M/S Punjab Urban Planning And Development Authority v. The Commissioner Of Income Tax And Others

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 122 of 2010 (O&M)Date of Decision: 22.9.2010 M/s Punjab Urban Planning and Development Authority ....Appellant. Versus The Commissioner of Income Tax and others ...Respondents. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Vishal Gupta, Advocate for the appellant. Ms. Urvashi Dhugga, Advocate for the respondents. AJAY KUMAR MITTAL, J. 1.In the instant appeal filed by the assessee under Section260A of the Income Tax Act, 1961 (in short “the Act”) against the orderof the Income Tax Appellate Tribunal, Chandigarh Bench “B”,Chandigarh (hereinafter referred to as “the Tribunal”) dated 22.5.2009passed in ITA No. 837/CHD/2008, for the assessment year 2002-2003,the following substantial question of law has been claimed:- “Whether on the facts and in the circumstances ofthe case, the Ld. ITAT was right in taking intoconsideration the unauthorized concession given bythe counsel and also the fact that the factum ofconcession given by the counsel in the earlier proceedings was not in the knowledge of theappellant in spite of fact that the counsel was neverauthorized to make such concession on behalf of theappellant?” 2.The facts as narrated in the appeal are that the assesseefiled its return on 31.10.2002 declaring nil income and claimedRs.27,31,92,259/- as exempt under Section 10(20A) of the Act.Thereafter, the assessee filed revised return on 28.7.2003 along withstatutory audit report and audited accounts. The case was taken up forscrutiny. The Assistant Commissioner of Income Tax vide order dated12.11.2003 assessed the total income at Rs.13,10,23,980/- and furtherordered for initiation of penalty under Section 271B and interest underSections 234B and 234C. Feeling aggrieved, the assessee preferredan appeal before the Commissioner of Income Tax (Appeals) [in short“the CIT (A)”] who vide order dated 9.8.2004 while allowing the appealof the assessee, deleted the additions made by the Assessing Officer.The assessee in the meanwhile filed a return and claimed refund of taxdeducted at source (TDS) to the tune of Rs.25.66 lacs. The AssessingOfficer initiated proceedings under Sections 154/155 of Act, observingthat the assessment was completed on 28.2.2003 and a refund ofRs.25.66 lacs was allowed to the assessee but as the TDS certificatedid not bear the signatures of the issuing authority or related to someother assessment period, he vide order dated 25.8.2003 rectified hisearlier order and assessed the total refundable tax at Rs.1,09,690/-.Thereafter, the assessee vide letter dated 12.3.2007 asked for refund ofthe TDS amount and for rectification under Section 155(14) of the Act. The Assessing Officer vide letter dated 22.5.2007 informed theassessee that the application for assessment year 2002-03 could not beaccepted as the same was time barred. The assessee filed an appealbefore the CIT (A) along with an application for condonation of delay infiling the appeal. It was urged on behalf of the assessee before the CIT(A) that the order under Section 154 of the Act dated 25.8.2003 wasnever served on the assessee and, therefore, the appeal was withinlimitation. On the other hand, it was submitted by the Assessing Officerthat the counsel for the assessee had given 'no objection' on the saidorder, though, inadvertently he forgot to sign the receipt of the order.The CIT (A) observed that the calculations which had been made in theorder under Section 154 got merged in the order under Section 143(3)of the Act which was served on the assessee on 14.11.2003. The delaywas, thus, not condoned. The issue was also held against theassessee on merits. The CIT (A) vide order dated 21.7.2008 dismissedthe appeal of the assessee. On further appeal by the assessee, it wascontended before the Tribunal that the order passed under Section 154of the Act was never served on the assessee and the counsel for theassessee was never authorized to give no objection without the formalconsent of the assessee. It was further pointed out that there is noreceipt on record whereby the counsel had given 'no objection' forrectification. The Tribunal vide order dated 22.5.2009 dismissed theappeal. Hence, the present appeal. 3.We have heard learned counsel for the parties and perusedthe record. 4.Learned counsel for the assessee-appellant submitted that the alleged concession made by the counsel for the appellant is notborne out from the record; a complaint was also submitted to theInstitute of Chartered Accountant of India wherein the professionalmisconduct committed by the Chartered Accountant firm- M/s KumarNohria & Co. in giving no objection for rectification without the consentof the assessee was made vide Annexure A-5; and the CIT (A) and theTribunal has erroneously dismissed the appeal. An application bearingCM No. 24238-CII of 2010 along with Forms 16A has been filed. It wasfurther argued that the Tribunal has erred and it is against the record asForm 16A attached with the application clearly shows that tax wasdeducted at source (TDS) in respect of payments which were made tothe assessee. According to the counsel once TDS was there, thebenefit had to be granted to the assessee and retaining the same by thedepartment amounts to undue enrichment on their part. He also laidstress that the appellant being a government organization, there was noulterior motive which can be attributed in the present case and thebenefit of TDS which is legally available to the assessee should not bedenied to it on the basis of technicality especially when there was nowritten or express authority to the counsel to make concession.5.Controverting the aforesaid submissions, learned counselfor the revenue argued that once the concession had been given, theappellant could not now urge otherwise and claim benefit. However,learned counsel could not dispute that in case TDS was in respect ofthe income which was paid to the appellant, the benefit had to be givento it. 6.After giving our thoughtful consideration to the respective 6.After giving our thoughtful consideration to the respective submissions of learned counsel for the parties, keeping in view totalityof peculiar facts and circumstances of the case and in the interest ofjustice and more particularly in the absence of any legal authorization tothe Chartered Accountant to give 'no objection' for rectification, thematter deserved to be decided on merits after condoning the delay.Further, in the light of the documents filed along with the application, weare of the opinion that the matter requires to be remanded to theTribunal to decide afresh on merits after examining the evidenceavailable on record and which might be produced by the assessee, ifpermissible under Rule 29 of the Income Tax Appellate Tribunal Rules,1963 by way of additional evidence. 7.Ordered accordingly. 8.The appeal stands disposed of. 9.The assessee shall appear before the Tribunal on29.11.2010 for further proceedings in accordance with law.29.11.2010 for further proceedings in accordance with law. (AJAY KUMAR MITTAL) JUDGE September 22, 2010gbs (ADARSH KUMAR GOEL) JUDGE