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TMI Blog2015 (5) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... y contentious issue raised by the assessee’s Ground No.1, decided differently by different coordinate benches of this tribunal, for uniform application across the tribunal, of course after hearing the parties. The larger bench of the tribunal, in the case the reference made hereby is accepted by the hon’ble President, shall, apart from the other arguments and case law as may be canvassed before it by the parties, consider the same. We support our decision for the reference aforesaid, apart from the clear provision of section 255(4) of the Act, on the settled law on precedence as explained by several celebrated decisions in the higher courts of law, as for example in the case of CIT v. B.R. Constructions [1992 (6) TMI 13 - ANDHRA PRADESH High Court]. The matter is accordingly referred to the Hon’ble President for constituting a larger bench to decide the assessee’s Ground I. We decide accordingly. - MA No. 126/Mum/2014, ITA No. 625/Mum/2012 - - - Dated:- 10-4-2015 - Shri D. Manmohan And Shri Sanjay Arora JJ. For the Appellant : Shri S. E. Dastur Shri Madhur Agarwal For the Respondent : Shri Rajiv Panth Shri Neil Philip ORDER Per Sanjay Arora, A. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order u/s. 12AA(3) withdrawing registration, it was argued that the tribunal in requiring the ld. DIT(E) to examine the issue of the said withdrawal with reference to the conditions of section 12AA(3), i.e., that the activities of trust or institution are genuine or are being carried out in accordance with subjects, traveled outside the scope of the appeal and, thus, exceeded its jurisdiction. The power of the tribunal u/s.254(1), howsoever wide, is not absolute and is confined to the grounds raised, and for which reliance was placed on decision of the hon ble Bombay High Court in the case of Pokhraj Hirachand v. CIT [1963] 49 ITR 293 (Bom) and J.B. Greaves IT v. CIT [1963] 49 ITR 107 (Bom). On his attention being drawn to the rule 11 of the Appellate Tribunal Rules, 1963, which provides for the tribunal being not confined to the grounds raised before it per the memo of appeal, so that it can, where deemed fit and proper, consider a ground deemed relevant, of course after allowing parties opportunity to state their case reference thereto, it was explained by him that the cited decisions considered the ambit of the relevant rules, i.e., rules 11,12 and 27, which are para materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) be held as ab-initio void and bad-in-law. WITHOUT PREJUDICE TO GROUND I: GROUND II: 1. On the facts and circumstances of the case and in law, the DIT(E) erred in holding that the income from the activities of the Appellant of granting loans to public bodies and the leasing activities of the Appellant are business activities and accordingly, proviso to section 2(15) applies. 2. He failed to appreciate and ought to have held that the activities carried out by the Appellant are in fulfillment of its objects as required by the statute (Mumbai Metropolitan Region Development Authority Act, 1974) and hence cannot be held that such activities amount to carrying on of business activities. . 3. The Appellant therefore prays that it be held that the provision of section 2(15) does not apply to the Appellant and accordingly the activities per se does not amount to carrying on any nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business. WITHOUT PREJUDICE TO GROUND I II GROUND III 1. On the facts and circumstances of the case and in law, the DIT(E) erred in withdrawing the registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E) s factual findings nor by itself be considered as a ground for considering the assessee s activities as not genuine or not in accordance with its objects; the same being the subject matter of the legal aspect afore-noted. We do so as the assessee s case would require being examined by the tribunal thereon only if the same survives an examination on facts, i.e., satisfies the test of s. 12AA(3) on facts. We decide accordingly. The tribunal has, as apparent, not decided Gd.1 for the reason that in its view the question as to whether the conditions for the withdrawal of registration u/s.12AA(3) stands satisfied are not, i.e., de hors section 2(15), needs to be determined first. Finding the facts on record as not leading to the said determination, it restored the matter back to file of the ld. DIT(E). It is this decision that is sought to be impugned as without jurisdiction. Firstly, therefore, it is incorrect to say that the tribunal proceeded to decide the Gd.2 without first addressing Ground 1. Both Gd. 1 2 relate to different aspects of section 2(15), and have not been decided by the tribunal, albeit for different reasons. It clearly states that the issue of application (o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed the decision of the tribunal in remanding the matter back to the file of the AAC to levy penalty in accordance with law, which the said authority found to have been levied by the AO at below the statutory minimum amount prescribed. Though the tribunal did not have power to enhance, it was certainly competent for it to remand the matter back for the purpose to the file of the AAC, who had the necessary power but had declined to exercise it on the mistaken ground that he had no such power. The penalty leviable in accordance with law was, thus, confirmed by the apex court to be issue before the tribunal. In Martin Burn Ltd. vs. CIT [1993] 199 ITR 606 (SC), the action of the tribunal in remanding the matter back to the ACIT for passing order u/s.263 after making further investigation was upheld. The question arising before the tribunal was perceived as not limited to what had been considered by the CIT, but as also what had not been, but ought to have been, in the exercise of his power in the matter. In CIT vs. National Taj Traders [1980] 121 ITR 535 (SC), the apex court clarified that the time limit of two years prescribed for passing an order u/s.33B by the CIT (correspond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(15). The issue, which the tribunal considered as the second limb of the matter before it, i.e., the application of s. 12AA(3) independent of s. 2(15), was thus not a subject matter of appeal, and the tribunal had wrongly assumed jurisdiction in its respect. The tribunal, as it appears to us, was moved by the assessee s reply before the ld. DIT(E), stating its activities as genuine and carried out in accordance with it objects (PB pgs. 41-55) as well as its argument before it to the same effect (refer para 3.2 of the impugned order). However, notwithstanding the assessee s arguments and pleadings, the subject matter of appeal cannot exceed the very basis on which section 12AA(3) is sought to be invoked by the Revenue in the present case, i.e., attraction of section 2(15), and which shall comprise the subject matter of appeal, or the controversy attending it. Whether the same is, in fact, attracted or not, is again a part thereof - the said basis - specifically covered by the assessee s Gd. 2. No doubt, the Revenue is not barred in law from raising, and is at liberty to raise, the said issue in another proceedings, even as argued before us by the ld. AR; there being even otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving during the course of the having accorded consent to our deciding the same, i.e., rather than being heard again; the appeal having been heard at length in the first instance, we proceed to decide the said grounds. The assessee in this regard claims that its Ground #1 would fall to be decided first inasmuch as if decided in its favour, Ground # 2 shall become redundant. True, but then, equally, Ground # 1 shall arise for consideration only it is found as a fact that section 2(15) is applicable thereto. It is pointless to decide Ground 1, i.e., the impact of section 2(15) on registration of an entity as a charitable institution, without first considering if section 2(15), including proviso thereto, is at all attracted in the facts of the case. We shall, therefore, proceed to decide Ground #2 first. Section 2(15) reads as under: Definitions. 2. In this Act, unless the context otherwise requires, - (1) .. (2) (15) charitable purpose includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife and preservation of monuments or places or objects of artistic or historic interest, and the advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business is a term of wide import, encompassing within it the different forms and shades of transactions, viz. trade, commerce, etc., which are again terms of considerable amplitude. The import or even the common parlance meaning of all these terms is not in dispute or in doubt. Reference in this context may be made inter alia to decisions in the case of Bengal Assam Investors Ltd. v. CIT [1966] 59 ITR 547 (SC); Khan Bahadur Ahmed Alladin Sons v. CIT [1968] 68 ITR 573 (SC); P.M. Mohammed Meera Khan v. CIT [1969] 73 ITR 735 (SC); Karam Chand Thapar Bros. (P) Ltd. vs. CIT [1971] 82 ITR 899); Dalmai Cement Ltd. v. CIT [1976] 105 ITR 633 (SC), besides several by the high courts, as recently in Institute of Chartered Accountants of India (ICAI) v. Director General of IT [2012] 347 ITR 99 (Del), where the term has been elucidated by the hon ble courts. The language of proviso to section 2(15) extends to any activity that may be in the nature of trade, commerce or business - all terms of wide amplitude, or any activity of rendering any services in relation to the same. We, accordingly, have no hesitation in holding that the assessee s activities are covered by the proviso to sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other arguments and case law as may be canvassed before it by the parties, consider the same. We support our decision for the reference aforesaid, apart from the clear provision of section 255(4) of the Act, on the settled law on precedence as explained by several celebrated decisions in the higher courts of law, as for example in the case of CIT v. B.R. Constructions [1993] 202 ITR 222 (AP)(FB). 9. We are unable to understand the import of the assessee s Ground III, raised without prejudice to its Grounds I II, in-as-much as the competent authority had withdrawn the approval u/s.12AA(3) only with effect from A.Y. 2009-10, the current year. As regards the retrospective application of the said provision, the same stands decided by the tribunal vide para 4.1 of its order dated 31.12.2013 with reference to the binding decision by the hon ble jurisdictional high court, and qua which the assessee has not raised any objection per its MA. The same shall, therefore, obtain. No ground qua the non-adjudication of its Gd. III has been taken by the assessee either per its MA or during the course of its arguments both in the appellate as well as the rectification proceedings. We hold accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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