ACIT Circle-43(1), New Delhi V. Merilina Foundation, New Delhi

ITA 1881/DEL/2020

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8436 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-11-2022
• Assessment Year: misc
• Appeal Filed On: 19-12-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: YOGESH KR.JAGIA
• Keywords: Validity of assessment; Set aside
• Section: 147; 148; 143(3); 54F

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “E” BENCH: NEW DELHI BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.1881/Del/2020 [Assessment Year : 2011-12] ACIT, Circle-43(1), New Delhi-110002. vs Merilina Foundation, S-3, Manish Twin Plaza-II, Plot No.3, Sec-11, Dwarka, New Delhi-110075. PAN-AABTM5893L APPELLANT RESPONDENT C.O.-110/Del/2022 [In ITA No.1881/Del/2020] [Assessment Year : 2011-12] Merilina Foundation, S-3, Manish Twin Plaza-II, Plot No.3, Sec-11, Dwarka, New Delhi-110075. PAN-AABTM5893L vs ACIT, Circle-43(1), New Delhi-110002. APPELLANT RESPONDENT Appellant by Shri Jitender Chand, Sr.DR Respondent by Shri Kundan Wahi, CA & Shri Yogesh Kr.Jagia, Adv. Date of Hearing 10.11.2022 Date of Pronouncement 16.11.2022 ORDER PER KUL BHARAT, JM : The present appeal filed by the Revenue and cross-objection filed by the assessee for the assessment year 2011-12 are directed against the order of Ld. CIT(A)-15, Delhi dated 21.08.2020. The appeal of Revenue and cross- objection of assessee are being disposed off by this consolidated order for the sake of brevity and convenience. Page | 2 C.O.-110/Del/2022 [In ITA No.1881/Del/2020] [Assessment Year : 2011-12] 2. Since the validity of assessment u/s 147 of the Act goes to the root of the case therefore, we take up C.O. No.110/Del/2022 pertaining to Assessment Year 2011-12 wherein the assessee has raised following ground in this cross-objection:- 1. “That in the facts and circumstances of the case and in law the Ld.CIT(Appeal) erred in upholding initiation of reassessment proceedings under section 148 of Income Tax Act by the Assessing Officer.” BRIEF FACTS OF THE CASE 3. Facts giving rise to the present appeal are that the case of the assessee was re-opened u/s 147 of the Income Tax Act, 1961 (“the Act”). Thereafter, a notice u/s 148 of the Act was issued to the assessee. In response thereto, the assessee filed its return of income declaring total income of Rs. 6,41,08,170/-. The Assessing Officer (“AO”) framed the assessment u/s 143(3) r.w.s. 147 of the Act vide order dated 28.12.2018. Thereby, the AO rejected the claim of deduction u/s 54F of the Act, amounting to Rs.4,82,40,602/- and assessed the income at Rs.11,23,48,770/-. 4. Aggrieved against this, the assessee filed appeal before Ld.CIT(A) who after considering the submissions, deleted the additions made by the AO. However, Ld.CIT(A) did not advert to the ground taken by the assessee regarding validity of re-opening of the assessment. Page | 3 5. Aggrieved against the order of Ld.CIT(A), the Revenue and the assessee filed appeal and cross-objection respectively before this Tribunal. 6. Ld. Counsel for the assessee submitted that the assessee had taken specific ground regarding validity of re-opening of the assessment. He pointed out that Ground No.2 before Ld.CIT(A) was specific against the validity of re-opening of the assessment u/s 148 of the Act. However, Ld.CIT(A) treated the ground as general in nature. He contended that Ld.CIT(A) erroneously recorded that the first two grounds are general in nature and not pressed. He contended that issue of jurisdiction cannot be general in nature. He therefore, contended that the assessment deserves to be quashed on the ground of validity, alternatively matter may be restored to Ld.CIT(A) for adjudicating the matter on validity. 7. On the contrary, Ld. Sr. DR appearing on behalf of the Revenue, supported the assessment order. 8. We have heard Ld. Authorized Representatives of the Revenue and the assessee and perused the material available on record. On a pointed query from the Bench of the Tribunal that there is no decision by the Ld.CIT(A) on the ground of validity of re-opening of the assessment, Ld. Sr. DR agreed that matter may be restored to the file of Ld.CIT(A) and direct the Ld.CIT(A) to adjudicate the grounds raised by the assessee. There is no dispute with regard to the fact that the assessee had raised specific ground related to validity of re-opening of the assessment u/s 148 of the Act however, this ground is not adjudicated by Ld.CIT(A) since the issue of jurisdiction goes to the root of any proceedings. We therefore, looking to the facts of the present Page | 4 case, the impugned order is set aside and the ground raised by the assessee are restored to the file of Ld.CIT(A) to decide it afresh by way of a speaking order. Thus, ground raised by the assessee in this cross-objection is allowed for statistical purposes. 9. In the result, the cross-objection filed by the assessee is allowed for statistical purposes. ITA No.1881/Del/2020 [Assessment Year : 2011-12] 10. Now, we take up appeal of the Revenue in ITA No.1881/Del/2020 for the AY 2011-12. The Revenue has raised following grounds of appeal:- 1. “Whether the income of the “Discretionary Trust” shall be assessed independently or the income shall be assessed in the hands of the beneficiary? 2. Whether it is not correct to assess the trust as such, and the taxable income be clubbed in the hand of beneficiaries for computing taxable income. 3. Whether the findings of the CIT(A) which is based on presumptive facts; is correct? 4. Whether the taxable income shall be computed as per the law applicable in the status of ‘individual’ with regard to the return filed by the assessee with the PAN of the ‘Trust’ status? 11. The assessee in its cross-objection has raised a ground that the Ld.CIT(A) failed to adjudicate the ground raised in respect of validity of re- opening the ground. The issue of legality of assessment order goes to the root of the matter. If the assessee succeeds, the other grounds would become academic in nature. Since we have set aside the impugned order in the cross-objection filed by the assessee for adjudicating the ground related to validity of reassessment u/s 147 of the Act. Therefore, the grounds Page | 5 raised by the Revenue in this appeal are also restored to the file of Ld.CIT(A) to decide it afresh after adjudicating the validity of re-opening of the assessment. 12. In the result, the appeal of the Revenue is allowed for statistical purposes. 13. In the final result, the appeal of the Revenue and cross-objection filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court on 16 th November, 2022. Sd/- Sd/- (N.K.BILLAIYA) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER * Amit Kumar * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI