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2017 (10) TMI 43 - AT - Income TaxExemption u/s 11 - Charitable purpose u/s 2(15) - registration u/s 12AA providing infrastructure facilities including handling, storage and clearance of import and export cargo of diamonds, precious, semi-precious stones, etc. - Held that:- the registration under section 12AA of the 1961 Act of the assessee cannot be cancelled by the learned Director of Income-tax (Exemption) and the same is hereby restored with effect from the date it was cancelled by the learned Director of Income-tax (Exemption) vide the impugned order of the learned Director of Income-tax (Exemption) which is under challenge before us. - Disallowance of outstanding liability of IAAI handling charges - Held that:- Contention of the assessee that it has written back the outstanding liability towards handling charges payable to IAAI in the financial year 2010-11 i.e. the assessment year 2011-12 on the grounds that IAAI has divested and transferred its operations to Mumbai International Airport Limited and hence the liability of the assessee ceased, does not inspire confidence unless positive and cogent evidence is brought on record to that effect as normally when the operations are transferred/divested, then adequate provisions are made in the agreements to preserve all rights in existing agreements which are either taken over by successor or are retained by transferor but to say that the liability has ceased just because IAAI divested its operations in favour of the Mumbai International Airport Limited cannot be accepted unless positive cogent evidence is brought on record to that effect to prove the said contention. Thus matter need to be set aside to the file of the Assessing Officer for de novo determination. Outstanding liability of Cost recovery customs - Held that:- The assessee once agreed to bear these costs, thereafter, cannot interfere with the Government of India in discharging its duties, obligation and responsibilities towards performance of the sovereign functions of the State under the Customs Act, 1962, unless it is brought on record that decision of the Government of India in deploying additional staff and officers is unconscionable or is suffering from perversity. Nothing of that sort is emanating from records and pleadings before us. These functions under the Customs Act, 1962 to be performed by the Government of India are sovereign functions of State and it is the responsibility of the Government of India to properly discharge its duties, obligations and responsibilities as mandated under the Customs Act, 1962. Further, it has now come on record that the outstanding amount payable by the assessee to the Government of India is now recovered by the Government of India through encashment of bank guarantee, the disallowance made by the Assessing Officer, thus, cannot be sustained. For limited verification of the claim of the assessee that the entire liability towards customs stood discharged, we are remitting the matter back to the file of the Assessing Officer for limited verification. Thus, the additions sustained by the learned Commissioner of Income-tax (Appeals) is ordered to be deleted, while relief granted by the learned Commissioner of Income-tax (Appeals) is hereby confirmed, subject to the limited verification by the Assessing Officer as indicated above. Principles of mutuality applicability - Held that:- Both the parties fairly agreed that this matter be restored to the file of the learned Commissioner of Income-tax (Appeals) for fresh adjudication of the issue on the merits after giving opportunity to the Assessing Officer for necessary examination, enquiry and verification of the additional claim of application of the principles of mutuality as well of evaluation of additional evidences filed by the assessee, and thereafter the submission of the Assessing Officer's remand report to the learned Commissioner of Income-tax (Appeals). As no opportunity was granted to the Assessing Officer to submit his remand report, we are inclined to set aside the issues in the appeal to the file of the learned Commissioner of Income-tax (Appeals) for fresh adjudication of the issues on the merits after granting opportunity to the Assessing Officer in terms of rule 46A(3).
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