Triveni Powerloom Cooperative Society v. Income Tax Officer, Ward 5(4), Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 56/2018 Triveni Powerloom Cooperative Society, Having Its Address AtKatta Street, Durgapura, Tonk Road, Jaipur In The State OfRajasthan Through Its President Shri Munna Lal Katta ----Appellant Versus Income Tax Officer, Ward 5(4), Jaipur Having Its Address NewCentral Revenue Building, Statue Circle, C-Scheme, Jaipur ----Respondent For Appellant(s) : Shri Siddharth Ranka For Respondent(s): Shri Prateek Kadawat with Shri Ankit Popli on behalf of Shri R.B. Mathur HON'BLE MR. JUSTICE MOHAMMAD RAFIQ HON'BLE MR. JUSTICE GOVERDHAN BARDHAR 28/08/2018 Judgment This appeal has been filed by assessee-appellant against thejudgement of the Income Tax Appellate Tribunal, Jaipur dated31.8.2017, which was admitted to hearing by this Court on24.4.2018 on the following substantial question of law: “Whether the ld. ITAT was right in law in confirmingproceedings initiated u/s.148 of the Act against the assesseeappellant when the re-assessment order was passed againstBODY OF ASSOCIATION whereas proceedings were initiatedagainst the status as an INDIVIDUAL.” Learned counsel for the appellant has contended that theappellant-M/s. Triveni Powerloom Cooperative Society acquired animmovable property from RIICO on 5.7.2007. However, since theappellant could not commence business, it has sold off the property acquired by it from RIICO during the assessment year2008-09. Indisputably, the assessee-appellant did not file itsincome tax return for the year under consideration i.e. assessmentyear 2008-09. The Income Tax Officer, Ward No.6(2), Jaipurinitiated the proceedings u/s.148 of the Act against Shri Munna LalKatta, President of M/s. Triveni Powerloom Cooperative SocietyLtd. vide notice dated 23.3.2015. Shri Siddharth Ranka, learned counsel for the appellant hascontended that in the form enclosed with notice u/s.148 forrecording reasons for initiating proceedings under Section 148, theAssessing Officer selected the status of the assessee as individual,but the notice dated 23.3.2015 was addressed to Shri Munna LalKatta as President of M/s. Triveni Powerloom Cooperative SocietyLtd. The Assessing Officer passed an order on 15.3.2016 underSection 144 read with 148 of the Act whereby he determined theincome of the assessee-appellant as Rs.16,42,752. At that stage,he realised his mistake in selecting wrong status of the person forinitiating the re-assessment proceedings. Accordingly, theAssessing Officer selected the status of the assessee as Body ofAssociation and also issued demand notice dated 15.3.2016wherein he selected the status of the assessee as Body ofIndividual. The appellant-assessee preferred first appeal beforethe Commissioner of Income Tax (Appeals), who vide order dated30.9.2016 rejected the ground of initiating proceedings u/s.148 ofthe Act. However, the CIT(A) granted part relief on account ofaddition made by the Assessing Officer by restricting the additionto Rs.10,12,704 instead of Rs.16,42,752. The appellant-assesseethen preferred second appeal before the ITAT, which vide its orderdated 31.8.2017 has confirmed the findings of the CIT(A) by restricting the addition to Rs.4,32,628 instead of Rs.16,42,752 asmade by the Assessing Officer. restricting the addition to Rs.4,32,628 instead of Rs.16,42,752 asmade by the Assessing Officer. Shri Siddhartha Ranka, learned counsel for the appellant tobuttress his arguments has relied on the judgements of AllahabadHigh Court in Lal Chand Agarwal vs. Commissioner of Income Tax,Agra-(2016) 68 Taxmann.com 102 (Allahabad) and CIT vs. RamDas Deokinandan Prasad-(2005) 148 Taxman 203 (Allahabad) andjudgement of Madhya Pradesh High Court in CIT vs. SobhagmalMishrilal Semlavada-(1996) 87 Taxman 124 (MP) that when theAssessing Officer in the assessment year has selected the statusof Body of Association and issued the demand notice on thatbasis, he cannot later change it to `Individual’. The assessmentorder could not have been framed against Munna Lal Katta asindividual when the reassessment was initiated against the Bodyof Association by the Assessing Officer, whereas the proceedingswere initiated against its President considering status as Body ofIndividual. Shri Prateek Kedawat on behalf of Shri R.B. Mathur, learnedcounsel for the respondent has opposed the appeal and supportedthe judgement of the Income Tax Appellate Tribunal. Having heard the learned counsel for the parties and perusedthe impugned judgement passed by the Tribunal, we hardly findany strength in the argument of the learned counsel for theappellant that the Tribunal in its order has taken note of the factthat notice was issued in the name of Individual in its capacity asthe President of M/s. Triveni Powerloom Cooperative Society Ltd.,which is borne out from the record. The Tribunal, therefore, onconsideration of the written statement filed by the assessee wasnot inclined to interfere with the order passed by the CIT(A). The notice issued to the assessee u/s.148, which is on record asAnnexure-1 clearly indicates that such notice was issued to ShriMunna Lal Katta as the President of M/s.Triveni PowerloomCooperative Society. Mere selection of the individual could nottherefore make any difference, which in any case, was correctedin the assessment year when it was indicated as Body ofAssociation. Even otherwise, the learned ITAT has substantiallyrestricted the addition to Rs.4,32,628 instead of Rs.16,42,752 asmade by the Assessing Officer, which was reduced by the CIT(A)to Rs.10,12,704. The cited judgements are distinguishable on facts. Wetherefore do not find any error in the order passed by the learnedITAT and any merit in this appeal. The appeal is thereforedismissed and the question proposed aforesaid is accordinglyanswered in favour of the revenue. (GOVERDHAN BARDHAR),JRS/196 (MOHAMMAD RAFIQ),J