1. The above five appeals have been filed by the Assessee U. P. Forest Corporation, 21/475, Indira Nagar, Lucknow under section 260-A of Income-tax Act, 1961 against the common judgment & order dated 27.8.2013, passed by the Income Tax Appellate Tribunal, Lucknow Bench, Lucknow in five Income Tax Appeals i.e. I.T.A. No. 258/Luc/2012 to I.T.A. No. 262, Lucknow/2012, U.P. Forest Corpn. v. CIT Ayakar Bhawan, Lucknow whereby the learned Tribunal has dismissed the said appeals arising out of five separate orders, passed on 16.3.2012 by the Commissioner of Income Tax in exercise of powers conferred on him vide section 263 of the Income-tax Act, 1961 whereby Commissioner has set aside assessment orders passed for the years 1990-91, 1991-92, 1992-93, 1993-94 and 1994-95 and remanded the case to make fresh assessment in terms of the remand order dated 30.1.2009, passed by the Tribunal in appeal for relevant years.
2. Since the substantial questions of law raised in all the appeals are the same and the parties are also the same, the above appeals are being decided by a common judgment.
3. Parties have filed their Written Statements which have been taken on record. In all the above appeals following substantial questions of law have been raised by the Appellant-Assessee for determination:
| "(I) |
Whether the Tribunal has committed substantial illegality by not considering ratio of the cases referred by the appellant during the course of hearing as mentioned in paras 39 and 40 of present appeal? |
(Il) |
Whether under the facts and circumstances of the case Income-tax Appellate Tribunal was justified in upholding order dated 16.3.2012, passed under section 263 of the Income-tax Act in setting aside the order of the Assessing Authority dated 29.12.2009 which was admittedly apropos direction of the Tribunal under section 254 of the Act, that too, without recording any finding on merit?" |
4. We have heard Sri Ashish Raj Shukla and Sri R.B. Shukla, learned counsel for the appellant as well as Sri Alok Mathur, learned counsel for the respondents.
5. Learned counsel for the Assessee-Appellant contended that assessment order has been passed by the Assessment Officer for each relevant year in compliance of judgment & order dated 30.1.2009, passed by Income-tax Appellate Tribunal in U.P. Forest Corpn. v. Addl.CIT [IT Appeal No. 302/lucknow/2012] and other connected appeals relating to relevant assessment years. As such, Commissioner of Income-tax was not competent to set aside assessment order passed in compliance of order of the Tribunal.
6. Learned counsel for the assessee-appellant further contended that the interference of the Commissioner in Assessment Order under section 263 of Income-tax Act 1961 on the ground that it does contain detail discussion, is not warranted by law. Learned counsel for the assessee-appellant placed reliance upon Division Bench Judgment of this Court rendered in the case of CIT v.Krishna Capbox (P.) Ltd. [2015] 372 ITR 310/60 taxmann.com 243 (All.) and contended that the impugned order passed by Income-tax Commissioner under section 263 of the Income-tax Act is illegal and without jurisdiction and the Tribunal has committed illegality of substantial nature in upholding impugned orders of Commissioner.
7. Learned counsel for Assessee-Appellant contended that following judicial pronouncements rendered by Hon'ble Apex Court as well as by Hon'ble High Court, Allahabad were referred and placed before the Tribunal but the Tribunal did not follow ratio of decisions referred:
| 1. |
Bhopal Sugar Industries Ltd. v. ITO [1960] 40 ITR 618 (SC) |
2. |
CIT v. Kamla Town Trust [1992] 198 ITR 191/61 Taxman 20 (All.) |
3. |
K.N. Agarwal v. CIT [1991] 189 ITR 769/56 Taxman 24 (All.) |
4. |
CIT v. Max India Ltd. [2007] 295 ITR 282/[2008] 166 Taxman 188 (SC) |
5. |
CIT v. Goyal (P.) Family Specific Trust [1988] 171 ITR 698/[1987] 35 Taxman 522 (All.) |
6. |
J.P. Srivastava & Sons (Kanpur) Ltd. v. CIT[1978] 111 ITR 326 (All.) |
7. |
CIT v. Kashi Nath & Co. [1988] 170 ITR 28/[1987] 33 Taxman 577 (All.) |
7. |
CIT v. Mahendra Kumar Bansal [2008] 297 ITR 99 (All.) |
8. Learned counsel for the Income-tax Department contended that the Assessment Officer has not complied with the directions given by the Tribunal in its judgment & order dated 30.1.2009. He has not examined the statistical details in view of section 11 of Income Tax Act, as directed by the Tribunal.
9. Learned counsel for the Department contended that the Commissioner of Income-tax has given sufficient and cogent reasons for exercising power under section 263 of the Act and the order passed by him under section 263 of Income-tax is in accordance with law. The Tribunal has committed no illegality in upholding the order passed by the Tribunal.
10. We have considered the submissions made by learned counsel for parties.
11. Admittedly, the impugned assessment orders for the relevant years have been passed by the Assessment Officer in compliance of the judgment & order dated 30.1.2009, passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'Tribunal') U.P. Forest Corporation (supra), Special Range, Lucknow along with other connected appeals relating to the relevant years.
12. Paras 52 and 54 of the judgment and order of the Tribunal are relevant to be extracted here:
"52. Regarding the above grounds, it was the common contention of both the parties that when the assessment was framed by the Assessing Officer, it was considered by him that the registration under section 12-A and the exemption under section 11 were not available to the assessee and now since the assessee is eligible for the above, these issues be remanded back to the Assessing Officer for re-computation of the exemption."
"54. In the result, the appeals by the assessee in I.T.A. Nos. 302/Luc/01, 927/Luc/02, 301/Luc/01, 556/Luc/02, 764/Luc/04 and C.O. No. 11/Luc/2000 are partly allowed for statistical purposes. All the Departmental Appeals in I.T.A. No. 280/Luc/01, 535/Alld/98, 279/Luc/01 and 662/Luc/02 are allowed for statistical purposes while I.T.A. No. 800/Luc/04 is partly allowed for statistical purposes."
Section 11 (1) of the Income-tax Act, 1961 reads as follows:
"11. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income-
| (a) |
income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India, and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of (fifteen) per cent of the income from such property. |
(b) |
Income derived from property held under trust in part only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income is applied to such purposes in India; and, where any such income is finally set apart for income so set apart is not in excess of (fifteen) per cent of the income from such property; |
(c) |
income (derived) from property held under trust- |
(I) |
created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and |
(lI) |
for charitable or religious purposes, created before the 1st day of April, 1952, to the extent to which such income is applied to such purposes outside India; |
|
Provided that the Board, by general or special order, has directed in either case that it shall not be included in the total income of the person in receipt of such income; |
(d) |
income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution. |
(Explanation- For the purposes of clauses (a) and (b)-
(1) in computing the (fifteen) per cent of the income which may be accumulated or set apart, any such voluntary contributions as are referred to in Section 12 shall be deemed to be part of the income;"
13. Para 2 of the Assessment Order passed by the Assessment Officer in compliance of judgment & order dated 30.1.2009, passed by the Tribunal is extracted below:
"2. Hon'ble ITAT, vide its order dated 16.1.2009 in ITA No. 512/Luc/2007, has granted registration to the assessee u/s 12A of the Income-tax Act, 1961. The assessee , vide its written reply dated 29.12.2009, has claimed that in view of the said decision of Hon'ble ITAT, its entire income is exempt u/s 11 of the Income-tax Act, 1961. After a careful consideration of the material on record and in compliance with the Hon'ble ITAT's directions, exemption claimed by the assessee under section 11 is allowed and the returned income is accepted."
Section 263 of the Income-tax Act, 1961 reads as under:
"263. (1) The [Principal Commissioner or ] Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the [Assessing] Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment."
14. Annexure 7 to Memo of Appeal is a notice, issued by the Assessment Officer in pursuance of remand order dated 30.1.2009, passed by the Tribunal. By this notice the Assessment Officer has required assessee-appellant to furnish documents and written submission in support of his claim and has fixed date 23.12.2009 for the said purpose. Admittedly, said notice was served on assessee on 23.12.2009 and assessee appellant filed reply of said notice on 29.12.2009 (Annexure No. 8 to the Memo of Appeal) in which he submitted detailed statements for computation of income with reference to Section 11 of the Income-tax Act but simultaneously submitted that Sri Vinod, Accounts Officer who is conversant with the facts and accounts of the Corporation is on leave upto 18th January, 2010. If books of accounts or any detail based thereon is required, the date of hearing may be fixed after 18th of January, 2010. But the Assessing Officer did not adjourn the case and passed assessment order on the same day i.e. on 29.12.2009. The Assessing Officer has not verified the statement given by assessee with account books of assessee as account books were not available on that day. There is no mention in Assessment Order itself that the statement furnished by the Assessee has been verified with account books.
15. As mentioned above, Tribunal had remanded the case to the Assessing Officer for statistical purposes. Therefore, it was mandatory for Assessing Officer to examine the statements furnished by Assessee and to verify it with account books in the light of provisions of Section 11 of Income-tax Act, 1961. It is, therefore, apparent that Assessing Officer has not complied with the directions of the Tribunal contained in its above judgment and order dated 30.1.2009 whereby case had been remanded for statistical purposes. In impugned order the Commissioner has rightly observed that the Assessing Officer did not at all examine or verify the contentions raised, did not examine the books of account and did not satisfy himself that the contentions for grant of exemption under section 11 were satisfied.
16. In the case of Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375 (Delhi) High Court has held as under:
'"The Income-tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further enquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry."
In this case Delhi High Court has further held that "the word 'erroneous' in section 263 includes the failure to make such an inquiry."'
17. In view of remand order dated 30.1.2009, passed by Tribunal as well as propositions laid down by Delhi High Court in above case we are of the considered opinion that the Assessing Officer has failed to discharge his legal obligation to ascertain truth of statement furnished by the Assessee by means of verification with account books. The Commissioner has rightly held that assessment order is erroneous and prejudicial to the interest of revenue. There is no illegality or infirmity in the impugned order passed by the Commissioner in exercise of power conferred by Section 263 of Income-tax Act, 1961. Commissioner has rightly vide impugned order remanded the case to the Assessing Officer to pass a fresh order in accordance with law in terms of remand order dated 30.1.2009, passed by the Tribunal in appeal.
18. In the case of Bhopal Sugar Industries Ltd. (supra) Hon'ble Apex Court as well as in the case of Commissioner of Income-tax v. Kamla Town Trust (supra) Hon'ble High Court, Allahabad has held that the Assessing Officer is bound to comply with the directions of the Tribunal.
19. In the case of K. N. Agarwal (supra) High Court, Allahabad has held that Section 263 of the Act cannot be invoked to set aside assessment order passed by Income-tax Officer in compliance of judgment of the Tribunal or High Court.
20. In the case of Mahendra Kumar Bansal (supra) High Court, Allahabad has held as under:
"We are of the considered opinion that merely because the Income-tax Officer had not written lengthy order, it would not establish that the assessment order passed under section 143 (3)/148 of the Act is erroneous and prejudicial to the interests of the Revenue without bringing on record specific instances,..."
21. In the case of Max India Ltd. (supra) Hon'ble Apex Court has held as under:
"Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue, unless the view taken by the Income-tax Officer is unsustainable in law. . . ."
22. In the case of Goyal (P.) Family Specific Trust (supra) Hon'ble High Court, Allahabad has held as follows:
"The orders of the Income Tax Officer may be brief and cryptic, but that by itself is not sufficient reason to brand the assessment orders as erroneous and prejudicial to the interest of the Revenue. Writing an order in detail may be a legal requirement, but the order not fulfilling this requirement cannot be said to be erroneous and prejudicial to the interest of the Revenue. It was for the Commissioner to point out as to what error was committed by the Income-tax Officer in having reached the conclusion that the income of the trust was exempted in its hands and was assessable only in the hands of the beneficiaries."
23. In the case of J.P. Srivastava and Sons (Kanpur) Ltd.(supra) the Division Bench of Allahabad High Court has held as under:
"We are, therefore, of the opinion that without going into the merits of the claim of the assessee, it was not possible for the Commissioner to say that the order of the Income Tax Officer had caused any prejudice to the interests of the revenue and, as such, he was not competent to set aside the assessment order and remand the matter to the Income-tax Officer."
24. In the case of Kashi Nath & Co. (supra), the Division Bench of this Court has held that "the power of the Commissioner under section 263 is quasi-judicial in character. He must give reasons in support of his conclusion that the assessment order is erroneous insofar as it is prejudicial to the interests of the Revenue."
25. In the case of CIT v. Krishna Capbox (P.) Ltd. [2015] 372 ITR 360/60 taxmann.com 243 (All.) the Division Bench of this Court has placed reliance upon a judgment of Bombay High Court rendered in the case of Idea Cellular Ltd. v. Deputy CIT [2008] 301 ITR 407 (Bom.) wherein Bombay High Court has observed as under:
". . . .if a query is raised during the assessment proceedings and responded to by the assessee, the mere fact that it is not dealt with in the assessment order would not lead to a conclusion that no mind had been applied to it."
26. Ratio laid down in above pronouncements, are not helpful to assessee-appellant on the facts and circumstances of the case, as in present case the Assessing Officer has not complied with direction of the Tribunal contained in Remand Order dated 30.1.2009. He has not examined the statistical statement furnished by the Assessee and has not verified the same with account books. He has accepted statement furnished by the Assessee without examination and verification.
27. Learned counsel for the appellant further referred following judicial pronouncements before us:
| (1) |
CIT v. Paul Bros [1995] 216 ITR 548/79 Taxman 378 |
(2) |
Prudential Assurance Co. Ltd. v. DIT [2010] 324 ITR 381/191 Taxman 62 (Bom.) |
(3) |
CIT v. Palghat Shadi Mahal Trust [1995] 212 ITR 287 (Ker.) |
(4) |
Addl. CIT v. A.L.N. Rao Charitable Trust [1995] 216 ITR 697/83 Taxman 252 (SC) |
(5) |
CIT v. Gabriel India Ltd. [1993] 203 ITR 108/71 Taxman 585 (Bom.) |
(6) |
CIT v. Vikas Polimers [2012] 341 ITR 537/[2010] 194 Taxman 57 (Delhi) |
(7) |
CIT v. DLF Ltd. [2013] 350 ITR 555/214 Taxman 91/31 taxmann.com 158 (Delhi) |
(8) |
CIT v. Development Credit Bank Ltd. [2010] 323 ITR 206/[2011] 196 Taxman 329 (Bom.) |
(9) |
CIT v. Krishi Utpadan Mandi Samiti [2012] 348 ITR 566/211 Taxman 32/27 taxmann.com 42 (SC) |
(10) |
CIT v. Lucknow Development Authority [2014] 98 DTR 183 (All.) |
(11) |
I.T.O. v. Lucknow Development Authority [ITR No. 204/Luc/09 for Assessment Year 2005-06]. |
(12) |
Anil Kumar Rastogi v. ITO [2014] 339 ITR 279/[2012] 20 taxmann.com 512 (All.) |
28. We have perused these pronouncements and found that the propositions laid down in these decisions are also not helpful to assessee-appellant on the facts of the present case.
29. In view of the discussion, made above, we are of the view that the impugned judgment & order passed by the Tribunal is in accordance with law and there is no illegality or infirmity in it. The Tribunal has rightly dismissed the appeals, filed by the Assessee-Appellant.
30. The substantial questions of law, raised by the assessee-appellant have not been correctly framed and cannot be accepted.
31. During course of arguments, learned counsel for the parties admitted that fresh assessment orders have already been passed by Assessing Officer in compliance of impugned orders of Commissioner passed under section 263 of the Act. If assessee is aggrieved with assessment orders, he has right of appeal in accordance with law.
32. In view of the above, all the five present appeals have no merit and are accordingly dismissed.