DEPUTY COMMISSIONER OF INCOME TAX vs. SINHAGAD TECHNICAL EDUCATION SOCIETY, PUNE

PER R.S.SYAL, VP :

This appeal by the Revenue is directed against the order dated 18-11-2016 passed by the Commissioner of Income-tax (Appeals)-10, Pune under section 254 of the Income-tax Act, 1961 (hereinafter also called `the Act’) in relation to the assessment year 2009-10. 2. The Revenue is aggrieved in the following terms : “On the facts and the circumstances of the case, the ld. CIT(A) has erred in holding that the Shri M.N. Navale (Bigger HUF) does not stand in a relationship specified under section 13(3) of the Act, without appreciating that Bigger HUF was a concern in which trustees of the trust had a substantial interest therefore, M.N. Navale (Bigger HUF) is a person specified in section 13(3) of the Act.?”

challenged the assessment order before the ld. CIT(A), who vide

his order dated 29-10-2014, decided the appeal. Thereafter, the assessee filed an application u/s.154 contending that the ground no.

1(a) related to contravention of the provisions of section 13(1)(c)

for payment of unreasonable rent for properties owned by M.N.

Navale (Bigger HUF). While passing the order, the ld. CIT(A)

relied on his decision for the assessment year 2008-09 in which three properties involved were taken by the appellant on rent, out

of which two properties belonged to M.N. Navale (Bigger HUF)

and it was held that HUF was not a prohibited person within the meaning of section 13(3) and as such the AO was directed to delete

the addition. While passing the order for the current year, the ld.

CIT(A) also went on to hold that the provisions of section 13(1)(c)

would not be attracted vis-à-vis as these properties belonged to M.N. Navale (Bigger HUF). However after holding so, the ld.

CIT(A) further came to find, similar to his view for the preceding

year, that the third property was owned by M.N. Navale, an individual, who was a prohibited person and hence, the provisions

of section 13(1)(c) were attracted in the instant year as well. The assessee prayed that for the assessment year 2009-10 only two

properties belonging to M.N. Navale (Bigger HUF) were involved

and not the third property as well. The assessee, therefore,

requested that the observations made in the order to the effect that invocation of section 13(1)(c) was upheld on the ground that part

of income received was used for the benefit of persons referred to in section 13(1)(c), was not correct which needed to be rectified.

was not a specified person in terms of section 13(3) of the Act.

He, therefore, held that there was no violation of section 13(1)(c)

of the Act during the year under consideration. The Revenue is aggrieved in the terms as extracted above.

material on record. It is seen that the ld. CIT(A) at the time of passing the original order for the year under consideration relied on his order for the assessment year 2008-09. The assessee as well as the Revenue preferred respective appeals before the Tribunal for the assessment years 2007-08 to 2009-10. Vide its common order

dated 17-10-2018, the Tribunal in ITA Nos. 2075 to 2077

/PUN/2014 and others, has disposed off the cross appeals for all the three years. In the appeal for the assessment year 2009-10

under consideration, the Revenue raised ground no.2 reading that “the ld. CIT(A) has erred in holding that the provisions of section 13(1)(c) r.w.s.13(3) of the I.T. Act,1961 are not attracted.” While

dealing with this ground, the Tribunal in para no.37 observed that “similarly, issues raised by the Revneue are also identical to the issues raised in A.Y. 2007-08 and our decision shall apply mutatis-

mutandis.” While disposing off the appeal for the assessment year

2007-08 in the same common order, the Tribunal dealt with the second ground no. 2 taken by the Revenue, which is similar to ground no.2 taken for the assessment year 2009-10 as well and held in para 10 that “linked ground of appeal nos.1 and 2 raised by the Revenue is allowed and the issue is send to the file of CIT(A)”.

When we read the order of the Tribunal for assessment year 2009-

10 in conjunction with the order for assessment year 2007-08, it becomes clear that the matter has been sent back to the file of ld.

CIT(A). It is the very same finding which was taken up by the assessee through proceedings u/s.154 before the ld. CIT(A). Since

the original order itself on this issue has been sent back by the Tribunal, the sequitur is that the instant rectification also, flowing

from the original ground, should also follow the suit. We,

therefore, set-aside the impugned order and remit the matter to the file of the ld. CIT(A) for deciding it in conformity with the view

taken by him in the proceedings flowing from the order of the Tribunal for the assessment year 2009-10 on this issue.

आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत/Copy of the Order is forwarded to: क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत आदेश आदेश आदेश अपीलाथ" / The Appellant;

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