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Income Tax - Case Laws
Showing 21 to 40 of 9304 Records
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2022 (12) TMI 1529
Reopening of assessment u/s 147 - Reasons to believe or Reason to suspect - AO was of the opinion that assessee might have purchased goods from the Grey Market - profit embedded in the turnover taxed at the rate of 12.5% - HELD THAT:- The information on the basis of which the AO formed the opinion of escapement of income to the tune of Rs.3,00,52,199 i.e. bogus sales was not correct and instead, AO after investigation has accepted the purchases as well as sales of goods shown by the assessee in the assessee’s book. In the light of this crucial fact, it is discerned that AO’s reasons recorded for reopening the assessment was based on information from the Investigation Wing, which can at best be termed as ‘Reason to suspect’ and not ‘Reasons to believe.’
When there was adverse information, AO ought to have made preliminary enquiries and collected material which could make him form belief that there is in fact escapement of income, which in the facts discussed the AO failed to do.
Therefore, we hold that the jurisdictional requirement that is ‘Reason to believe, escapement of income’ as occurring in section 147 of the Act has not been met by the AO in the reasons recorded in the instant facts of the case. Therefore, we are inclined to quash the notice issued u/s 148 of the Act itself. Appeal of the assessee is allowed.
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2022 (12) TMI 1528
Delayed payment of employees contributions of PF & ESI beyond the due date as prescribed under the PF & ESI Act but before the date of filing of return of income - Adjustment u/s 143(1) - HELD THAT:- Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd [2022 (10) TMI 617 - SUPREME COURT] has considered the aspect of deemed income in regard to money held by assessee as a custodian on account of employees contribution of ESI and PF payments and that is also held not be an expenditure. The Hon’ble Supreme Court considered that the money held by employer of employees contribution to ESI and PF as custodian is deemed income in view of provisions of section 36(1)(va) as well as section 2(24)(x) of the Act.
In view of the above discussion carried out in view of the amended provisions of the Act by the Finance Act, 2008 w.e.f. 01.04.2008 and subsequently by Finance Act, 2016 w.e.f. 01.06.2016, the legal position is very clear that while processing return of income u/s.143(1)(a)(ii) of the Act, an incorrect claim, if such incorrect claim is apparent from any information in the return of income is to be disallowed and such adjustment is to be made on the total income or loss to the assessee. We find not infirmity in the order of CIT(A) and that of the CPC and hence, the same are confirmed. This issue of assessee’s appeal is dismissed.
Action of AO denying the tax benefit / tax rates to be adopted while computing tax liability in term of Section 115BAA(5) - We noted that the assessee has already moved petition for condonation of delay in filing the return of income u/s.119(2)(b) of the Act dated 09.11.2022 before CBDT, New Delhi. Revenue can await decision of this petition and in the eventuality, the CBDT condones the delay, the assessee is liable to assess at a lower rate of tax in the given facts and circumstances of the case. Hence, we restore this issue back to the file of the AO to await and pursue the petition for condonation of delay filed by assessee before CBDT, New Delhi. The assessee will also pursue the same and we are confident that CBDT will take up this decision and will decide this issue at the earliest. In term of the above, this issue of assessee’s appeal is allowed for statistical purposes.
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2022 (12) TMI 1525
Income tax proceedings/claims against company insolvent/dissolved - application u/s 7 of Insolvency and Bankruptcy Code, 2016 was filed by the financial creditor against the assessee before the NCLT, Guwahati Bench and moratorium was declared under Section 14 of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Since as per the order of the NCLT, Guwahati Bench, any claim of the Income Tax Department against the assessee company made prior to 20th September, 2018 are not maintainable in the eyes of law, all the instant bunch of appeals deserves to be quashed being infructuous.
For the claims which have been allowed to be raised or admitted by the NCLT, Guwahati Bench and if they are raised in the instant bunch of appeals, then liberty is granted to the respective parties to file Miscellaneous Application for recalling of such issues within the time limit provided under the Act. Thus, all captioned appeals are dismissed as infructuous in terms indicated herein above.
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2022 (12) TMI 1521
Condonation of delay in filing appeal before Tribunal - appeal is time-barred by 101 days - assessee submitted that the reason for delay in filing appeal was due to a communication gap between the CA of the assessee representing the matter before Ld. CIT(Appeals) and M/s Chajjed and Co. who were to argue the case before ITAT - HELD THAT:- The Vishakhapatnam ITAT in the case of Smt. Samanthapudi Lavanya [2021 (5) TMI 26 - ITAT VISAKHAPATNAM] held that where assessee was under bona fide impression that its appeal had been filed by accountant, but came to know fact of not having filed appeal when there was pressure from department for payment of demand, delay of 492 days in filing appeal was to be condoned, in the interests of justice. Accordingly, looking into the facts of the instant case, and the period of delay under consideration, in the interests of justice, we are hereby condoning the delay in filing the appeal. The Ld. Departmental Representative has also not objected to condonation of delay in filing of appeal by the assessee.
Scope of limited scrutiny - grounds of appeal included disallowance of commission and purchases made by AO - The assessment order has travelled beyond the scope of notice issued u/s 143(2) of the Act, we are in agreement with the contention that the assessment order was initiated as “limited scrutiny assessment” and it is settled law that unless the limited scrutiny assessment is converted into full scrutiny assessment, after taking due approval as mandated under the Act, such assessment order has to be restricted in scope to the issues on which the notice was issued/assessment was initiated.
In our considered view, the term “interest expenses” cannot be so general so as to encompass within its scope disallowance under section 14A as well. Further, we observe that the commission payment in the instant facts were disallowed on the ground that the same were “bogus” in nature and not on account of “related party mismatch” as mentioned in the notice under section 143(2) of the Act. Accordingly, the assessment order has been passed in respect of issues which were not the subject matter of “limited scrutiny assessment” notice section 143(2) of the Act.
In the case of Chaitanya Bansibhai Nagori [2022 (6) TMI 225 - ITAT AHMEDABAD] held that in limited scrutiny, AO cannot go beyond dispute raised in section 143(2) notice. In the case of Dharmin N. Thakkar [2022 (6) TMI 255 - ITAT AHMEDABAD] ITAT quashed the assessment order on the ground that the order was passed beyond the scope of limited scrutiny as there was no question the said notice for the limited scrutiny under section 143(2) of the Act, for the cash balance. In the case of Rajesh Jain [2005 (4) TMI 629 - ITAT CHANDIGARH] ITAT held that the jurisdiction of the Assessing Officer in such cases where the notices are issued for limited scrutiny is confined to the claims he has set out in the notice for verification. This position of law was further elaborated by the CBDT in its Circular No. 8/2002, dated 27-8-2002.
Since the assessment order has travelled beyond the scope of notice issued under section 143(2) of the Act, the additional Grounds of Appeal of the assessee is allowed.
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2022 (12) TMI 1520
Revision u/s 263 - CIT-DR submits that the AO has not made desired investigation during assessment and accepted the returned income without further investigation on the issue of cash seized during the search - HELD THAT:- We find that in the assessment order, there is no discussion about the issue raised by the ld. CIT in the show cause notice u/s 263 about the cash of Rs. 15.50 lacs. We further find that in reply to show cause notice, the assessee specifically stated that the cash of Rs. 15.50 lacs were of the assessee-company. And the assessee notionally reduced the cash balance by passing accounting entry by crediting cash by Rs. 15.50 lacks and debiting Rs. 15.50 lacks to cash seized in the search on 18.06.2016. We find that the ld. Pr.CIT has not disputed any other amount deposited in the form of SBN except the cash of Rs. 15.50 lacs.
We further find that the department has already made addition of Rs. 15.50 lacs in the hands of Director of the assessee. Assessee vehemently submitted that when such amount was added in the hands of Director of the assessee, a reverse zonal entry was made to treat the said amount in the hands of Director of assessee.
AR further stated that such addition was not disputed by the Director of the assessee in further appeal. AR before us raised a very limited contention that once the amount of Rs. 15.50 lacs is already added in the hands of Director of assessee, the same cannot be added in the hands of assessee company and thus, the assessment order is not at all prejudicial to the interest of revenue. We find merit in the submission of assessee that such submission is not disputed by the ld. Pr. CIT while revising the assessment order.
We find that the revenue has already taxed the said amount in the assessment order dated 28/03/2016 passed u/s 143(3) for A.Y. 2014-15 in case of Director of assessee. Thus, the assessment order is not at all prejudicial to the interest of revenue. Thus, in our considered view, the twin condition as required to revise the assessment order is not meet out in the present case, therefore, the order passed by the ld. Pr.CIT is set aside and the grounds of appeal raised by the assessee are allowed.
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2022 (12) TMI 1519
Addition of deposits into bank account - assessee has not explained the source of deposit of this amount to the assessee’s bank account - HELD THAT:- Assessee explained before us that assessee has placed necessary evidence before the lower authorities that assessee having salary income which has been regularly deposited into bank account and also withdrawn from SB account from HDFC & Canara banks. The total cash withdrawn by assessee was Rs. 13,72,500/- during the financial years 2015-16 & 2016-17.
Out of which the assessee explained that Rs. 6.46 lakhs was used to redeposit only bank account during the demonetization period. However, the AO considered only Rs. 2.5 lakhs available to assessee to redeposit to bank accounts and this is not based on any material evidence. There was no evidence brought on evidence by the AO that the assessee is left with only Rs. 2.5 lakhs out of Rs. 13,72,500/- withdrawn by assessee from various bank accounts.
Unless and until the AO brought on record any material that assessee has spent balance amount of Rs. 11,22,500/-, which has been withdrawn in earlier financial year 2015-16 & 2016-17, it is not possible to hold that the said amount is not available to assessee to redeposit into bank account.
Considering the quantum of withdrawals made by the assessee in earlier financial years, that the amount of Rs. 3.96 lakhs addition sustained by the AO has been sourced by the earlier withdrawals and due credit to be given. Accordingly, considering the meagre amount of Rs. 3.96 lakhs, which addition is made by the AO, the amount withdrawn by assessee on earlier occasion has been unutilized and available to the assessee to redeposit to the bank account and according to me the source has been explained by the assessee by earlier withdrawals and the addition sustained by the CIT (A) is deleted. Appeal filed by the assessee is allowed.
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2022 (12) TMI 1518
Penalty u/s 271(1)(c) - Assessment was reopened for claiming excess loss - HELD THAT:- The Hon’ble Bombay High Court in the case of CIT – vs.- Jet Airways [2010 (4) TMI 431 - HIGH COURT OF BOMBAY], Ranbuxy Laboratories [2011 (6) TMI 4 - DELHI HIGH COURT] and Md. Juned [2013 (2) TMI 292 - GUJARAT HIGH COURT] propounded unanimously that unless an addition is being made in a reassessment order on an item for which assessment was reopened, no other item can be added.
There is no application of mind at the end of the ld. A.O. either in the assessment order or in the penalty proceedings. He has not categorically proved that assessee has concealed the income or furnished the inaccurate particulars. As observed above, there is an inherent contradiction even for opening of the assessment, vis-a-vis ultimate additions made in the hands of the assessee.
On this strength of the Hon’ble three High Courts’ decision, this addition itself would not be sustainable though the issue is not before us and we cannot express our opinion about that in the present proceedings, but we can take cognizance of this fact for absolving the assessee from levy of penalty under section 271(1)(c) of the Income Tax Act. Appeal of the assessee is allowed.
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2022 (12) TMI 1516
Invalid return - Validity of intimation issued u/s 143(1) on invalid return - assessee did not rectify the defects as per the notice issued u/s 139(9) - HELD THAT:- A perusal of the communication issued to the assessee clearly shows that the CPC has issued the notice u/s.139(9) of the Act intimating defects in the return. In the notice, it has been categorically mentioned that if the defects were not removed, the return filed by the assessee would be treated as invalid return.
Admittedly, the assessee has not rectified the defects. Consequently, the return filed by the assessee is liable to be treated as invalid return. Once the return filed by the assessee is treated as invalid return, intimation u/s.143(1) of the Act issued on the said return admittedly, is invalid and consequently the same stands quashed. Appeal of assessee allowed.
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2022 (12) TMI 1514
Mandation to issue notice u/s 143(2) - whether the notice required to be issued under Section 143(2) was issued? - HELD THAT:- Tribunal has referred to a remand report submitted by the Assessing Officer wherein the Department could not controvert the contention made by the assessee that no notice under Section 143(2) of the Act was issued by the Deputy Commissioner of Income Tax, Circle-13(1), Kolkata who completed the assessment.
Tribunal has also noted the relevant decisions and rightly held that the assessment order is bad in law for the reason that the Assessing Officer passed the order u/s 143(2) of the Act without issuing any notice 143(2). We find that there is no substantial question of law arising for consideration in this appeal.
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2022 (12) TMI 1512
Issuance and continuation of the Look-Out Circular issued against him at the behest of the Income Tax Department - Black Money - Appellant very fairly submits that the LPA may be disposed of with a request to the learned Single Judge to decide the writ petition at an early date.
HELD THAT:- The prayer made by learned Senior Counsel for the Appellant is genuine. The learned Single Judge is requested to decide the writ petition as expeditiously as possible. The learned Single Judge shall be at liberty to decide the case on its own merits.
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2022 (12) TMI 1508
Addition u/s 56(2)(viib) - rejection of valuation report of the valuer - premium received on issue of equity share exceeds its ‘Fair Market Value’ (FMV) and consequently the excess premium received on issue of equity share is susceptible to tax in view of provisions of Section 56(2)(viib) as deemed income of the assessee - Substitution of value of shares - valuation as per DCF method - AO proceeded to determine value based on actual figures of profits for next two years, i.e., F.Ys. 2015-16 and 2016-17 in substitution of the projected profits before tax adopted in the valuation report
HELD THAT:- The assessee in the instant case has proceeded to issue equity share at a premium on the basis of independent valuer report wherein DCF method was adopted for the purposes of determination of fair market value. The Assessing Officer has not disputed the DCF method adopted for valuation per se. AO however, has compared the projected figures used by the valuer with the actual figures available at the time of assessment.
AO displaced the FMV determined as per DCF method based on projected figures by replacing the same by actual figures to discard the justification of share premium. We find that such action of the AO substitute the figures estimated at the time of valuation towards ensuing years by actual figures made available to AO at the later point of time is squarely in contrast to the judgment of Cinestaan Entertainment [2021 (3) TMI 239 - DELHI HIGH COURT] and decision of Intelligrape Software Pvt. Ltd [2020 (10) TMI 403 - ITAT DELHI]
In Cinestaan [2021 (3) TMI 239 - DELHI HIGH COURT] took cognizance of the identical situation, i.e., the AO had disregarded the valuation report of the assessee primarily on the ground that the projections of revenue considered for the purpose of valuation do not match with the actual revenue arose in the subsequent years - in the fact situation observed that the assessee company has adopted a recognized method of valuation and the revenue could not show that assessee has adopted demonstrably wrong approach. It was observed that valuation is not an exact science and therefore cannot be done with arithmetic precision.
It is a technical and complex issue which should best be appropriately left to the consideration and wisdom of experts in the field, having regard to the imponderables which enter the process of valuation of shares. The Hon’ble High Court thus upheld the action of the ITAT and consequently the additions made under the deeming provisions of Section 56(2)(viib) made by the AO were reversed.
Similar view has been taken in Intelligrape Pvt. Ltd [2020 (10) TMI 403 - ITAT DELHI] wherein it was observed that the valuation based on future projections at the time of issue of shares cannot be inferred as the actual figures may vary depending on the market conditions and host of other factors. Appeal of the assessee is allowed.
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2022 (12) TMI 1506
Validity of reopening of assessment - Bogus LTCG claimed - addition u/s 68 - penny stock transaction - HELD THAT:- From the reasons recorded by AO, it is vivid that there is merit in the arguments advanced by ld DR for the Revenue. We note that assessing officer had received the information from the DDIT (Investigation) unit3(2) Kolkata in respect of the BSE listed Penny stock companies. After getting such information, assessing officer has applied his mind and then framed the reasons for reopening the assessment, therefore it is not a borrowed satisfaction. The assessing officer has also mentioned in the reasons recorded the quantity of shares sold, name of the scrip, and amount received on sale of such shares etc. Thus, we note that reasons recorded by the assessing officer are in accordance with the provisions of law. Therefore, based on these facts and applicable precedents to these facts, we dismiss the additional grounds raised by the assessee.
Addition u/s 68 - We note that findings of the Hon`ble Jurisdictional High Court of Gujarat in the case of Jagat Pravinbhai Sarabhai (2023 (1) TMI 44 - GUJARAT HIGH COURT] is squarely applicable to the assessee`s facts under consideration. The genuineness of investment in the shares by the assessee was substantiated by him by producing contract note, Transaction was through recognised Broker, transaction was done through banking channel on which STT was paid. The shares were held by assessee, as an Investor for a period of seven/ eight years. The investment was made in the year 2003 and sold in 2010-11. The shares were retained for more than seven years and were sold after such long time. These circumstances suggest that the investment was not bogus. The shares were purchased in order to invest and not for the purpose of earning exempted income by frequent trading in short time.
We note that Judgment of Hon`ble Calcutta High Court in the case of Swati Bajaj and others [2022 (6) TMI 670 - CALCUTTA HIGH COURT] should not be applicable to the assessee as it is outside the territorial jurisdiction of Gujarat. However, the Judgment of Hon`ble Jurisdictional High Court of Gujarat in the case of Jagat Pravinbhai Sarabhai(supra) should be applicable to the assessee`s case, as it is the judgment of Jurisdictional High Court.
Addition u/s 69C on account of commission paid @ 2% or 3% of bogus long term capital gain - Since, we have deleted the alleged addition of bogus LTCG, hence addition made by AO does not have leg to stand, therefore it is hereby deleted.
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2022 (12) TMI 1505
Addition u/s 69A in respect of cash deposited in bank accounts during demonetization period - Assessee argued that provisions of this section cannot be invoked in case where concerned money is already recorded in the books of account - HELD THAT:- On a perusal of the cash books for the year under consideration, it stands revealed beyond doubt that both the cash deposits each in mentioned bank accounts on 29.11.2016 were made from his books of accounts, thus no justification in dubbing of the cash deposits in question as unexplained money of the assessee u/s.69A of the Act by the lower authorities.
Also we cannot remain oblivion of the fact that as the aforesaid claim of the Ld. AR not only militates against the observations of the lower authorities, but also there is nothing discernible from the record which would reveal that the authenticity of the cash book of the assessee for the year under consideration had been looked into by the lower authorities, therefore, it would be unfair to summarily accept the same without subjecting the same to necessary verification - the matter in all fairness requires to be revisited by the A.O. A.O is herein directed to re-adjudicate the issue after duly taking cognizance of the explanation of the assessee as regards the source of the cash deposits in the bank accounts in question. Appeal of the assessee is allowed for statistical purposes.
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2022 (12) TMI 1501
Monetary limit to file appeal before High Court - Appeal dismissed on low tax effect - HELD THAT:- Central Board of Direct Taxes (CBDT) has issued Circular No. 17 of 2019, dated 08.08.2019, amending the previous Circular No. 3 of 2018, dated 11.07.2018, by further enhancing the monetary limits for filing appeals by the Income Tax Department before the Income Tax Appellate Tribunals, High Courts and Supreme Court as a measure for reducing litigation. In paragraph 2 of the said circular we find that the monetary limit fixed for filing an appeal before the High Court is Rs. 1.00 crore.
Therefore, the appeal filed by the Department is dismissed in terms of the aforesaid Circular No. 17 of 2019, dated 08.08.2019. However, if the appeal comes within the exception under paragraph 10 of Circular No. 3 of 2018, it would be open to the Income Tax Department to seek revival of the appeal.
Miscellaneous applications pending, if any, shall stand closed.
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2022 (12) TMI 1500
Monetary limit to file appeal before High Court - Appeal dismissed on low tax effect - HELD THAT:- Central Board of Direct Taxes (CBDT) has issued Circular No. 17 of 2019, dated 08.08.2019, amending the previous Circular No. 3 of 2018, dated 11.07.2018, by further enhancing the monetary limits for filing appeals by the Income Tax Department before the Income Tax Appellate Tribunals, High Courts and Supreme Court as a measure for reducing litigation. In paragraph 2 of the said circular we find that the monetary limit fixed for filing an appeal before the High Court is Rs. 1.00 crore.
Therefore, the appeal filed by the Department is dismissed in terms of the aforesaid Circular No. 17 of 2019, dated 08.08.2019. However, if the appeal comes within the exception under paragraph 10 of Circular No. 3 of 2018, it would be open to the Income Tax Department to seek revival of the appeal.
Miscellaneous applications pending, if any, shall stand closed.
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2022 (12) TMI 1498
Revision u/s 263 - sustainability of the disallowance of the assessee’s claim for deduction of “VAT” on sale of liquor - CIT holding a conviction that the “VAT” claimed by the assessee which was liable for disallowance u/s.40(a)(iib) was summarily allowed by the A.O, thus, vide his order passed u/s.263 had set-aside the order passed by the A.O u/s.143(3) - HELD THAT:- We find substance in the claim of the Ld. AR that the issue involved in the present appeal is squarely covered by the judgment of Kerala State Beverages Manufacturing & Marketing Corporation Ltd. [2022 (1) TMI 184 - SUPREME COURT]. As stated by the Ld. AR, and, rightly so, the Hon’ble Apex Court had approved the view taken by the Hon’ble High Court of Kerala that [2020 (5) TMI 176 - KERALA HIGH COURT] as “surcharge on sales tax” is a “tax”, and Section 40(a)(iib) does not contemplate “tax”, and surcharge on sales tax is not a “fee” or a “charge”, therefore, no disallowance under the said statutory provision was called for in the hands of the assessee.
Considering the aforesaid judgment of the Hon’ble Apex Court[surpa], we are of the considered view that the same in fact supports the claim of the assessee that the provisions of Section 40(a)(iib) would not be applicable to the case of the assessee qua the “VAT” paid by the assessee company. We, thus, in terms of our aforesaid observations set18 aside the order passed by the Pr. CIT u/s.263 of the Act, dated 28.03.2021, and restore the order of the A.O passed u/s.143(3), to the extent he had allowed the assessee’s claim for deduction of “VAT”. Assessee appeal allowed.
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2022 (12) TMI 1495
Disallowance u/s 14A - claim of interest - HELD THAT:- Both the parties submitted that this issue is squarely covered in assessee’s own case by Co-ordinate Bench of this Tribunal in [2020 (10) TMI 1021 - ITAT AHMEDABAD] wherein the Hon’ble ITAT remanded the matter back to the Assessing Officer for fresh adjudication to examine the facts and figures of the case in the light of our observations made above in order to arrive at a final conclusion as to whether disallowance u/s 14A is to be made and if so, then the amount thereof which in no case should exceed the exempted income earned by assessee during the year under appeal.
Nature of expenses - Guarantee fees paid to Govt. of Gujarat related to capital work-in-progress which needs to be capitalized - assessee submitted that the certificate of utilization was already furnished before the Ld. CIT(A) stating that the loans on which guarantee fees was paid were utilized for construction of power plant and there was no capital work-in-progress in respect of such loans borrowed - HELD THAT:- As decided in own case in [2020 (10) TMI 1021 - ITAT AHMEDABAD] wherein CIT(A) directed to verify the certificate filed during the appellate proceedings that the loans on which guarantee fees was paid were utilized for construction of power plants at that time and there was no capital work-in-progress in respect of such loans during the Financial Year 2014-15. Both the assessee counsel as well as the Ld. D.R. could not place on record what is the giving effect order passed by the A.O. thereafter, pursuant to the direction of the Ld. CIT(A). Therefore this ground no. 2 is also set aside to the Assessing Officer for proper verification and adjudication.
Disallowance u/s 14A r.w.r. 8D while determining the income under the provisions of MAT - HELD THAT:- As this case is already remanded back to the Assessing Officer for verification for the earlier two issues under consideration for the Assessment Year 2015-16, this issue is also remanded back to the Assessing Officer for verification of the same and allow the submission of the assessee, if the same is found to be is in order
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2022 (12) TMI 1494
Revision u/s 263 - as per CIT AO erroneously allowed this taxpayer’s section 80P deduction claim representing interest derived from deposits made in cooperative banks - HELD THAT:- We find merit in assessee’s arguments in light of this tribunal’s recent order in Rena Sahakari Sakhar Karkhana Ltd. [2022 (1) TMI 419 - ITAT PUNE] though the co-operative banks pursuant to the insertion of sub-section (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a cooperative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2)(d)
Thus as the A.O while framing the assessment had taken a possible view, and allowed the assessee’s claim for deduction under Sec. 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 of the Act for dislodging the same.
Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers under Sec. 263 of the Act, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we set-aside his order and restore the order passed by the A.O under Sec. 143(3).
Thus PCIT’s revision directions stand reversed. - Decided in favour of assessee.
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2022 (12) TMI 1493
Validity of reassessment order passed u/ss.143(3)/147 on the basis of notice u/s.148 issued by non jurisdictional A.O - validity of the jurisdiction that was assumed by the A.O i.e. ITO, Ward-2(1), Bhilai for framing of the impugned assessment u/ss. 143(3)/147 - whether or not the assessment framed by the ITO, Ward-2(1), Bhilai vide order passed u/ss.143(3)/147 on the basis of notice issued u/s.148 by the ITO, Ward1(1), Raipur i.e. a non jurisdictional A.O is sustainable in the eyes of law?
HELD THAT:- The assessment proceedings in the case of the assessee were initiated by the ITO, Ward-1(1), Raipur vide notice u/s.148 dated 23.03.2015. Subsequently, the ITO, Ward- 1(1), Raipur had transferred the case record of the assessee on 12.05.2015 to ITO, Ward-2(1), Bhilai. The ITO, Ward-2(1), Bhilai had, thereafter, on the basis of notice u/s.148 dated 23.03.2015 (supra) proceeded with and framed the assessment vide his order u/ss.143(3)/147 dated 25.03.2016. Ostensibly, the ITO, Ward-2(1), Bhilai, i.e., jurisdictional officer had not issued any notice u/s.148 of the Act but had acted upon that as was issued by the ITO, Ward1(1), Raipur i.e. a non-jurisdictional officer on 23.03.2015.
It is not the case of the department that the jurisdiction over the case of the assessee was transferred from ITO, Ward-1(1), Raipur to ITO, Ward-2(1), Bhilai vide an order passed by the appropriate authority u/s.127 of the Act. Also, no material had been placed before me by the Ld. DR which would reveal that as the ITO, Ward-1(1), Raipur at the time of issuance of notice u/s.148 dated 23.03.2015 was duly vested with the jurisdiction over the case of the assessee, which, thereafter, had validly been transferred to the ITO, Ward-2(1), Bhilai, therefore, as per Section 129 of the Act the assessment framed by the latter on the basis of notice u/s.148 dated 23.03.2015 issued by the ITO, Ward-1(1), Raipur could not be faulted with.
On the basis of the aforesaid facts, as stated by Mr. R.B Doshi, the Ld. AR, and, rightly so, the framing of the impugned assessment u/ss.143(3)/147 dated 25.03.2016 by the ITO, Ward-2(1), Bhilai on the basis of notice issued u/s. 148 dated 23.03.2015 by the ITO, Ward-1(1), Raipur i.e. an officer who at the relevant point of time was not vested with jurisdiction over the case of the assessee, was devoid and bereft of any force of law. Appeal of assessee allowed.
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2022 (12) TMI 1492
Validity of Re-assessment order framed by non-jurisdictional officer - scope of instruction No.1/2011, dated 31.01.2011 as revising the earlier existing monetary limit for assigning the cases to ITOs/ACs/DCs w.e.f. 01.04.2011 - HELD THAT:- As per the CBDT Instruction No.1/2011, dated 31.01.2011 the jurisdiction over the case of the assessee who is located in a mofussil area i.e. Raipur and had in compliance to the notice u/s. 148, dated 18.06.2013 filed a non-corporate return on 05.07.2013 for the year under consideration, i.e., A.Y.2010-11 declaring an income of Rs. 9,47,500/- was vested with the ITO, Ward 1(3), Raipur [which w.e.f. 15.11.2014 was transferred to ITO-1(2), Raipur].
Although notice u/s. 148, dated 18.06.2013 was issued within the stipulated time period, however, the same was issued by the DCIT-1(1), Raipur, i.e., an A.O who pursuant to the CBDT Instruction No.1 of 2011, dated 31.01.2011 was not vested with jurisdiction over the case of the assessee for the year under consideration. On the other hand as the ITO, Ward-1(3), Raipur [succeeded by ITO, Ward-1(2), Raipur w.e.f. 15.11.2014] who as per the aforesaid CBDT Instruction (supra) was at the relevant point of time vested with the exclusive pecuniary jurisdiction over the case of the assessee for the year under consideration had not issued any notice u/s. 148 of the Act, and had proceeded with on the basis of the notice u/s. 148 dated 18.06.2013 issued by the DCIT-1(1), Raipur i.e. a non-jurisdictional Officer, therefore, no valid jurisdiction could have been assumed by him for framing the impugned assessment vide order passed u/s. 143(3)(sic), dated 31.03.2015.
Thus the assessment framed in the case of the present assessee by the ITO-1(2), Raipur vide order u/s. 143(3)(sic) dated 31.03.2015 on the basis of notice u/s. 148 dated 18.06.2013 issued by the DCIT-1(1), Raipur i.e. a non-jurisdictional A.O, is devoid and bereft of any force of law, therefore, the same cannot be sustained and is liable to be struck down on the said count itself. Decided in favour of assessee.
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