INCOME TAX OFFICER(EXEMPTION), UDAIPUR vs. ANANTA CHARITABLE EDUCATIONAL SOCIETY, UDAIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR

BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 855/Jodh/2024 (Assessment Year 2016-17) Income Tax Officer (Exemption), Ananta Charitable Udaipur Educational Society 53, V-Road, New Keshav Nagar, Udaipur PAN: AABTT6654Q Assessee by Shri Amit Kothari, CA (Virtual) Revenue by Shri O.P. Meena CIT-DR (Virtually) Date of Hearing 01 / 06 / 2026. Date of Pronouncement 12 / 06 / 2026.

ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by revenue against the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the NFAC/CIT(A)] dated 25.09.2024 with respect to the assessment year 2016-17.

2 ITA No. 855/Jodh/2024 (Assessment Year 2016-17) unsecured loans received during the year without going into merits of the case while following the judgment of the coordinate bench, ITAT, Jodhpur where the tribunal had quashed the PCIT’s order passed under Section 263 on the same issue though the decision of the Tribunal has been challenged by the department before the Hon’ble High Court of Rajasthan vide appeal in ITA No. 78/Jodh/2022.

3 ITA No. 855/Jodh/2024 (Assessment Year 2016-17) 7. …….. 11. A Division Bench of Commercials Ltd. Versus Deputy Commissioner of of Bombay High Court in Aroni Income-Tax and Another1 has held that once a query is ralsed during the assessment proceedings and assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment and it is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Para 14 of the judgment reads as under: "14. We find that during the assessment proceedings the petitioner had by a letter dated July 9, 2 petitioner were engaged in the business of financing, trading and investment 9, 2010, pointed out that they in shares and securities. Further, by a letter dated September 8, 2010, during the during the course of the assessment proceedings on a specific query made by the Assessing Officer, the petitioner has disclosed in detail as to why its profit on sale of investments should not be taxed as business profits but charged to tax under the head. "Capital gains". In support of its contention the petitioner had also relied upon the Central Board of Direct Taxes Circular No.4 of 2007, dated June 15, 2007 (The reasons for reopening furnished by the Assessing Officer also places reliance upon Central Board of Direct Taxes Circular dated June 15, 2007). It would, therefore, be noticed that the very ground on which the notice dated March 28, 2013, seeks to reopen the assessment for the assessment year 2008-09 was considered by the Assessing Officer

4 ITA No. 855/Jodh/2024 (Assessment Year 2016-17) while originally passing the assessment order dated October 12, 2010. This by itself demonstrates the fact that notice dated March 28, 2013, under Section 148 of the Act seeking to reopen the assessment for the assessment year 2008-09 is based on mere change of opinion. However, according to Mr. Chhotaray, learned Counsel for the revenue, the aforesaid issue now raised has not been considered earlier as the same is not referred to in the assessment order dated October 12, 2010, passed for the assessment year 2008-09. We are of the view that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. If an Assessing Officer has to record the consideration bestowed by him on all issues raised by him during the assessment proceeding even where he is satisfied then it would be impossible for the Assessing Officer to complete all the assessments which are required to be scrutinized by him under Section 143(3) of the Act. Moreover, one must not forget that the manner in which an assessment order is to be drafted is the sole domain of the Assessing Officer and it is not open to an assessee to insist that the assessment order must record all the questions raised and the satisfaction in thereof of the Assessing Officer. The only requirement is that the in respect Assessing Officer ought to have considered the objection now raised in the grounds for Issuing notice under Section 148 of the Act, during the original assessment

5 ITA No. 855/Jodh/2024 (Assessment Year 2016-17) proceedings. There can be no doubt in the present facts as evidenced by a letter dated September 8, 2012, the very issue of taxability of sale of shares under the head "Capital gains" or the head "Profits and gains from business" was a subject matter of consideration by the Assessing Officer during the original assessment proceedings leading to an order dated October 12, 2010. It would, therefore, follow that the reopening of the assessment by impugned notice dated March 28, 2013, is merely on the basis of change of opinion of the Assessing Officer from that held earller during the course of assessment proceeding leading to the order dated October 12, 2010. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment." The law is settled inasmuch as once a query has been raised during the assessment proceedings and the assessee has answered the query, it would mean that the issue was inconsideration of the Assessing Officer during the assessment proceedings even if it does not find mention in the assessment order." 8. The findings there would squarely apply to this case also. The ITAT has come to a factual finding that AO has taken a view and there was no need to remand the matter for de-novo consideration. 4. In rebuttal, the Ld. DR failed to disprove or distinguish the contention of the appellant assessee that the High Court dismissed the appeal of the department.

6 ITA No. 855/Jodh/2024 (Assessment Year 2016-17) 5. Accordingly, we hold that Ld. CIT(A) was justified in deleting the addition made by the AO in pursuant to the decision delivered by the tribunal setting aside the order passed by the CIT(Exemption), Jaipur under Section 263 of the Act dated 11.12.2019. Thus, the decision of the Ld. CIT(A) is sustained.

Order pronounced on 12 / 06 / 2026 under Rule 34(4) of the Income Tax Appellate Tribunal Rules,1963.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 12 / 06 / 2026. Pritesh Vaishnav PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,