The Pr. Commissioner Of Income Tax, Panchkula v. M/S Haryana State Agricultural Marketing Board, Panchkula

ITA No. 553 of 2017 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 553 of 2017 (O&M)Decided on : 04.10.2018 The Pr. Commissioner of Income Tax, Panchkula ...... Appellant Versus M/s Haryana State Agricultural Marketing Board, Panchkula ...... Respondent CORAM : HON'BLE MR. JUSTICE AJAY KUMAR MITTALHON'BLE MR. JUSTICE AVNEESH JHINGANHON'BLE MR. JUSTICE AVNEESH JHINGAN Present :Mr. Denesh Goyal, Senior Standing Counselfor the appellant. Mr. Jagmohan Bansal, Advocatefor the respondent. * * * AVNEESH JHINGAN, J. The revenue has filed the present appeal under Section 260A ofIncome Tax Act, 1961 (for brevity, 'the Act') against the order dated21.12.2016 of Income Tax Appellate Tribunal, Chandigarh (hereinafterreferred to as 'ITAT') passed in ITA No.452/CHD/2010. The assessment yearinvolved is 2003-04. 2.As per the appellant, the following substantial questions of lawarise for consideration in the present appeal:- 1) Whether on the facts and circumstances of the case, thelearned ITAT has erred in holding that the assessee is eligiblefor exemption under Section 11 without appreciating the factthat the assessee did not maintain books of account aslearned ITAT has erred in holding that the assessee is eligiblefor exemption under Section 11 without appreciating the factthat the assessee did not maintain books of account as ITA No. 553 of 2017 (O&M) stipulated under the Income Tax Act, 1961 which was statedby the auditor itself and the assessee therefore not satisfyingthe necessary conditions?by the auditor itself and the assessee therefore not satisfyingthe necessary conditions? 2) Whether on the facts and circumstances of the case, the ITAT,in para 49 of its order, has erred in observing that no appealagainst the CIT (Appeal)'s order upholding the exemptionclaimed by the assessee has been filed by the Revenueignoring the fact that the Department had filed appeal beforethe Hon'ble High Court on the issue?in para 49 of its order, has erred in observing that no appealagainst the CIT (Appeal)'s order upholding the exemptionclaimed by the assessee has been filed by the Revenueignoring the fact that the Department had filed appeal beforethe Hon'ble High Court on the issue? 3.The brief facts of the case are that the assessee filed the IncomeTax Return declaring nil income, claiming exemption for entire income underSection 11(1) of the Act. The assessment was completed under Section 143(3) of the Act on 16.03.2006. The Assessing Officer (AO) denied theexemption under Section 11(1) and made the following additions:- i) Contribution to Pension Fund and Provident Fund Rs.28415626/- ii)On account of Krishak Uphar Yojna Rs.79664/- iii) On account of Revenue Income shown as capital income Rs.3211750/-. 4.Aggrieved of the assessment order, the assessee filed an appealbefore Commissioner of Income Tax (Appeals), Panchkula (for short,'CIT(A)'). Vide order dated 02.09.2006 the appeal was dismissed. Further,the appeal was preferred before the Tribunal. The Tribunal vide order dated22.01.2008 remanded the matter back to the AO with regard to the issue ofexemption. In pursuance to the remand, AO passed afresh order dated24.12.2008. The only relief of ` 79,664/- was given on account of Krishak Uphar Yojna and the addition made on account of contribution to the PensionFund and Provident Fund was upheld. 5.Aggrieved of the order passed by the AO, the assessee preferredan appeal before CIT(A) on the ground of denial of exemption under Sections11 and 12 of the Act and challenging the addition on account of contributionto the Pension Fund and Provident Fund. The CIT(A) vide order dated01.03.2010 allowed the exemption under Section 11 of the Act but confirmedthe addition on account of contribution to the Pension Fund and ProvidentFund . Uphar Yojna and the addition made on account of contribution to the PensionFund and Provident Fund was upheld. 5.Aggrieved of the order passed by the AO, the assessee preferredan appeal before CIT(A) on the ground of denial of exemption under Sections11 and 12 of the Act and challenging the addition on account of contributionto the Pension Fund and Provident Fund. The CIT(A) vide order dated01.03.2010 allowed the exemption under Section 11 of the Act but confirmedthe addition on account of contribution to the Pension Fund and ProvidentFund . 6.Both the department as well as the assessee filed appeals beforethe Tribunal against the order of CIT(A). The appeal of the assessee wasallowed. Hence the present appeal. 7.Learned counsel for the appellant argued that the matter withregard to the exemption in the subsequent year had already been remandedby this Court in ITA No. 126 of 2009 dated 20.02.2017 to the Tribunal. Hefurther produced the order of the Tribunal dated 22.05.2018, whereby whiledealing with the remanded matters the Tribunal had further remanded theissue to the AO. He contended that since the matter of exemption is pendingbefore the AO, the Tribunal erred in deleting the addition on the ground thatthe entire income of the assessee has been held to be exempted especiallywhen appeal of revenue against order of CIT(A) has not been decided. 8.Learned counsel for the assessee was not in a position to disputethe factual position. 9.From the perusal of the order of CIT(A), it is evident thatexemption under Section 11 of the Act was allowed by relying upon thedecision for assessment years 2005-06, 2006-07. The revenue being ITA No. 553 of 2017 (O&M) aggrieved of this part of the decision had also preferred an appeal before theTribunal. 9.This Court while dealing with the appeals filed by the revenuefor subsequent years remanded the matter back to the Tribunal. The extractof the order is reproduced below :- “Learned counsel for the revenue veryemphatically submitted that the finding recordedregarding maintenance of books of account by theassessee are perverse and more so when inspite oftaking several opportunities before this court aswell, the learned counsel for the assessee wasunable to substantiate these findings by producingthe record in the High Court. Thus, the findingrecorded by the Tribunal is required to be verifiedand since the respondent-assessee has not beenable to produce the books of account and the auditreport, it is appropriate to set aside the impugnedorders and remand the matter back to the Tribunalfor fresh decision in accordance with law afterhearing both the parties. As regards the additionalsubstantial question of law raised in ITA No. 588of 2010, though no serious error was raised, sincethe matter is being remanded, the Tribunal shalllook into this fact also.” 10.The Tribunal while dealing with the remand matters furtherremanded the matter back to the AO. The relevant portion of the order ofTribunal dated 22.05.2018 is extracted below:- “Having heard the arguments of both the partiesand since the assessee categorically submits thatbooks of accounts have been duly maintained andcan be produced for verification along with theaudit reports and also the arguments of the Ld. ITA No. 553 of 2017 (O&M) DR that if the books are maintained, they arerequired to be examined by the primary authorityi.e. the Assessing Officer for the limited purpose ofpassing an order denovo with regard to thisground only and with directions to the assessee toproduce books of accounts promptly before theAssessing Officer.” 11.Without going further into the issue, it would be appropriate toremit the matter back to the AO to decide the same afresh. 12.The appeal is disposed of accordingly. (AJAY KUMAR MITTAL) JUDGE October 04, 2018anju (AVNEESH JHINGAN) JUDGE Whether speaking/reasoned: Yes/NoWhether reportable :Yes/No