Reassessing any revenue other than that for which AO has shown a justification is not justifiable
Fact and issue of the case
This appeal filed by the assessee is directed against the order of the ld. CIT(A) dated 28-09-2022, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2010-11 wherein the assessee has raised the following grounds of appeal. “
In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of ld. AO of reopening the assessment u/s 147 of Income Tax Act, 1961. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the reassessment proceedings being illegal and without any basis.
In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of Id. AO of not providing copy of reasons recorded, for reopening of the case of the assessee trust, thereby depriving the assessee trust from objecting to such reasons recorded, which is against the principle of natural justice. The action of the ld. CIT(A) is illegal, unjustified arbitrary and against the facts of the case. Relief may please be granted by quashing the reassessment proceedings being illegal and without any basis.
In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of ld. AO of issuing notice u/s 148 of Income Tax Act, 1961 without obtaining proper sanction u/s 151 of the Income Tax A ct, 1961. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the reassessment proceedings being illegal and without jurisdiction.
In the facts and circumstances of the case and in law, Ld CIT(A) has erred in confirming the action of ld. AO of not allowing exemption to the assessee trust in accordance with section 11(2). The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by allowing exemption under section 11(2).
In the facts and circumstances of the case and in law, Id. CIT(A) has erred in confirming the action of Id. AO of rejecting the claim of the assessee trust, under section 24(a), being 30 percent of the rental income, amounting to Rs. 4,93,435 carmed by the assessee trust. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case Relief may please be granted by allowing such claim of the assessee trust.
In the facts and circumstances of the case and in law, the d. CIT(A) has orred in confirming the action of Id. AO of not allowing the claim of depreciation, of Rs. 1,80,824, made by the assessee trust on the premises that the said trust had already claimed capital expenditure on such asset as application of Income while computing its income. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by allowing the claim of depreciation of Rs. 1,89,824 while computing its income.
In the facts and circumstances of the case and in law, the d. CIT(A) has erred in deciding the appeal ex-parte. The action of Id.CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by providing opportunity to assesee trust of being heard.
At the outset of hearing, the Bench observed that there is delay of 10 days in filing the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers:-
“ Aggrieved by the said order the assessee trust filed appeal before Id. CIT(A). The appeal was then decided by Id. CIT(A) ex-parte vide order dated 28.09.2022. Accordingly, the appeal was to be filed on or before 27.11.2022 as per the provisions of Section 253(3).
It is submitted that the assessee is a trust running Digamber Jain Mandir in Padampura.Two events namely Mahamastakabhisheka and Panchkalyanaka were organized at national level at Shree Mahavir Ji, Karauli. The said events were one of their kind and first in the 21st Century. Therefore, all the Digamber Jain Mandir Trusts had participated in organizing the said events. Accordingly, the assessee trust was also occupied in the preparations of events as well as in attending the events. First, event Panchkalyanaka was from 24.11.2022 to 28.11.2022. Thereafter, the Second event Mahamastakabhisheka was from 27.11.2022 to 04.12.2022. It is submitted that the last date for filling appeal was 27.11.2022 i.e. the date falling between the dates of aforementioned two national level events. The assessee trust and its trustees because of the preparation of events and on the dates of events were so occupied that they could not file the appeal within the stipulated time. As per the provisions of sections 253(5), if there is sufficient cause for delay in filing of appeal, Hon’ble ITAT may condone such delay.
In the above legal and factual background it is submitted that preparation for national level events and attending such national level events of Digambar Jains was sufficient cause for not filing appeal within the stipulated time by Digambar Jain Mandir i.e. assessee trust It is submitted that the delay was not deliberate.
As soon as the trustees got free from events on 05.12.2022 necessary actions were taken for filing of appeal. The appeal could be filed on 07.11.2022.
In view of above, it is humbly prayed that delay in filing of appeal of 10 days may please be condoned.
Reliance is placed on the following judicial pronouncement of the Hon’ble Supreme Court:
Collector, Land Acquisition vs. Mst. Katiji [1987] 167 ITR 471
“The legislature has conferred the power to condone delay by enacting S.5 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on “merits”. The expression “sufficient cause” employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserve the end of justice that being the life-purpose of the existence of the institution of courts.”
In view of above, a very humble prayer is made for condoning the delay.”
During the course of hearing, the ld. DR fairly not objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit and proper in the interest of justice.
Observation of the court
The condition precedent to the exercise of the jurisdiction under section 147 is the formation of a reason to believe by the Assessing Officer. Upon the formation of the reason to believe that income chargeable to tax has escaped assessment, the AO is empowered to assess or to reassess such income ‘and also’ any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under section 147.Explanation 3 to section 147 provides that even though the notice issued under section 148 containing the reasons for reopening the assessment does not contain a reference to a particular issue with reference to which income has escaped assessment, yet the AO may assess or reassess the income in respect of any issue which has escaped assessment, when such issue comes to his notice subsequently in the course of the proceedings. It is noted that the words ‘and also’ cannot be read as being in the alternative. These words are conjunctive and cumulative. Therefore, meaning of the words ‘and also’ is that the AO, upon the formation of a reason to believe under section 147 and the issuance of a notice under section 148(2), must assess or reassess: (i) ‘such income’; and also (ii) any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. The words ‘such income’ refer to the income chargeable to tax which has escaped assessment and in respect of which the AO has formed a reason to believe that it has escaped assessment. Hence, the assessment or reassessment must be in respect of the income in respect of which he has formed a reason to believe that it has escaped assessment and also in respect of any other income which comes to his notice subsequently during the course of the proceedings as having escaped assessment. If the income, the escapement of which was the basis of the formation of the reason to believe, is not assessed or reassessed, it would not be open to the Assessing Officer to independently assess only that income which comes to his notice subsequently in the course of the proceedings under the section as having escaped assessment. Reliance is placed on the following judgments: Jet Airways Ltd [2011] 331 ITR 236 (Bombay) – Copy enclosed [CLC 15-23]. Ranbaxy Laboratories Ltd. [2011] 12 taxmann.com 74 (Delhi) – In view of the above factual position of the case, it is found that reopening of assessment is patently illegal and deserves to be quashed. Since we are disposing off this appeal on legal issues, therefore the other grounds raised by the assessee are not adjudicated upon on merits and thus infructuous. Thus the appeal of the assessee is disposed off as indicated hereinabove.
In the result appeal of the assessee is partly allowed
Order pronounced in the open court on 22/08/2023.
Conclusion
In the result, appeal of the assessee is allowed and ruled in favour of the assessee
Read the full order from here
Digamber-Jain-Atikshaya-Keshtra-VPO-Bada-Vs-ITO-ITAT-Jaipur2
