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TMI Blog2019 (11) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... the clerks working on the office of its Chartered Accountant to draft the appeal to be filed before the ITAT. However, the said clerk kept the above order in his drawer and forget to file the appeal in the above-mentioned case. Later on, when the assessee enquired from its Chartered Accountant regarding the status of his appeal to be filed before the ITAT, it came in the light that at that the clerk to whom the order was handed over has not filed the appeal against the order of the ld.CIT(A). Thereafter, the appellant has taken immediate steps and filed the appeal before the ITAT with 41 delay. Thus, the delay has been caused due to unavoidable circumstances and beyond the control of the assessee. Therefore it was requested that the delay in filing of the appeal may be condoned as it was unintentional and beyond the control of the assessee. 4. The ld. CIT (DR) did not seriously opposed the condonation of the delay. 5. We have heard the rival submissions and perused the material available on record. It is a settled law that the courts as quasi-judicial bodies are empowered to condone the delay, if the litigation satisfies the court that there were sufficient reasons for availing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a precondition for according sanction as per section 151 of the Act. 7. That the Ld. AO and Ld. CIT(A) has erred in the eyes of law and facts of the case in making addition of Rs. 17,07,730/- by disallowing the claim of exemption u/s 10(23C)(iiiab) of the Act. 8. That the Ld. CIT (A) has not considered the legal issues involved in the reassessment as stated in Ground No. 1 to 6 above. 9. That the interest charged u/s 234B on the tax calculated on the reassessed income is not sustainable in law and facts of the case. 10. That the appellant craves leave to add, amend or alter any of the grounds of appeal before or the time of personal hearing or written submission." 7. Ground No.1 to 6 & 8 are relates to reopening of assessment u/s.147 of the Act and issue of notice u/s.148 based on audit report, which is bad in law and without application of mind and amounts to change of opinion. 8. Succinct facts are that the assessee is a Public charitable educational institution and assessed as AOP. The assessee has filed its return of income on 30.09.2010 disclosing income at Rs. Nil and it was processed u/s. 143(1) of the Act. Later on, the case was picked up for scrutiny and the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment was not tenable. Reliance was also placed on plethora of case laws, which finds mentioned at page 3 of the order of ld. CIT (A). It was also contended that the AO failed to dispose-off the objections raised by the appellant against the issue of notice u/s.148 of the Act, therefore reopening is not valid. It was further submitted that sanction by the JCIT, as per provision of section 151 of the Act has been accorded without application of mind, which is against the spirits of the law and is unjustified and unwarranted. However, the ld.CIT (A) observed that the perusal of facts on record prove that there is no infirmity in the issue of notice u/s.148 of the Act, reasons have been duly recorded, approval by the JCIT (E) has been accorded as per the procedure and the objections of the assessee for issue of notice u/s.148 have also been dealt with. Therefore, the assessee's objections are based on surmises. Moreover, the AO has clearly stated in his order that the assessee has received Government grant of Rs. 49,32,102/- only and its gross receipts are at Rs. 2,23,78,924/- which is only 22.03% of the gross receipts which is very much low than 50% of gross receipts, hence, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in original assessment, amounts to change of opinion only for which the assessee has placed reliance on the following case laws. 1. CIT Vs. Kelvinator of India Ltd., 920100 228 CTR 0488, SC 2. CIT Vs. Usha International Limited, 92012) 253 CTR 0113 (FB), DHC 3. Unitech Holdings Ltd. Vs. DICT, (2016) 290 CTR 0201, DHC 4. Oriental Insurance Company Vs. CIT, (2016) 283 CTR 0078, DJHC 5. Turner Broadcasting Systems Asia Pacific Vs. DCIT,(2016) 380 ITR 0412, DHC 6. Ralson India Ltd. Vs. DCIT and Anr., W.P. (C) 142/1998, Delhi ITAT 11. The ld.Counsel further submitted that the reasons recorded for reopening of assessment u/s.148 of the Act are nothing but based on audit note/objections raised by the Senior Audit Officer which could not be taken as ground for reopening assessment. The copy of audit objection raised by the auditor was filed which is placed at Paper Book, page 10. Therefore, it was submitted that the reopening based on audit objection is not a new information for reopening of the assessment u/s.147 of the Act as held by the Hon'ble Supreme Court in the case of CIT Vs. Lukas TVS Ltd., [2001] 249 ITR 306 (SC) wherein it was held that an audit opinion in reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the noting and at the same time satisfaction has to be recorded of the given case which can be reflected in possible manner." The ld. Counsel further relied in the case of CIT Vs. S. G. Lime and Chemicals Ltd., [CC.No.11961/2015] wherein the Hon'ble Supreme Court has dismissed the Revenue appeal and upheld the decision of Hon'ble Madhya Pradesh High Court where the sanction authority being JCIT, has only recorded approval as "yes, I am satisfied" for giving sanction for issue of notice u/s.148 which was held to be invalid. The ld.Counsel further submitted that various questions of allowability of exemption u/s.10 (23C) (iiiab) were asked during the course of original assessment proceedings and duly complied with by the assessee. Even on merit, the ld.Counsel submitted that the assessee has received gross receipt of Rs. 2.23 crore whereas Government Grant was at Rs. 49.32 lakhs which forms 22.03% of the total grants. The AO disallowed the exemption u/s. 10(23C) (iiiab) on the ground that assessee trust has not been substantively financed by the Government i.e. say that at least 51% of the gross receipts should be received from the Government. However, the said percentage prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available on record. The perusal of original assessment order passed u/s.143(2) of the Act dated 23.11.2012 shows that the AO has duly examined and scrutinized the details submitted during the course of assessment proceedings and has applied his mind regarding exemption u/s.10(23C)(iiiab) of the Act. The AO had obtained necessary information and allowed the same by observing in para 2 of the assessment order which reads as under : "2. The assessee is a public educational body constituted by the public in the year 1974-75 and is registered as a Society under the Society under the Societies Registration Act, 1860 vide No.64 of 1974-75 dated 12.11.1974. The assessee is running two schools at Narwana town of District Jind and is affiliated with Haryana Education Board, Bhiwani. The main object of the assessee, inter-alia include to run schools and to provide education to the general public at large. During the year, the assessee has declared Gross Receipts at Rs. 2, 23, 78,964/- as per Income & Expenditure Account. The assessee was asked to substantiate its claim exemption under section 10(23C) (iiiab) of the I. T. Act, 1961. The assessee filed a written reply received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Act can be applied to an assessment order framed under section 143(3) of the Act, provided that there has been a full and true disclosure of all material and primary facts at the time of original assessment. In such a case if the assessment is reopened in respect of matter covered by the disclosure, it would amount to change of opinion." 16. Therefore, the fact in the instant case shows that it amounts to change of opinion, as the assessee has disclosed full and true particulars at the time of original assessment made under section 143 (3) of the Act. This view is further supported, by the decision of Hon'ble Supreme Court decision as relied by the ld.Counsel in the case of CIT Vs. Kelvinator India Ltd., [2010] 320 ITR 561 (SC) wherein it was held that the AO has power to reopen the assessment u/s.147 provided AO has reason to believe that income has escaped assessment and there is tangible material to come in to the possession of the AO, that there is escapement of income, mere "change of opinion" cannot per-se be reason to reopen the assessment. In the present case, there is no new tangible material, which had come into the possession of the AO, therefore, reopening on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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