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Facts
The assessee, a society registered under Section 12A, faced an assessment where its income was computed under normal provisions because the land housing its university was provisionally attached as benami property under the PBPT Act, with the assessee deemed the beneficial owner. This assessment was upheld by the CIT(A).
Held
The Tribunal noted a subsequent order by the SAFEMA Tribunal which set aside the Adjudicating Authority's confirmation of the benami attachment. Given this development, which was foundational to the original assessment, the Tribunal set aside the impugned orders and remanded the matter to the AO for de novo adjudication in light of the SAFEMA Tribunal's order, which also allowed the Department to initiate independent action.
Key Issues
Whether an assessment based on a benami attachment order can sustain when the attachment itself is later set aside by a superior tribunal, and if the case warrants a de novo adjudication by the AO.
Sections Cited
143(3), 12A, 24(4) of PBPT Act, 26(3) of PBPT Act, 24(6) of PBPT Act, Prohibition of Benami Property Transaction Act, 1988 (as amended by Amendment Act, 2016)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “H”: NEW DELHI
Before: SHRI G.S. PANNU & SHRI ANUBHAV SHARMA
O R D E R PER ANUBHAV SHARMA, JM: The assessee has come in appeal against the order dated 17.12.2021, for the assessment year 2016-17, passed by the Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred as “learned First Appellate Authority” or in short “FAA”), in appeal no. CIT, Delhi- 40/10209/2018-19, arising out of assessment order dated 31.12.2018 u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred as the “Act”), passed by the ACIT, Circle Exemption 1(1), Delhi, hereinafter referred to as the “AO”).
Heard and perused the record.
The assessee is a society, registered under the Societies Act, 1860 and also under Section 12A of the Act. The learned AO examined the issue that the assessee is running Bhagwant University on the land which was provisionally attached u/s 24(4) of the Prohibition of Benami Property Transaction Act, 1988 (hereinafter referred to as “PBPT Act”) and Deputy Commissioner of Income Tax (Benami Prohibition), Rajasthan, Jaipur vide order dated 14.11.2018 has considered this property to be benami property and assessee as beneficial owner of the property.
Therefore, income of assessee was computed as per the normal provisions and learned CIT(A) has sustained the same, for which the assessee is in appeal before us.
At the time of hearing, learned AR has relied order dated 30.11.2022 passed by the Appellate Tribunal under SAFEMA (hereinafter referred as ‘SAFEMA Tribunal’) at New Delhi, in an appeal preferred by the present assessee, challenging the order passed by the Adjudicating Authority u/s 26(3) and 24(6) of the Prohibition of Benami Property Transaction Act, 1988 (hereinafter referred to as “PBPT Act”), as amended by the Act of 2016.
As we consider this order, it comes up that the SAFEMA Tribunal has set aside the order of Adjudicating Authority confirming the action of Initiating Officer. This order dated 30.11.2022 is subsequent to the impugned order of CIT(A) dated 17.12.2021. Thus, we are of the considered view that the subsequent development by way of order of the SAFEMA Tribunal in favour of the assessee, the impugned order of learned AO, which was completely on the foundation of the attachment initiated by the DCIT (Benami Prohibition), Rajasthan, Jaipur, does not sustain.
However, as the SAFEMA Tribunal has vide order dated 30.11.2022 has given Department an independent right to initiate action, if any, under the Amendment Act, 2016 of the PBPT Act, 1988, we set aside the impugned orders and restore the issues for de novo adjudication by the AO in the light of order dated 30.11.2022 of SAFEMA Tribunal.
Appeal is allowed for statistical purposes.
Order pronounced in open court on 24.01.2024.