COMMISSIONER OF INCOME TAX-III LUDHIANA vs. LUDHIANA AGGARWAL COOP HOUSE BUILDING SOCIETY LTD

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ITA/450/2010HC Punjab & HaryanaPHHC01093385201022 November 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the question raised by the Revenue was not a substantial question of law. The Court noted that the Revenue's counsel was unable to demonstrate the status of the earlier order of the Tribunal. However, it was stated that a fresh assessment had been made by the Assessing Officer in pursuance of the earlier order of the Tribunal, which had thus attained finality. In light of this, the High Court found no reason to interfere with the impugned order passed by the Tribunal, which had followed its earlier order. The appeal was accordingly dismissed. The specific finding on the applicability of the principle of mutuality itself was not decided on merits by the High Court, as the appeal was dismissed on the ground that no substantial question of law arose.

What were the facts?

The Revenue appealed under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT) dated July 30, 2009, for Assessment Year 2006-07. The assessee, The Ludhiana Aggarwal Co-op. Housing Building Society Ltd., runs a school and other activities. The Assessing Officer made additions to the returned income, which declared a loss. The CIT(A) granted 50% exemption based on the principle of mutuality. The ITAT set aside the CIT(A)'s direction, holding that the percentage of income to be exempted required factual determination, and remanded the matter to the Assessing Officer for a fresh assessment, following its own earlier order for a prior assessment year concerning the same assessee.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon’ble ITAT was right in holding that the principle of mutuality applies in this case? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. The ITAT's order, which the High Court is reviewing, had remanded the matter to the Assessing Officer to consider the plea of mutuality raised by the assessee. Revenue's Contention: The Revenue, represented by its counsel, was unable to show the status of the earlier order of the Tribunal. However, it was stated that a fresh assessment had been made by the Assessing Officer pursuant to the earlier order of the Tribunal, implying that the said order had attained finality. The Revenue did not press for interference with the impugned order passed by the Tribunal, which followed the earlier order.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 22.11.2010 The Commissioner of Income Tax. -----Appellant. Vs. The Ludhiana Aggarwal Co-op. Housing Building Society Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Denesh Goyal, Standing Counsel for the appellant. --- ADARSH KUMAR GOEL, J.

1.

This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, Chandigarh dated 30.7.2009 in I.T.A. No.577/CHANDI/2009 for the assessment year 2006-07 proposing to raise following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was right in holding that principle of mutuality apply in this case?”

3.

The assessee is running a school apart from other activities. The assessee filed its return declaring loss but the Assessing Officer made addition and assessed the income accordingly. On appeal, the CIT(A) directed that 50% of the income should be treated to be exempt on the principle of mutuality. On appeal of the revenue, the Tribunal set aside the direction to treat 50% income to be exempt on the principle of mutuality on the ground that percentage had to be worked out on facts. Tthe matter was remanded to the Assessing Officer to pass a fresh order of assessment after considering the plea of mutuality raised by the assessee. The Tribunal followed its earlier order in the case of the assessee itself for the earlier assessment year.

4.

We have heard learned counsel for the appellant.

5.

Learned counsel for the appellant is unable to show the status of the earlier order of the Tribunal. However, he states that fresh assessment has been made by the Assessing Officer in pursuance of earlier order of the Tribunal. Thus, the said order having attained finality, there is no reason to interfere with the impugned order passed by the Tribunal, following the earlier order.

6.

In view of above, the question raised cannot be held to be substantial question of law.

7.

Accordingly, the appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 22, 2010 (AJAY KUMAR MITTAL) ashwani JUDGE 2

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