TaxTMI 
TaxTMI 
TaxTMI 
2009 (1) TMI 300
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....e ground of mutuality. 4. The learned CIT(A) has erred in confirming the receipts of the co-operative society and not following principles of not taxing an income/receipt on the ground of mutuality as laid down by the apex Court in case of the Chelmsford Club vs. CIT (2000) 159 CTR (SC) 235 : (2000) 243 ITR 89 (SC). 5. The assessee reserves right to add, amend or alter any grounds of appeal as and when found necessary." 2. Though the assessee has raised various grounds, but, they all relate mainly on two issues viz., (1) Whether the new claim raised by the assessee without filing a return before the AO under s. 139 can be entertained by the AO? and (2) Whether the CIT(A) can entertain that claim or direct the AO to entertain the same if the AO did not entertain the same during the course of assessment proceedings? 3. The brief facts borne out from the record in this regard are that assessee is a co-operative group housing society registered under Maharashtra State Co-operative Societies Act. The society formed by the members who have been allotted plots for construction of house for their residential use and society does not carry out any activity according to the AO. During th....
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....the return of income. The decision of Hon'ble Supreme Court in the case of Goetze (India) Ltd. has specifically answered this question which was against the assessee. The Hon'ble Supreme Court held that the AO is not under legal obligation to entertain such claim which has not been filed in a revised return. I find that the aforesaid ratio of the decision is fully applicable in the present case. Hence, I accord the finding of the AO in toto. As a result, appeal is dismissed on this ground." 5. Now, the assessee has preferred an appeal before the Tribunal and placed a heavy reliance upon the judgment of the Larger Bench of the apex Court in the case of National Thermal Power Co. Ltd. vs. CIT (1999) 157 CTR (SC) 249 : (1998) 229 ITR 383 (SC) and other orders of the Tribunal in support of his contention that the purpose of assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law and even a new ground can be entertained and adjudicated by the Tribunal. The learned counsel for the assessee has also commented on the judgment of the apex Court in the case of Goetze (India) Ltd. vs. CIT with the submissions that in....
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....on record in this regard, the issue has to go for verification to the AO. If the Tribunal instead of asking the AO to entertain the impugned claim, admit this ground itself, the Tribunal has to send this issue back to the AO for verification and this act of the Tribunal will also be against the spirit of the judgment of the apex Court in the case of Goetze (India) Ltd. vs. CIT. In these circumstances, the Tribunal being the subordinate authority to the Supreme Court, has no power either to direct the AO to admit the impugned claim adjudicate or ask the AO to verify the facts. 9. Having heard the rival submissions and from careful perusal of the record we find that undisputedly in the original return of income the assessee has offered the receipts from its members for issuing NOC for taxation. Within a time-limit prescribed under s. 139 of the Act, the assessee has not filed any revised return for revising its claim. During the course of assessment proceedings, the assessee vide letter dt. 12th Aug., 2006 raised a claim that the entire receipts are exempted from tax on the ground of mutuality, relying upon the judgment in the case of CIT vs. Adarsh Co-operative Housing Society Ltd.....
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....disallowed by the AO on the ground that there was no provision under the IT Act to make amendment in the return of income by modifying an application at the assessment stage without revising the return. 3. This appellant's appeal before the CIT(A) was allowed. However, the order on the further appeal of the Department before the Tribunal was allowed. The appellant has approached this Court and has submitted that the Tribunal was wrong in upholding the AO's order. He has relied upon the decision of this Court in National Thermal Power Co. Ltd. vs. CIT (1999) 157 CTR (SC) 249 : (1998) 229 ITR 383 (SC), to contend that it was open to the assessee to raise the points of law even before the Tribunal. 4. The decision in question is that the power of the Tribunal under s. 254 of the IT Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the AO to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this ca....
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....t of that item. Their Lordships further clarified that there is no reason to restrict the powers of the Tribunal und6r s. 254 only to decide the ground which arises from the order of the CIT. The relevant observation of the apex Court are extracted hereunder: "Under s. 254 of the IT Act, the Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms; The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under s. 254 only to decide the grounds which arise from the order of the....