1. IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH: JODHPUR
BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND
SHRI N.K. SAINI, ACCOUNTANT MEMBER.
MA Nos.34 to 38/JU/2014
A/o ITA Nos. 54 to 58/JU/2012
(A.Y. 2003-04 to 2006-07 & 2008-09)
M/s Nosegay Kinder Garden Vs. The Income-tax Officer
Chak – 7 – E, Chhoti Ward – 2
Sriganganagar Sriganganagar
PAN No. AAAJN 0531 H
MA Nos. 39 to 43/JU/2014
A/o C.O. Nos. 9 to 13/JU/2012
(A.Y. 2003-04 to 2006-07 & 2008-09)
Nosegay Public School Vs. Income-tax Officer
Chak – 7 – E, Chhoti Ward – 2
Sriganganagar Sriganganagar
PAN No. AAATN 5781 D
Assessee by : Shri Suresh Ojha
Department by : Shri Jai Singh
Date of hearing : 26/08/2014
Date of pronouncement: 08/09/2014
PER HARI OM MARATHA, JM :
These miscellaneous applications arising out of Tribunal
order dated 12.02.2013 have been filed by the assessee.

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2. In the present miscellaneous applications submitted by the
assessee, the ground of rectification of mistake is in respect of the fact
that the ground taken by the assessee has not be disposed off. It was
submitted in the application that the ground taken in the memo was
not disposed off. It was also submitted in the miscellaneous application
that the argument of AR taken in the written submission and in person
were also not considered and adjudicated upon. It was also mentioned
in the application that before the ld. CIT(A) as well as before the
Bench the AR relied upon the judgment of Hon’ble Supreme Court in
respect of status of the assessee. The judgments so referred were also
not adjudicated and considered. Therefore, it was prayed that the
mistakes pointed out are the mistakes covered u/s 254(2) of IT Act,
and, therefore, requested to rectify the mistake apparent from the
record in the appellate order of the Tribunal. In the application, the
grounds which remained indisposed of were reproduced.
3. During the course of hearing the ld. A.R reiterated the contents
of the aforesaid Misc. Application and submitted that since the mistake
is apparent from the record, the order dated 12.2.2013 may be
recalled and rectified. During the course of hearing the ld. A.R of the
assessee relied upon the judgment reported in 249 ITR 323 (Raj.) in

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case of Ramesh Chander Modi and further on the order of the Bench in
case of Ashok Uppal Sriganganagar Vs. Income-tax Officer Ward 1 in MA
No. 92/JU/2007. The assessee also submitted written submissions
wherein also he relied upon the judgment of Rajasthan High Court
delivered in case of Sh. Ramesh Chander Modi reported in 249 ITR page
323 (Raj) where in it was held that if the ground was not disposed of it
shall be a mistake apparent from the record. Regarding the argument
of ground not considered, the ld. A.R also relied upon the judgment
reported in 199 ITR 771 in the case of CIT Vs. Keshav Fruit Mart
wherein it was held that if the argument of ground is not disposed of,
it shall be a mistake apparent from record. It was also argued that if
the judgment of Supreme Court was not considered, it is also a mistake
apparent from record.
4. The ld. D.R., in his rival submissions, opposed the recalling of the
order and stated that the matter should be restored to the file of A.O.
5. We have considered the submissions of both the parties and find
merit in the submissions of ld. A.R. It appears that in the present case,
inadvertently, the Bench has not considered the argument in respect of
status of the assessee and also could not adjudicate the judgment of

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Hon’ble Supreme Court referred and relied upon by the ld. AR of the
assessee. The appeal of the assessee was decided by the Bench vide
order dated 12.2.2013. The matter was restored back to the file of the
AO. We have considered the argument and also perused the record.
The mistakes so pointed out by the assessee in the application are
correct. Though, the matter in question was restored to the file of the
AO in the light of the fact that the registration has been granted u/s
12A of the Act by the Bench with effect from 9.11.1985 vide order
dated 19.12.2012 but the ground in respect of the status was not
decided. The issue raised in the ground regarding status of the
assessee is important and effecting the taxability of the assessee. The
written submissions were also submitted by the assessee at the time of
appeal wherein it has been mentioned that the Nose Gay Management
Committee is the parent institute and Nosegay Public School and
Nosegay Kinder Garden are the branches thereof. The assessee
submitted copy of written submission, which is placed at pages 1 to 8
of the paper book. In the submissions, the assessee specifically argued
in respect of status of the assessee. The question was as to whether
the separate assessments should have been completed or consolidated
assessment should have been completed. This issue was raised before
the CIT(A) and the CIT(A) did not accept the contention of the

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assessee, therefore, the assessee has come in appeal in respect of the
status of the institution before this Bench. The A.O took status of the
appellant as AOP. The assessee challenged that the status taken by the
AO is not correct and should have considered the assessee as
controlled and managed by the parent institute i.e. Nose Gay Public
School Management Committee. Before the CIT(A) the assessee
submitted submission and also relied upon two judgments reported in
88 ITR 432 G. Murugesan & Bros. Vs. CIT and 35 ITR 594 G.
Venkataswamy Naidu & Co. Vs. CIT. The CIT(A) also referred to the
judgments in the appellate order at page No. 5 of the order. While
deciding the issue regarding the status it has not adjudicated in
respect of the judgments of Hon’ble Supreme Court in respect of the
status of the AOP. Before the Bench the same arguments were taken
and again relied upon the same judgments. We reproduce the relevant
portion of the judgment reported in 88 ITR 432, which is as under :
“The expression " association of persons " is not a term of art.
That expression has come up for consideration before this court in
more than one case. In Commissioner of Income-tax v. Indira
Balkrishna, this court, after referring to the various judgments,
observed thus :
" It is enough for our purpose to refer to three decisions : In re B.
N. Elias , Commissioner of Income-tax v. Laxmidas Devidas ; and

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In re Dwarkanath Harishchandra Pitale. In In re B. N. Elias,
Derbyshire C.J. rightly pointed out that the word ' associate '
means, according to the Oxford Dictionary, ' to join in common
purpose, or to join in an action '. Therefore, an association of
persons must be one in which two or more persons join in a
common purpose or common action, and as the words occur in a
section which imposes a tax on income, the association must be
one the object of which is to produce income, profits or gains.
This was the view expressed by Beaumont C.J. in Commissioner of
Income-tax v. Laxmidas Devidas, at page 589 and also in In re
Dwarkanath Harishchandra Pitale. In In re B. N. Elias, Costello J.
put the test in more forceful language. He said; ' It may well be
that the intention of the legislature was to hit combination of
individuals who were engaged together in some joint enterprise
but did not in law constitute partnerships ...... When we find. . .
. . that there is a combination of persons formed for the
promotion of a joint enterprise. . . . . then I think no difficulty
arises whatever in the way of saying that ...... these persons did
constitute an association.
We think that the aforesaid decisions correctly lay down the
crucial test for determining what is an ' association of persons '
within the meaning of section 3 of the Income-tax Act, and they
have been accepted and followed in a number of later decisions
of different High Courts to all of which it is unnecessary to call
attention. It is, however, necessary to add some words of caution
here. There is no formula of universal application as, to what
facts, how many of them and of what nature, are necessary to
come to a conclusion that there is an association of persons

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within the meaning of section 3; it must depend on the particular
facts and circumstances of each case as to whether the conclusion
can be drawn or not."
In the course of that judgment, this court also observed :
" With regard to the shares, dividends, and interest on deposits
there was no finding of any act of joint management. Indeed, the
main item consists of the dividends and it is difficult to
understand what act of management the widows performed in
respect thereof which produced or helped to produce income."
For forming an " association of persons ", the members of the
association must join together for the purpose of producing an
income. An " association of persons " can be formed only when
two or more individuals voluntarily combine together for a
certain purpose. Hence volition on the part of the members of
the association is an essential ingredient. It is true that even a
minor can join an " association of persons " if his lawful guardian
gives his consent. In the case of receiving dividends from shares,
where there is no question of any management, it is difficult to
draw an inference that two or more shareholders function as an "
association of persons " from the mere fact that they jointly own
one or more shares, and jointly receive the dividends declared.
Those circumstances do not by themselves go to show that they
acted as an " association of persons ".

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6. Though, there is no definition of AOP given in the Income-tax Act
and whereas the Hon’ble Supreme Court in this judgment has
observed that the association of person can be formed only when two
or more persons voluntarily combined together for certain purposes.
Hence, the volition on the part of the members on the association is
an essential ingredient. As such, there must be characteristics of an
association of persons, which can be summarized as under in view of
the above mentioned judgments:
1. There should be two or more persons.
2. Such persons must join together. There should be meeting of
minds unless there is violation there can be no association.
3. The association or volition must be for the purpose of producing
an income, profit or gain.
If the facts of the case of the assessee is put on this test then the
order of the learned AO does not stand anywhere for the reason that
Nose Gay Public School and Nosegay Kinder Garden is a part of the
activities of Nosegay Public Management Committee, this fact is also
confirmed in an affidavit submitted by the assessee. Furthermore,
there is no group of the persons who could hold property of school then
there remains no status available in the Income-tax Act. In these
circumstances, the status taken by the Assessing authority of the

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appellant as AOP is not correct if tested on the characteristic as laid
down by the Hon’ble Supreme Court. The judgment of Hon’ble
Supreme Court is having the character of binding nature as per article
141 of Constitution of India. The D.R. is also not in position to
controvert the case law on which the AR relied upon. Merely, because
PAN was obtained under some wrong advice of tax consultant cannot
be a ground for sustaining the status of the appellant as AOP. We
therefore in view of ratio laid down by the Hon’ble Supreme Court in
the aforesaid referred case, are of the confirmed view that the status
of the assessee cannot be taken as AOP and modified the earlier order
to this extent passed by the ITAT.
7. As far as the other grounds are concerned there is no mistake
apparent from the record because these grounds are covered by the
Tribunal order.
8. In the result, all the MAs stand allowed.
Order pronounced in the open court on 08th
September, 2104.
Sd/- Sd/-
[N.K. Saini] [Hari Om Maratha]
Accountant Member Judicial Member
Dated : 8th
September, 2014

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VL/-
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A) By Order
5. The DR
Assistant Registrar
ITAT, Jodhpur