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Income Tax Appellate Tribunal, DELHI BENCH “B” BENCH NEW DELHI
Before: SHRI P.K. BANSAL & SHRI AMIT SHUKLA
ORDER
PER AMIT SHUKLA, JUDICIAL MEMBER:
The aforesaid appeal has been filed by the assessee against impugned order dated 16.10.2014, passed by the Ld. CIT (Appeals), Meerut for the quantum of assessment passed u/s 143(3) for the A.Y. 2011-12. In the grounds of appeal
, assessee has raised following grounds:- “1. That the, order under appeal is contrary to law and facts of the case.
2. That on the whole facts and circumstances of the case, the order passed by the Ld. CIT(A) is without allowing proper and sufficient opportunity of being'; heard.
That on the whole facts and circumstances of the case and materials on record, the Ld. C.I.T. (A) is not justified and correct in dismissing the appeal when the notice issued u/s 143(2) and the relevant assessment order passed by the Addl. CIT, Range- Bulandshahar in the case on this basis is illegal and without jurisdiction.
4. That the Addl. CIT, Range-Bulandshahar issuing jurisdictional notice u/s 143(2) and passing the relevant assessment order u/s 143(3) on this basis has wrongly exercised the powers and functions of an 'Assessing Officer' in the case when he is not an 'Assessing Officer' in the case within the meaning of section 2(7A) of the IT Act'1961, hence the Ld.CIT(A) is not justified and correct in dismissing the appeal rejecting the ground taken by the appellant in this respect. 5. That the rejection of the ground relating to assumption of jurisdiction over the case, by the Ld. CIT (A) on the basis of provision u/s 124(3)(a) is not justified and correct when this provision does not apply in the case. 6. That on the whole facts and circumstances of the case and materials on record, the Ld. CIT (A) is not justified and correct in treating an application filed for summoning the copy of order/direction passed u/s 2(7A), if any, with regard to the appellant's case and requesting for adjournment of hearing of appeal fixed on 15.10.14 as a 'written submission' in the appeal and in deciding the appeal merely on this basis. 7. That on the whole facts and circumstances of the case, the Ld. CIT (A) is not justified and correct in not adjudicating upon the material grounds of appeal
other than the ground relating to jurisdiction.
8. That the addition made by the Id.AO is illegal, unjustified and incorrect, hence the Ld. CIT (A) is not justified and correct in dismissing the appeal.
9. That on the whole facts and circumstances of the case-and materials on record, the addition made deserves to be deleted.”
The assessee is a Cane Development Council, which is completely a Government body, established u/s 5 of ‘UP Sugar Cane (Regulation of Supply & Purchase) Act 1953, by the order of Cane Commissioner of the State of U.P. under Rule 8 of U.P. Sugar Cane (Regulation of Supply & Purchase) Rules 1954. The assessee only carries out activities in the area assigned by the Cane Commissioner of U.P. Government, which is construction of roads, culverts, etc. on the government land and the constructed road belongs to the State Government. The assessee is mainly a fund management body for the funds placed at their disposal for the development of the sugar cane area and it has not been established with any profit earning motive. The fund required for execution of fund development work is either from the grant given by the Central Government or by the State Government contribution or Anshdan from the Sugar Mill or the Cane Growers’ Cooperative Societies. The assessee had sought exemption u/s 10(20) being Government body and having administrative control of U.P. State. However the Ld. Assessing Officer held that the assessee is not entitled for exemption u/s 10(20), because of the Explanation inserted with effect from 1.4.2013; and accordingly, he taxed the surplus of Rs. 65,69,560/-.
3. Before the Ld. CIT (Appeals) the assessee challenged the jurisdiction of the Assessing Officer on the ground that the Joint Commissioner of Income Tax, Range Bulandshahar has passed the assessment, who has neither issued any notice u/s 143(2) nor was empowered in terms of section 120(4), to act as an Assessing Officer in assessee’s case. The Learned CIT (Appeals) has rejected the assessee’s contention on the ground that the assessee should have challenged the jurisdiction within the scope and time limit of section 124(3)(a); and since the assessee has not raised the issue of jurisdiction at the appropriate time, therefore, the assessee cannot raised the issue of jurisdiction at the first appellate stage.
4. Before us the assessee has filed detailed written submissions not only on the issue of jurisdiction but also strongly contending that the Ld. CIT(Appeals) has not adjudicated the other material grounds raised before him, being ground no. 4, 5, 6, 7 and 8, whereby the assessee has challenged the merits of the addition.
On the other hand the Ld. DR strongly relied upon the order of the Hon'ble Delhi High Court in the case of Pr. CIT vs. Mega Corporation Ltd. in judgment dated 23.2.2017, wherein the Hon'ble High Court held that the issue of challenging the jurisdiction in terms of section 120(4) should have been raised within the statutory time limit provided u/s 124(3)(a) which is one month from the date of service of notice. Besides this reliance was also placed upon the judgment of Hon'ble M.P. High Court in the case of Sita Rathor vs. CIT, reported in 77 taxmann.com 265.
We have heard the Ld. DR and also perused the relevant material referred to before us. Here in this case we find that the Ld. CIT (Appeals) has merely confined his finding on the legal issue of jurisdiction of Jt. CIT to act as an Assessing Officer and not on the merits of the additions made in the assessment order. He has observed that the assessee had not offered any comments on other grounds of appeal and therefore, he has only adjudicated the ground relating to challenge of jurisdiction of the Assessing Officer that he was not authorized to act as an Assessing Officer by the competent authority u/s 120(4). However, before us the assessee now in the written submission has submitted that the assessee has not only challenged the validity of assessment but also the issue relating to merits of the addition made by the Assessing Officer. We are of the opinion that in the interest of justice, the entire matter should go back to the file of the Ld. CIT (Appeals) who shall decide all the issue afresh after taking into consideration all the legal issues raised in light of the judgment of the Hon'ble Delhi High Court in the case of Pr. CIT vs. Mega Corporation Ltd. (supra) as relied upon by the Ld. Sr. DR and also upon merits of the addition made by the Assessing Officer. Accordingly, we are setting aside the entire matter to the file of the Ld. CIT (Appeals) for afresh adjudication in accordance with the law after giving due and effective opportunity to the assessee to substantiate its case.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 31.10.2017.