TRIVENI POWERLOOM COOPERTATIVE SOCIETY vs. INCOME TAX OFFICER

Judgment 28/08/2018 This appeal has been filed by assessee-appellant against the judgement of the Income Tax Appellate Tribunal, Jaipur dated 31.8.2017, which was admitted to hearing by this Court on 24.4.2018 on the following substantial question of law: “Whether the ld. ITAT was right in law in confirming proceedings initiated u/s.148 of the Act against the assessee appellant when the re-assessment order was passed against BODY OF ASSOCIATION whereas proceedings were initiated against the status as an INDIVIDUAL.” Learned counsel for the appellant has contended that the appellant-M/s. Triveni Powerloom Cooperative Society acquired an immovable property from RIICO on 5.7.2007. However, since the appellant could not commence business, it has sold off the (2 of 4) [ITA-56/2018] property acquired by it from RIICO during the assessment year 2008-09. Indisputably, the assessee-appellant did not file its income tax return for the year under consideration i.e. assessment year 2008-09. The Income Tax Officer, Ward No.6(2), Jaipur initiated the proceedings u/s.148 of the Act against Shri Munna Lal Katta, President of M/s. Triveni Powerloom Cooperative Society Ltd. vide notice dated 23.3.2015. Shri Siddharth Ranka, learned counsel for the appellant has contended that in the form enclosed with notice u/s.148 for recording reasons for initiating proceedings under Section 148, the Assessing Officer selected the status of the assessee as individual, but the notice dated 23.3.2015 was addressed to Shri Munna Lal Katta as President of M/s. Triveni Powerloom Cooperative Society Ltd. The Assessing Officer passed an order on 15.3.2016 under Section 144 read with 148 of the Act whereby he determined the income of the assessee-appellant as Rs.16,42,752. At that stage, he realised his mistake in selecting wrong status of the person for initiating the re-assessment proceedings. Accordingly, the Assessing Officer selected the status of the assessee as Body of Association and also issued demand notice dated 15.3.2016 wherein he selected the status of the assessee as Body of Individual. The appellant-assessee preferred first appeal before the Commissioner of Income Tax (Appeals), who vide order dated 30.9.2016 rejected the ground of initiating proceedings u/s.148 of the Act. However, the CIT(A) granted part relief on account of addition made by the Assessing Officer by restricting the addition to Rs.10,12,704 instead of Rs.16,42,752. The appellant-assessee then preferred second appeal before the ITAT, which vide its order dated 31.8.2017 has confirmed the findings of the CIT(A) by (3 of 4) [ITA-56/2018] Agra-(2016) 68 Taxmann.com 102 (Allahabad) and CIT vs. Ram Das Deokinandan Prasad-(2005) 148 Taxman 203 (Allahabad) and Mishrilal Semlavada-(1996) 87 Taxman 124 (MP) that when the Assessing Officer in the assessment year has selected the status of Body of Association and issued the demand notice on that basis, he cannot later change it to `Individual’. The assessment order could not have been framed against Munna Lal Katta as individual when the reassessment was initiated against the Body of Association by the Assessing Officer, whereas the proceedings were initiated against its President considering status as Body of Individual. Shri Prateek Kedawat on behalf of Shri R.B. Mathur, learned counsel for the respondent has opposed the appeal and supported the judgement of the Income Tax Appellate Tribunal. Having heard the learned counsel for the parties and perused the impugned judgement passed by the Tribunal, we hardly find any strength in the argument of the learned counsel for the appellant that the Tribunal in its order has taken note of the fact that notice was issued in the name of Individual in its capacity as the President of M/s. Triveni Powerloom Cooperative Society Ltd., which is borne out from the record. The Tribunal, therefore, on consideration of the written statement filed by the assessee was not inclined to interfere with the order passed by the CIT(A). The (4 of 4) [ITA-56/2018] notice issued to the assessee u/s.148, which is on record as Annexure-1 clearly indicates that such notice was issued to Shri Munna Lal Katta as the President of M/s.Triveni Powerloom Cooperative Society. Mere selection of the individual could not therefore make any difference, which in any case, was corrected in the assessment year when it was indicated as Body of Association. Even otherwise, the learned ITAT has substantially restricted the addition to Rs.4,32,628 instead of Rs.16,42,752 as made by the Assessing Officer, which was reduced by the CIT(A) to Rs.10,12,704. The cited judgements are distinguishable on facts. We

therefore do not find any error in the order passed by the learned ITAT and any merit in this appeal. The appeal is therefore dismissed and the question proposed aforesaid is accordingly answered in favour of the revenue. (GOVERDHAN BARDHAR),J (MOHAMMAD RAFIQ),J RS/196