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2015 (5) TMI 859
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....hdrawing its registration u/s. 12A of the Act as a charitable institution, granted on - 22.07.2002 (PB pg.39), with effect from assessment year (AY) 2009-10, is the invocation of section 2(15), i.e., read with proviso thereto, effective from the said assessment year, contending that the proviso to section 2(15) is applicable to it and, therefore, it is no longer a charitable institution. The assessee appealed there-against, contesting the said withdrawal (u/s.12AA(3)) on both counts. Firstly, the proposition per se that informs the withdrawal under reference, so that an application of proviso section 2(15) would itself operate to be a ground for the withdrawal of registration (per Gd. #1). Vide Ground 2, the assessee, without prejudice, disputed the applicability of the proviso to section 2(15), i.e., on facts. This was for the reason that if the assessee's case is decided in its favour on the legal plea raised per Gd.1, there would be no necessity to decide its Gd. 2. The Tribunal, however, without deciding its ground no.1, proceeded to decide Gd. 2, i.e., the alternate ground. This, despite as many as six decisions being relied upon by the assessee in its favour on that ground (G....
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....to the decisions in the case of CIT v. Keshav Fruit Mart [1993] 199 ITR 771 (All); Commissioner of Income Tax v. K.M. Sugar Mills (P.) Ltd. [2005] 275 ITR 247 (All); and CIT vs. Ramesh Chand Modi [2001] 249 ITR 323 (Raj.). In Kansai Nerolac Paint s. Dy. CIT (in ITA No. 1030 of 2011 dated 06.05.2014/copy on record), the hon'ble jurisdictional court held that where there was the material before the tribunal to decide the issue, it would be justified in deciding the same, rather than setting it aside to the file of a lower authority/s to decide afresh. 3.2 The ld. DR, on the other hand, did not raise any specific objection, being content in relying on the impugned order, stating that it was a considered decision by the tribunal, not liable for any modification whatsoever. 4. We have heard the parties and perused the relevant material on record. 4.1 We may, to begin with, reproduce the relevant grounds, as under: 'GROUND I: 1. On the facts and circumstances of the case and in law, the Director of Income tax (Exemption) ("DIT(E)") erred in withdrawing the registration granted u/s. 12A with retrospective effect from A.Y. 2009-10 on the alleged ground that the activit....
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....llenging the application of the proviso to section 2(15), i.e., on facts. It was even otherwise incumbent on the assessee to assume the said ground, lest it be argued that the assessee admits the application of proviso and, thus, section 2(15), to it. The arguments by the assessee during the hearing (of the appeal) qua this ground were toward this end, even as it was impermissible for the tribunal to proceed to decide Gd.2 without first adjudicating Gd. 1. This also broadly defines the assessee's case. The second limb of the assessee's argument is that the tribunal has in taking up the issue of withdrawal of registration u/s.12AA(3), on the ground of either non-genuineness of its activities or not being carried out in accordance with its objects, traveled outside the scope of the appeal and, thus, acted without jurisdiction. 4.3 The decision of the tribunal is contained at para 5 of its order, which reads as under: '5. The issue of applicability or otherwise of section 12AA(3) in the instant case being factually indeterminate, we only consider it fit and proper in the facts and circumstances of the case to restore this matter back to the ld. DIT(E) for allowing the assesse....
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....ous issue is precluded, we shall, even as indicated during the course of hearing, state the position of law in the matter with reference to the decisions by the apex court, settling the same. In the case of Hukumchand Mills Ltd. vs. CIT [1967] 63 ITR 232 (SC), the subject matter of appeal, in the opinion of the hon'ble apex court, was rightly discerned by the tribunal as the WDV of the building, machinery, etc. of the assessee for calculating the depreciation allowance u/s.10(2)(vi) of the Act (Income Tax Act, 1922). It was clarified that it was open for the Revenue to raise a contention in this regard before the tribunal for the first time, supporting the finding of the Appellate Assistant Commissioner (AAC) on any ground decided against it. Even assuming rules 12 and 27 of the Appellate Tribunal Rules were not strictly applicable, the same are procedural in character and not exhaustive of the powers of the tribunal, so that they do not in any way circumscribe or control its power u/s.33(4). The tribunal was accordingly within its jurisdiction to entertain the argument as to depreciation and direct the ITO to find whether any depreciation was actually allowed under the Industrial ....
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....ents, clarified that the power or purview of the tribunal shall, as in the case of first appellate authority, extend to the whole assessment, and is not confined to matters raised by the assessee; the whole premise of the appellate procedure under the Act being ascertainment of the correct tax liability of the assessee, i.e., in accordance with the law. The subject matter of appeal was, in its view, to be construed as the subject matter of the assessment. Reference in this context may also be made to its decision in the case of CIT vs. Parthasarathy [1995] 125 CTR 174 (Mad). The tribunal is, thus, fully empowered in law to frame issue/s raising different aspect/s of the matter before it, decided expressly or impliedly by the authorities below, whose orders are under challenge before it, i.e., is the subject matter of the tax proceedings. 4.5 The next question before us is whether the withdrawal u/s.12AA(3), i.e., de hors section 2(15), was or could be considered as arising out of the order under appeal before the tribunal. Toward this, we have perused the assessee's reply, to the show cause notice; the order u/s. 12AA(3), and the assessee's arguments before us; the show cause....
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....consequently, the withdrawal afore-stated, which in fact constituted the Tribunals' decision, so that it is also incorrect to state that the same did not constitute a decision. Though of no consequence in view of our acceptance of a mistake by the tribunal in inferring the subject matter of appeal, the assessee having relied on Kansai Nerolac Paint (supra) toward the same, we may meet the said reliance. The said decision is distinguishable inasmuch as in that case the tribunal decided likewise, restoring the matter back to the file of the first appellate authority, merely for the reason of the relevant issue having not been decided by the authorities below. It is in those circumstances that the hon'ble court held that the issue before the tribunal being only a legal issue, with all the facts on record, it ought to have decided the same itself rather than by restoring the matter back. By implication, even if, therefore, the two documents on which reliance was placed by the assessee in that case remained to be verified, the tribunal could have made its decision in the said case as subject to the validity, i.e., the veracity of the said documents, by the Revenue. In the present case, ....
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....principal object is the development of the Mumbai Metropolitan Region according to the Regional Plan. The same involves a number of interrelated activities, viz. review of plans - physical, economic and financial; projects or schemes of development (including preparation thereof); their execution, supervision, financing, as well as co-coordinating the execution amongst, and rendering advise to, different authorities engaged in formulation and undertaking such schemes in different areas, viz. agricultural, horticultural, diary, fishery, cattle breeding, etc. If this is not an economic activity, carried on in an organized manner, what we wonder it is? It is also not the case that the assessee does not charge any sum for its activities. That is, generates revenue there-from. The expression 'business' is well known in the income-tax law, being in fact defined u/s.2(13) thereof to include trade, commerce or manufacture or any adventure or concern in relation thereto. As observed by the apex court as far back as in Narain Swadeshi Weaving Mills vs. Commissioner of Excess Profits Tax [1954] 26 ITR 765 (SC), the word 'business' connotes some real, substantial and systematic or organized....
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....er. Both the parties have, as shall be evident there-from (refer paras 3.1 & 3.4) relied on several decisions by the tribunal. No doubt, the assessee has relied on one decision by the hon'ble high court [CIT v. Sarvyodaya Ilakkiya Pannai [2012] 343 ITR 300 (Mad)], but then the said decision stands also considered by the tribunal in the case of Entertainment Society of Goa v. CIT [2013] 23 ITR (Trib) 636 (Panaji), relied upon by the Revenue, holding, with reference to decision by the hon'ble jurisdictional high court in CIT v. Thane Electricity Supply Ltd. [1994] 206 ITR 727 (Bom), the decision by the non-jurisdictional high court as not binding. The rule of precedence, in case of conflicting views by the high courts, none of which is jurisdictional, is for the tribunal to follow that which appeals to its conscious In our considered opinion, therefore, the appropriate course under the circumstances, even as indicated during the hearing in the instant proceedings - to no objection by either party, is that the matter be referred to the hon'ble President of the Tribunal for constituting a larger bench of the tribunal to decide the highly contentious issue raised by the assesse....