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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SRI MAHAVIR SINGH
O R D E R महावीर स िंह, उपाध्यक्ष / PER MAHAVIR SINGH, VP: These appeals of assessee are arising out of the orders of the Commissioner of Income Tax (Appeals)]-5, Mumbai, [in short CIT(A)], in Appeal No. CIT(A)-5/AC-16(2)/IT-333&328/17- 18 even date 30.07.2018. The assessments were framed by the Income Tax Officer, Ward 16(2)(2), Mumbai (in short ITO/ AO) for the A.Y. 2010-11 & 2011-12 vide orders dated 26.12.2017 & 29.12.2017 under section 143(3) r.w.s 147 of the Income-tax Act, 1961 (hereinafter ‘the Act’).
“1. It is submitted that the impugned Assessment order passed in violation of principles of natural justice be declared bad in law and null and void.
On the facts and circumstances of the case and in law, the learned CIT (A) ought to have held that the impugned reassessment order u/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 passed in contravention of the provisions of law was abinitio void and bad in law”
Briefly stated facts are that a search action under section 132 of the Act was conducted on Navjeevan Charitable Trust and the main trustee Shri Ashok A Bagaria on 27.10.2014. This trust was notified by the national committee, Ministry of Finance for the purpose of claim on deduction under section 35AC of the Act. Subsequent to search the trust registration was cancelled vide order under section 12AA(3) of the I.T. Act vide order dated 20.12.2016 by the Pr. CIT (Central)-I, Mumbai. The “A search action u/s 132 of the I T Act, 1961 was conducted on Navjeevan Charitable Trust and the main trustee Shri Ashok A Bagaria on 27-10-2014. The trust was notified by the National Committee, Ministry of Finance for the purpose of deduction u/s. 35AC of the I. T. Act. Subse1uent to Search the trust registration was cancelled vide order u/s. 12AA(3) of the L T. Act, dated 2016 by the Pr. CIT(Central)-l, Mumbai. It has been noticed that after receipt of donation, trust booked bogus purchases through accommodation entry providers. The entry providers after receipt of cheque payment from trust, encashes the cheque and returns back cash to the Trust/trustee after retaining commission on the accommodation entries. It was concluded that the trust was indulged in bogus activity and not as per its objectives for which trust was formed. The donation made was
The assessee filed original return of income for Assessment Year 2010-11 on 15.10.2010 and this return was processed under section 143(1) of the Act. The assessee received reasons recorded from the Assessing Officer and raised objections against the same vide letter dated 16.10.2017 and the relevant text of the objection read as under: - “We are in receipt of recorded reasons and have objections against recorded reasons as mentioned below:
The assessee has given donation of Rs.5,00,000 to Navjeevan Charitable Trust and claimed deduction u/s.35AC.
The recorded reasons has stated that the above donation is not genuine as the registration of said trust is cancelled on 20/12/2016 .
We would like to also submit that she did not received any money back and such claim by the trust may be for saving their skin and cannot be applied against her only on the basis of third party statement and without any corroborative material to held so and on such reason the reopening cannot be done.
The above mentioned transaction i.e. donation given is genuine in nature and the same has been duly supported by the documentary evidence (Donation Receipt) There is no question of return of money as alleged in the recorded reason.
In view of above you would appreciate that the notice u/s 148 is required to be dropped. We shall be highly obliged for the same.”
The Assessing Officer never disposed of these objections as argued by the learned Counsel for the assessee. The learned Counsel for the assessee took me through the assessment order and pointed out that there is no iota of word about “8 We note that once the impugned order finds the Assessment Order is without jurisdiction as the law laid down by the Apex Court in GKN Driveshafts (supra) has not been followed, then there is no reason to restore the issue to the Assessing Officer to pass a further/fresh order. If this is permitted, it would give a licence to the Assessing Officer to pass orders on re-opening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the Assessing Officer for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale/ old matters.
9 In fact, to ensure that re-opening notices are disposed of, expeditiously the parliament itself has provided in Section 153(2) of the Act a 10 The Director of the appellant has filed an affidavit dated 19th September, 2006. In the affidavit, it is stated that consequent to the impugned order of the Tribunal dated 14th August, 2013, the Assessing Officer has not passed any order of re-assessment. Time was granted on the last occasion to enable the Respondent to respond to the affidavit dated 19th September, 2006 of the Director of the Appellant-Company. The Respondent is unable to dispute the facts stated in the affidavit dated 19th September, 2016 filed by the Director of the Appellant-Company. The time to pass a order on the notice dated 28th March, 2008, even consequent to the impugned order of the Tribunal, has lapsed.”