted that the case laws relied on by the ld. AR of the assessee
is not applicable in the present case because there was jurisdiction of
ITO, Bhadrak Ward at the time of issuance of notice u/s.143(2) of the
Act as is evident from the system data base of the Income Tax
Department. Even in respect of exemption u/s.10(46) the assessee has
made an application before the CIT(A), Bhubaneswar, which relates to
6 ITA No.08/CTK/2018 & SA No.12/CTK/2018 subsequent years, therefore, the assessee’s case does not have any
merit and liable to be dismissed.
After hearing both the sides and carefully perusing the entire
materials available on record and the orders of authorities below,
prima facie, on the ground of non-issuance of notice u/s.143(2) of the
Act, who holds the jurisdiction over the assessee as argued by ld. AR,
we find that the assessee is a Government of Odisha Undertaking
namely State Pollution Control Board bearing PAN No.AAALS2490J,
wherein the address is given as State Pollution Control Board, Plot
No.A-118, Paribesh Bhawan, Nilakantha Nagar, Unit-VIII, Nayapalli,
Bhubaneswar-751012 and filed return of income for A.Y.2014-2015
electronically showing total income as Nil. From the PAN details, it is
clear that the jurisdictional AO of the assessee is ITO, Bhubaneswar.
However, when the case of the assessee was selected for scrutiny, the
ITO, Bhadrak Ward, Bhadrak issued notices u/s.143(2) & 142(1)of the
Act, dated 19.09.2016. Thereafter on request of the assessee that the
ITO Bhadrak Ward Bhadrak is not the jurisdictional AO of the assessee,
therefore, the ITO Bhadrak vide letter dated 17.10.2016 transferred the
case stating that the jurisdiction of the assessee lies with the ITO Ward-
5(2), Bhubaneswar. During the course of hearing, we asked the ld.DR
for filing basic data of the assessee at the time of filing of the PAN. In
7 ITA No.08/CTK/2018 & SA No.12/CTK/2018 reply, the ld. DR produced CBN PAN data, which is placed on record
and the same is reproduced as under :-
From the above scanned data, it is clear that while applying for
PAN, the assessee had mentioned clearly his address as noted above of
Bhubaneswar, therefore, the Income Tax Department has also noted
8 ITA No.08/CTK/2018 & SA No.12/CTK/2018 this address in the data base and allotted PAN accordingly. We also
observe that the ld. DR also filed data summary generated from the
Income Tax Website in which the jurisdiction of the assessee has been
mentioned as Income Tax officer, Bhadrak and the notice u/s.143(2) of
the Act has been issued by the ITO Bhadrak at the address given in the
PAN data. The notice issued by the ITO Bhadrak reads as under :-
9 ITA No.08/CTK/2018 & SA No.12/CTK/2018 Further we noticed that when the assessee asked the ITO Bhadrak
Ward Bhadrak for transferring the case to concerned ITO
Bhubaneswar, then the ITO Bhadrak has transferred the case of the
assessee, copy of which is placed at pager book at page 23, stating as
under :-
10 ITA No.08/CTK/2018 & SA No.12/CTK/2018
From the above it is clear that the ITO, Bhadrak when issued
notice to the assessee u/s.143(2) of the Act on 19.09.2016, the assessee
he should have taken in his cognizance that if the address mentioned at
Bhubaneswar which is not the jurisdiction of the ITO Bhardak, he
should have immediately informed to the jurisdictional AO of the
assessee rather issuing notice u/s.143(2) & 142(1) of the Act to the assessee.
In the totality of facts and circumstances of the case, we are of the
opinion that, the Income Tax data base is showing the jurisdictional AO
of the assessee at Bhadrak, however, from the PAN data base shown by
11 ITA No.08/CTK/2018 & SA No.12/CTK/2018 the department, the jurisdictional AO of the assessee is at Bhubaneswar
in the PAN data base which is primary interaction with the Income Tax
Department. Therefore, why the assessee should suffer the mistake
occurred on the part of the Income Tax Department in spite of giving
full and true information to the Department. Considering the above
and as per the data of the Income Tax Department notice must be
issued by the jurisdictional AO but not by the ITO Bhadrak. In the
peculiar facts and circumstances of the case the case law relied on by
the ld.DR is not applicable in the case in hand. Therefore, the notice
issued u/s.143(2) of the Act is beyond jurisdiction of the AO, which is
not sustainable in law and, consequently, the assessment order passed
by the AO is hereby quashed. Accordingly, we set aside the impugned
order passed by the CIT(A) and quashed the assessment order dated
15.12.2016. Thus, the legal ground of appeal of the assessee is allowed.
As we have decided the legal ground raised by the assessee
holding that the notice u/s.143(2) of the Act issued by the AO, who
does not hold the jurisdiction over the assessee is not sustainable and
consequently quashed the assessment order passed by the AO,
therefore, other grounds raised by the assessee on merits are not
required to be adjudicated upon by us.
12 ITA No.08/CTK/2018 & SA No.12/CTK/2018 14. The assessee has filed stay petition for stay of demand. As we have heard and decided the appeal of the assessee, the stay petition of the assessee has become infructuous and accordingly it is dismissed. 15. In the result, appeal of the assessee is allowed and stay petition of the assessee is dismissed. Order pronounced in the open court on this 30/10/ 2019. Sd/- Sd/- (C.M.GARG) (L.P.SAHU) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER कटक Cuttack; ददनांक Dated 30/10/2019 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : 1. अऩीलाथी / The Appellant- State Pollution Control Board, Plot No.A-118,Paribesh Bhawan Nilakantha Nagar, Unit-VIII, Nayapalli, Bhubaneswar-751012 2. प्रत्यथी / The Respondent- ITO, Ward-5(2), Bhubaneswar-751007 3. आयकि आयुक्त(अऩील) / The CIT(A), 4. आयकि आयुक्त / CIT 5. ववभागीय प्रनतननधध, आयकि अऩीलीय अधधकिण, कटक / DR, ITAT, Cuttack 6. गार्ा पाईल / Guard file. सत्यावऩत प्रनत //True Copy// आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीऱीय अधिकरण, कटक / ITAT, Cuttack