CS A RENGARAJAN: Aug 30, 2013

Friday, August 30, 2013

Companies Act 2013

Companies Bill enacted into law

K.R. SRIVATS

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NEW DELHI, AUG 30:

The Companies Bill 2013 has received Presidential assent. President Pranab Mukherjee gave his assent to this Bill today, informed sources said.

With this move, India has now got a new company law that has replaced the erstwhile Companies Act 1956.

The Corporate Affairs Ministry is expected to in the next few weeks come up with draft rules for public comments.

(This article was published on August 30, 2013)

Finally, the president has also given his assent to the Companies Act 2013 on 29th Aug 2013. Now, the next task is to frame the rules and regulations which is going to take lot of time. The new companies Act without the rules and regulations is incomplete . We hope that the same shall be in place before the end of this financial year.

For details of the section wise provisions , you may refer the following link :

http://www.taxmann.com/companylaws/companies-acts.aspx

Clarification on HUF by MCA

CA Update : HUF or its karta can not be designated partner in LLP

General Circular No. 13/2013, Dated 29th July,2013
Sub: Whether Hindu Undivided Family (HUF) / its Karta can become partner/Designated Partner (DP) in Limited Liability Partnership (LLP).
Sir,
It has come to the notice of the Ministry that some Hindu Undivided Families (HUFs) / Kartas of such families are applying to become partner/ Designated partner (DP) in LLPs and a question has arisen whether a ‘HUF’ or a karta can be allowed to do so. The matter has been examined in consultation with Ministry of Law.
2. As per section 5 of LLP Act, 2008 only an individual or body corporate may be a partner in a Limited Liability Partnership. A HUF cannot be treated as a body corporate for the purposes of LLP Act, 2008. Therefore, a HUF or its karta can not become designated partner in LLP.
3. This issues with the approval of Secretary, MCA
F.No. 1/13/2012-CL-V
Yours faithfully
J N Tikku
Joint Director

income tax case laws

The question as to whether the expenditure incurred on replacement of machinery is revenue or capital expenditure, particularly in the nature of replacements of parts, thus rests on the nature of expenditure incurred, vis-a-vis the benefit that the assessee derives. The ratio deductible from the decisions referred to above are:

(i) To decide the applicability of Section 31(i), the test is not whether the expenditure is revenue or capital in nature, but whether the expenditure is “current repairs”. The basic test is to find out whether expenditure is incurred to “preserve and maintain” an already existing asset and the expenditure must not be to bring a new asset into existence or to obtain a new advantage vide [2007] 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.)

(ii) Under Section 31(i), the deduction admissible is only for current repairs. Therefore, thequestion as to whether the expenditure incurred by the assessee conceptually is revenue or capital in nature is not relevant for deciding the question whether such expenditure comes within the etymological meaning of the expression “current repairs”. In other words, even if the expenditure is revenue in nature, it may not fall in the connotation of “current repairs” [2007] 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.)

(iii) A new asset or new/different advantage cannot amount to `current repairs’. – 2009-TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited)

(iv) Repair implies existence of a part of the machine which has malfunctioned, thereby requiring repair to that machinery, plant etc. Replacement cannot be a current repair, for, “replacement” and “current repair” do not go hand in hand . If one is to hold otherwise, it would only make Section 31(i) wholly redundant and absurd. Thus, replacement expenditure cannot be said to be `current repairs’ vide [2007] 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.) and 2009-TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited)

(v) Expenditure is deductible under section 37 only if it (a) is not deductible under sections 30-36, (b) is of a revenue nature, (c) is incurred during the current accounting year and (d) is incurred wholly and exclusively for the purpose of the business. – 2009-TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited);

(vi) Expenditure is of a capital nature when it amounts to an enduring advantage for the business and repair is different from bringing a new asset for the business. Further, bringing into existence a new asset or an enduring benefit for the assessee amounts to capital expenditure vide Lakshmiji Sugar Mills (P) Co. v. CIT (AIR 1972 SC 159) referred in 2009-TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited).

(vii) Therefore, whether an expenditure is revenue or capital in nature would depend on the facts of each case. – [2007] 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.)

HIGH COURT OF JUDICATURE AT MADRAS

Dated : 24.07.2013

Tax Case (Appeal) Nos.140 to 143 of 2013

489 to 491 of 2012 and 319 of 2013

and connected MPs

Tax Case (Appeal).No.140/2013:-

M/s.Super Spinning Mills Ltd.

-vs-

The Assistant Commissioner of Income-tax

Coram

The Honourable Mrs.Justice CHITRA VENKATARAMAN

The Honourable Ms.Justice K.B.K.VASUKI

Prayer in Tax Case (Appeal).No.140/2013:- Tax Case Appeal filed under Section 260A of theIncome Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai ‘C’ Bench dated 07th February 2013 in ITA.No.04/Mds/2013 for the assessment year 2005-06.

COMMON JUDGMENT

(The Judgment of the Court was made by CHITRA VENKATARAMAN, J.)

The assessee is one and the same in all the present Tax Case (Appeals). The assessee raised the following common substantial question of law seeking admission of the present Tax Case Appeals:

” Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal is right in law, in disallowing the claim of expenditure on replacement of machinery as revenue expenditure ?”

After issuing notice to the respondent in the Tax Case (Appeals), we decided to take the Tax Cases for final hearing.

2. It is seen from the documents placed before this Court that in respect of the assessment year 1994-95, the Revenue preferred an appeal before this Court in T.C(A).No.1074 of 2010, wherein, the same issue was raised, which reads as follows:-

“1. Whether the replacement of machinery parts will amount to revenue expenditure or not ?

2. Whether brining into existence of a new asset or obtaining a new advantage would amount to revenue expenditure or not ?”

3. Under order dated 10.01.2011, this Court remanded the matter back to the Commissioner of Income Tax (Appeals) to reconsider the issue as to whether the replacement of machinery parts brings into existence a new asset or a new advantage, so as to hold the expenditure as revenue or not by following the decision of this Court in Tax Case (Appeal) No.261 of 2010 dated 22.06.2010, wherein, this Court followed the decision in T.C.Nos.1290 and 1291 of 2009 and 1216 to 1221 of 2009 and the decision of the Apex Court in S.L.P.Nos.413 and 414 of 2009 andCivil Appeal No.7297 of 2009. Thus, a reading of the order of this Court shows that based on the decisions on similar issues rendered by the Apex Court and that of this Court, this Court remanded the matters therein back to the Commissioner of Income Tax (Appeals) for fresh investigation of the facts and thus the Revenue’s case in TC(A).No.1074 of 2010 was also remitted back to the Commissioner of Income Tax (Appeals). Thereupon, the Commissioner of Income Tax (Appeals) passed the order dismissing the appeal, holding that the assessee had not submitted the efficiency of the machinery replaced nor had given details about the new machinery. The aggrieved assessee preferred appeals before the Tribunal, which dismissed the appeals.

4. The assessment years under consideration are 2003-04 and 2005-06 to 2008-09. Before going into the questions raised, few facts need to be seen. The assessee herein is engaged in the business of manufacture and trading in cotton yarn and allied products. In the course of the previous year relevant to the respective assessment years, the assessee incurred expenditure in respect of replacement of certain textile machinery. The machinery which had gone for replacement are different in respect of each of the assessment years involved in the respective Tax Cases. For the purpose of considering the question raised, for the reasons given below, it is not necessary for us to go into the details of the machinery replaced. It is suffice to say that the assessee claimed expenditure therein as revenue expenditure/ current repairs. However, the Assessing Officer held that the replacement could not be considered to be current repairs.

5. It is a matter of record that the question as to whether such replacement could be current repairs/capital in nature came up for consideration in series of decisions before this Court, which, however, went on appeal before the Apex Court. The question as to the nature of the claim on expenditure incurred on the replacement of machinery, came up for consideration before this Court in the decision reported in [2005] 275 ITR 403 (CIT Vs. Janakiram Mills Ltd.). There the assessee claimed the expenditure on the replacement on ring frames as current repair, while the Revenue treated it as a capital expenditure. On appeal, the Commissioner of Income Tax (Appeals) held the expenditure as revenue expenditure, that replacement of ring frames constituted an integral part of the production system in a textile machinery. The view of the Commissioner of Income Tax(Appeals) was affirmed by the Tribunal. On appeal, in the decision cited above, this Court held that the expenditure was deductible under Section 31(i) of the Income Tax Act. On appeal against the judgment of this Court, the Supreme Court considered the question in the decisions reported in (2007) 293 ITR 201 (SC) (CIT Vs. Saravana Spinning Mills P.Limited) and (2007) 294 ITR 328 (SC) (CIT Vs. Ramaraju Surgical Cotton Mills) as to (a) Whether the expenditure incurred on modernisation and replacement came with the constitution of the words “current repairs” in Section 31(i) and (b) Whether replacement of an old machinery by a new machinery constituted an advantage of an enduring nature and hence, capital in nature.

6. In the decision reported in (2007) 293 ITR 201 (SC) (CIT Vs. Saravana Spinning Mills P.Limited), the Apex Court considered the meaning of the phrase “current repairs”. Reversing the decision of this Court, the Apex Court held that one of the basic tests to find out whether the expenditure was current repairs or not, was to see as to whether the expenditure was incurred to “preserve and maintain” an already existing asset. The expenditure must not be one to bring a new asset into existence or to obtain new advantage; the replacement of ring frames constituted substitution of an old asset by a new asset and therefore, the expenditure incurred by the assessee did not fall within the meaning of “current repairs” under Section 31(i) of the Income Tax Act, 1961 (hereinafter called as the “Act”). The Supreme Court observed “… we may state that replacement generally may not fall under the expression “current repairs” but, in certain cases, where the old parts were not available in the market or where the old parts had worked for 50 to 60 years, replacement can, in such cases of exception, fall within the expression “current repairs”. … old type of replacement parts were not available in the market and, therefore, the expenditure came within the expression “current repairs.” … Holding that Section 37 is a residuary Section, the Supreme Court observed: “Therefore, whether an expenditure is revenue or capital in nature would depend on the facts of each case. “ Thus, the Supreme Court held that even if the expenditure is revenue in nature, it may not fall within the connotation of “current repairs”. Thus, the Supreme Court reversed the decision of this Court and held that the expenditure in question was not “current repairs” and hence, could not be allowed under Section 31(i) of the Act. The Apex Court accepted the case of the Revenue that the assessee was not entitled to deduction under Section 31(i) of the Act. It however pointed out to the decision reported in (1967) 3 SCR 957 (CIT Vs. Mahalakshmi Textile Mills Ltd.) that when old parts were not available in the market or where the old parts had worked 50 or 60 years, replacement in such cases of exception fall within the expression “current repairs”. The Apex Court, however, expressed no opinion on the applicability of Section 37(1) of the Act. This came to be considered separately in other batch of cases reported in (2007) 294 ITR 328 (SC) (CIT Vs. Ramaraju Surgical Cotton Mills).

7. In the case of CIT Vs. Ramaraju Surgical Cotton Mills reported in (2007) 294 ITR 328 (SC), in the appeal taken by the Commissioner of Income-Tax, the Supreme Court considered the case where the assessee claimed the expenditure under Section 37 of the Act. The assessee contended that the expenditure incurred on replacement of assets without increase in the production capacity was revenue in nature. Pointing out that such question was not raised before the Commissioner, the Supreme Court pointed out that to decide the question as to whether the expenditure is revenue or capital, number of aspects are required to be considered therein; in the absence of any details regarding the production capacity even after replacement, the matter needed to be remitted back to the Commissioner of Income Tax (Appeals). The Apex Court pointed out that since there was confusion regarding the applicability between the tests to be applied in respect of Section 31 of the Act and the test to be applied in the case of Section 37 of the Act, the matter deserved to be remanded back to the Commissioner of Income Tax (Appeals) to decide the matter uninfluenced by any observations made in the orders of the Court. Thus, in the case of CIT Vs. Ramaraju Surgical Cotton Mills (SC) reported in (2007) 294 ITR 328 (SC), the Apex Court, after referring to the decision reported in (2007) 293 ITR 201(SC) in the case of CIT Vs. Saravana Spinning Mills (P) Ltd., held that Section 31 of the Act and Section 37 of the Act, operated on different spheres and the tests applicable to Section 31 of the Act could not be read into Section 37 of the Act. Thus, the matters were restored to the files of the Assessing Officer for fresh hearing.

8. Apart from these two decisions, there is yet another decision of the Apex Court in the case of CIT Vs. Sri Mangayarkarasi Mills P. Limited reported in 2009-TIOL-86-SC-II. There the assessee incurred expenditure on replacement of machines. The assessee claimed the expenditure as allowable under Section 37 of the Act. While the Assessing Officer disallowed the expenditure on the ground that each machine in a spinning mill was independent of each other and they were not integrally connected; hence, he treated the expenditure as capital in nature, the Appellate Authority allowed the appeal filed by the assessee. On further appeal by the Revenue before the Income Tax Appellate Tribunal, it followed the decision of this Court and upheld the order of the Commissioner of Income Tax (Appeals) and dismissed the appeal. On further appeal before this Court, this Court agreed with the assessee and rejected the Revenue’s Appeal. This Court held that the expenditure on replacement of machinery was revenue in nature. In so holding, it followed the decision reported in [2005] 275 ITR 403 (CIT Vs. Janakiram Mills Ltd.), which was subsequently reversed by the Apex Court. It further referred to the decision reported in (2007) 293 ITR 201 (SC) (CIT Vs. Saravana Spinning Mills P.Limited) and pointed out: “expenditure is deductible under section 37 only if it (a) is not deductible under sections 30-36, (b) is of a revenue nature, (c) is incurred during the current accounting year and (d) is incurred wholly and exclusively for the purpose of the business. We are satisfied that the assessees’ expenditure satisfies requirements (a), (c) and (d) as stated above. … expenditure is of a capital nature when it amounts to an enduring advantage for the business and repair is different from bringing a new asset for the business. Further, in Lakshmiji Sugar Mills (P) Co. v. CIT (AIR 1972 SC 159) it has been held by this Court that bringing into existence a new asset or an enduring benefit for the assessee amounts to capital expenditure.” The Supreme Court considered the question as to whether the expenditure amounted to revenue expenditure or current repairs. The Supreme Court pointed out that each machine in a spinning mill should be treated independently as such and not as a mere part of an entire composite machinery of the spinning mill. It can, at best, be considered part of an integrated manufacturing process employed in a textile mill. Referring to its decision reported in (2007) 293 ITR 201 (SC) (CIT Vs. Saravana Spinning Mills P.Limited), it held that the expenditure could not be treated as current repairs under Section 31(i). The expenditure incurred for reaping long-term and enduring benefits by replacing the independent machine could only be a capital expenditure. Thus, the Apex Court restored the Assessing Officer’s order and held that the expenditure was capital in nature. The decision in the case of CIT Vs. Sri Mangayarkarasi Mills P. Limited reported in 2009-TIOL-86-SC-II, thus rested on the facts of its case.

9. The question as to whether the expenditure incurred on replacement of machinery is revenue or capital expenditure, particularly in the nature of replacements of parts, thus rests on the nature of expenditure incurred, vis-a-vis the benefit that the assessee derives. The ratio deductible from the decisions referred to above are:

(ii) Under Section 31(i), the deduction admissible is only for current repairs. Therefore, the question as to whether the expenditure incurred by the assessee conceptually is revenue or capital in nature is not relevant for deciding the question whether such expenditure comes within the etymological meaning of the expression “current repairs”. In other words, even if the expenditure is revenue in nature, it may not fall in the connotation of “current repairs” [2007] 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.)

(iii) A new asset or new/different advantage cannot amount to `current repairs’. – 2009-TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited)

10. In the case of Empire Jute Co. Ltd Vs. Commissioner of Income Tax reported in (1980) 124 ITR 1 (SC), the Apex Court referred to the decision in the case of John Smith and Son Vs. Moore reported in (1921) 12 TC 266, 296 (HL) that for an expenditure to become a business expenditure, there must be an outlay of a business “in order to carry it on and to earn a profit out of this expense as an expense of carrying it on”. The Apex Court further cautioned that when considering the question on the claim of the expenditure being revenue or capital, it must be viewed in the larger context of business necessity or expediency. The Apex Court further pointed out to the concept of an advantage of enduring benefit and further explained the question on capital or revenue expenditure in the following words:-

” There may be cases where expenditure, even if incurred for obtaining an advantage of enduring benefit, may, none the less, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee’s trading operations or enabling the management and conduct of the assessee’s business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. The test of enduring benefit is, therefore, not a certain or conclusive test and it cannot be applied blindly and mechanically without regard to the particular facts and circumstances of a given case.”

11. Having thus held so, the Apex Court further pointed out that where an expenditure is incurred primarily and essentially for the purpose of business of an assessee without any addition or augmentation in the profit-making structure to the better utilisation of the assessee, the claim would be in the nature of revenue expenditure. The Apex Court pointed out that even if the expenditure is producing a larger quantity of goods and earning more income, nevertheless, the nature of expenditure would be revenue in character. This judgment of the Apex Court in the case of Empire Jute Co. Limited Vs. CIT reported in (1980) 124 ITR 1 (SC) has to be seen in the background of the decision of the Apex Court in the case of CIT, Madras Vs. Mahalakshmi Textile Mills Limited reported in (1967) 66 ITR 710 (SC).

12. The decision in the case of CIT, Madras Vs. Mahalakshmi Textile Mills Limited reported in (1967) 66 ITR 710 (SC) is related to the assessee introducing “Casablanca conversion system” in its spinning plant. This involves replacement of certain roller stands and fluted rollers fitted with rubber aprons to the spinning machinery, removal of ring frames from certain existing parts, introduction of ball-bearing jockey-pulleys for converting the original band-drivers to tape- drivers and other additions and alterations in the drafting mechanism. Confirming the judgment of this Court, the Supreme Court pointed out that with the introduction of the Casablanca conversion system, there was no installation of new machinery or plant, but it amounted, in substance, to “current repairs” to the existing machinery.

13. The judgment of the Supreme Court in the case of CIT, Madras Vs. Mahalakshmi Textile Mills Limited reported in (1967) 66 ITR 710 (SC) read along with the decision the Madras High Court pointed out that there was no change in the method of spinning and that the parts that were replaced, performed precisely the same function as old parts and when it was found that the original old type of replacement parts were not available in the market, necessarily the company had to replace it with the new system; in that context, the Supreme Court affirmed the judgment of this Court that it was “current repairs” to the machinery and plant.

14. Keeping the decisions referred to above, one can detect that in considering the claim of the assessee, the decision must be guided by business prudency of the necessity or expediency which compel the assessee to carry on such repairs/replacement and if this repair ultimately has gone in for bettering its business profits in the nature of increasing its profits, as held by the Supreme Court in the case of CIT Vs Ramaraju Surgicial Cotton Mills reported in (2007) 294 ITR 328 (SC) through increase in the production capacity, then the outlay, not being just to carry on the business to earn profit out of its existence, but to enlarge its profit-earning capacity, the expenditure may fall for consideration under the head of “capital expenditure”. But, whether the expenditure in question has no such ingredient of increasing its production capacity, expenditure would necessarily fall under the head of “revenue expenditure”.

15. With the law declared by the Apex Court in the background, when we look at the order of Commissioner of Income Tax (Appeals) as well as that of the Income Tax Appellate Tribunal, one may note herein summary of case law alone and admittedly, there is no discussion on the facts as to the impact of such expenditure on the profit-earning capacity or mechanism of the assessee. Learned Senior counsel appearing for the assessee placed before us the expenditure incurred on the various items which had gone in for replacement and also the date of installation of such machinery and its impact on the production capacity.

16. Even though the assessee has furnished list of items chart, the data which are available before us were not available before any of the Appellate Authorities for coming to the right conclusion herein. Thus, with no details available as stated in the case of CIT Vs.Ramaraju Surgical Cotton Mills reported in (2007) 294 ITR 328 (SC), the decision of the Tribunal cannot be held as based on any material data necessary for considering the claim one way or the other. Hence, the proper course herein is to set aside the order of the Income Tax Appellate Tribunal and remit the matter back to the Commissioner of Income Tax (Appeals) for de novo consideration.

17. Keeping in view the law declared by the Apex Court in the case of CIT Vs. Ramaraju Surgical Cotton Mills’ case reported in (2007) 294 ITR 328 (SC) and in the case of CIT Vs. Sri Mangayarkarasi Mills P. Limited reported in 2009-TIOL-86-SC-II, the Commissioner of Income Tax (Appeals) shall grant an opportunity to the assessee to state its case in a proper perspective and decide on the issue as to whether the expenditure, in effect, could be treated as “revenue expenditure”.

18. We direct the Commissioner of Income Tax (Appeals) to pass a detailed order on the impact of the replaced material as well as the functioning of the machinery after hearing the assessee in detail, whom, we hope, would extend all cooperation before the Commissioner of Income Tax (Appeals) and furnish the materials for arriving at a proper conclusion.

19. The Tax Case (Appeals) stand disposed of on the above terms. No costs. Consequently, connected MP is closed.

Regards

Prarthana Jalan

__._,_.___

Income tax laws

IT: Merely because there is an exemption order under section 10(23C), assessee is not entitled to exemption unless he satisfies conditions subject to which said exemption is granted

■■■

[2013] 36 taxmann.com 81 (Karnataka)

HIGH COURT OF KARNATAKA

Commissioner of Income-tax, Mangalore

Manipal Academy of Higher Education (MAHE)*

N. KUMAR AND B. MANOHAR, JJ.

IT APPEAL NO. 1344 OF 2006†

APRIL 1, 2013

Section 10(23C), read with section 11, of the Income-tax Act, 1961 - Charitable or religious trust - Educational institutions [Conditions precedent] - Whether merely because there is an exemption order under section 10(23C), assessee is not entitled to exemption unless he satisfies conditions subject to which said exemption is granted - Held, yes - Assessee, a deemed university, claimed that its income was exempt under section 10(23C) and, consequently, claimed exemption under section 11 - But it failed to produce notification exempting tax under section 10(23C) - Assessing Officer proceeded to compute its income on premise that assessee did not have any exemption -He noticed that assessee had advanced a sum for purchase of property but during year no purchase was made and it remained as advance and held that said sum could not be treated as utilized for educational purpose and thus, assessee had violated section 11(5) - Meanwhile, CBDT extended exemption to assessee - Appellate Authority held that assessee was entitled to exemption under section 10(23C) but as regards infringement of section 11, he agreed with Assessing Officer - However, Tribunal held that exclusive jurisdiction to decide infringement of section 11 was with Board - Order granting exemption revealed that it was an conditional approval dependent upon assessee applying its income towards charitable objects - Moreover, two fact-finding authorities had recorded that assessee had violated section 11 - Whether since Tribunal committed serious error by ignoring said findings, approach of Tribunal could not be sustained and matter was to be set aside to Assessing Officer for re-adjudication - Held, yes [Para 13] [In favour of revenue]

FACTS

■		The assessee, a deemed university, claimed that its income was exempt under section 10(23C)(vi), consequently, it claimed exemption under section 11 but it failed to produce Notification granting exemption under section 10(23C).
■		The Assessing Officer proceeded with assessment on ground that assessee did not have exemption under section 10(23C)(vi).
■		Further, the Assessing Officer noticed that assessee had advanced a sum to a party for purchase of property but during year no purchase against advance had been made and said sum remained as advance and was not utilized towards any educational purpose and he rejected assessee's claim for exemption under section 11 and raising demand against assessee.
■		Meanwhile, CBDT granted exemption under section 10(23C) to assessee.
■		The Commissioner (Appeals) noticed that the Assessing Officer had not brought anything adverse to his notice regarding the fulfilment of the conditions as laid down in the order of exemption. Therefore, he proceeded to hold that the Assessee qualified for exemption under section 10(23C)(vi). But he agreed with the Assessing Officer in respect of infringement of provisions of section 11.
■		However, the Tribunal held that only the prescribed authority had the power to withdraw approval in case there was violation of the condition in approval provided by them. It did not give any finding regarding infringement of section 11(5) and held the assessee was entitled to the exemption under section 10(23C)(vi) and not liable to pay tax.
■		On further appeal:

HELD

■		In computing the total income of a previous year of any person, any income falling under section 10(23C)(vi) shall not be included. Before the assessee could claim the benefit of the said provision, the assessee should obtain an approval by the prescribed authority. In the instant case, the approval has been accorded by the prescribed authority. [Para 10]
■		As is clear from the said order, it is not an unconditional approval. It is subject to the conditions mentioned therein. The proviso to the said provision makes it clear that after obtaining the approval from the prescribed authority, if the assessee has not applied its income in accordance with the provisions contained in the third proviso then, the approval granted to such assessee is liable to be rescinded. However, before the prescribed authority rescinds such an approval, the assessee is entitled to a reasonable opportunity of showing cause against the proposed acts.
■		The third proviso to section 10(23) makes it very clear that if the assessee does not invest or deposit its funds, other than in the manner set out therein for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11, then the assessee is not entitled to the benefit of the said exemption.
■		If an assessee invests its funds in immovable property and satisfies one of the requirements of law, then he is entitled to the exemption as per the notification issued. Whether the assessee has complied with the conditions stipulated in the exemption order, before it could claim exemption is a matter, which has to be investigated by the assessing authority. It is only on the assessee satisfying the conditions stipulated in the exemption order, that it would be entitled to exemption. In the event there is a violation of the terms and conditions of the exemption order, the assessing authority would be justified in not extending the benefit of exemption but at the same time the assessing authority cannot ignore the order of exemption. Therefore, on enquiry if he is satisfied that the assessee is not entitled to exemption as he has violated the terms and conditions of exemption order, he has to bring the said fact to the notice of the prescribed authority. Thereafter, the prescribed authority is under an obligation to issue a show cause notice to the assessee to show cause, why the order of exemption should not be rescinded. After hearing the assessee, if the prescribed authority decides to rescind the exemption granted, they are at liberty to pass such an order and a copy of the said order is to be communicated both to the assessee as well as the assessing authority. It is on receipt of such an order rescinding the exemption order, that the assessing authority could proceed to assess the assessee and raise a demand for payment of tax. This is the procedure prescribed under the scheme of the Act. Therefore, merely because there is an exemption order, the assessee is not entitled to exemption unless he satisfies conditions subject to which said exemption is granted; question whether such conditions are fulfilled or not is a matter to be investigated by assessing authority. [Para 11]
■		In the instant case, on the day the assessment order was passed, this order of exemption was not there. Therefore, the Assessing Authority did not have the opportunity to bring the violations as recorded by them under section 11(5) of the Act. On that day, the assessing authority was justified in proceeding with the assessment. However, during the pendency of the appeal, the order of exemption was passed. The jurisdiction of the First Appellate Authority being continuation of the jurisdiction of the assessing authority, though the First Appellate Authority concurred with the finding recorded by the Assessing Authority with the continuation of jurisdiction under section 11(5), it committed a serious error in extending the benefit of exemption on the ground that it has not yet been rescinded. The First Appellate Authority had a duty to bring the said fact to the notice of the Prescribed Authority and await decision of the prescribed authority before passing an order on appeal. That was not done. On the contrary, ignoring the said violation, without waiting for the prescribed authority to look into the matter, it granted the exemption. In appeal, the Tribunal could have gone into the correctness of the finding recorded by both the authorities under section 11(5), but the Tribunal was of the view that it has no jurisdiction to go into the same. The reason given is, as long as the order of exemption stands and not rescinded, is the assessee is entitled to the said benefit. This approach is also erroneous. An assessee is entitled to exemption subject to the conditions stipulated in the said order. When two fact finding authorities recorded a categorical finding that there is violation of section 11(5), the Tribunal committed a serious error by ignoring the same holding that the assessee is entitled to the benefit. If the Tribunal was not inclined to go into the merits of the case, the proper course would have been to set-aside the order of the authorities, remit the matter back to the Assessing Authority to take note of the exemption and then to see whether the violation of section 11(5) is recorded by it earlier, still holds good and then pass appropriate orders in the light of the aforesaid provisions of law. Therefore, the approach of the Tribunal cannot be countenanced and sustained. Therefore, the appropriate course would be to set aside the order passed by all the authorities and remit the matter back to the assessing authority. [Para 12]

CASE REVIEW

Asstt. CIT v. Manipal Academy of Higher Education (MAHE) [2006] 9 SOT 284 (Bang) (para 12) reversed.

E.R. Indrakumar and E.I. Sanmathi for the Appellant. S. Parthasarathi and S.Gopalkrishna for the Respondent.

JUDGMENT

N. Kumar, J. - This appeal is by the Revenue against the order dated 21.04.2006 passed by the Tribunal declining to go into the question whether there is an infringement of Section 11(5) of the Income Tax Act, 1961 (for short, hereinafter referred to as 'the Act') as the Board has already approved the Assessee under Section 10(23C)(vi) of the Act.

2. The Assessee M/s. Manipal Academy of Higher Education (MAHE) filed a return of income on 31.10.2001. The assessee claimed a sum of Rs. 212,74,25,714/- as exempt from income tax under Section 10(23C)(vi) of the Act. The Government Notification exempting the assessee's income under Section 10(23C)(vi) of the Act was not produced before the Assessing Officer. Therefore, he proceeded with the assessment on the premise that the Assessee is not having any exemption. He assessed the total income at Rs. 47,03,58,078/- and raised a demand for Rs. 24,32,30,437/- including interest and surcharge. In the said Assessment Order, he recorded a finding that. the assessee had advanced a sum of Rs. 37 crores to Sri. Dayananda Pai for purchase of property. During the year no purchase of property had been made and it remained as advance. Therefore, the said advance amount paid cannot be treated as utilized for educational purpose. Aggrieved by the said order, the Assessee preferred an appeal before the Commissioner of Income Tax (Appeals). Though the Appellate Authority agreed with the said finding of fact, in view of the notification under Section 10(23C)(vi) of the Act, he held the assessee is entitled to exemption and therefore, allowed the appeal. Aggrieved by the said order, the Revenue preferred an appeal before the Tribunal. The assessee also preferred a Cross-objection.

3. The Tribunal held that as the Board has already approved the Institution under Section 10(23C)(vi) of the Act, its income is exempted under that Section. Since the Income Tax Authorities directed the prescribed authority to withdraw the approval in case there is violation of the condition by them while granting, approval, it is not necessary for them to record a finding that there has been any violation of the conditions mentioned while giving approval. Therefore, the Tribunal refrained from giving any finding regarding infringement of Section 11(5) of the Act as the exclusive jurisdiction to decide such infringement is with the Board. Accordingly, the Tribunal held that the Institution is exempted under Section 10(23C)(vi) as approved by the Board and not liable to tax. In view of the said finding, the Cross-objection was also dismissed. Aggrieved by the said order of the Tribunal, the Revenue is in appeal.

4. Sri. E.R. Indrakumar, learned Senior Counsel appearing for the Revenue assailing the order of the Tribunal contended that the approval is given by the Board subject to the terms and conditions mentioned in the said order of approval. There is a violation of those terms and conditions. Section 11(5) of the Act has been contravened. There is a concurrent finding recorded by the Assessing Authority as well as the First Appellate Authority regarding the contravention. Under those circumstances, the Tribunal was not justified in ignoring the said concurrent finding and granting exemption solely on the ground of notification issued by the Board, which has not been withdrawn. Therefore, he submits that a case for interference is made out.

5. Per contra, Sri. Parthasarathi, learned counsel appearing for the Assessee supported the impugned order.

6. At the time of admission, this Court had framed three substantial questions of law. After hearing the learned counsel appearing for the parties, with their consent, the substantial question of law is refrained as under:

"Whether the Tribunal was justified in declining to go into the correctness of the finding regarding infringement under Section 11(5) of the Act on the ground that the notification issued granting exemption under Section 10(23C)(vi) of the Act is not withdrawn?"

7. The Assessee is a deemed University and it runs several Educational Institutions. The Assessee claims that its income is exempted under Section 10(23C)(vi) of the Act. They did not produce the Notification exempting tax under Section 10(23C)(vi) of the Act. Therefore, the Assessing Authority proceeded with the Assessment on the ground that the Assessee does not have exemption under Section 10(23C)(vi) of the Act. The Assessee also claimed computation of income under Sections 11 and 12 of the Act. The Assessing Authority noticed that the Assessee has made an advance of Rs. 37 crores to one P. Dayananda Pai for purchase of property. During the year, no purchase as against the advance has been made. The Assessee claimed that the advance for purchase of property is an admissible investment under Section 11(5) of the Act. During the year, neither the property was registered nor possession of the property was taken over by the Assessee. In the circumstances, he held the Assessee cannot claim ownership rights with respect to this property and that the amount continues to be an advance only as on 31.03.2001. Therefore, the claim of the Assessee for computation of income under Sections 11 and 12 of the Act was also rejected. Therefore, he proceeded to pass an order under Section 143(3) of the Act and raised a demand for Rs. 24,32,30,437/-. Aggrieved by the said order, the Assessee preferred an appeal to the Commissioner of Income Tax (Appeals).

8. During the pendency of this appeal, the Central Board of Direct Taxes vide their order dated 02.07.2004 approved the assessee - Trust for the purpose of Section 10(23C)(vi) of the Act for assessment years 1999-2000 to 2001-2002. A copy of the order of the Board was placed before the Appellate Authority. He noticed that the Assessing Officer has not brought anything adverse to his notice regarding the fulfilment of the conditions as laid down in the order of exemption. Therefore, he proceeded to hold that the Assessee-Academy qualifies for exemption under Section 10(23C)(vi) of the Act. Insofar as the payment of advance of Rs. 37 crores to Sri. P. Dayananda Pai, for the purchase of immovable property as an investment under Section 11(5) of the Act is concerned, he was of the view that the amount of Rs.37 crores has actually remained as an advance only during the year under consideration, as the same could not be utilized and invested for purchase of the land for the purposes of the Academy. Therefore, he recorded a finding that he is in complete agreement with the Assessing Officer that the Assessee's claim in the above matter cannot be accepted as there has been a clear infringement of the provisions contained under Section 11(5) of the Act. In view of the notification issued by the Board under Section 10(23C)(vi) of the Act and the fulfilment of the conditions laid down therein, the entire income of the assessee was held to qualify for exemption under the said provision. Accordingly, the appeal was partly allowed. Aggrieved by the said order, the Revenue preferred an appeal to the Tribunal.

9. The Tribunal after narrating the aforesaid facts was of the view that since the Board has already approved the Institution under Section 10(23C)(vi) of the Act, its income is exempted under the Section since only the prescribed authority has the power to withdraw approval in case there is violation of the condition provided by them. It is not necessary for the Tribunal to record a finding that there has been violation of the conditions while giving approval. Therefore, on merits, the Tribunal refrained from, giving any finding regarding infringement of Section 11(5) of the Act as such jurisdiction is with the Board. Therefore, it also held that the Assessee is entitled to the exemption and not liable to pay tax.

Section 10(23C)(vi) of the Act reads as under:

"10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included-

(23C) any income received by any person on behalf of-

(vi)

any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority; or"

10. In computing the total income of a previous year of any person any income falling under Section 10(23C)(vi) shall not be included. Before the assessee could claim the benefit of the said provision, the assessee should obtain an approval by the prescribed authority. In the instant case, the approval has been accorded by the prescribed authority which reads as under:

"ORDER

In exercise of powers conferred by the sub-clause (vi) of clause (23C) of Section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby approves "Manipal Academy of Higher Education, Manipal" for assessment year 1999-2000 to 2001-2002 for the purpose of the said sub-clause subject to the following conditions namely:-

(i)		the assessee will apply its income, or accumulate for application, wholly and exclusively to the objects for which it is established;
(ii)		the assessee will not invest or deposit its fund (other than voluntary contributions received and maintained in the form of jewellery, furniture etc.) for any period during the previous years relevant to the assessment years mentioned above other wise than in any one or more of the forms or modes specified in sub-section (5) of Section 11;
(iii)		this order will not apply in relation to any Income being profits and gains of business, unless the business is incidental to the attainment of the objectives of the assessee and separate books of account are maintained in respect of such business;
(iv)		the assessee will regularly file its return of Income before the Income-tax authority in accordance with the provisions of the Income-tax Act, 1961;
(v)		that in the event of dissolution, its surplus and the assets will be given to a charitable organisation with similar objectives."

As is clear from the said order, it is not an unconditional approval. It is subject to the conditions mentioned therein. The proviso to the said provision makes it clear that after obtaining the approval from the prescribed authority, if the assessee has not applied its income in accordance with the provisions contained in the third proviso then, the approval granted to such assessee is liable to be rescinded. However, before the prescribed authority rescinds such an approval, the assessee is entitled to a reasonable opportunity of showing cause against the proposed acts. The third proviso reads as under:

"Provided also that the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via)-

(a)		applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent of its income is accumulated on or after the 1st day of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent of its income shall in no case exceed five years; and
(b)		does not invest or deposit its funds, other than-

(i)		any assets held by the fund, trust or institution or any university or other educational institution or any hospital or other medical institution where such assets form part of the corpus of the fund, trust or institution or any university or other educational institution or any hospital or other medical institution as on the 1st day of June, 1973;
(ia)		any asset, being equity shares of a public company, held by any university or other educational institution or any hospital or other medical institution where such assets form part of the corpus of any university or other educational institution or any hospital or other medical institution as on the 1st day of June, 1998;
(ii)		any assets (being debentures issued by, or on behalf of, any company or corporation), acquired by the fund, trust or institution or any university or other educational institution or any hospital or other medical institution before the 1st day of March, 1983;
(iii)		any accretion to the shares, forming part of the corpus mentioned in sub-clause (i) and sub-clause (ia), by way of bonus shares allotted to the fund, trust or institution or any university or other educational institution or any hospital or other medical institution;
(iv)		voluntary contributions received and maintained in the form of jewellery, furniture or any other article as the Board may, by notification in the Official Gazette, specify, for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of Section 11."

The third proviso makes it very clear that if the assessee does not invest or deposit its funds, other than in the manner set out therein for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-Section (5) of Section 11, then the assessee is not entitled to the benefit of the said exemption. Section 11(5) of the Act reads as under:

"11(5) The forms and modes of investing or depositing the money referred to in clause (b) of sub-section (2) shall be the following, namely :-

(x) investment in immovable property.

Explanation.—"Immovable property" does not include any machinery or plant (other than machinery or plant installed in a building for the convenient occupation of the building) even though attached to, or permanently fastened to, anything attached to the earth;"

11. A reading of the aforesaid provisions makes it very clear that if an assessee invests its funds in immovable property as aforesaid and satisfies one of the requirements of law, then he is entitled to the exemption as per the notification issued. Whether the assessee has complied with the conditions stipulated in the exemption order, before it could claim exemption is a matter, which has to be investigated by the Assessing Authority. It is only on the Assessee satisfying the conditions stipulated in the exemption order, it would be entitled to exemption. In the event there is a violation of the terms and conditions of the exemption order, the Assessing Authority would be justified in not extending the benefit of exemption but at the same time the Assessing Authority cannot ignore the order of exemption. Therefore, on enquiry if he is satisfied that the assessee is not entitled to exemption as he has violated the terms and conditions of exemption order, he has to bring the said fact to the notice of the prescribed authority. Thereafter, the prescribed authority is under an obligation to issue a show cause notice to the assessee to show-cause, why the order of exemption should not be rescinded. After hearing the assessee, if the prescribed authority decides to rescind the exemption granted, they are at liberty to pass such an order and a copy of the said order is to be communicated both to the assessee as well as the Assessing Authority. It is on receipt of such an order rescinding the exemption order, the Assessing Authority could proceed to assess the assessee and raise a demand for payment of tax. This is the procedure prescribed under the scheme of the Act. Therefore, merely because there is an exemption order, the assessee is not entitled to exemption unless he satisfies the conditions subject to which the said exemption is granted. The question whether such conditions are fulfilled or not is a matter to be investigated by the Assessing Authority.

12. In the instant case, on the day the assessment order was passed, this order of exemption was not there. Therefore, the Assessing Authority did not have the opportunity to bring the violations as recorded by them under Section 11(5) of the Act. On that day, the Assessing Authority was justified in proceeding with the assessment. However, during the pendency of the appeal, the order of exemption was passed. The jurisdiction of the First Appellate Authority being continuation of the jurisdiction of the Assessing Authority, though the First Appellate Authority concurred with the finding recorded by the Assessing Authority with the continuation of jurisdiction under Section 11(5) of the Act, it committed a serious error in extending the benefit of exemption on the ground that it has not yet been rescinded. The First Appellate Authority had a duty to bring the said fact to the notice of the Prescribed Authority and await decision of the prescribed authority before passing an order on appeal. That was not done. On the contrary, ignoring the said violation, without waiting for the prescribed authority to look into the matter, it granted the exemption. In appeal, the Tribunal could have gone into the correctness of the finding recorded by both the authorities under Section 11(5) of the Act, but the Tribunal was of the view that it has no jurisdiction to go into the same. The reason given is, as long as the order of exemption stands and not rescinded, the assessee is entitled to the said benefit. This approach is also erroneous. An assessee is entitled to exemption subject to the conditions stipulated in the said order. When two fact finding authorities recorded a categorical finding that there is violation of Section 11 (5) of the Act, the Tribunal committed a serious error by ignoring the same holding that the assessee is entitled to the benefit. If the Tribunal was not inclined to go into the merits of the case, the proper course would have been to set-aside the order of the authorities, remit the matter back to the Assessing Authority to take note of the exemption and then to see whether the violation of Section 11(5) of the Act is recorded by it earlier, still holds good and then pass appropriate orders in the light of the aforesaid provisions of law. Therefore, the approach of the Tribunal cannot be countenanced and sustained. Therefore, the appropriate course would be to set-aside the order passed by all the authorities, remit the matter back to the Assessing Authority.

13. The Assessing Authority shall on the facts available as on today shall go into the question whether the assessee has violated the terms and conditions subject to which, exemption was granted. If it records a finding that there is violation of Section 11(5) of the Act,. then it shall bring the said violation to the notice of the prescribed authority. On such violations being brought to the notice of the prescribed authority, the prescribed authority shall issue a show cause notice to the assessee to show cause why the order of exemption should not be rescinded and after hearing him, to pass orders on merits and in accordance with law. If the prescribed authority decides to rescind the order of exemption granted earlier, it shall do so and shall send a copy of the same to the Assessing Authority as well as to the assessee. On receipt of such order, the Assessing Authority shall proceed to frame the assessment order and proceed in accordance with law. That would meet the ends of justice. Hence, we pass the following order:

(a)		Appeal is allowed.
(b)		The substantial question of law is answered in favour of the Revenue and against the assessee.
(c)		The entire matter is remitted to the Assessing authority to pass appropriate orders in accordance with law keeping in mind the observations made in the order supra.

Parties to bear their own costs.

Income tax laws

ONCEALMENT PENALTY - CONCURRENT ACT OF CONCEALMENT - GOLDEN RULE ON DOCTRINE OF CONTINUITY - ADVANTAGE ASSESSEE

Introduction

1. Penalty is a hot subject. The AO can initiate penalty in one stroke by issuing such direction in the assessment order and that shall be sufficient to denote his satisfaction after insertion of sub-section (1B) in section 271 w.r.e.f. 1.4.1989. There are situations where the concealment could be collective or universal in nature, meaning thereby that the assessment order may showcase identical addition or disallowance in more than one year or successive years. Whether in such cases it would be possible to levy penalty in each of the years on a continuing basis or only in the initial year? More importantly, whether it is possible to levy penalty for concurrent offense of concealment under the Income-tax law? The doctrine of continuity offers an answer to this.

Chennai Bench of the ITAT applied the doctrine of continuation in the case of Dr. Bapuji Cherukuri v. Dy. CIT

2. In an interesting ruling of the Hon'ble Chennai ITAT in Dr. Bapuji Cherukuri v. Dy. CIT [2013] 33 taxmann.com 406 the bench applied the fundamental general rule on the doctrine of continuity to get advantage to the assessee, who in this case was slapped with concealment penalty in the six assessment years in concurrence for concealment on identical nature of undisclosed income. In this case the assessees being more than one doctor working in the Apollo Hospitals Ltd., were found to have not disclosed certain amounts received from the Hospital. In other words, the source of income was not doubted in this case but it was the fact of not accounting for such amounts in the returns of income.

Brief facts of the case

3. The department during the survey in respect of the hospital found that it had collected moneys from the patients and had not accounted for the same in their books. The hospital clarified that it had retained 10% of the unaccounted money in the form of provision for infrastructural facilities and the balance of 90% had been paid to the concerned doctors, including the assessees. This statement from the hospital led to reopening of the cases of the doctors who admitted of such non-declaration of incomes.

On the subject of penalty they pleaded that they had omitted to add such sums in their returned incomes as they were led by the genuine impression that all the amounts received by them from the hospital were included in the certificate issued by the hospital. In other words, these were sums on which the hospital did not deduct tax. Against alleged non-deduction of tax at source the hospital stated that it only acted as a collecting agent on behalf of the doctors.

The department failed to tax the hospital as per the decision of the Delhi Bench of the ITAT in Asstt. CIT v. Indraprastha Medical Corpn. Ltd. [2009] 33 SOT 261 (Delhi). In this case it had been the claim of the assessee that it provided only secretarial and chamber services (similar to infrastructural services) to the doctors and the hospital merely collected the fees on behalf of the respective doctors/consultants and that such fee was paid to doctors on a daily basis without any retention. Further, the hospital only charged Rs. 100 for the new patient's registration. It was also found that the cash receipts as professional fee were issued in the name of the doctors. The judgment went on to hold that there was no relationship of the service provider and service recipient between the consultants and the assessees. One wonders how facts could differ in the two cases, viz, one before Chennai Bench and the other before the Delhi Bench where one was citing some retention of 10% and the other was not retaining anything. Nonetheless, the doctor's statement in Chennai case played a role sufficient to nab the hospital under the law for non-deduction of tax at source.

Analysis of the case of Dr. Bapuji (supra)

4. The present facts in the case of Dr. Bapuji (supra) almost point to the fact that the doctors never did account for their share of income in their original returns of income, for which reason it was most desirable to impose a liability upon the hospitals for non-deduction of tax at source, especially on the basis of statement given by the doctors stating the genuine impression held by them of such amounts forming part of the certificate of tax deduction issued by the hospital. Had the hospital considered such amounts for tax withholding there would have been no concealment. Hope that in the next stage of litigation wisdom will prevail over technicalities in the matter of tax deduction at source.

On the subject of penalty in Dr. Bapuji case (supra) the Bench observed that the assessees-doctors who had been continuing with the practice of concealing identical nature of income for six years in concurrence could not be subjected to penalty in all the six assessment years. Taking note of the common rule on the Doctrine of Continuity in this case the Bench held that it was a case of collective concealment and confirmed penalty for the first year instead of for all six years involved. Conceptually, continuity implies some kind of unity in distinction to plurality, for which reason the act of concealment of identical income in six years is considered as one and the same act and more precisely, is referred to as collective concealment in all the six assessment years.

Conclusion

5. The principle of continuity (PC) is a rule of universal application. Therefore, in case of repeated additions of the same type of income an assessee can press for invoking of Doctrine of Continuity and Concurrence and get over with penalty in the successive years. This decision is laudable one and is going to unburden the task of revenue as well as of the assessee in general and save precious time and efforts of the Courts. At the same time it is expected of the CBDT to issue a direction in this regard to the AOs not to press demands in cases of concealment of a collective nature.