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Income Tax Appellate Tribunal, F Bench, Mumbai
Before: Shri Jason P. Boaz & Shri Sandeep Gosain
The relevant portion of the Hon'ble High Court’s order (supra) directing filing of these appeals and condonation of delay reads as under: - “2. At the hearing, the parties agreed that the issue under challenge in the present petition viz. whether an Intervention application can be entertained by a Regular Bench (not a Special Bench) of the Tribunal may not be adjudicated upon in this petition and be left open to be considered in an appropriate case. This for the reason that the parties are in broad agreement that the entire petition could be disposed of in the following terms: - (i) The respondent nos. 2 and 3 will serve on the petitioner copies of the orders passed by the Assessin5g Officer and the 1st appellate authority in the case of IRE Loan Trust for the Assessment Year 2007-08 and all unreported orders and other materials relied on therein within 7 (seven) days from today on its Advocates M/s. Dutt Menon Dunmorrsett, 121 Maker Chambers IV Nariman Point, Mumbai-400 021. (ii) The petitioner shall be at liberty to require the respondent nos. 2 and 3 to serve upon them similar orders and materials in respect of other assessments if so advised within 30 days from today along with address on which the orders are to be served. (iii) The petitioner shall file an appeal against any order served upon it under para (i) hereinabove, if it is so chooses within 14 days (fourteen) days of service upon it under para (i) hereinabove.
3 + 32 M/s. G.E. Capital Services India (iv) The petitioner shall be at liberty to file appeals against orders referred to in para (ii) hereinabove if so advised. (v) The 1st respondent shall forthwith hear the appeals filed in the case of IRE Loan Trust Nos. 5758/M/2014 and 5513/M/2014 along with the appeal if any filed by the petitioner as per para (iii) herein above.
Taking into account the peculiar facts of this case, after hearing the parties, we give further following decisions: - (a) In the peculiar facts of the present case, particularly taking into account the following facts (i) the petitioners were not heard before the order dated 30'h June, 2014 was passed; (ii) the order dated 30th June, 2014 of the Commissioner of Income Tax (Appeals) has not yet been officially communicated to the petitioner (although on being asked, on instructions, Mr. Mistry states they came to know of the order in August, 2014); (iii) a copy of the order in the case of Indian Corporate Loan 'Securitization Trust 2008 series 14 passed by the Commissioner of Income Tax (Appeals) relied upon in the order dated 14th June, 2014 has not been furnished to the petitioner; (although on being asked, Mr. Mistry states on instructions that the petitioner got a copy of the same sometime in November, 2015); and (iv) Mr. Chhotaray, the learned Counsel very fairly in the interest of justice states that the Revenue does not desire to oppose the appeal on the ground of delay. In the aforesaid facts, the delay, if any, on the part of the petitioner in filing its appeal to the Tribunal stands condoned. Thus the Tribunal shall hear the petitioner's appeal on merits, if the appeal is filed in terms of para 2 (i) and (iii) hereinabove. (b) The Tribunal would continue with the ongoing hearing of the appeals before it in the case of Indian Corporate Loan Securitization Trust 2008 series 14 being Income Tax Appeal No 3986/Mum/2013 and 4343/Mum/2013. We are informed that there are other 245 appeals listed on the board of the Tribunal along with the aforesaid two appeals. It is open for the Tribunal to decide either the lead appeal which they have hearing presently or any of the other 245 appeals or all the 247 appeals as it deems fit. However, before passing the final order in any one of the appeals which are presently listed on the Tribunal's board, the petitioner's appeal if filed as provided in para 2(i) and (iii) hereinabove, would be heard along with the appeal of ARE loan Trust being Appeal No.5758/Mum/2014 and 5513/mum/2014 (already amongst the 247 matters listed on board). This is for the reason that the order dated 30th June, 2014 passed by the Commissioner of Income Tax (Appeals) adverse to the petitioner has placed reliance upon its decision in the case of Indian Corporate 4 + 32 M/s. G.E. Capital Services India Loan Securitization Trust 2008 series 14. Thus, the basis of the decision in the pending appeal in Indian Corporate Loan Securitization Trust 2008 series 14 is the same as passed in the case of the petitioner. Therefore, before the Tribunal takes a view on the Indian Corporate Loan Securitization Trust 2008 series 14 or any of the other 245 pending appeals (in case it gives rise to the same issue), it is necessary to hear the petitioner's submission otherwise it may faced with fait accompli. Respectfully following the orders of the Hon'ble High Court these appeals are taken up for hearing for which the delay in filing them has also been condoned.
3. The grounds of appeal raised in the case of GE Capital Services India (GECSI) for A.Y. 2007-08 in ITA No. 1080/Mum/2016 are as under: - “1) That on the facts and circumstances of the case and in law, the Commissioner of Income -tax (Appeals) ["CIT(A)"] erred in mechanically following the decision of the CIT(A) in the case of Indian Corporate Loan Securitization Trust 2008 Series 14 and thereby holding that an Association of Persons ("AOP") was formed between IL&FS Trust Company ("IL&FS"), the mutual fund investors/pass through certificate ("PTC") holders and the appellant-originator of loan ("GECSI"). 2) That on the facts and circumstances of the case and in law, the CIT(A) failed to appreciate that no AOP was formed, since there was no common purpose or action between GECSI, IL&FS and the PTC holders, and indeed, no common or joint management; in fact, the roles and responsibilities of all parties of the alleged AOP were distinctly and separately identifiable. 3) That on the facts and circumstances of the case and in law, the CIT(A) failed to appreciate that GECSI had no rights or obligations insofar as the management of the IRE Loan Trust ("Trust") and/or interests of the PTC holders and, therefore, GECSI could not be held to be a part of any alleged AOP. 4) That on the facts and circumstances of the case and in law, the CIT(A) having held that the originator (GECSI in this case) has actually sold the loan along with interest therein, could not have held GECSI as part of the alleged AOP. 5) That on the facts and circumstances of the case and in law, the CIT(A) failed to appreciate that the Assessing Officer ("AO"), in the case of IRE Loan Trust, had recorded a categorical finding that assignment of loan by GECSI to IL&FS was a different and separate transaction, and had no relation whatsoever with the subsequent issuance of PTCs and, therefore, the action of the CIT(A) was in direct contradiction of the findings of the AO, for which no reason was assigned by the CIT(A).
5 + 32 M/s. G.E. Capital Services India 6) That on the facts and circumstances of the case and in law, the CIT(A) could not have held GECSI as part of the alleged AOP without affording GECSI an opportunity of being heard, particularly when the AO had recorded a categorical finding that assignment of loan by GECSI to IL&FS was a different and separate transaction and had no relation whatsoever with the subsequent issuance of PTCs. 7) That on the facts and circumstances of the case and in law, the CIT(A) failed to appreciate that once he came to the conclusion that the constituents of the alleged AOP were different from the constituents included by the AO, he ought to have quashed the said assessment. 8) Without prejudice to the aforesaid, the CIT(A) failed to appreciate that no income could be attributed to GECSI, since income from securitization/ assignment of the loan, which was the alleged role of GECSI in the AOP, has already been brought to tax by the AO of GECSI in Delhi. 9) Without prejudice to the aforesaid, the CIT(A) erred in enhancing the assessment made by the AO without appreciating that income by way of interest becomes due and payable under the relevant contractual arrangements.
Without prejudice to the aforesaid, the CIT(A) erred in not allowing deduction for interest expenditure on the basis applied by him for charging interest receipts as income.” Similar grounds have been raised in the other 32 appeals/cases (supra).
A perusal of the grounds raised
by the GE Capital Services India, in sum and substance, challenges the action of the learned CIT(A) as being erroneous in including it as part of an Association of Persons (AOP) consisting of (i) IL & FS Trust Company Ltd., (ii) Mutual Fund investors/ Pass through Certificate (PTC) holders and (iii) GECSI the originator of the loan in the case of IRE Loan Trust and other 32 cases (supra), by following the decision of the CIT(A) in the case of Indian Corporate Loan Securitization Trust 2008, Series 14 for A.Y. 2009-10.
5. This Bench of the Tribunal while deciding the cross appeals in the lead matter, i.e. case of Indian Corporate Loan Securitization Trust 2008, Series 14 for A.Y. 2009-10 in its order in ITA Nos. 2986 & 4343/Mum/ 2013 dated 17.02.0217 (a copy of which will form part of this order) has held, inter alia, that the assessee therein is a valid trust and is not to be assessed as an AOP as held by the authorities below. In this regard, both