High Court Of Rajasthan
Sumerpur Truck Operators Union vs. Income Tax Officer
Sections 4, 10(24), 147, 260A
Asst. Year 1993-94
N.N. Mathur & H.R. Panwar, JJ.
IT Appeal No. 54 of 2002
2nd July, 2002
Dinesh Mehta, for the Appellant
BY THE COURT :
This appeal under s. 260A of the IT Act is directed against the order of the Tribunal, Jodhpur Bench dt. 22nd Feb., 2002. The appellant has framed as many as 9 substantial questions of law in para No. 10 of the memo of appeal. However, the learned counsel has pressed only question Nos. (ii), (iii), (iv) and (v). The said questions as reproduced are as under :
“(ii) Whether the income of the excess of receipts over expenditure of the appellant union was not exempt under s. 10(24) of the IT Act, particularly when the appellant union was duly registered under the Indian Trade Union Act, 1926 ?
(iii) Whether in the facts and circumstances of the case, the appellant union, a union of truck owners was not a union of workers within the meaning of Trade Unions Act, 1926 (primarily formed with the view to regulate the relations between its members and the employers namely the transporters), was not entitled to claim exemption of income as provided under s. 10(24) of the IT Act, 1961 ?
(iv) Whether in the facts and circumstances of the case, the learned authorities below were justified in holding that the AO has rightly issued notice under s. 147/148 of the IT Act particularly when the limitation for issuing notice under s. 143(2) of the IT Act had not expired ?
(v) Whether in the facts and circumstances of the case, the income of the appellant union was not exempted on the principles of mutuality in view of the law laid down by Honâble Supreme Court in case of Chelmsford Club vs. CIT (2000) 159 CTR (SC) 235 : (2000) 243 ITR 89 (SC) and CIT vs. Bankipur Club Ltd. (1997) 140 CTR (SC) 102 : (1997) 226 ITR 97 (SC) : TC S38.3434 ?”
2. As regards question Nos. (ii) and (iii), it is contended by the learned counsel that the appellant being a trade union registered under the Trade Union Act is entitled for exemption under s. 10(24) of the IT Act. In order to claim exemption, the following conditions are required to be satisfied : (i) the trade union should be a registered union within the meaning of the Indian Trade Union Act, 1926; (ii) the trade union should have been formed primarily for the purpose of regulating the relation between : (a) workman and employer, or (b) workman and workman.
3. It is submitted by Mr. Mehta that the appellant trade union has been primarily formed for the purpose of regulating the relations between workman and employer. This aspect has been dealt with by the Tribunal and it is held that the truck operators can neither be termed as employees nor they can be termed as employers. The bye- laws of union have been placed on record as Annexure1. The object of the truck operatorsâ union is to raise the social and economic level of the truck operators with co-operative feeling. The object clause of the bye-laws in Hindi is extracted as follows : “NOT BEEN REPORTED” Thus the appellant union has been formed primarily to protect the interest of the truck owners. Thus, we find no substance in the contention of the learned counsel pertaining to question Nos. (ii) and (iii).
4. As regards question No. (iv), it is submitted by Mr. Mehta that the assessing authority has committed error of jurisdiction in issuing a notice under s. 147 of the IT Act. He placed reliance on the proviso to s. 147 of the IT Act. It is submitted that the order of assessment is condition precedent for issuing notice under s. 147. It is further submitted by Mr. Mehta that AO can issue notice under s. 147, where he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. The expression “may assess or reassess such income” under s. 147 is of great significance. The Tribunal on the perusal of the entire record found that : “from the perusal of the facts of the case and the legal provisions, it is evident that even if assessments are completed in summary manner under s. 143(1)(a) of the Act, the AO can reopen the assessment under s. 147 of the Act even if the assessee has disclosed all material facts in the returns filed by the assessee”. Since s. 147 contemplates not only reassessment but assessment as well, it cannot be said that assessment is condition precedent. No substantial question of law arises as framed on this count.
Lastly, it is contended by the learned counsel that income of the appellant union could not be taxable on the plea of mutuality. The plea of mutuality can be attracted only where there is a complete identity between the contributors and the participants. The bye-laws of union show that the ordinary membership can be given to the person residing outside Sumerpur. In view of this also no substantial question of law arises on question No. (v).
At this stage, learned counsel has also pressed question Nos. (vi) and (vii). The findings being purely findings of fact, no interference is called for. Putting of the parameters laid down by this Court for entertaining an appeal under s. 260A of the IT Act, laid down by this Court in Dy. CIT vs. Marudhar Hotels (P) Ltd. (1999) 155 CTR (Raj) 437 : (2000) 245 ITR 138 (Raj) no substantial question of law arises in this appeal. Thus, the appeal stands dismissed.
[Citation : 259 ITR 749]