Haryana Warehousing Corporation , ... vs Assessee

Haryana Warehousing Corp., Vs The DCIT, Bay No. 15-18, Panchkula Circle, Sector 2, Panchkula. Panchkula.

PAN: AAACH3948K

(Appellant) (Respondent)

Appellant by : Shri B.K.Nohria Respondent by : Smt. Jyoti Kumari

Date of Hearing : 17.06.2015 Date of Pronouncement : 19.06.2015

PER BHAVNESH SAINI,JM

This appeal by assessee is directed against the order

of ld. CIT(Appeals) Panchkula dated 29.03.2011 for

assessment year 2003-04.

2. The assessee originally filed this appeal on two

grounds. Thereafter, ld. counsel for the assessee filed

revised grounds of appeal containing six grounds of

appeal.

3. Ground No. 6 is general in nature and need no

finding. The ld. counsel for the assessee did not press

ground Nos. 1 & 2 of the revised grounds of appeal. The

same are, therefore, dismissed as not pressed. The 2

remaining ground Nos. 3, 4 and 5 of the revised grounds

read as under :

"3. That on the facts and in the circumstances of the case the Learned CIT (A) Panchkula has erred in law and facts in adding the expenditure of Rs.37,84,658/- as violation to Section 43B as the same has not been claimed as application of income as the appellant is a charitable institution.

4. That on the facts and in the circumstances of the case the Learned CIT (A) Panchkula has erred in law and facts in disallowing the pension fund expenditure of Rs.44,97,575/- as the same arose during the year and allowable as application of income on payment basis appellant is a charitable institution.

5. That on the facts and in the circumstances of the case the Learned CIT (A) Panchkula has erred in law and facts in disallowing the loan waive off expenditure of Rs.2,13,828/- as the same arose during the year and allowable as application of income on payment basis as appellant is a charitable institution."

4. Briefly the facts of the case are that return of

income in this case was filed on 28.11.2003 declaring

income at Rs. 2,44,34,637/-. The assessment was

completed under section 143(3) of the Act on 30.12.2005

after making various additions and income was assessed

at Rs.25,75,07,660/-. The assessee filed appeal before ld.

CIT(Appeals) which was decided on 02.09.2006 allowing

the appeal of the assessee on the issue of status of the

assessee i.e. 'charitable organization' and confirmed the

additions made by the Assessing Officer. The assessee as

well as department filed appeals before the Tribunal who

vide its order in ITA 780/CHD/2006 and I TA

797/CHD/2006 for assessment year 2003-04 dated

14.09.2007 directed the Assessing Officer to give effect to

the order of Tribunal by treating the assessee corporation

as charitable institution. The Assessing Officer, 3

accordingly, take up the matter and passed the order

under section 143(3) read with Section 254 of the Income

Tax Act dated 24.12.2010 and after discussing various

issues, assessed the income at Rs.25,75,07,664/- as was

maintained vide order under section 143(3) dated

30.12.2005. The assessee challenged the order before ld.

CIT(Appeals). Since the present appeal is confined to

ground Nos. 3, 4 and 5 of the revised grounds of appeal

reproduced above, therefore, we note the facts with

regard to these three grounds only from the order of ld.

CIT(Appeals) under appeal.

5. The ld. CIT(Appeals) noted in para 6 of the appellate

order that assessee has challenged various additions

made in the original assessment order dated 30.12.2005

i.e. violation of Section 43B Rs. 37,84,658/-, pension

fund Rs. 44,97,575/- and loan waive off expenditure

Rs. 2,13,828/-. The ld. CIT(Appeals) in para 6.3 of the

impugned order held as under :

"6.3 As regards, the other expenses no details have been filed. The appellant has stated that the additions as per above have been confirmed by my predecessor. The appellant has not given any arguments in support of its claim that the same have been wrongly made. In the absence of the details filed and in view of the reasoning given by my predecessor in his order dated 02.09.2006, the addition so made under the respective heads is confirmed. The ground of appeal is partly allowed."

6. It may be noted here that the ld. CIT(Appeals) while

allowing this ground partly, has allowed two other

grounds of appeal of the assessee in favour of the

assessee. However, on rest of the grounds, which are

agitated in the present appeal, ld. CIT(Appeals) 4

dismissed these grounds of appeal following the reasons

given by his predecessor vide order dated 02.09.2006.

7. We have heard ld. Representatives of both the

parties. The ld. counsel for the assessee submitted that

the expenditure of Rs. 37,84,658/- was not claimed as

expenditure. He has submitted that the issue of pension

fund was decided earlier by ITAT Chandigarh Bench in

the case of Haryana Financial Corporation Vs DCIT dated

27.03.2014 in ITA Nos. 785 and 945 of 2011. He has

submitted that loan waive off expenditure should be

allowed as application of income on payment basis.

8. On the other hand, ld. DR submitted that matter

may be remanded to the ld. CIT(Appeals) for verification

of the facts.

9. In view of the submissions of the parties in the light

of the order passed by the ld. CIT(Appeals), we are of the

view the matter requires re-consideration at the level of

the ld. CIT(Appeals). The ld. CIT(Appeals), with regard to

the above three additions, noted in his findings in para

6.3 reproduced above, that no details have been filed on

these expenses and that counsel for assessee has also

not given any arguments. The ld. CIT(Appeals) followed

the order of his predecessor dated 02.09.2006 which

remained in appeal before Tribunal, therefore, the ld.

CIT(Appeals) instead of following the order of his

predecessor should have given independent finding on all

these grounds. Further, assessee claimed that no 5

expenditure was claimed under section 43B of the Act,

therefore, facts should be verified and further when some

addition is made against the assessee, it could be

considered as application of income but neither the

assessee has filed any detail before ld. CIT(Appeals) nor

argued the grounds before ld. CIT(Appeals). Further, the

ld. CIT(Appeals) has also not discussed any facts and

material on record while deciding and giving his

independent opinion on these grounds. Therefore,

considering the above facts that ld. CIT(Appeals) has

passed non reasoned order, it would be reasonable and

appropriate to restore these three grounds to the file of

ld. CIT(Appeals) with direction to re-decide these grounds

by giving reasonable sufficient opportunity of being herd

to the assessee and ld. CIT(Appeals) shall pass reasoned

order giving finding of fact on the above grounds of

appeal.

10. With these observations, appeal of the assessee is

partly allowed for statistical purposes.

Order pronounced in the Open Court on 19th

June,2015.

Sd/- Sd/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 19th June,2015. 'Poonam' Copy to:

The Appellant, The Respondent, The CIT(A), The CIT,DR

Assistant Registrar ITAT Chandigarh