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2024 (1) TMI 1132 - AT - Income TaxTaxability of unutilized accumulated funds under section 11(2) as on 01.04.2008, as income under section 11(3) on the ground that the appellant did not claim exemption under section 11 of the Act during the year under consideration - Pursuant to the order u/s 263 AO reframed the assessment order and held that the assessee is not eligible for exemption u/ss 11/12 of the Act under the Principles of Mutuality and unutilized amount accumulated u/s 11(2) of the Act in the preceding years ceased to be for the objects of the assessee and is taxable u/s 11(3) of the Act - CIT(A) dismissed the appeal of the assessee holding that the directions of the DIT(E) have attained finality. HELD THAT:- We have carefully perused the order of the Hon'ble High Court of Delhi [2018 (3) TMI 2025 - DELHI HIGH COURT] preferred by the assessee against the order of this Tribunal [2017 (1) TMI 1826 - ITAT DELHI] by which the Tribunal dismissed the appeal of the assessee preferred against the order of the DIT(E) u/s 263 of the Act wherein as clarified that the ITAT should consider the substantive merits of the appeal with respect to the assessee's taxability of amounts under Section 11(3) of the Act without in any manner holding adversely against it, for the withdrawal of the previous appeal (which was concerned only with the question of assumption of taxability under Section The appeal is disposed of in the above terms. It can be seen from the above findings of the Hon'ble High Court [supra] that the contention of the assessee has to be considered within the provisions of section 11(3) of the Act. Therefore, in the interest of justice and fair play and in line with the directions of the Hon'ble High Court of Delhi [supra], we restore this appeal to the file of the ld. CIT(A). The ld. CIT(A) is directed to decide the appeal afresh considering the claim of the assessee in light of provisions of section 11(2) and 11(3) of the Act after affording reasonable and adequate opportunity of being heard to the assessee. Appeal of the assessee allowed for statistical purposes.
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