TaxTMI 
TaxTMI 
2019 (7) TMI 1510
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....rise against the Commissioner of Income Tax (Appeals), Shillong separate orders, all dated 09-10-2018 passed in case No. CIT(A)/Shg/10047, 10068 & 10070/2017-18 involving proceedings u/s 147 r.w.s. 144 of the Income Tax Act, 1961; in short 'the Act'. Case(s) called twice. None appears at the assessees' behest. The registry has already sent a RPAD notice(s) for today's hearing. We therefore proceed ex parte against these assessees. 2. We are informed by the departmental representative, Shri M. Haokip that all these four appeals raise the following identical substantive grounds:- "1. For that the learned Commissioner of Income Tax (Appeals) CIT(A) ought to have hold that the order of assessment passed by the learned Asses....
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....been ran by partners as BOI and not firm is also not in question. In view of this, the crux of matter to be examined is whether exemption available to Tribal members in scheduled area from business ran in capacity as individual or BOI would be available if the same is conducted through partnership firm formed by tax-exempt partners. 4.3.1 According to section 4(1) of the Act, income tax is charged on person in accordance with Central Act. Person is detained u/s.2(31). The same is extracted as under: (31) "persons" includes- (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated ....
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.... identity to partnership forms and there is separate scheme of taxation and assessment meant for firms only. In fact, a whole chapter i.e. Chapter XVI fo the Income Tax Act is dedicated to assessment of firms with the heading: "Special Provisions Applicable to Firms.". A firm cannot be equate d to individuals and BOI. BOI can be formed by individuals; whereas firms may be formed by non-individuals who have legal entities. 4.3.2 In the written submission, assessee reproduced text of section 10(26). Opening line of the section says: "In the case of a member of a scheduled Tribe...."A reading of the section makes it very clear that an assessee has to be a member of a scheduled Tribe. Even by common understanding, one has to be an indi....
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....here is very little difference between "Individuals" and "Body of Individuals" in the sense that an accumulation of individuals is a BOI. That is a BOI comprises only of individuals. (ii) On the other hand, an AOP, a firm, a company could contain other entities. Hence, what applies to an "individual" may well apply to its collective, i.e. a BOI. But it would most certainly not apply to AOP, Firm or Companies. (iii) Companies, firms and non-individual cannot be members of BOI, which can have only human beings or a plurility of individuals.. (iv) Thus the logic can be that an individual earning income can be exempt u/s 10(26) of the Act, and, so can a conglomeration of individuals. (v) The case deals with "....
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....ation and benefit of such ambiguity cannot be claimed by the assessee and it must be interpreted in the favour of revenue. The Hon'ble Apex Court held: '52. To sum up, we answer the reference holding as under (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and al....
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....ax Act and give exemption which is not granted by the expressed provision of the Act. 4.3.7 The A/R also argued that in prelude to the Chapter on Exemption, the Act states: "In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included". According to the A/R, corollary to this is that income of any person falling within clause 10(26) shall not be included to the income. Therefore, as a firm comes within the definition of person, income of firm which is formed by taxexempt individuals should also be exempt from tax. In my view, the argument is fallacious. If one goes through the Chapter on Exemption, it is seen that some for the clauses are meant....