TaxTMI 
TaxTMI 
2011 (2) TMI 281
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....eals) that pertained to the Uttar Pradesh Krishi Utpadan Mandi Parishad (hereinafter Parishad) which was not a party to the appeal." 2. The respondent was the appellant before the ITAT. An assessment order was passed in respect of respondent by the Assessing Officer dated 11-11-2008. The assessee has claimed status as a charitable Institution on being registered under section 12AA of the Income-tax Act (hereinafter referred to as 'the Act'). The assessee had transferred some amounts to Mandi Parishad, which is another assessee. The Assessing Officer in respect of certain amounts transferred by the assessee to the Mandi Parishad raised a query as to why the development cess should not be treated as a non-charitable purpose, since Mandi Sa....
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....s were also treated by the Parishad as liabilities and directly credited in the Balance Sheet under 'Mandi Vikas Nidhi'. The CIT(A) held that the treatment of receipts by Mandi Parishad is not consistent with the Accounting Principles and payments treated as expenditure or application by Mandi Samitis shall be treated as business receipt by Mandi Parishad and that the Mandi Parishad cannot treat it as liability, as these receipts are firstly, non-voluntary contribution by Samitis, and secondly, non-refundable. Accordingly, CIT(A) directed the Assessing Officer to make a reference to the Assessing Officer of Mandi Parishad to take remedial measures, if necessary, in the relevant assessment years to tax the relevant receipts in the hands of M....
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....3 of the Cross Objection, already reproduced above, would clarify that the grievance of the assessee relates to the following common observations of the ld. CIT(A) in para 12.4 of the order dated 24-12-2009, para 10.4 of the order dated 24-12-2009 and para 12.5 of the order dated 23-12-2009. 12.4 Having accepted that the money transferred by Mandi Samiti to Mandi Parishad is application of income, what is important as well as essential is that the amount transferred by the Mandi Samiti in terms of payment to Mandi Parishad must be accounted for by Mandi Parishad as its business receipts. If this amount transferred to Mandi Parishad is not treated as advance but application of income by the Mandi Samiti, it cannot be treated as liability ....
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....ave been referred to by the ld. CIT(A). 11. In his rival submissions, the ld. D.R. strongly supported the order of the ld. CIT(A) and submitted that as per the provisions contained in section 251 of the Income-tax Act, the ld. CIT(A) can make such observations. 12. We have considered the submissions of both the parties and gone through the material available on record. In the instant case, it is noticed that the ld. CIT(A) while referring to the cases of Mandi Parishads had not afforded any opportunity to the said assessees and it is also noticed that the ld. CIT(A) made these observations in spite of the fact that no such material relating to Mandi Parishads was available to him. In our opinion, these observations of the ld. CIT(A) a....
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....ere held that the scope of powers of the Appellate Authority was co-terminus with that of the Income-tax Officer. In the instant case, we are really not concerned with that issue. 8. The only question before us is, whether it is open to an assessee, who was in appeal before a competent Tribunal, to contend that in the appeal preferred by them, in respect of money transferred by them to another assessee, CIT(A) could not have made any observations in respect of that other assessee. 9. The legal position in the proceedings between the parties, who are in appeal before the Tribunal or Court, is that the Court addresses itself to the issues, which are before it and confines its exercise of jurisdiction to those grounds, which can result i....