STATE POLLUTION CONTROL BOARD,BHUBANESWAR vs. ITO, WARD-5(2), BHUBANESWAR

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.

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.

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.

in appeal before the Income Tax Appellate Tribunal.

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.

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.

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 :-

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

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.

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.

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