INCOME TAX OFFICER(E)-2(2), MUMBAI vs. OLD GIRTONIANS ASSOCIATION PROPERTY FUND, MUMBAI

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ITA 4418/MUM/2024Status: DisposedITAT Mumbai15 October 2024AY 2016-174 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal filed by the department as infructuous. The primary reason for dismissal was the issuance of Circular No. 9/2024 dated 17.09.2024, which raised the monetary limit for filing appeals before the Income Tax Appellate Tribunal to Rs. 60 lacs. The Learned DR fairly submitted that the tax effect in the present appeal was below Rs. 60 lacs, rendering the appeal infructuous. The Learned AR for the assessee supported this submission. The Tribunal, after considering the submissions and examining the record, noted that the tax effect in this appeal was Rs. 57,92,897/-. Consequently, in view of the enhanced monetary limit and the submissions made, the appeal was dismissed. The Tribunal did not decide on the merits of the grounds of appeal concerning the quashing of proceedings under section 148, the applicability of section 2(15) and section 11, or the issue of change of opinion, as the appeal was disposed of on procedural grounds.

What were the facts?

The appeal was filed by the Income Tax Officer (Appellant) against the order dated 02.07.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The assessment year in question is 2016-17. The assessee is the Old Girtonians Association Property Fund. The appeal challenges the CIT(A)'s decision to quash proceedings initiated under section 148 of the Income Tax Act, 1961. The dispute revolves around the assessee's entitlement to exemption under section 11 and the applicability of the proviso to section 2(15) due to its activities. The amount in dispute is stated to be Rs. 57,92,897/-. The appeal was heard on 15.10.2024 and pronounced on the same day.

What were the issues?

The Tribunal had to decide the following questions: 1. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) was justified in quashing the proceedings u/s 148 of the Act in view of the case being re-opened in light of the assessee's activities falling under the 7th limb which attracts the proviso to section 2(15), and consequently, the assessee is not entitled to exemption u/s 11 of the Act? 2. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) was justified in giving relief and quashing the proceedings u/s 148 of the Act on the basis that the assessee would have to suffer double taxation in view of the exempt amount offered for taxation due to failure to utilize the exempt proceeds accumulated within the statutory time limit required by law? 3. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) was justified in quashing the proceedings u/s 148 of the Act considering them as a change of opinion, when the case was re-opened based on a fresh interpretation of law with respect to the proviso to section 2(15) of the Act in light of the Supreme Court judgment in ACIT (Exemptions) Vs. Ahmedabad Urban Development Authority [2022] 143 taxmnn.com 278(SC)? Contentions: The Revenue argued that the CIT(A) was not justified in quashing the proceedings under section 148, as the assessee's activities attracted the proviso to section 2(15) and disentitled it to exemption under section 11. The Revenue also contended that the CIT(A) erred in granting relief based on potential double taxation and in treating the re-opening as a change of opinion, especially in light of the Supreme Court's decision in ACIT (Exemptions) Vs. Ahmedabad Urban Development Authority. The Assessee supported the submissions of the Revenue's DR, stating that the appeal was not maintainable and had become infructuous.

Which sections of the Income-tax Act were involved?

Section 148,Section 250,Section 2(15),Section 11

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI

Before: SHRI. NARENDRA KUMAR BILLATYA, ACCOUNTANT & SHRI. RAJ KUMAR CHAUHAN

For Appellant: Shri. Bharat Kumar, Shri. Krishna Kumar (Sr
Pronounced: 15.10.2024

O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order dated 02.07.2024 of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the Page | 1 Old Girtonians Association Property Fund; A.Y. 2016-17 “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] for the A.Y. 2016-17.

2.

The department is in appeal before us and has raised following grounds of appeal:

1. “Whether, on the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) was justified in quashing the proceedings u/s 148 of the Act in view of the case being re-opened in light its activities of the assessee involved in the 7th limb which attracts proviso to section 2(15) and the assessee is not entitled to exemption u/s 11 of the Act? 2. Whether, on the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) was justified in giving relief and quashing the proceedings u/s 148 of the Act on the basis the assessee would have to suffer double taxation in view of the exempt amount offered for taxation in view of failure to utilize the exempt proceeds accumulated within the statutory time limit required by law? 3. Whether, on the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) was justified in quashing the proceedings u/s 148 of the Act considering them as change of opinion when on facts and circumstance the case which has been re-opened on the basis of fresh interpretation of law with respect to the proviso to section 2(15) of the Act in the judgement by the Hon’ble Supreme Court in in ACIT (Exemptions) Vs. Ahmedabad Urban Development Authority [2022] 143 taxmnn.com 278(SC).?”

3.

During the arguments, the Ld. DR very fairly submitted that the department appeal has become infructuous by virtue of circular no. 9/2024 dated 17.09.2024, wherein the monetary limit for tax effect for filing appeal before Income Tax Appellate Tribunal has been raised upto Rs. 60 lacs. It is submitted that the tax effect in this appeal is below 60

4.

We have also heard the Ld. AR on behalf of the assessee, who has supported the submissions of the Ld. DR, and stated that since the appeal is not maintainable and has become infructuous.

5.

We have considered the submissions and examined the record. In view of the enhancement of the monetary limit for filing the departmental appeal wherein the tax effect for filing the appeal should be Rs. 60 Lacs or above and the tax effect in this appeal has been shown to be Rs. 57,92,897/-; in view of these facts and the submissions made by the Ld. DR, the appeal filed by the department is accordingly dismissed having become infructuous.

6.

In the result, appeal filed by the department is accordingly dismissed having become infructuous.

Order pronounced on 15.10.2024

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