MONAD EDUCATIONAL SOCIETY,NEW DELHI vs. CIT(E), NEW DELHI

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ITA 849/DEL/2020Status: DisposedITAT Delhi11 January 2021AY 2009-107 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(E) erred in assuming jurisdiction under Section 263 of the Income Tax Act, 1961. The Tribunal found that the assessment order dated 28.04.2016, framed under Section 143(3) r.w.s. 147 of the Act, was neither erroneous nor prejudicial to the interest of the revenue. The Tribunal noted that the CIT(E) had directed the AO to re-examine documents that had already been thoroughly examined during both the original assessment proceedings and the reassessment proceedings. Furthermore, the Tribunal observed that out of the cash deposit entries cited as reasons for reopening the assessment, only an entry of Rs. 2 lacs pertained to the Financial Year 2008-09, which is relevant to the Assessment Year 2009-10 under consideration. The other entries did not relate to the year under appeal. A report from the DCIT, Circle-1(1), Exemption, dated 19.03.2019, confirmed that the amount of Rs. 2,00,000 pertaining to AY 2009-10 was deposited in the account of Mr. Ravinder, and the assessee had submitted supporting documents for land purchase and demand drafts. The office agreed with the assessee's contention, and an order for NIL income was passed. Consequently, the Tribunal set aside the order of the CIT(E) and restored the assessment order dated 28.04.2016.

What were the facts?

The assessee, Monad Educational Society, filed its return of income for Assessment Year 2009-10, which was processed under Section 143(1) and later assessed under Section 143(3) accepting NIL income. Subsequently, the assessment was reopened under Section 147 based on information received from the ITO, Ward-3(5), Hapur, regarding cash deposits in the bank accounts of persons from whom land was purchased by Monad University during FY 2007-08 and 2008-09. The reassessment under Section 147 r.w.s. 143(3) again accepted NIL income. The Commissioner of Income Tax (Exemption) [CIT(E)] then assumed jurisdiction under Section 263, directing the Assessing Officer (AO) to re-examine the matter. The assessee challenged the assumption of jurisdiction by the CIT(E).

What were the issues?

1. Whether the CIT(E) erred in assuming jurisdiction under Section 263 of the Income Tax Act, 1961, to revise the assessment order dated 28.04.2016 framed under Section 143(3) r.w.s. 147 of the Act. Assessee's Contentions: The assessee contended that the CIT(E) wrongly assumed jurisdiction under Section 263. The original assessment under Section 143(3) and the subsequent reassessment under Section 147 r.w.s. 143(3) had already examined all the documents and accepted the returned income of NIL. The CIT(E) sought to re-examine documents already scrutinized, and the reasons recorded for reopening the assessment under Section 148 primarily pertained to earlier financial years, with only an entry of Rs. 2 lacs relating to the relevant Assessment Year 2009-10. Revenue's Contentions: The judgment does not record specific contentions from the revenue regarding the assumption of jurisdiction by the CIT(E).

Which sections of the Income-tax Act were involved?

Section 263,Section 143(1),Section 143(3),Section 147,Section 148,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: SH. N. K. BILLAIYA & SH. SUDHANSHU SRIVASTAVA

For Respondent: Ms. Pramita_M. Biswas
Hearing: 06/01/2021Pronounced: 11/01/2021

This appeal by the assessee is directed towards the order of the CIT(E) dated 31.03.2019 pertaining the A.Y.2009-10 framed u/s.263 of the Act.

2.

The appellant has vehemently challenged the assumption of jurisdiction by CIT(E) u/s.263 of the Act.

3.

The representatives of both the sides were heard at length. Case records carefully perused and with the assistance of the counsel, we have considered the relevant documentary evidences brought on record in the light of rule 18 (6) of the ITAT Rules.

4.

Briefly stated the facts of the case are that the appellant is a society registered with Registrar of Society under society Act and is also registered u/s.12A of the Act. Return of income was filed on 25.09.2009 which was processed u/s.143(1) of the Act on 30.03.2011.

5.

Subsequently the assessment was framed u/s.143(3) of the Act vide order dated 21.10.2011 and the returned income of NIL rupees was accepted.

6.

Subsequently vide notice dated 31.03.2016 u/s.148 of the Act the completed assessment was sought to be reopened and the reasons recorded for reopening the assessment read as under :-

7.

During the course of reassessment proceedings the assessee furnished all the details as required by the AO copies of such replies are placed in the paper book at pages 24 to 31.

8.

After completely scrutinizing the details, the assessment was framed u/s.147 r.w.s. 143 (3) of the Act vide order dated 28.04.2016 and once again the returned income of rupees NIL was accepted as such.

9.

Now, the CIT(E) assumed jurisdiction u/s.263 of the act.

10.

We have carefully perused the orders of the CIT(E). We find that the CIT(E) wants the AO to once again examine all those documents which have already been examined during the original assessment proceedings and also during the reassessment proceedings. Moreover, in the reasons recorded for the reopening the assessment which are exhibited elsewhere only entry of Rs.2 lacs pertained to F.Y. 2008-09 relevant to 2009-10, which year is under consideration and all other entries mentioned therein do not pertain to the year under consideration.

11.

At page 11 of paper book No.2 we find a report from the office of DCIT, Circle–1(1), Exemption dated 19.03.2019 which is addressed to CIT (E), New Delhi in which at para-3 it has been reported as under :-

Further the assessee submitted that an amount of Rs.2,00,000 pertained to A.Y.2009-10 which was deposited in the account of one Mr. Ravinder. In his support the assessee submitted the copies of land purchased and demand draft for the above mentioned transactions.

4. The office agreed with the contention of the assessee and an order for NIL income was passed”.

12.

These clinching evidences / facts are emanating from the records which clearly demonstrate that there was no error in the assessment order framed u/s.143(3) r.w.s. 147 of the Act which can prompt the CIT(E) to assumed jurisdiction u/s.263 of the Act.

13.

Considering the factual matrix mentioned here in above we are of the considered opinion that the assessment order dated 28.04.2016 framed u/s.143 (3) r.w.s. 147 of the Act is neither erroneous nor prejudicial to the interest of the revenue and is accordingly restored. The order of the CIT(E) is accordingly set aside.

14.

In the result, the appeal filed by the assessee is allowed.

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