SACHIN NOTIFIED AREA,SURAT vs. THE DCIT, CENTRAL CIRCLE-1(1)(1), SURAT

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER ITA Nos.1044, 1045, 1046 & 1047/SRT/2025 (Assessment Years: 2013-14, 2014-15, 2015-16 & 2016-17) M/s. Sachin Notified Area, Assessment Unit, Plot No.5719, Unnati Building, Income Tax Department, Sachin Gidc, Sachin, Jurisdictional AO, Surat The Deputy Commissioner of Gujarat Vs. Income Tax, Central Circle-1(1)(1), Aaykar Bhawan, Majura Gate, Surat, Gujarat PAN: AAALS0146H (Appellant) : (Respondent) Assessee by : Shri P.M. Jagasheth, CA Respondent by : Shri Ravi Kant, CIT (DR) Date of Hearing : 10.06.2026 Date of Pronouncement : 30.06.2026 O R D E R PER : SUCHITRA KAMBLE, J M: These appeals filed by the assessee are against the orders passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] even dated 07.08.2025 for the Assessment Year (in short “AY”) 2013-14, 2014-15, 2015-16 & 2016-17.

ITA Nos.1044, 1045, 1046 & 1047/SRT/2025 M/s. Sachin Notified Area “1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in re-opening the assessment u/s.147 of the Act and issuing notice u/s. 263 of the Income Tax Act, which is bad in law hence liable to be quashed and void ab inito. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs. 3,76,57,512/- on account of alleged disallowance of deduction claimed u/s.10(20) of the Act. 3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs. 9,16,72,909/ on account of disallowance of FD interest income received claimed under the deduction u/s.10(20) of the Act and treated as income from other sources. 4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s. 271(1)(c) of the Income Tax Act, 1961. 5. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s. 271B of the Income Tax Act, 1961. 6. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s. 271(1)(b) of the Income Tax Act, 1961. 7. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper. 8. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 4. The assessee filed the return of income for the assessment year 2013-14 manually on 29.03.2014, declaring a total income of Nil after claiming exemption of Rs.3,76,57,512/- u/s 10(20) of the Income-tax Act, 1961 Act. Subsequently, the case of the assessee was reopened with the prior approval of the specified authority and after recordings reasons of reopening. Accordingly, notice u/s. 148 of the Act was issued to the assessee on 27.03.2021. Subsequently, order u/s. 147 r.w.s. 144 r.w.s. 144B of the Income-tax Act passed on 30.03.2022, wherein income assessed at Rs.3.76.57,512/- after

ITA Nos.1044, 1045, 1046 & 1047/SRT/2025 M/s. Sachin Notified Area making disallowance of exemptions claimed at Rs.3.76.57,512/- u/s. 10(20) of the I.T. Act, 1961 (in short “the Act”). The aforesaid assessment order dated 30.3.2022 was later reviewed by the Pr. CIT-1, Surat under the provisions of section 263. The PCIT held that the amount of Rs.9,16,72,909/- being interest on FDR was taxable income since the assessee was held to be ineligible for deduction u/s 10(20). The PCIT, vide his order u/s. 263 of the Act dated 09.02.2024, set aside the assessment order passed u/s. 147 r.พ.ร. 144 r.พ.ร. 144B of the Act dated 30.03.2022 with a direction to pass fresh assessment order after providing reasonable and sufficient opportunity of being heard to the assessee. Various opportunities were afforded to the assessee as per details given at Para 2 of the impugned order. After hearing the assessee, upon consideration of his submissions etc., the Assessing Officer (in short the “AO”) was of the view that the assessee is not covered under the provision of section 10(20) of the Act. Therefore, an amount Rs. 12,93,30,421/- (i.е. Rs.3,76,57,512/- being the non-allowable exemption claimed u/s. 10(20) of the Act + Rs. 9,16,72,909/- interest on FDR directly shown in the Balance Sheet as Capital Fund under the head 'Reserve and Surplus') was disallowed.

ITA Nos.1044, 1045, 1046 & 1047/SRT/2025 M/s. Sachin Notified Area and hence the appeal challenging the said order and the order of the CIT(A) also becomes nullified. Therefore, the appeal becomes infructuous and hence the same is dismissed.

The findings given in this appeal will apply mutatis mutandis to other appeals in 8. ITA Nos.1045, 1046 & 1047/SRT/2025 as well and hence the same are also hereby dismissed. 9. In result, all the appeals filed by the assessee are dismissed.

Order pronounced in the open court on 30.06.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 30.06.2026 * Kishore, Sr. P.S. Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat 5. Guard File By order,

Assistant Registrar/Sr.PS/PS ITAT, Surat Bench