BHARATBHAI MAHASUKHLAL DOSHI FAMILY TRUST,AHMEDABAD V. DY.DIT, CPC PRESENT JAO THE ITO,WARD-5(3)(1), AHMEDABAD

ITA 24/AHD/2025

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The case involves the Bharatbhai Mahasukhlal Doshi Family Trust appealing against the order of the Additional/Joint Commissioner of Income Tax (A)-11, Delhi, which dismissed their appeal regarding an intimation under Section 143(1) of the Income Tax Act, 1961. The intimation changed the assessee's status from 'any other AOP' to 'LLP', resulting in additional tax liability. The Tribunal found that the intimation was not properly served to the assessee and that the change in status was beyond the scope of adjustment under Section 143(1). The Tribunal also noted discrepancies in the date of intimation and the application of CBDT Circular No.13/2016, leading to the decision to remand the matter back to the Jurisdictional Assessing Officer for a proper assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786471 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 03-01-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANANYA KULSHRESTH
• Assessee Lawyers: ANIL N. SHAH
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; Maximum Marginal Rate
• Section: 143(3); 154

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.24/Ahd/2025 Assessment Year: 2011-12 Bharatbhai Mahasukhlal Doshi Family Trust, 116/B, Pankaj Society, Fatehpura, Paldi, Ahmedabad – 380 007. (Gujarat) [PAN – AAAAB 4635 P] Vs. Deputy Director of Income Tax, CPC, Present JAO, The Income Tax Officer, Ward – 5(3)(1), Income Tax Office, Vejalpur, Ahmedabad. (Gujarat). (Appellant) (Respondent) Assessee by Shri Anil N. Shah, AR Revenue by Smt. Ananya Kulshresth, Sr. DR Date of Hearing 17.11.2025 Date of Pronouncement 20.11.2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the Additional/Joint Commissioner of Income Tax (A)-11, Delhi (in short “the Addl./JCIT(A)”) dated 05.11.2024 for the Assessment Year (A.Y.) 2011- 12 in the proceeding under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2011-12 on 30.07.2011 declaring income of Rs.2,46,340/-. The return of income was processed by the CPC on 28.01.2012. While processing, no variation in the income as declared by Printed from counselvise.com ITA No.24/Ahd/2025 (Assessment Year: 2011-12) Bharatbhai Mahasukhlal Doshi Family Trust vs. DDIT, CPC, Present JAO the ITO Page 2 of 8 the assessee was made. However, the status of the assessee, which was declared as “any other AOP” in the return, was changed to “LLP” in the intimation under Section 143(1) of the Act, which resulted in additional tax liability to the assessee. 3. Aggrieved with the intimation order, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. Addl./JCIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee in second appeal before us. The following grounds have been taken in this appeal: - “1. The impugned intimation Us.143(1) dtd. 28.01.2012 passed by the DDIT, CPC is bad in law and liable to be quashed as the same is passed without considering the facts of the case & law and also against the rule of natural justice as the same is passed without giving proper opportunity of being heard under 1st Proviso to Sec.143(1)(a) of the Act, the CPC have erred in law and on facts in issuing the same and the Ld. Addl./JCIT(A)-11, Delhi have erred in law and on facts in upholding the same which may kindly be quashed and we pray for the same, 2. The Ld. Addl./JCIT(A)-11, Delhi has erred in law and on facts in not considering the application for condonation of delay in filing the Appeal in proper perspective & in not considering the applicable case law to the facts of the case and also in not considering the merits of the case and the fact that, an application of the appellant Us.154 of the Act dtd. 05.05.2023 was not disposed of at all and by not taking cognizance thereof, the Ld. Addl./JCIT(A)-11, Delhi have erred in law & on facts in dismissing the appeal merely by not condoning the delay in filing the appeal. 3. The Ld. DDIT, CPC has erred in law and on facts in not considering the fact that, the appellant trust is the only trust declared by Late Mr. Bharatbhai Mahasukhlal Doshi by will and such trust is only trust so declared by him and the appellant trust was covered by Clause (ii) of the Proviso to Sub Section 1 of Sec. 164 of the Act and therefore was not liable to be taxed on the relevant income of the trust at the maximum marginal rate as has been charged by the Ld. DDIT,CPC and Ld. Printed from counselvise.com ITA No.24/Ahd/2025 (Assessment Year: 2011-12) Bharatbhai Mahasukhlal Doshi Family Trust vs. DDIT, CPC, Present JAO the ITO Page 3 of 8 AddI./JCIT(A)-11, Delhi has erred in law and on facts in not considering & upholding such Intimation/ order, 4. The Ld. DDIT, CPC has erred in law and on facts in ignoring the provisions of Clause (ii) to 1st Proviso to Sec. 164(1), which provides that, (ii) the relevant income or part of the income receivable under a trust declared by any person by will and such trust is the only trust so declared by him i.e. by Late Shri Bharatkumar Mahasukhlal Doshi and therefore in its case, tax was liable to be charged on the relevant income or part of relevant income as if it were the total income of an Association of Persons and by applying the rate of tax applicable which is as applicable to the Individuals. and thereby the Ld. DDIT, CPC ignored the above provisions of the Act and charged entire returned income of the appellant at the maximum marginal rate of 30% + 3% on tax (1% Education Cess+ Secondary & Higher Education CESS) and that too even without allowing deduction for basic exemption of Rs.1,60,000 instead of taxing income of Rs.86,340 (Total Income Rs.2,46,340 Less: Rs.1,60,000 basic Exemption) @ 10% + 2% Edu, Cess & 1% Secondary & Higher Education Cess) and thereby levying tax of Rs.8,893 only and Ld. Addl./JCIT(A)-11, Delhi has erred in law and on facts in not considering the same & upholding such Intimation/ order, 5. The Ld. DDIT,CPC has erred in law and on facts in invoking inapplicable provisions of the Act and thereby charging tax of Rs.73,902, without granting deduction for the income below taxabie limit of Rs.1,60,000, at the maximum marginal rate of 30% + Education Cess + Secondary & Higher Education CESS of Rs.2,217 and thereby in raising the demand of Tax of Rs.76,119 without any justification instead of raising of tax demand of Rs.8,893 and Ld. Addl./JCIT(A)-11. Delhi has erred in law and on facts in not considering the same & upholding such Intimation/ order, 6. The Ld. DDIT, CPC has erred in law and on facts in raising the demand of tax of Rs.76,119, demand of interest U/s.234B of Rs.5,270 and interest of Rs.1,950 making total interest of Rs.7,220 se charged and thereby raising total demand of Rs.83,339 may kindly be quashed and refund of Rs.14,510 net after tax payable shown in the return/ computation may kindly be ordered to be granted along with interest U/s.244 of the Act and thereby Demand raised of Rs.59,937 under Identification No. 2012201137002662134T and the Ld. Addl./JCIT(A)- 11, Delhi have erred in law and on facts in upholding the same which may kindly be quashed and we pray for the same, 7. While issuing the impugned intimation the Ld. DDIT, CPC ignored the past records and the order passed U/s. 143(3) of the Act for A.Y. 2008.09 Printed from counselvise.com ITA No.24/Ahd/2025 (Assessment Year: 2011-12) Bharatbhai Mahasukhlal Doshi Family Trust vs. DDIT, CPC, Present JAO the ITO Page 4 of 8 which was passed after considering the Will under which the appellant trust was the only trust which was declared under the will by the late Shri Bharatbhai Mahasukhlal Doshi and in several subsequent years the same was accepted and the appellant trust was charged under the normal provisions of the Act and there had been no change in the facts of the case at all yet, the LD. JCIT, Appeals, NFAC has erred in law and on facts in upholding such intimation / order passed by the CPC and the Ld. AddI/JCIT(A)-11, Delhi have erred in law and on facts in upholding the same which may kindly be quashed and we pray for the same, 8. Your appellant craves to add, amend or alter grounds of appeal, if occasion demands.” 5. Shri Anil N. Shah, Ld. AR of the assessee, submitted that the Ld. Addl./JCIT(A) had dismissed the appeal of the assessee on the ground of limitation and did not adjudicate the appeal of the assessee on merits. He explained that the change of status of the assessee from AOP to LLP was beyond the scope of adjustment as provided under Section 143(1) of the Act. Further that no opportunity was provided to the assessee before making this change while processing the return. The Ld. AR further submitted that the intimation order was never received by the assessee. The assessee being a Trust, was not conversant with the Income Tax proceedings and the trustees were not conversant with the Income Tax portal. Further, the demand raised while processing the return was also not communicated to the assessee and no notice was ever received for payment of this demand. It was only in the year 2023 that the assessee came to know about the outstanding demand for the A.Y. 2011-12 and, thereafter, had filed an application under Section 154 of the Act on 05.05.2023 vide e-mail. Thereafter, an appeal against the intimation under Section 143(1) of the Act was also filed on 14.10.2023. The Ld. Addl./JCIT(A) had, however, dismissed the appeal of the assessee for the reason that there was delay of 4209 days in filing the appeal. This delay was computed from the date of intimation under Section 143(1) of the Act Printed from counselvise.com ITA No.24/Ahd/2025 (Assessment Year: 2011-12) Bharatbhai Mahasukhlal Doshi Family Trust vs. DDIT, CPC, Present JAO the ITO Page 5 of 8 on 28.01.2012. The contention of the Ld. AR was that this intimation could not have been passed on 28.01.2012 as in the intimation mention of CBDT Circular No.13/2016 was appearing. This fact was also brought to the knowledge of the Ld. Addl./JCIT(A), however, he did not consider this aspect and dismissed the appeal of the assessee. 6. Per contra, Smt. Ananya Kulshresth, Ld. Sr. DR submitted that the intimation under Section 143(1) of the Act was passed on 28.01.2012 and the assessee had not given any reasonable explanation for inordinate delay of 4209 days in filing the appeal before the Ld. Addl./JCIT(A). Therefore, Ld. Addl./JCIT(A) had rightly dismissed the appeal of the assessee. 7. We have considered the rival submissions. The Ld. Addl./JCIT(A) has computed the delay of 4209 days on the basis of the intimation u/s 143(1) of the Act which was dated 28.01.2012. However, he did not give any finding as to when this intimation was served on the assessee. When enquired about the date of service of the intimation, the Revenue has filed the following report of the Assessing Officer (ITO Ward – 5(3)(1), Ahmedabad) “Respected Sir/Madam, Kindly refer to letter no. CIT/ITAT-SMC/AHM/BMDFT/2025-26/329 dated 29.07.2025 2. In this regard, it is submitted that on perusal of CPC 2.0, it is seen from the menu \"assessee communication\" that an intimation order u/s 143(1) passed on 28.01.2012 is available for AY 2011-12 and shared with the assessee. Copy of said intimation is attached for kind perusal (Password- aaaab4635p18092001). There is no tab or details available from which it could be ascertained that this intimation order was duly served on E-mail on a particular date. But it is a general practice that all the communication was duly served through E-mail and shared through E-proceeding/Assessee's Communication on E-filling Portal. Printed from counselvise.com ITA No.24/Ahd/2025 (Assessment Year: 2011-12) Bharatbhai Mahasukhlal Doshi Family Trust vs. DDIT, CPC, Present JAO the ITO Page 6 of 8 3. Further, details of communication under communication reference number CPC/1112/15/1110643417 is available under this tab and same is also attached for kind reference. 7.1 It is apparent from the above report that the Department is not in a position to ascertain as to when the intimation u/s 143(1) of the Act was served on the assessee. A copy of the e-mail through which the service was made has also not been brought on record, though it is mentioned that it is general practice to serve all communications through e-mail. From the copy of intimation under Section 143(1) of the Act as brought on record by the Revenue, it is found that the following comment is appearing therein: “This return is processed at CPC as per CBDT Circular No.13/2016”. 7.2 If the return of the assessee for the A.Y. 2011-12 was processed pursuant to CBDT Circular No.13/2016, it could never have been processed on 28.01.2012. The Revenue has also not brought on record any evidence for intimation of demand to the assessee and about any subsequent notice issued to the assessee for recovery of demand. In view of these facts, the Ld. Addl./JCIT(A) was not correct in computing the delay, if any, on the part of the assessee w.e.f. 28.01.2012. In the absence of any evidence for communicating the intimation to the assessee or any other communication for recovery of demand, we are constrained to come to a conclusion that the intimation was not served on the assessee. As already mentioned earlier, the intimation could not have been passed by the CPC on 28.01.2012 in pursuance to subsequent Circular No.13/2016 of CBDT. Therefore, we are of the opinion that the Ld. Addl./JCIT(A) was Printed from counselvise.com ITA No.24/Ahd/2025 (Assessment Year: 2011-12) Bharatbhai Mahasukhlal Doshi Family Trust vs. DDIT, CPC, Present JAO the ITO Page 7 of 8 not correct in dismissing the appeal of the assessee on the ground of delay in filing the appeal and without examining the facts of the case. 8. As regarding merit of the adjustment, the only grievance of the assessee is that its status was changed from AOP to LLP without allowing any opportunity. From the copy of return filed by the assessee, it is found that the assessee had disclosed its status as “any other AOP”. It appears that the status of “any other AOP” was considered as “LLP” while processing the return u/s 143(1) of the Act. The assessee has explained that the status “any other AOP” was shown considering the provisions of Section 164(1) of the Act, (1st proviso, clause-2) of the Act which was not considered by the CPC. The assessee has further contended that in the assessment order passed under Section 143(3) of the Act for the A.Y. 2008-09, the status of the assessee was treated as AOP by the Department. Considering these facts, we deem it proper to set aside the matter to the file of the Jurisdictional Assessing Officer with a direction to allow an opportunity to the assessee to explain the status “any other AOP” as mentioned in the return of income for the A.Y 2011-12. The Jurisdictional Assessing Officer may correctly decide the status of the assessee after considering the reply of the assessee. 9. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 20th November, 2025. Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 20th November, 2025 Printed from counselvise.com ITA No.24/Ahd/2025 (Assessment Year: 2011-12) Bharatbhai Mahasukhlal Doshi Family Trust vs. DDIT, CPC, Present JAO the ITO Page 8 of 8 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "