2015 (9) TMI 594 - AT - Income Tax

Appellate Tribunal rules in favor of Artificial Juridical Person, deems assessment as Association of Persons invalid.

Asstt Director Of Income Tax- (E) Versus Oil Industry Safety Directorate

The Appellate Tribunal upheld the Ld. CIT(A)'s decision, ruling in favor of the appellant, an Artificial Juridical Person (AJP) under the Ministry of ... Additions made on the basis of assessment completed as AOP - CIT(A) deleted the addition - whether the assessee has nowhere proved that it falls under the category of Artificial Juridical Person and is created by the Ministry of Petroleum and Natural Gas as its extension wing? - Held that:- CIT(A) in the impugned order has correctly deleted the addition in dispute by respectfully following his own earlier order for the asstt. year 2004- 05 wherein on the basis of the notification [Resolution No. 13013/4/84-0R-I dated 10.1.986] issued by the Ministry of Petroleum and Natural Gas, it is very clear that it is nothing but a government and an extension of the government. Hence it is not liable for any tax; . The assigning officer had on his own had changed the status of the appellant from AJP to AOP. This legally he cannot do it and the entire assessment is wrong and bad in law. It is liable to be annulled. - Decided against revenue. Issues:1. Deletion of additions made on the basis of assessment completed as AOP.2. Validity of the assessment conducted in the status of AOP without the appellant's consent.Analysis:1. The Revenue appealed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-XXI, New Delhi, for the assessment year 2009-10, challenging the deletion of additions made on the basis of assessment completed as AOP. The Ld. CIT(A) had ruled in favor of the assessee, stating that the appellant falls under the category of Artificial Juridical Person (AJP). The appellant, an extension of the Ministry of Petroleum and Natural Gas, was created to oversee safety standards in the oil industry. The Ld. CIT(A) referred to an earlier order for the assessment year 2004-05, where a similar issue was decided in favor of the appellant. The Ld. CIT(A) upheld the appellant's status as an AJP, leading to the deletion of the additions in dispute.2. The assessment was conducted in the status of AOP without the appellant's consent, contrary to the status of AJP claimed by the appellant. The appellant argued that the change in status by the assessing officer was unilateral and without proper explanation or opportunity given to the appellant. The Ld. CIT(A) considered the submissions and clarified that the assessment conducted in the status of AOP was null and void. The Ld. CIT(A) referred to the earlier decision for the assessment year 2004-05, where a similar contention was accepted. The Ld. CIT(A) annulled the assessment framed under section 143(3) in the status of AOP, aligning with the appellant's status as an AJP.In conclusion, the Appellate Tribunal upheld the order of the Ld. CIT(A) on both issues, finding no infirmity in the decision. The Tribunal dismissed the Revenue's appeal, affirming the deletion of additions made on the basis of assessment completed as AOP and declaring the assessment conducted in the status of AOP as invalid. The judgment was pronounced in open court on 11.3.2015.