DCIT, CIRCLE-4(2), KOLKATA, KOLKATA vs. M/S THE CALCUTTA STOCK EXCHANGE ASSOCIATION LIMITED, KOLKATA

The preliminary issue to be decided in these appeals is as to whether the ld. CIT(A) was justified in annulling the assessments as time barred in the facts and circumstances of the case.

The brief facts of this case is that the assessee is registered u/s 12A of the Act and in the relevant assessment years, was entitled to claim exemption u/s 11 of the Act. In accordance with Article 7(3) of its Articles of Association, a person when elected by the assessee as eligible for admission as a member was required to pay to the assessee a 2 & 1875/Kol/2016 The Calcutta Stock Exchange Association Ltd. A.Yr.1994-95 & 1997-98 fee/levy towards development activities as may be prescribed by the assessee. Payment of the said development fee was a condition precedent to become a member of the assessee. The said Article 7(3) was inserted and given effect by the assessee with the approval of the Central Government for raising substantial resources for financing capital expenditure having regard to the Central Government’s directive based on report of High Powered Committee. The development fee received in terms of Article 7(3) had nothing to do with any service rendered by the assessee to the members. Candidates for membership, being aware that the development fee was being collected under and for the purpose of Article 7(3), paid it as a corpus contribution. The issue regarding treatment of development fee was first considered by the AO in the order passed under section 143(3). The AO treated the development fee of Rs.1,60,00,000/- as assessee’s income under section 28(iii). The assessee preferred an appeal before the Learned CIT(A)-XIII. Vide order in appeal No.524/XIII/DDIT (ER)/SR/97-98 dated 14.6.1998, the Learned CIT(A) deleted the addition made by the AO following his order for the assessment years 1991-92 and 1992-93. This tribunal for A.Yrs. 1993-94 and 1997-98 in ITA NO.1352/Kol/1999 and ITA No.876/Kol/2002 and for A.Yrs. 1994-95 and 1995-96 in ITA Nos. 1810- 1811/Cal/1998 vide consolidated order dated 31.07.2003 had restored the matter for all these years to the file of the ld. AO for fresh adjudication in accordance with the tribunal’s order passed for A.Y.1991-92 and 1992-93. The ld. AO passed order u/s 254/143(3) of the Act on 19.12.2011 pursuant to this tribunal’s order for A.Yrs.1994-95 and 1997-98 by adding the receipt of development fees as revenue receipt u/s 28(iii) of the Act.

The ld. CIT(A) observed that the stipulated time limit for completion of assessment is specified u/s 153 of the Act. He observed that since the tribunal had directed the ld. AO to frame the assessment afresh in accordance with law, relevant 2

We have heard the rival submissions. It is very clear that the ITAT had remanded the issue to the file of the ld. AO for fresh orders to be passed thereon after examining the entire facts available on record. Hence the ld. AO is bound to pass the set aside assessment orders in accordance with the time limit stipulated u/s 153(2A) of the Act. We find that the revenue had raised the preliminary ground before us that the assessment is to be framed in terms of section 153(3)(ii) of the Act which does not stipulate time limit for framing set aside the assessments. But in our considered opinion, the present case squarely fall u/s 153(2A) of the Act and not 153(3)(ii) of the Act. Hence the set aside assessments framed by the ld. AO on 19.12.2011 after a huge gap of 8 years was squarely barred by limitation and not in accordance with time limit stipulated in connection with section 153(2A) of the Act. Hence we hold that the ld. CIT(A) had rightly annulled the assessments as barred by limitation. We do not find any justifiable reason to interfere in the said order. Since the assessments are annulled , the 3

In the result the appeals of the revenue are dismissed.