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AHMEDABAD URBAN DEVELOPMENT AUTHORITY Versus DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION)

2016 (12) TMI 1196 - GUJARAT HIGH COURT

Reopening of assessment - registration under Section 12A(a) withdrawn retrospectively with effect from 01.04.2002 - Held that:- Considering the fact that at the relevant time and during the years under consideration the registration under Section 12A(a) of the I.T. Act in favour of the petitioner – assessee was in force and in existence and accordingly the assessee claimed the deduction under Section 11 of the IT Act, which came to be granted / allowed by the Assessing Officer. Therefore it cann .....

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favour of assessee - SPECIAL CIVIL APPLICATION NO. 9652 of 2010 With SPECIAL CIVIL APPLICATION NO. 9653 of 2010 - Dated:- 9-12-2016 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE PETITIONER : MR BS SOPARKAR with MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR MR BHATT, SR. ADVOCATE with MS MAUNA M BHATT, ADVOCATE COMMON ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] As common question of law and facts arise in both these petitions and with respect to one assessee but with res .....

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Section 147 of the IT Act. [2.1] Special Civil Application No.9653/2010 has been preferred by the petitioner - assessee for an appropriate writ, direction and order to quash and set aside the impugned notice under Section 148 of the IT Act, by which the Assessing Officer has sought to reopen the assessment for AY 200405 in exercise of powers under Section 147 of the IT Act. [3.0] Facts leading to the present Special Civil Applications in nutshell are as under: [3.1] That during the years under .....

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eled the registration granted under Section 12A(a) of the IT Act retrospectively with effect from 01.04.2002. That thereafter beyond the period of 4 years from the relevant assessment year, the Assessing Officer has reopened the assessment for AY 200304 and 200405 under Section 147 of the IT Act solely on the ground that registration under Section 12A(a) of the IT Act has been withdrawn with effect from 01.04.2002 and therefore, the assessee is not entitled to deduction under Section 11 of the I .....

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llowed includes capital expenses and revenue expenditure. The DIT(E) Ahmedabad has vide order No.DIT(E)/12AA/386/200910 dated 15/02/2010 withdrawn the registration u/s.12A(a) of the Act with effect from 01.04.2002. The assessee is therefore not entitled to deduction u/s.11 of the Act. The income of the assessee is to be computed in normal commercial manner. As the income has escaped assessment permission may be accorded to reopen the assessment u/s.148. Similar reasons recorded have been supplie .....

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essing Officer allowed the exemption as claimed and finalized the assessment. It was submitted that therefore the condition precedent for assuming the jurisdiction under Section 147 of the IT Act to reopen the assessment beyond the period of 4 years are not satisfied. That the Assessing Officer has disposed of the said objections not agreeing with the objections raised by the assessee. Hence, the petitioner has preferred the present Special Civil Applications challenging the reassessment proceed .....

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that therefore the condition precedent to assume the jurisdiction under Section 147 of the IT Act to reopen the assessment beyond the period of 4 years are required to be satisfied. It is submitted that as per proviso to Section 147 of the IT Act, unless and until it is alleged that there was any failure on the part of the assessee in not disclosing true and correct facts, there may not be any reassessment proceedings beyond the period of 4 years. [4.2] it is submitted that in the present case d .....

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said ground alone the impugned reassessment proceedings deserve to be quashed and set aside. [4.3] Shri Soparkar, learned advocate appearing on behalf of the petitioner - assessee has submitted that as such the order passed by the Director of Income Tax (Exemption), Ahmedabad dated 15.02.2010 withdrawing the registration under Section 12A(a) of the IT Act has been subsequently set aside by the learned Tribunal, however against which the appeal is pending before this Court. [5.0] Shri Manish R. B .....

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ve effect to the order withdrawing the registration under Section 12A(a) of the IT Act, which has been withdrawn with effect from 01.04.2002, the Assessing Officer is justified in reopening the assessment. [5.1] It is further submitted by Shri Bhatt, learned advocate appearing on behalf of the Revenue that as such against the order passed by the learned Tribunal in quashing and setting aside the order passed by the Director of Income Tax (Exemption) withdrawing the registration under Section 12A .....

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, in that case, he has requested to clarify that the same may be without prejudice to the rights and contentions of respective parties in appeal against the order passed by the learned Tribunal setting aside the order of Director withdrawing the registration under Section 12A(a) of the IT Act. [6.0] Heard the learned Advocates appearing for respective parties at length. At the outset it is required to be noted that assessment for AY 200304 and 200405 are sought to be reopened under Section 147 o .....

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earned Counsel appearing on behalf of the Revenue. [6.1] In the present case during the years under consideration i.e. for AY 200304 and 200405, the assessee claimed the deduction under Section 11 of the Act on the basis of the registration under Section 12A(a) of the IT Act accordingly. It is not in dispute that at the relevant time when the assessee claimed the deduction under Section 11 of the IT Act, the registration under Section 12A(a) of the IT Act was in existence and in force. Consideri .....

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