Agricultural Market Committee, ... vs Department Of Income Tax

Director of Income Tax Agricultural Market (Exemptions), Hyderabad vs. Committee, Achampet, Mahabubnagar District.,

PAN: AACTA 1522 B

For Department : Shri D. Sudhakar Rao, CIT For Assessee : Shri Ravi Seshagiri Rao, AR

Date of Hearing : 12-12-2014 Date of Pronouncement : 02-01-2015

ORDER

PER B. RAMAKOTAIAH, A.M. :

This Miscellaneous Application is preferred by Director of Income Tax-(Exemptions), Hyderabad against the order of the Income Tax Appellate Tribunal (ITAT) 'B' Bench in assessee's case in ITA No.400/Hyd/2014 dated 05-09-2014. The ITAT while directing the registration to be granted to the assessee observed as under in para No.8:

"8. In this context, we have to observe that learned DIT(E) is wholly bent on refusing registration on various extraneous considerations in almost all cases which have come up before him. This Forum has been observing regularly and also some times passing adverse remarks that DIT(E) was exceeding his 2 MA.No.169/Hyd/2014 in ITA No.400/Hyd/2014

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jurisdiction and not following the jurisdictional High Court direction/ITAT Orders while considering the issues. Even though ITAT directs the DIT(E) to grant registration in many cases, he is making some other conditions applicable which are beyond his purview. This Forum cannot ignore such blatant violations of judicial proprietary. Even though there is a direct jurisdictional High Court judgment in the case of AMCs for grant of registration under section 12A of the Act, learned DIT(E) took recourse to the judgment of another High Court decision given in the context of sec.10(23C) so as to deny the registration under section 12A which, in fact, was granted to the said Seed Certification Agency by the DIT(E) as can be seen from the facts of that case. This may call for contempt of Court, but since that is not before us, we can only observe that learned DIT(E) should be visited with costs for making assessee unnecessarily coming up in appeal. Since assessee paid Rs.500 as Appeal fees and employed Counsel for representing the case before the ITAT, we will levy a cost of Rs.2000 (Rupees Two Thousand only) on DIT(E), which should be recovered from his salary and paid to the assessee. With these observations, assessee's appeal is allowed, with costs to be paid by the DIT(E)".

The DIT(E) has preferred the present Miscellaneous Application requesting that the cost levied should be withdrawn.

2. The DIT(E) submits in writing as under:

4. In this context, it is further respectfully submitted that the said decision of the Hon'ble Jurisdictional High Court in the case of Andhra Pradesh State Seed Certification Agency, which was subsequent to the decision of the Hon'ble Jurisdictional High Court in the case of CIT Vs. Agricultural 3 MA.No.169/Hyd/2014 in ITA No.400/Hyd/2014

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Market Committee (2011) 336 ITR 641 (AP), has been followed earlier by the DIT(E) in his order dated 28.03.2013 for denial of registration u/s.l2A in the case of Agricultural Market Committee, Sarangapur, Adilabad District, and on appeal filed by the assessee against the said order of the DIT(E) before the Hon'ble Tribunal, the Hon'ble ITAT,"B" Bench vide order in ITA No.903/Hyd/2013 dated 17.09.2013 directed to grant registration to the assessee, without imposing any cost on the DIT(E). Later, on appeal filed by the Department before the Hon'ble High Court, against the said order of the Hon'ble ITAT, the Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh, vide their order dated 11.06.2014 in ITTA No.346 of 2014, dismissed the said appeal of the Department, but however, without perceiving any contempt o court and without taking any adverse view and without imposing any cost on the DIT(E). In that order dated 11.06.2014, the Hon7ble High Court noted that the Ld. Tribunal has followed the judgement of this Court on an identical issue and further observed that the aforesaid judgement of this court has no application to the facts of this case. A copy of the said order of the Hon'ble Jurisdictional High Court is enclosed herewith as 'Annexure- A' for kind perusal of the Hon'ble Tribunal.

5. Further, later, on another appeal filed by the Department, before the Hon'ble High Court, against the order of the Hon'ble ITAT in ITA. No.903/Hyd/2013 dated 17.09.2013, involving identical issue and deciding the appeal in favour of the assessee, but without imposing any cost on the DIT(E), in the case of Agricultural Market Committee, Kubeer, Adilabad District, wherein also registration has been denied u/s.12A by the DIT(E) following the said order of the Hon'ble Jurisdictional High 4 MA.No.169/Hyd/2014 in ITA No.400/Hyd/2014

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Court in the case of Andhra Pradesh State Seed Certification Agency (supra), the Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh, vide their order dated 06.08.2014 in ITTA No.545 of 2014, dismissed the said appeal of the Department, but however, without perceiving any contempt of court and without taking any adverse view and without imposing any cost on the DIT(E). A copy of the said order dated 06.08.2014 of the Hon'ble High Court is enclosed herewith as 'Annexure-B' for kind perusal of the Hon'ble Tribunal.

6. It is humbly submitted that, had those decisions of the Hon'ble High Court in the case of those two AMCs been brought to the notice of the Hon'ble ITAT at the time of hearing of the appeal in the case of the assessee AMC, the Hon'ble ITAT might not have proceeded to levy any cost on the DIT(E), in the appellate order dated 05.09.2014 in ITA No.400/Hyd/2014 passed in the case of the assessee AMC. However, when the said two decisions of the Hon'ble Jurisdictional High Court, dismissing the appeals filed by the DIT(E), but without levying any cost on the DIT(E), were existing at the relevant time, the first one dated 11.06.2014 in AMC, Sarangapur, prior to hearing of the appeal by the Hon'ble ITAT on 21.07.2014 in the case of the assessee AMC ( available in the website of Hon'ble High Court from where it was first downloaded on 18.06.2014 (copy enclosed as Annexure C) and the second one dated 06.08.2014 in AMC, Kubeer, prior to the pronouncement of judgement on 05.09.2014 in the case of the assessee AMC, which decisions, it is respectfully submitted that should be followed in spirit, it may kindly be noticed that a mistake has been committed in the present order dated 05.09.2014 of the Hon'ble ITAT in the case of the assessee AMC in 5 MA.No.169/Hyd/2014 in ITA No.400/Hyd/2014

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levying such cost on the DIT(E).

7. Under the circumstances of the case explained above, honestly and truthfully, it is earnestly requested that the Hon'ble ITAT may kindly consider to recall their said order dated 05.09.2014 in the case of the assessee AMC and suitably amend the said para 8 of that order, by withdrawing such cost imposed on the DIT(E), Hyderabad".

3. The ld. Departmental Representative (DR) reiterated the submissions made by the DIT(E) in the application. The assessee's Counsel, however, has no objection if cost is withdrawn.

4. We have considered the issue and perused the record. As can be seen from the order of ITAT and the submissions made by the DIT(E), the observations made by the ITAT are justified. In fact, the DIT(E) admits that on a similar case as early as 17-09-2013, the ITAT granted registration to the AMC in ITA No.903/Hyd/2013. In spite of having an order from the ITAT, there is no mention of the same in the order passed by the DIT(E) in the present assessee's case on 31-01-2014. Had DIT(E) mentioned this fact that ITAT has already directed DIT(E) to grant registration and DIT(E) was in appeal before the Hon'ble High Court at the relevant point of time, ITAT would not have levied cost. In spite of having a decision of the ITAT on record, without even mentioning the same in the order and also without mentioning that Revenue preferred appeal before the Hon'ble High Court, the DIT(E) passed the order relying on a judgment of the Hon'ble High Court not applicable on the facts of the case. In view of this, we are of the opinion that the 6 MA.No.169/Hyd/2014 in ITA No.400/Hyd/2014

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comments passed against the DIT(E) are justified, however, considering the request made by the DIT(E), we withdraw the cost levied on the DIT(E). To that extent, the order dt.05-09- 2014 in the assessee's case stands modified.

5. In the result, Miscellaneous Application is allowed.

Order pronounced in open Court on 02-01-2015.

Sd/- Sd/- (SAKTIJIT DEY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated 2nd January, 2015.

TNMM

Copy to :

1. Director of Income Tax (Exemptions), Hyderabad

2. Agricultural Market Committee, Achampet, Mahabubnagar Dist., C/o. Shri S.Rama Rao, Advocate, Flat No.102, Shriya's Elegance, H.No.3-6-643, St.No.9, Himayatnagar, Hyderabad

3. ADIT (Exemptions), Hyderabad

4. D.R. ITAT, Hyderabad.