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Facts
The Revenue filed two appeals against separate orders of the Ld. CIT(A) concerning the assessment year 2011-12. The appeals dealt with quantum additions to returned income and penalty proceedings. The Ld. CIT(A) had quashed the assessment order based on a prior Tribunal order that cancelled the CIT(E)'s direction under section 263 of the Income-tax Act. This cancellation meant the subsequent assessment and penalty orders did not survive.
Held
The Tribunal found no infirmity in the Ld. CIT(A)'s order. The decision was based on the fact that the order u/s 263 of the Act had been quashed by a Co-ordinate Bench of the Tribunal. Consequently, the assessment and penalty orders derived from it were also rendered invalid.
Key Issues
Whether the Ld. CIT(A) correctly set aside the assessment and penalty orders based on the cancellation of the CIT(E)'s order u/s 263 of the Act.
Sections Cited
115BBC, 115BBC(3), 263, 143(3), 271(1)(c)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
The facts and circumstances The facts and circumstances involved in the appeals involved in the appeals being identical, both the appeals were heard together and disposed off by identical, both the appeals were heard together and disposed off by identical, both the appeals were heard together and disposed off by way of this consolidated order. way of this consolidated order.
Despite notifying none attended on Despite notifying none attended on behalf of the assessee and behalf of the assessee and therefore, the appeal was heard ex therefore, the appeal was heard ex-parte qua the assessee after parte qua the assessee after hearing arguments of the Ld. Departmental Representative (DR). hearing arguments of the Ld. Departmental Representative (DR). hearing arguments of the Ld. Departmental Representative (DR).
We find that in this case, the impugned assessment order has We find that in this case, the impugned assessment order has We find that in this case, the impugned assessment order has been passed in compliance to the direction of the Ld. Commissioner been passed in compliance to the direction of the Ld. been passed in compliance to the direction of the Ld. of Income-tax-exemption [in short the ‘CIT(E)’ ] exemption [in short the ‘CIT(E)’ ]passed u/s 263 of passed u/s 263 of the Income-tax Act, 1961 (in short ‘the Act’) dated 22.03.2021 tax Act, 1961 (in short ‘the Act’) dated 22.03.2021 tax Act, 1961 (in short ‘the Act’) dated 22.03.2021 holding the assessment order passed originally by the Assessing holding the assessment order passed originally by the Assessing holding the assessment order passed originally by the Assessing Officer u/s 143(3) of the Act as erroneous in so far as prejudicial to Officer u/s 143(3) of the Act as erroneous in so far as prejudicial to Officer u/s 143(3) of the Act as erroneous in so far as prejudicial to the interest of the Revenue. The Ld. CIT(A) has noted that said the interest of the Revenue. The Ld. CIT(A) has noted that said the interest of the Revenue. The Ld. CIT(A) has noted that said order of the CIT(E) has been cancelled by the Co order of the CIT(E) has been cancelled by the Co-ordinat ordinate Bench of the Tribunal in and therefore, the Ld. CIT(A) the Tribunal in ITA No. 1284/M/2021 and therefore, the Ld. CIT(A) the Tribunal in ITA No. 1284/M/2021 and therefore, the Ld. CIT(A) quashed the assessment order consequent to such order u/s 263 of the assessment order consequent to such order u/s 263 of the assessment order consequent to such order u/s 263 of the Act and has allowed the appeal of the assessee holding has allowed the appeal of the assessee holding has allowed the appeal of the assessee holding that order of the Assessing officer Assessing officer did not survive. The relevant finding he relevant finding of the Ld. CIT(A) is reproduced as under: of the Ld. CIT(A) is reproduced as under:
“4. The Assessing Officer erred in treating the amount of Rs “4. The Assessing Officer erred in treating the amount of Rs “4. The Assessing Officer erred in treating the amount of Rs 5,52,04,903, being voluntarily contribution received towards 5,52,04,903, being voluntarily contribution received towards 5,52,04,903, being voluntarily contribution received towards
Vighnahartha Trust 3 & 3530/Mum/2023 ITA No building fund for the year under reference as anonymous donations building fund for the year under reference as anonymous donations building fund for the year under reference as anonymous donations within the meaning of section 115BBC of the Act. the meaning of section 115BBC of the Act. The appellants contend that on the facts and in the circumstances of The appellants contend that on the facts and in the circumstances of The appellants contend that on the facts and in the circumstances of the case and in law, the Assessing Officer has not correctly the case and in law, the Assessing Officer has not correctly the case and in law, the Assessing Officer has not correctly appreciated the facts and law in its entirety, inasmuch as the appreciated the facts and law in its entirety, inasmuch as the appreciated the facts and law in its entirety, inasmuch as the appellants have appellants have given details of all the donors from whom voluntary given details of all the donors from whom voluntary contributions are received and as such, cannot be termed as contributions are received and as such, cannot be termed as contributions are received and as such, cannot be termed as 'anonymous donations' per the provisions of section 115BBC(3) of 'anonymous donations' per the provisions of section 115BBC(3) of 'anonymous donations' per the provisions of section 115BBC(3) of the Act.
5. The Assessing Officer erred in not allowing deficit of Rs 5. The Assessing Officer erred in not allowing deficit of Rs 5. The Assessing Officer erred in not allowing deficit of Rs 5,30,22,671 suffered by the appellants in respect of activities 71 suffered by the appellants in respect of activities 71 suffered by the appellants in respect of activities carried out during the year under reference to be carried forward for carried out during the year under reference to be carried forward for carried out during the year under reference to be carried forward for subsequent years for the reason that the return of income filed by subsequent years for the reason that the return of income filed by subsequent years for the reason that the return of income filed by the appellants for year under reference is not in prescribed for the appellants for year under reference is not in prescribed for the appellants for year under reference is not in prescribed form and hence, invalid.” and hence, invalid.” 4.1 Similarly, the penalty proceedi Similarly, the penalty proceedings u/s 271(1)(c) of the Act ha ngs u/s 271(1)(c) of the Act had also been initiated in the assessment ord also been initiated in the assessment order passed consequent to er passed consequent to proceedings u/s 263 of the Act, which has been cancelled by the ld u/s 263 of the Act, which has been cancelled by the ld u/s 263 of the Act, which has been cancelled by the ld CIT(A) and Revenue has challenged CIT(A) and Revenue has challenged the said cancellation by way of the said cancellation by way of appeal in ITA No. 3529/Mum/2023.
4.2 We find that the ld CIT(A) has set aside the impugned orders We find that the ld CIT(A) has set aside the impugned orders We find that the ld CIT(A) has set aside the impugned orders of the Assessing officer in of the Assessing officer in respective appeals, first appeals, first, against the assessment order and second assessment order and second, against the penalty order against the penalty order, on the ground that the order u/s 263 of the Act has been quashed by the the order u/s 263 of the Act has been quashed by the the order u/s 263 of the Act has been quashed by the Co-ordinate Bench of the Tribunal (supra), ordinate Bench of the Tribunal (supra), thus, consequent thus, consequent assessment and penalty order don’t survive. W assessment and penalty order don’t survive. We do not find any e do not find any infirmity in the order of the Ld. CIT(A) on the issues in dispute and, infirmity in the order of the Ld. CIT(A) on the issues in d infirmity in the order of the Ld. CIT(A) on the issues in d accordingly uphold the same. The grounds raised in both the accordingly uphold the same. The grounds raised in both the accordingly uphold the same. The grounds raised in both the appeals are accordingly dismissed. appeals are accordingly dismissed.
Vighnahartha Trust 4 & 3530/Mum/2023 ITA No
In the result, both the appeals of the Revenue are dismissed. In the result, both the appeals of the Revenue are dismissed. In the result, both the appeals of the Revenue are dismissed.
Order pronounced in the open Court on nounced in the open Court on 30/04/2024. /04/2024.