M/S GURDASPUR IMPROVEMENT TRUST vs. COMMISSIONER OF INCOME TAX & ANR

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ITA/237/2015HC Punjab & HaryanaPHHC01109871201507 September 2015Author: MR. JUSTICE SURINDER GUPTA,MRS JUSTICE DAYA CHAUDHARY5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court observed that the Income Tax Appellate Tribunal had passed two conflicting orders in the same case for the same assessment year and between the same parties. One order, dated 9.10.2012, was in favour of the assessee, while the subsequent order, dated 23.1.2014, took a converse view. The Court noted that it was not discernible whether the earlier order had been recalled before the second order was passed, and counsel for both parties were unable to provide this information. This procedural irregularity led the High Court to conclude that the matter needed to be decided afresh. Consequently, both impugned orders of the Tribunal were set aside, and the matter was remanded back to the Tribunal for a fresh decision in accordance with the law, after affording an opportunity of hearing to both parties. The High Court did not decide the substantial questions of law on merits.

What were the facts?

The assessee, Gurdaspur Improvement Trust, filed its return for assessment year 2006-07 declaring nil income. The Assessing Officer assessed income at ₹46,30,435. The CIT(A) partly allowed the appeal, granting exemption under Section 11. The revenue appealed to the Tribunal, which upheld the Assessing Officer's order. The assessee then filed an appeal to the High Court. Separately, the revenue had also filed an appeal against the CIT(A)'s order. The High Court noted that the Tribunal had passed two conflicting orders for the same assessment year and parties: one dated 9.10.2012 (in favour of the assessee) and another dated 23.1.2014 (in favour of the revenue). It was unclear if the earlier order was recalled before the second was passed. The High Court found this procedural anomaly surprising.

What were the issues?

1. Whether, after granting registration under Section 12A of the Income Tax Act, 1961, the Assessing Officer can question the objects and deem them non-charitable, and if so, whether the Tribunal was justified in holding that the trust's activities did not qualify for exemption? (Assessee's contention: No, once registration is granted, the AO cannot re-examine objects. Revenue's contention not recorded.) 2. Whether the impugned orders were contradictory, as the CIT(A) noted that case laws relied upon by the CIT related to Section 12A registration and not exemption under Sections 11 and 12, while the Tribunal relied on PUDA Vs. CIT, which also pertained to Section 12A registration? (Assessee's contention: The orders are contradictory. Revenue's contention not recorded.) 3. Whether the Assessing Officer was justified in assessing the appellant as a local authority despite having registration under Section 12AA of the Act? (Assessee's contention: No, AO was not justified. Revenue's contention not recorded.) 4. Whether the impugned orders were legally sustainable? (Assessee's contention: No. Revenue's contention not recorded.)

Which sections of the Income-tax Act were involved?

Section 260A,Section 12A,Section 11,Section 12,Section 12AA,Section 143(1)

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 237 of 2015 (O&M) Date of Decision: 7.9.2015 Gurdaspur Improvement Trust, Gurdaspur ....Appellant. Versus Commissioner of Income Tax, Amritsar and another ...Respondents. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Rohit Sud, Advocate for the appellant. Mr. Denesh Goyal, Advocate for the respondents.

1.

Delay in refiling the appeal is condoned.

2.

This order shall dispose of two appeals bearing ITA No. 237 of 2015 and 59 of 2013 as both the appeals arise out of one and same ITA No. 461(Asr)/2011 for the assessment year 2006-07 wherein in one case the said appeal has been dismissed whereas in other case the same has been allowed. ITA No. 59 of 2013 has been filed by the revenue and ITA No. 237 of 2015 has been filed by the assessee. For brevity, the facts are being extracted from ITA No. 237 of 2015. 3. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 23.1.2014 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as “the Tribunal”) in ITA No. 461(Asr)/2011 for the assessment year 2006-07 GURBACHAN SINGH 2015.10.07 16:01 authenticity of this document High Court Chandigarh -2- claiming the following substantial questions of law:- (i) Whether in facts and circumstances of the case, after the grant of registration under section 12A of the Act can the assessing officer go into the objects and hold them to be non- charitable? If know, whether the ld. tribunal was justified to hold that the activities done by the appellant trust does not qualify for exemption? (ii) contradictory? (iii) Whether in facts and circumstances of the case, the assessing officer was justified in assessing the appellant as local authority despite of the fact the appellant was granted registration under section 12AA of the Act? (iv) Whether in fact and circumstances of the case, the action of the authorities below, the GURBACHAN SINGH 2015.10.07 16:01 authenticity of this document High Court Chandigarh -3- impugned orders Annexure A-1 to A-3 are legally sustainable in the eyes of law?

4.

Put shortly, the few facts necessary for disposal of the present appeal as mentioned therein may be noticed. The appellant filed its return of income on 23.7.2007 for the assessment year 2006-07 declaring nil income in the status of a Trust. The said return was processed under Section 143(1) of the Act. The Assessing Officer vide order dated 29.12.2008 (Annexure A-1) framed the assessment at ` 46,30,435/-. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), Amritsar [hereinafter referred to as “the CIT(A)”]. The CIT(A), Amritsar vide order dated 22.6.2011 (Annexure A-2) partly allowed the appeal by granting exemption of Section 11 of the Act. Being dissatisfied with the order, Annexure A-2, the revenue filed the appeal before the Tribunal, who vide order dated 23.1.2014 (Annexure A-3) allowed the appeal by upholding the assessment order dated 29.12.2008 (Annexure A-1). Hence, the present appeal by the assessee.

5.

We have heard learned counsel for the parties.

6.

Both the appeals one by the assessee and the other by the revenue have been filed against the two conflicting orders dated 9.10.2012 (Annexure A-3 in ITA No. 59 of 2013) and dated 23.1.2014 (Annexure A-3 in ITA No.237 of 2015) passed by the Tribunal in one and the same case, i.e. ITA No. 461(Asr)/2011 for the assessment year 2006-07 between the same parties.

6.

It was not discernible whether before passing the order dated 23.1.2014, earlier order dated 9.10.2012 was recalled. Learned counsel for the parties are also unable to show that the order passed by GURBACHAN SINGH 2015.10.07 16:01 authenticity of this document High Court Chandigarh -4- the Tribunal on 9.10.2012 was ever recalled. In the absence of the said material, we are surprised to see how the second order came to be passed. Moreover, earlier the case was decided in favour of the assessee and secondly the converse view has been taken. In such circumstances, it would be appropriate to remand the matter back to the Tribunal.

7.

In view of the above, both the impugned orders dated 9.10.2012 (Annexure A-3) in ITA No. 59 of 2013 and dated 23.1.2014 (Annexure A-3) in ITA No.237 of 2015 are set aside and the matter is remanded back to the Tribunal to decide afresh, in accordance with law after affording an opportunity of hearing to both the parties. (AJAY KUMAR MITTAL) JUDGE September 7, 2015 (RAMENDRA JAIN) gbs JUDGE GURBACHAN SINGH 2015.10.07 16:01 authenticity of this document High Court Chandigarh -5- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 59 of 2013 Date of Decision: 7.9.2015 The Commissioner of Income Tax-II, Amritsar ...Appellant. Versus The Gurdaspur Improvement Trust, Gurdaspur ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Denesh Goyal, Advocate for the appellant. Mr. Rohit Sud, Advocate for the respondent.

For orders, see ITA No. 237 of 2015 (Gurdaspur Improvement Trust, Gurdaspur v. Commissioner of Income Tax, Amritsar and another). (AJAY KUMAR MITTAL) JUDGE September 7, 2015 (RAMENDRA JAIN) gbs JUDGE GURBACHAN SINGH 2015.10.07 16:01 authenticity of this document High Court Chandigarh

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