Rajeev Educational Trust, Ghaziabad V. DCIT, Circle- Exemption, Ghaziabad

ITA 4047/DEL/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3651 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 43; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.4047/DEL/2018 Assessment Years 2009-10 Rajeev Educational Trust, C-357, Lohia Nagar, Ghaziabad. v. DCIT, Circle-Exemption, Ghaziabad. TAN/PAN: AAATR3081N (Appellant) (Respondent) Appellant by: Shri Akhilesh Kumar, AR Shri Vipin Garg, CA Respondent by: Ms. Moninder Kaur, Sr.D.R Date of hearing: 14 07 2022 Date of pronouncement: 25 07 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The c apt io ne d ap p eal ha s be en f i le d at th e i ns ta nc e o f the ass es se e a ga in st t he or der of t he Co mmi s si on er of Inc o me Ta x (Ap pe al s) , G ha zi ab ad (‘ CIT (A )’ in s h ort ), da te d 2 8.02 .2 01 8 a ris in g f ro m th e as se ss me n t ord er d at ed 3 0. 12 . 20 16 p as sed by t he Ass es si ng Of f icer ( AO ) un der Sect io n 14 3( 3) r . w. S ect io n 14 7 of the I nc o me Tax A ct , 19 61 (t he Act ) co nc ern in g A Y 2 0 10- 11 . 2. The g ro un ds of a pp eal r ais ed b y t h e a s ses se e reads a s un d er: “ 1 . B e c a u s e t h e L d C I T (A ) h a s e r r e d o n f a c t s a n d l aw i n c o n f i r m i n g t h e i n i t i a t i o n o f r e a s s e s s m e n t p r o c e e d i ng s u / s 1 4 7 / 1 4 8 o f t h e A c t b e y o n d f o u r y e a r s w i t h r e s p e c t t o a l r e a dy c o n c l u d e d a s s e s s m e n t u / s 1 4 3 ( 3] o f t h e A c t w h i c h i s t i m e - b a r re d , i l l e g a l , a g a i n s t t h e a u t h o r i t y o f l a w a n d w i t h o u t j u r i s d i c t io n a n d h e n c e t h e e n t i r e r e a s s e s s m e n t p r o c e e d i n g s w e r e l i a b l e t o b e qu a s h e d . I.T.A. No.4047/DEL/2018 2 2 . B e c a u s e t h e L d C I T (A ) h a s e r r e d o n f a c t s a n d l a w i n c o n f i r m i n g t h e a s s e s s m e n t o r d e r m a k i n g a n a d d i t i o n o n a f r e s h g r o u n d w h i l e t h e a d d i t i o n s b a s e d o n r e a s o n s r e c o r d ed w e r e g r o s s l y i l l e g a l , a g a i n s t t h e a u t h o r i t y o f l a w a n d h a v e b e e n s t r u c k d o w n b y C I T ( A ) h e r s e l f 3 . B e c a u s e t h e L d C I T (A ) h a s e r r e d o n f a c t s a n d l a w i n c o n f i r m i n g t h e a s s e s s m e n t o r d e r b y r e d u c i n g t h e a p pl i c a t i o n f r o m R s 1 , 3 8 , 8 8 , 5 0 9 / - d u l y a s s e s s e d i n o r i g i n a l a s s e s s m en t u / s 1 4 3 ( 3] to R s . 1 , 0 6 , 9 3 , 6 2 3 / - i n r e a s s e s s m e n t u / s 1 4 7 o f t h e A c t ( t h u s a d d i n g a d i f f e r e n c e c R s . 3 1 , 9 4 , 8 8 6 / - ) w h i c h w a s a d d e d i n r e as s e s s m e n t o r d e r w i t h o u t a n y s h o w c a u s e n o t i c e a n d a g a i n s t t h e p r i n c i p l e s o f n a t u r a l j u s t i c e a n d t h u s w a s g r o s s l y a r b i t r a r y , i l le g a l a n a g a i n s t t h e a u t h o r i t y o f l a w a n d w a s l i a b l e t o b e d e l e t e d . ” 3. W h en th e mat te r w as cal le d f or h ear in g, th e l d. co un se l f or th e ass es se e s ub mi tte d tha t t he As ses si ng Of f icer h as il le gal l y a s su me d jur is di ct io n u nd er Sec ti on 1 47 of the Ac t to r eo pen t he as se ss me nt wit ho ut t he c o mpli anc e of th e pr ere qu isi te s of 1 s t pr ov is o to S ec ti on 14 7 of the Ac t. T he ld. co un se l al so a d ver te d to t he re as on s rec or de d in th is re ga rd a nd su b mitt ed t ha t t he ass es s men t comp le ted e arl ie r un der S ec ti on 1 43 ( 3) of the A ct w as r eop en ed af t er f our ye a rs f ro m the e nd of the A ss ess me nt Yea r 2 00 9 -10 in q ue st io n on extr an eo us and un te nab le gro un ds. It w as a ls o alle ge d t hat the rea so ns f or esc ap e men t a re w it ho ut an y s u bst an ce and o pp os ed to t he pro vi si on s of law an d w el l s et tle d j ud ic ial pr ec ed ent s a ls o. We sh al l dea l w it h the ar gu me nt s of the as se sse e a t the ap pr op ria te place in the su bse qu en t pa rag ra ph s whe re c on si der ed ne ce ss ar y. 4. The l d. Sr .D R f o r the R ev en ue re lie d up on t he actio n o f the lo wer a ut ho rit ie s. I.T.A. No.4047/DEL/2018 3 5. W e hav e c ar ef ull y co ns id er ed th e riv al su b mis si on s. T he ass es se e i s a Ch ar i tab le Ed uc ati o nal Tru st . T he or ig in al ass es s men t was co mp let ed u n der Sec ti on 1 43 (3 ) of the Ac t o n 23. 12 .2 01 1. The re af ter , a n ot ic e d at ed 30 .0 3. 20 16 wa s is su ed unde r Sec ti on 1 48 of the A ct s ee ki n g to r eo pe n th e c o mple te d as se ss ment. Th e re - ass es s men t p ro ce e din gs w ere t hu s t a ken u p af te r f o ur ye a rs vi de rea so ns da te d 3 0. 03. 20 16 t o e xa mi ne the i ss ues n a mel y; (a ) all ow ab il it y of a cc u mula te d sur pl us of Rs .2 cr or e vid e Fo r m 10 f ile d on 1 6. 12 .2 01 1 in o rig in al a ss es s men t pro ce ed in gs , (b ) al lo wab il it y of dep re ci ati on al r ead y a ll ow ed as a ppl ic at io n a s per Inc o me & Ex pen di tu re A /c and ( c) c as h de p osi ts i n ID BI B a nk al re ad y exa mi ne d as p er bo ok s of ac co unt /b an k s ta te me nt s. 6. The as se ss ee ha s i nte r a li a c ha ll en ge d t he val id it y of r e aso ns rec or de d al le gi ng e sca pe d a ss es s men t on t he to uc hs to ne of Sec ti on 14 7 of the Ac t. T her ef or e, it ma y b e per ti ne nt to rep r od uce t he rea so ns r eco rd ed h e reu nd er : “ R e a s o n s f o r t h e b e l i e f t h a t i n c o m e h a s e s c a p e d a s se s s m e n t : A s p e r A I R i n f o r m a t i o n , M / s R a j i v E d u c a t i o n a l T r u s t, C - 3 5 7 , L o h i a N a g a r , G h a z i a b a d h a s d o n e c a s h d e p o s i t s o f R s. 1 0 , 2 6 , 3 5 5 / - d u r i n g A . Y . 2 0 0 9 - 1 0 . Wh i l e a s p e r I D B I 4 4 8 7 3 b o o k fi l e d b y t h e a s s e s s c e , i t h a s d o n e c a s h d e p o s i t s o f R s . 9 , 8 5 , 9 7 0/ - d u r i n g t h e y e a r u n d e r c o n s i d e r a t i o n . F u r t h e r , i t i s n o t i c e d t h a t t h e s u r p l u s o f R s . 1 , 9 2 ,6 5 , 6 6 6 / - w a s a l l o w e d t o b e a c c u m u l a t e d u / s . 1 1 ( 2 ) o f I T . A c t , 1 96 1 d u r i n g t h e a s s e s s m e n t p r o c e e d i n g s . T h e a s s e s s e e h a s f i l e d F o r m N o . 1 0 o n 1 6 . 1 2 . 2 0 1 1 i . e . a f t e r t h e d u e d a t e f i l i n g o f r e t u r n o f i n c o m e . T h e r e f o r e , t h e s u r p l u s o f R s . 1 , 9 2 , 6 5 , 6 6 6 / - c a n n o t b e a l l o w e d to b e a c c u m u l a t e d b y t h e a s s e s s e e . H e n c e t h e s u r p l u s o f R s . 1 , 9 2 , 6 5 , 6 6 6 / - w a s l i a b l e t o b e t a x e d a t M M R . F u r t h e r , i t i s n o t i c e d t h a t d u r i n g t h e a s s e s s m e n t pr o c e e d i n g s , t h e a s s e s s e e h a s b e e n a l l o w e d R s . 6 5 , 4 7 , 5 4 0 / - o n a c c o u n t o f d e p r e c i a t i o n o n a c c o u n t o f a p p l i c a t i o n o f i n c o m e f o r c h a r i t a b l e p u rp o s e s w h i c h i s n o t I.T.A. No.4047/DEL/2018 4 a l l o w a b l e a s t h e c a p i t a l e x p e n d i t u r e o n a c q u i r i n g fi x e d a s s e t s h a s a l r e a d y b e e n a l l o w e d i n r e s p e c t i v e y e a r s . H e n c e d e pr e c i a t i o n a m o u n t i n g t o R s . 6 5 , 4 7 , 5 4 0 / - s h o u l d b e d i s a l l o w e d a nd a d d e d t o i n c o m e o f t h e a s s e s s e e . T h e r e f o r e , I h a v e r e a s o n t o b e l i e v e t h a t t h e i n c o m e o f R s . 2 , 5 8 , 5 4 , 0 6 6 / - h a s e s c a p e d a s s e s s m e n t w i t h i n t h e m e an i n g o f s e c t i o n 1 4 7 o f t h e I n c o m e T a x A c t , 1 9 6 1 a n d i s c h a r g e a b l e t o t ax f o r t h e a s s e s s m e n t y e a r 2 0 0 9 - 1 0 . D a t e d : 3 0 . 0 3 . 2 0 1 6 D e p u t y C o m m i s s i o n e r o f I n c o m e T a x E x e m p t i o n , C i r c l e , G h a z i a b a d ” 7. As c on te nde d o n b eha lf of the as se ss ee, t he r eo pe ni ng i n th e ins ta nt ca se i s t i me ba rr ed h av in g r e gar d t o t he e mb ar g o pl ac ed b y 1 s t p ro vi so to S ec ti on 14 7 of th e Ac t. On ba re re ad in g of the r eas on s rec or de d, it is s ee n th at th e As se ssi ng Of f icer h as no t ev en car ed t o all eg e an y f a il ur e on t he p ar t of the ass es se e to di scl os e f ull y an d tru l y al l mat er ial f acts ne ce ss ar y f or as se ss me nt whic h i s the con di ti on p re ce de nt to re op en a c o mp le ted as ses s ment b y i ssu an ce of not ic e u nd er Sec ti o n 14 8 b e yo n d f ou r ye a rs . T her e is n o all eg ati on of f ailu re wh ic h i s f ound at io na l c on d iti on f o r i nv ok in g a pr ov is io n of Se ct io n 1 47 of th e Ac t b e yo n d f our ye a rs i n the ma tt er of co mpl et ed as se ss m ent . Fr o m th e r ea s on s r ec ord ed , i t is not k no wn , wh at ma te ri al f act s wer e no t br ou gh t o n rec or d b y the a ss ess ee i n th e cou rs e of or ig in al ass es s men t. The sal ut ar y b urd en pl ace d o n t he As ses si ng Of f ice r un der th e 1 s t p ro vis o i s n ot di sc ha rge d at all . The jur is di ct io n u nd er Sec ti on 1 47 w as ex erc is ed in a mos t f lip pa nt a nd no nch al an t man ne r . I t i s a xi o mat ic t hat a re op eni ng of co mp le ted ass es s men t i s s p eci al a nd ex tr a- ord in ar y a nd c ar ries c ivi l con se qu en ce s. He n ce, th e A ss es si ng Of f icer is e xp ecte d to e xe rc ise the j ur is di cti on u nde r Se ct io n 14 7 with scr up ul ou s care . A co mpl et ed as se ss m ent is a val ua bl e rig ht an d c an no t be rig ht l y I.T.A. No.4047/DEL/2018 5 ign or ed . Th e co mp l ete d as se ss me nt h a s be en r eo pen ed i n the i ns ta nt cas e wi th ou t sa ti sf yi n g t he c on dit io ns of 1 s t prov is o to S ect io n 14 7 of th e A ct . T he j uri sd ic ti on as su me d t hu s i s cle ar ly t i me b arr ed ow in g t o no n f ulf i l l me nt of e mb ar go p lac ed in 1 s t pr o vis o to S ect io n 14 7 of t he A ct. O s ten si bl y, th e c o mp ete nt au th or it y u nd er Se cti on 15 1 of t he A ct ha s f or med hi s ‘sa ti sf act io n’ of e sca pe m ent o n s uc h uni nt el li gi ble re as on s mec han ic al l y. Su ch s ymb ol ic co mp lia nc e of app ro va l of s up er i or aut ho ri t y un de r Se cti on 1 51 cann ot als o be cou nt en an ce d. 8. The Ho n’ ble J ur is d ict io na l Hi gh C ou rt in PC IT v s. L ig ht Ca rt P. L td ., (20 18 ) 40 4 ITR 5 74 (Al ld ) ha s obs erv ed tha t in t he a bse nc e of an y a lle ga ti on i n t he ‘r eas on s to b eli ev e’ re corde d un der S ect io n 14 8(2 ) of th e Ac t t hat the as se sse e h a s f aile d t o di sc lo se f ull y a nd tru l y all ma te ria l f act s n ece ss ar y f o r ass es s men t whi ch i s on e of th e ma nda to r y c on dit io ns f o r i ni ti at in g p r oce ed in gs u nder S ect io n 14 7 of th e Act , it ca nn ot be s ai d t ha t the De pa rt me nt was j ust if ie d i n ini ti at in g t he re- as s ess me nt pr oc ee di ng s. The re as on s r ec o rde d mu st spe ak f o r i ts elf . T he ma nda to r y ju ri s dic ti on al req ui re me nt i n t er ms of 1 s t pro vi so t o Sec ti on 14 7 wi ll not be d ee me d to hav e be en f ulf ille d if t he r eas on s did n ot t he ms el ves c le arl y i n di ca te th at t he re was , i n f act, a f ail ur e b y t he as s ess ee t o mak e f ull an d t rue dis cl os ur e of all m ate ri al f act s. Th e r eas on s h ave to e x pla in wh at mat er ia l was n ot d i scl os ed b y t he a ss e sse e wh ic h the a ss e sse e ou gh t to h av e di sc lo se d i n th e i nst an t c ase . Thi s s ho ul d b e ap p are nt f ro m the r ea di ng of t he r eas on s it se lf . Si mi l ar vi ew ha s be en e x pre ss ed b y the Ho n’ bl e D el hi H ig h C ou rt i n BP T P L td. vs . Pri nc ip al Co mm is si on er of I nco me T ax , (20 20 ) 11 3 t ax ma nn .c om 58 7 (De l ). The SL P f il ed a ga i nst wh ic h w as d is m iss ed b y the Hon’ bl e Su pr e me Co urt as r ep ort ed i n (2 02 1) 1 25 t ax ma nn. co m 8 1 (S C). T he H on ’b le I.T.A. No.4047/DEL/2018 6 Del hi Hi gh Co ur t i n O rac le In di a P vt . Lt d. vs . A CI T, 39 7 IT R 4 80 (20 17 ) al so ec ho ed the s a me vi ew ea rl i er. 9. The As se ssi ng Of f icer h as p lai nl y ove rl oo ke d the jur is di ct io nal r eq ui re men t in te r ms of 1 s t p ro vi so to S ec ti on 14 7 of the A ct . Th e ju ri sdi ct io n as su me d un der S ec ti on 1 4 7 in th is bac kd ro p i s ex fa ci e vi ti ate d a nd th us req ui re s to be st ru c k do w n at the t hre sh ol d. T he san ct io n gra nt ed b y th e CI T a ls o c an n ot be sa id to be i n a cc or d w it h S ect io n 1 51 of t he Act an d t hus vi tia te s t he ass u mpt io n of jur is di ct io n. T he i mpu gne d c on seq ue ntia l ass es s men t f ra med un der Sec ti on 1 47 r .w. Sec ti on 1 43 (3 ) is cl ea rl y bad in la w i n th e a bse nc e of a n y v al id jur is di cti on. A s a cor ol la r y, the i mp ug ne d a ss ess me nt o rd er da ted 3 0. 12 .2 01 6 f r a me d in pur su an ce of n on es t j ur is dic ti on s ta nd s q ua sh ed . 10. In t hi s vi ew of t he mat ter , it is n ot n ece ss ar y to go i nt o the asp ec ts of t he mer it of a dd iti o ns/ di sa ll ow anc es . 11. In th e res ul t, t he ap pea l of th e as se ss ee is a ll ow ed. Order pronounced in the open Court on 25/07/2022. Sd /- Sd /- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /07/2022 Prabhat