TMI Blog2014 (8) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... As decided in assessee’s own case it has been rightly held that the CIT has passed an order during the course of discharge of her duty as CIT - While discharging her duty, her action might have caused some hardship to the assessee due to error of judgement but that in our opinion does not warrant levy of cost on the department – Various decisions relied on by the assessee relate to levy of cost by the courts against administrative orders and not against judicial/quasi-judicial orders – following the assessee’s own case – Decided against Assessee. - ITA Nos.798,799 & 800/PN/2013 - - - Dated:- 20-8-2014 - Shailendra Kumar Yadav and R K Panda, JJ. For the Appellant : Shri Sunil Ganoo For the Respondent : Smt M S Verma ORDER:- PER : R K Panda The above 3 appeals filed by the assessee are directed against the separate orders dated 26-03-2013 passed u/s.263 of the I.T. Act, 1961 by the CIT-II, Kolhapur for Assessment Years 2004-05, 2005-06 and 2008- 09 respectively. Since identical grounds have been taken by the assessee in all these appeals, therefore, for the sake of convenience these were heard together and are being disposed of by this common order. ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Hon ble Punjab Haryana High Court in the case of CIT Vs. Market Committee, Pipli reported in 330 ITR 16 were brought to the notice of the CIT for the above proposition. It was accordingly requested that the proceedings u/s.263 should be dropped as the assessment cannot be considered as erroneous as well as prejudicial to the interest of the revenue. 3. However, the Ld.CIT was not satisfied with the explanation given by the assessee. He noted that the assessee had spent an amount of ₹ 30,35,565/- for purchase of various capital assets. Apart from this, the assessee has also purchased fixed assets prior to the year presently under consideration. The income corresponding to these assets has been claimed as deduction u/s.11 of the I.T. Act as it was applied for charitable purposes. The assessee has also worked out the depreciation on the above assets as well as that purchased prior to the commencement of the financial year. The assessee, therefore, has claimed double deduction in respect of the same amount for which the deduction has already been allowed. There is nothing on records by way of questionnaire or by way of submission by the assessee during assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t arise. According to the Ld.CIT, an order passed on an incorrect assumption of facts or incorrect application of law or without applying principles of natural justice or without application of mind or without making requisite enquiries will satisfy the requirement of the order being erroneous and prejudicial to the interest of the revenue within the meaning of section 263 of the I.T. Act. 3.3 So far as the decisions relied on by the assessee are concerned he noted that since the assessee could not substantiate that the issues in question were considered by the AO in the light of the facts narrated by him that the order passed is after due and proper application of facts and after due application of mind, therefore, he declined to go into the merit of the case as being premature and unsubstantiated. He accordingly set-aside the assessment order to the file of the AO with a direction to reexamine the issue of claim of depreciation on fixed assets claimed by the assessee to the extent permissible under the Act after giving due opportunity of being heard to the assessee. While doing so, he relied on the decision of the Hon ble Supreme Court in the case of Rampyari Devi Saraogi Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of ITO Vs. Rajasthani and Gujarathi Charitable Foundation Poona Hospital and Research Centre vide ITA No.467/PN/2010 order dated 30-11-2011 for A.Y. 2006-07 he submitted that the Tribunal, following the decision of the Hon ble Bombay High Court in the case of Institute of Banking Personnel Section (Supra), upheld the order of the CIT(A) allowing the claim of depreciation on immovable property to the extent of ₹ 1,08,86,330/- over and above the capital expenditure on the concerned assets claimed by the assessee. He submitted that the Revenue challenged the order of the Tribunal before the Hon ble High Court and the Hon ble High Court dismissed the appeal filed by the Revenue. 5.2 Referring to the decision of the Hon ble Bombay High Court in the case of CIT Vs. Rajashtani and Gujarati Charitable Foundation Poona Hospital and Research Centre vide Income Tax Appeal No.1562 of 2012 order dated 28-01-2013 (copy filed), he drew the attention of the Bench to the question formulated by the Revenue and the decision of the Hon ble High Court which reads as under : Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal is just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raja Mohammed Amir Mohammad Khan reported in 2005-(SC4)-GJX-0815-SC. 5. Urban Improvement Trust, Bikaner Vs. Mohanlal reported in 2009-(SC2)-GJX-1653-SC. 6. CIT Vs.M/s. Larsen and Toubro Ltd. vide ITA Nos. 424, 425 and 483 /2012 order dated 10-07-2014 7. ITO Vs. M/s. Growel Energy Co. Ltd. vide ITA No.338/Mum/2011 order dated 13-06-2014 8. Charanjilal Tak Shyam Parwani Party Vs. Union of India and Others reported in 252 ITR 333 5.5 Referring to the above decisions he submitted that various courts have awarded cost to the assessee due to undue harassment caused to the assessee by the action of the department. He submitted that in view of the above decisions, appropriate cost should be levied on the department which will act as deterrent for any malicious, arbitrary and perverse exercise of powers by the revenue authorities. 5.6 The Ld. Counsel for the assessee however fairly cited the decision of the Hon ble Delhi High Court in the case of Director of Income Tax (Exemptions) Vs. Charanjiv Charitable Trust wherein the Hon ble High Court has decided the issue against the assessee by following the decision of the Hon ble Supreme Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument of the Ld. Counsel for the assessee that the claim of depreciation by the AO was not erroneous in view of the decision of the jurisdictional High Court and therefore the proceedings u/s.263 should be dropped, the Ld. Departmental Representative referring to various decisions submitted that any deduction or allowance by the AO without examining the correctness thereof leads to error in the assessment order. Under these circumstances, the CIT was fully justified in invoking the provisions of section 263 to set aside such erroneous order with a direction to the AO to examine the allowability of such expenses claimed. For this proposition, she relied on the following decisions : 1. Smt. Seema Hemant Shirali Vs. ITO reported in (2012) 141 TTJ 351 (Pune) 2. Ranka Jewellers Vs. Addl.CIT reported in 36 SOT 11 (Pune) 3. Ambika Agro Suppliers Vs. ITO reported in 95 ITD 326 (Pune) 4. Nagnath Hanumantrao Jalkote Vs. ACIT reported in 110 ITR 549 (Pune) 5. Ninestar Enterprises (P) Ltd. Vs. ACIT reported in (2013) 30 taxmann.com 57 (Hyd.) 6. Gee Vee Enterprises Vs. Addl.CIT reported in 99 ITR 375 (Delhi) 7. Hindustan Tin Works Vs. JCIT report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e jurisdictional High Court without making any comment upon the said decision. However, the Tribunal has full authority/jurisdiction to distinguish the decision cited by any party by pointing out its distinguishing features both on facts and on law involved in the said decision. In such cases, the reasons as to why the decision cited by any party has no application and the distinguishing feature have to be specifically stated in the order. 7.2 Referring to the decision of the Hon ble Delhi High Court in the case of DIT Vs. Vishwa Jagriti Mission vide ITA No.140/2012 order dated 29-03-2012 the Ld. Counsel for the assessee submitted that in the said case the Ld.CIT(A) following the decision of the Hon ble Bombay High Court in the case of Institute of Banking (Supra) and Framjee and Cawasjee Institute (Supra) allowed the claim of depreciation on assets which were claimed as exemption u/s.11 of the I.T. Act. The Tribunal upheld the order of the CIT(A) and on further appeal by the Revenue the Hon ble High Court dismissed the appeal filed by the Revenue. While doing so, the Hon ble High Court has distinguished the decision of the Hon ble Supreme Court in the case of Escorts Ltd. (Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not taken uniform stand in allowance/disallowance of the depreciation to trusts and allowed irregular depreciation. He submitted that the CAG in the said report has stated that the Supreme Court in the case of Escorts Ltd. (Supra) has held that where full deduction has been allowed in relation to capital asset (under section related to exemptions), no depreciation has to be allowed u/s.32 on the same asset. There is a fundamental axiom that the double deduction is not intended unless there is a statutory indication to the contrary. The Hon ble Kerala High Court in the case of CIT Vs. Matha Amrithananda mayi Math also supported to the above view. However, the Income Tax department is allowing depreciation and when it was pointed out to the Ministry, the Ministry stated that the issue raised by the Audit will be examined. The Audit is of the view that the Ministry may take a decision in principle whether depreciation is to be allowed or not to remove inconsistencies in allowance due to divergent views expressed by different courts. He submitted that since the issue of allowing depreciation on assets which were claimed as deduction on account of application for charitable purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for charitable purposes is decided in favour of the assessee by the two decisions of the Hon ble Bombay High Court cited (Supra), therefore, respectfully following the above decisions, it has to be held that the assessee is entitled to depreciation on assets, the entire amount of which was claimed as deduction on account of application for charitable purposes. In view of the above, the order passed u/s.263 passed by the Ld.CIT is set aside and the first ground raised by the assessee is allowed. 9. In ground of appeal No.2 the assessee has requested to award cost on the department u/s.254(2B) of the I.T. Act. 9.1 We have considered the rival arguments made by both the sides. No doubt, in the instant case, the assessee has relied on two decision of the Hon ble Bombay High Court and the Ld.CIT instead of deciding the issue himself restored the issue to the file of the AO with a direction to re-examine the issue of claim of depreciation on fixed assets claimed by the assessee to the extent permissible under the Act. While doing so, he relied on the decision of the Hon ble Supreme Court in the case of Rampyari Devi Sarogi (Supra) where it has been held that since the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see as much as possible so that within a reasonable time what is estimated due to the Government may be retained and what should be returned to the assessee may be immediately returned to him. Even with regard to the books of account and documents seized, their return is guaranteed after a reasonable time. In the meantime the person from whose custody they are seized is permitted to make copies and take extracts. Sixthly, where money, bullion, etc., is seized, it can also be immediately returned to the person concerned after he makes appropriate provision for the payment of the estimated tax dues under sub section (5), and, lastly, and this is most important, the provisions of the Criminal Procedure Code relating to search and seizure apply, as far as they may be, to all searches and seizures under section 132. Rule 112 provides for the actual search and seizure being made after observing normal decencies of behaviour. The person in charge of the premises searched is immediately given a copy of the list of articles seized. One copy is forwarded to the authorising officer. Provision for the safe custody of the articles after seizure is also made in rule 112. In our opinion, the safe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Charanjilal Tak Shyam Parwani Party (Supra) is concerned, there also facts were different. In that case, the respondent ITO issued illegal notice to the petitioner and later withdrew the same. Under these circumstances, the Court directed the respondent to pay for the advocate fee and litigation expenses incurred by the petitioner in prosecuting writ proceedings. However, in the instant case, there is no prima-facie illegality in issuing the notice. We, therefore, do not find any merit in the argument of the Ld. Counsel for the assessee to award cost. The ground raised by the assessee is accordingly dismissed. 9.2 The various decisions relied on by the Ld. Counsel for the assessee relate to levy of cost by the courts against administrative orders and not against judicial/quasi judicial orders. In this view of the matter and following our order in assessee s own case (cited Supra) the ground of appeal No.2 by the assessee is dismissed. 10. Ground of appeal No.3 by the assessee being general in nature is dismissed. ITA No.799/PN/2013 (A.Y. 2005-06) : ITA No.800/PN/2013 (A.Y. 2008-09) : 11. After hearing both the sides, we find the grounds r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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