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The High Court held that the benefit under Section 10B is to be interpreted strictly in accordance with the taxing statute, and the court cannot exercise charity. On a plain reading of Section 10B(1), the benefit commences from the date of manufacturing, which in this case was March 12, 2001, making AY 2001-02 the first year for the deduction. The court found that the 10-year period is consecutive. Regarding the claimed exemption or benefit under Section 10B(8), the court noted that the assessee made a declaration in 2013, which was after filing the return. The court held that a declaration under Section 10B(8) must be made prior to the filing of the return, and mentioning it in the return itself is not permissible. Since the declaration was not made prior to filing the return, the issue was answered in favor of the department and against the assessee. The appeal was allowed.
The High Court allowed the appeals, quashing and setting aside the order of the Tribunal. The Court held that reassessment proceedings initiated under Section 147/148 are invalid if based on a 'change of opinion'. The Court emphasized that if an issue or query was raised and answered by the assessee in the original assessment, and the Assessing Officer did not make any addition, it implies the issue was examined and accepted. In such cases, reassessment proceedings are invalid. The Court cited judgments from the Delhi High Court (CIT vs. DLF Powers Limited) and Gujarat High Court (Praful Somabhai Patel (HUF) vs. Income Tax Officer) to support its reasoning. The Court noted that if an assessment order is erroneous and prejudicial to the revenue's interest, the remedy lies under Section 263 of the Act, not through invalid reassessment proceedings based on a change of opinion. The Court explicitly stated it was not expressing any opinion on the merits of the case, but that the Tribunal would consider the matter afresh. The operative direction was to allow the appeals and remit the matter back to the Tribunal.
The Tribunal held as follows: On the first issue, it agreed with the ITAT that the expenditure was capital in nature and thus not allowable as revenue expenditure, answering the issue in favour of the department. On the second issue, the Tribunal found that the rights granted to the assessee were commercial rights akin to a mining license, which fall under the definition of intangible assets under Section 32(1)(ii). Therefore, the contention for depreciation under Section 32(ii) was accepted, answering the issue in favour of the assessee. Regarding the third issue, considering the expenditure in light of the decision in S.A. Builders Ltd. and other judgments relied upon by the assessee, the issue was answered in favour of the assessee. On the fourth issue, the Tribunal distinguished the Madhya Pradesh High Court judgment in CIT vs. Alpine Solvex Ltd., stating that the payments received were for loss of business guaranteed by the supplier, not compensation for business loss. Thus, this issue was also answered in favour of the assessee.
The High Court addressed two substantial questions of law. Regarding the first issue, concerning the applicability of CBDT Circular No. 21 dated December 10, 2015, to pending appeals, the Court referred to the Supreme Court's decision in Director of Income Tax vs. S.R.M.B. Dairy Farming (P.) Ltd. The Court held that the Circular is binding on the Department, and appeals cannot be filed contrary to its instructions. However, a clarification was issued: if an issue decided by the CIT(A) or Tribunal is contrary to judgments of the Supreme Court, the Department can prefer an appeal, provided it is in cases where the order contradicts the Supreme Court's ratio. This is to maintain the sanctity of Article 141 of the Constitution. The Court suggested incorporating this clarification into the Circular. The second issue, concerning the ITAT's reversal of CIT(A)'s findings and confirmation of additions under Section 68, was deemed academic as the first issue was decided in favor of the assessee. The appeal was disposed of.
The High Court observed that the argument regarding Section 292B of the Income Tax Act was not considered by the Tribunal. The Court noted that the Tribunal had traveled beyond the pleadings and had not correctly given its finding while reversing the view of the CIT(A). Considering these factors, the High Court was of the opinion that the matters should be remitted back to the Tribunal to reconsider the issues afresh after hearing both sides on all questions of law and fact. Therefore, the order of the Tribunal was quashed and set aside, and the matters were remitted back to the Tribunal for a fresh decision. The appeals were allowed to the extent of remitting the matters back to the Tribunal.
The High Court allowed the appeal, setting aside the order of the ITAT. The Court noted that the primary reason for the denial of registration under Section 12AA was clause 5 of the society's objects, which was interpreted as being contrary to charitable purposes. However, the appellant society, through an undertaking and minutes of a meeting, demonstrated a clear intention to remove this clause. The Court found reliance on judgments like CIT vs. Dawoodi Bohara Jamat, Sri Venkateshwar Educational Society (Regd.) v. Director General of Income Tax (exemptions), and Digember Jain Society for Child Welfare vs. Director General of Income Tax (Exemptions) persuasive. These judgments indicated that when an assessee provides a clear undertaking to amend or delete problematic clauses from its objects, and assures that such clauses have not been acted upon and will not be in the future, the authorities can consider granting registration. The Court concluded that the issue was answered in favour of the assessee and against the department, implying that the undertaking provided was sufficient to address the concerns regarding the objects of the society.
The High Court held that the writ petitions had become infructuous. This was because the assessment order, which was the subsequent step after the notice under Section 148, had already been passed. Furthermore, the petitioner had pursued the appellate remedies, with the CIT(A) having decided the appeal and the matter now pending before the ITAT. Therefore, the High Court dismissed the writ petitions as having become infructuous. The petitioner was granted liberty to pursue their pending appeal before the Income Tax Appellate Tribunal. No decision was made on the merits of the original challenge to the Section 148 notices.
The High Court held that the writ petitions had become infructuous. The reasoning was that subsequent to the notice under Section 148 of the Income Tax Act, 1961, an assessment order had already been passed, and the petitioner had preferred an appeal which was decided by the CIT (Appeals). The matter was currently pending before the Income Tax Appellate Tribunal. Therefore, the writ petitions were dismissed as rendered infructuous. The Court granted the petitioner liberty to pursue their pending appeal before the Income Tax Appellate Tribunal. No specific issue was left undecided; the petitions were disposed of on procedural grounds.
The High Court held that the view taken by the jurisdictional High Courts, particularly the Gujarat High Court in CIT vs. Rishikesh Apartments Co-operative Housing Society Ltd., should be accepted. The reasoning was that if the person on whose behalf tax was to be deducted at source had already paid the tax, and in fact paid more than what was payable, then no loss was caused to the revenue. In such circumstances, levying interest under Section 201(1A) would be improper and would result in the revenue deriving undue benefit. The Court noted that the Gujarat High Court's decision allowed for the deduction of tax paid by the contractor from the gross tax the assessee should have deducted, when computing interest under Section 201(1A). The Court found no infirmity in the orders of the CIT(A) and the Tribunal, and observed that there was a concurrent finding of the authorities below. Therefore, the issue was answered in favour of the assessee and against the department. The appeals were dismissed.
The High Court held that no substantial question of law arises from the order of the ITAT. The Court referred to its own decision in Tax Appeal No. 193/2017 and the Supreme Court's decision in Commissioner of Income Tax-VI, New Delhi vs. Usha International Ltd. [2012] 25 taxmann.com 200 (Delhi)(FB). The Court noted that the Supreme Court in Usha International Ltd. dealt with the concept of 'change of opinion' in the context of Section 147 of the Act. 'Change of opinion' implies that the Assessing Officer had formed an opinion in the initial assessment proceedings under Section 143(3) and subsequently proposed to take a different view in the reassessment proceedings. It involves the formation of a belief by an Assessing Officer resulting from his understanding, experience, and reflection on a particular issue. The High Court found that the ITAT's decision was in line with these precedents, implying that the ITAT had correctly addressed the issue of 'change of opinion' and the validity of the reassessment. Consequently, the appeal filed by the department was dismissed.
The Tribunal held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court applied the test laid down in various judgments, including those of the Apex Court in *Raymond Woollen Mills Ltd. vs. Income Tax Officer* (236 ITR 34) and *ITO vs. Lakhmani Mewal Das* (1976) 3 SCC 757. These judgments emphasize that the court only needs to ascertain if there was prima facie material for the Department to reopen the case, and the sufficiency or correctness of the material is not to be considered at the stage of issuing a notice under Section 147. The Tribunal noted that the impounded documents from the survey, combined with the company's memorandum of association which listed land dealing as a business object, provided a basis for the belief of escaped income. Furthermore, the revenue's submission regarding evidence of tax evasion, stamp duty evasion, benami properties, and subsequent actions under the Prohibition of Benami Property Transactions Act, including provisional attachment of properties, further supported the existence of reasonable grounds for reopening. Therefore, no ground for interference was made out, and the writ petitions were dismissed.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court applied the principles laid down in the judgments of the Apex Court in Raymond Woollen Mills Ltd. Vs. Income Tax Officer and ITO Vs. Lakhmani Mewal Das. It was observed that the Memorandum of Association of the assessee companies clearly indicated that one of their objects was the purchase and sale of land, including agricultural land, which is a business activity. Furthermore, the revenue presented evidence of significant tax evasion, stamp duty evasion, violations of land laws, falsification of sale deeds, and the discovery of benami properties, leading to show cause notices and provisional attachment of properties. The court found that the existence of such material was sufficient to clothe the Income Tax Officer with jurisdiction to issue the notice under Section 147, and the sufficiency or correctness of the material was not to be considered at the stage of reopening. Therefore, no ground for interference was made out.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The Court applied the principles laid down in Supreme Court judgments such as "Raymond Woollen Mills Ltd. Vs. Income Tax Officer (236 ITR 34)" and "ITO Vs. Lakhmani Mewal Das (1976) 3 SCC 757". These judgments establish that the court's role at the stage of reopening is only to see if there was prima facie material for the Department to form a belief, not to assess the sufficiency or correctness of that material. The Court found that the impounded documents from the survey, the nature of the business as per the Memorandum of Association, and the subsequent actions taken under the Prohibition of Benami Property Transactions Act, including the provisional attachment of properties, constituted sufficient material to form a reasonable belief of escapement of income. Therefore, the reopening of assessments was justified.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court applied the test laid down in various judgments, including those of the Apex Court. It referred to the Supreme Court's decision in "Raymond Woollen Mills Ltd. vs. Income Tax Officer" (236 ITR 34), stating that the court only needs to see if there was prima facie material for reopening, and the sufficiency or correctness of the material is not to be considered at that stage. Similarly, referencing "ITO vs. Lakhmani Mewal Das" (1976) 3 SCC 757, the court noted that once reasonable grounds exist for the Income Tax Officer to form the belief of escapement of income, it is sufficient to clothe him with jurisdiction. The court found that the impounded documents, the Memorandum of Association indicating land dealing as a business object, and the evidence of tax evasion, stamp duty evasion, falsification of deeds, and benami properties provided a sufficient basis for the belief of escaped income. Therefore, no ground for interference was made out.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court relied on the Apex Court's decisions in *Raymond Woollen Mills Ltd. vs. Income Tax Officer* (236 ITR 34) and *ITO vs. Lakhmani Mewal Das* (1976) 3 SCC 757. In *Raymond Woollen Mills Ltd.*, it was held that the court only needs to see if there was prima facie material for reopening, not the sufficiency or correctness of the material. Similarly, in *ITO vs. Lakhmani Mewal Das*, the Apex Court stated that grounds leading to the belief of escapement of income must have a material bearing, and once reasonable grounds exist, the Income Tax Officer has jurisdiction to issue notice, with the adequacy of grounds not being a matter for the court to investigate. The court found that the impounded documents, post-survey investigations, the nature of the business as per the Memorandum of Association, and the subsequent actions taken under the Prohibition of Benami Property Transactions Act provided sufficient material to form a belief of escapement of income. Therefore, no ground for interference was made out.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court referred to the Apex Court's decisions in Raymond Woollen Mills Ltd. vs. Income Tax Officer and ITO vs. Lakhmani Mewal Das. In Raymond Woollen Mills Ltd., the court stated that it only needs to see if there was prima facie material for reopening, and the sufficiency or correctness of the material is not to be considered at that stage. Similarly, in ITO vs. Lakhmani Mewal Das, the Apex Court held that grounds for belief must have a material bearing on the escapement of income, and once reasonable grounds exist, the Income Tax Officer has jurisdiction to issue notice. The court found that the material impounded during the survey, the nature of the assessee's business objects, and the subsequent findings of tax evasion, benami properties, and provisional attachments provided a reasonable basis for the belief that income had escaped assessment. Therefore, no ground for interference was made out.
The Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The Court referred to the Supreme Court's decisions in "Raymond Woollen Mills Ltd. Vs. Income Tax Officer :: 236 ITR 34" and "ITO Vs. Lakhmani Mewal Das (1976) 3 SCC 757". These judgments establish that for reopening an assessment, the Department only needs prima facie material to form a belief, and the sufficiency or correctness of the material is not to be considered at the initial stage. The Court noted that the reasons for reopening included findings from a survey, impounded documents, and post-survey investigations revealing the assessee companies' involvement in land transactions as a business activity, which was also part of their Memorandum of Association. Additionally, the revenue presented evidence of significant tax evasion, stamp duty evasion, violations of land laws, falsified sale deeds, and benami properties, which led to the provisional attachment of numerous properties. This collective information provided a reasonable basis for the belief that income had escaped assessment. Therefore, no ground for interference was made out.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court applied the test laid down in various judgments, including those of the Apex Court in "Raymond Woollen Mills Ltd. Vs. Income Tax Officer" (236 ITR 34) and "ITO Vs. Lakhmani Mewal Das" (1976) 3 SCC 757. These judgments emphasize that at the stage of reopening, the court only needs to ascertain if there was prima facie material on the basis of which the department could reopen the case, and the sufficiency or correctness of the material is not to be considered. The court noted that the impounded documents from the survey, the company's Memorandum of Association indicating business in land sale and purchase, and the evidence of tax evasion, stamp duty evasion, and benami properties provided a reasonable basis for the Assessing Officer's belief. Therefore, no ground for interference was made out.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court applied the test laid down in Supreme Court judgments, including "Raymond Woollen Mills Ltd. vs. Income Tax Officer (236 ITR 34)" and "ITO vs. Lakhmani Mewal Das (1976) 3 SCC 757". These judgments emphasize that at the stage of reopening, the court only needs to ascertain if there was prima facie material on the basis of which the department could reopen the case, and the sufficiency or correctness of the material is not to be considered. The court found that the impounded documents from the survey, the Memorandum of Association of the assessee companies indicating land dealing as a business object, and the further information regarding tax evasion, benami properties, and actions under the Prohibition of Benami Property Transactions Act constituted sufficient grounds for the Assessing Authority to form the belief of escapement of income. Therefore, no ground for interference was made out.
The High Court held that there was sufficient reason for the respondent authorities to believe that there might have been an escapement of income from assessment. The Court referred to the Apex Court's decisions in "Raymond Woollen Mills Ltd. Vs. Income Tax Officer" (236 ITR 34) and "ITO Vs. Lakhmani Mewal Das" (1976) 3 SCC 757. These judgments establish that the court's role at the stage of reopening is to ascertain if there was prima facie material for the department to believe that income had escaped assessment, and the sufficiency or correctness of the material is not to be considered. The Court found that the material impounded during the survey, coupled with the objects of the assessee companies as per their Memorandum of Association, and the subsequent findings of tax evasion, stamp duty evasion, benami properties, and provisional attachments, provided a reasonable basis for the belief of income escapement. Therefore, the Court found no ground for interference with the reopening notices.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court relied on the Supreme Court's decisions in "Raymond Woollen Mills Ltd. Vs. Income Tax Officer (236 ITR 34)" and "ITO Vs. Lakhmani Mewal Das (1976) 3 SCC 757". These judgments establish that at the stage of reopening, the court only needs to ascertain if there was prima facie material on the basis of which the department could reopen the case, and the sufficiency or correctness of the material is not to be considered. The court found that the information gathered during the survey, including the nature of the assessee's business as per its Memorandum of Association, and the subsequent findings of tax evasion, stamp duty evasion, and benami properties, constituted sufficient grounds for the Assessing Authority to form a belief of escapement of income. Therefore, no ground for interference was made out.
The High Court held that there was sufficient reason for the respondent authorities to believe that income may have escaped assessment. The court relied on the Apex Court's decisions in "Raymond Woollen Mills Ltd. Vs. Income Tax Officer (236 ITR 34)" and "ITO Vs. Lakhmani Mewal Das (1976) 3 SCC 757". In Raymond Woollen Mills, the court stated that it only needs to see if there was prima facie material for reopening, and the sufficiency or correctness of the material is not to be considered at that stage. Similarly, in ITO Vs. Lakhmani Mewal Das, the Apex Court held that grounds leading to the formation of belief under Section 147 must have a material bearing on the escapement of income, and once reasonable grounds exist, the Income Tax Officer has jurisdiction to issue notice. The court found that the material impounded during the survey, the nature of the business as per the Memorandum of Association, and the subsequent findings of tax evasion, benami properties, and provisional attachments provided a reasonable basis for the belief of escaped income. Therefore, no ground for interference was made out.
The High Court held that the substantial questions of law were to be answered in favour of the assessee and against the department. The court referred to its own previous decisions, including the case of CIT Vs. JDA, Jaipur, which in turn relied on the Allahabad High Court's decision in Lucknow Development Authority's case and the Jammu & Kashmir High Court's decision in Jammu Development Authority's case. The court emphasized that for the proviso to Section 2(15) to apply, the activities of the trust must be carried out on commercial lines with an intention to make a profit. If a trust carries out its activities on non-commercial lines without a motive to earn profits, for fulfilling its charitable aims and objectives, and incidentally earns some profit, it would not be hit by the proviso. The intention of the trustees and the manner of undertaking activities are crucial. The court found that the statutory functions of the Rajasthan Housing Board, such as providing housing, infrastructure, and amenities for public welfare, fall under 'any other object of general public utility'. Activities like sale of property or levying betterment charges are incidental to its main object. The court concluded that the ITAT's orders, holding the assessee entitled to registration and exemptions, were correct. Therefore, the appeals filed by the department were dismissed.
The High Court held that the amendments to Section 2(15) and the proviso to Section 12AA, effective from 1.4.2009 and 1.4.2012 respectively, would not apply to the assessment years in question (2005-06, 2008-09, and 2009-10), except for the assessment year 2009-10 where the proviso would apply. The Court emphasized that the real purpose of registration is to ascertain if the objects fall within the definition of Section 12AA and its proviso. While breaches of conditions could lead to cancellation, the procedure must be followed. The contention that non-communication of changes automatically cancels registration was deemed invalid. However, the Court acknowledged that the department could disallow expenses or income as per Sections 11(5) and 13 if they were not in line with approved bye-laws, but cancellation of registration was considered uncalled for. All issues were answered in favour of the assessee and against the department. The Court clarified that earlier High Court orders would not be modified and the department could take appropriate proceedings. The appeals were dismissed.
The High Court held that for the issue concerning disallowance under Section 14A read with Rule 8D, the facts were squarely covered by its previous judgment in the case of Reliance Utilities and Power Ltd. The court reiterated the principle that if an assessee has sufficient interest-free funds available to meet its investments, it can be presumed that the investments were made from such funds, even if loans were also raised. The court found that the assessee's own funds and other non-interest bearing funds were more than the investment in tax-free securities, establishing this presumption. Consequently, the High Court found no substantial question of law arising on this issue. For the issue related to VAT reimbursement, the appeal was not pressed by the appellant in view of a CBDT circular. The High Court also noted that for the issue admitted on 11.12.2015 (likely related to Section 80IA, though not explicitly stated), it was answered in favour of the assessee based on Supreme Court observations, without disturbing the ITAT's finding. Therefore, no substantial question of law arose, and the appeals were dismissed.
The High Court held that the Tribunal had not committed any error in passing its order. The Court noted that depreciation is allowed for the use of property under ownership. It observed that the Tribunal relied on a Mumbai Tribunal decision, which was not disputed by the department. Furthermore, the Court considered insurance, maintenance, and repair as indicators of ownership for income tax purposes, and it was admitted that the ownership, for practical purposes, was with the assessee. The original owner (DMRC) held the title only for security purposes. Therefore, the Tribunal's observations that the agreement was essentially a finance lease and that the assessee was entitled to depreciation were considered just and proper. The Court concluded that no substantial questions of law arose and dismissed the appeal.
The High Court decided the issues in favor of the assessee. Regarding the Rs. 57,07,62,552/-, the court held it should be considered for capitalization as it accrued by March 31, 2005, and the mercantile system of accounting was followed. Interest under Sections 234B and 234C was not to be charged. The deduction under Section 80G was allowed. The disallowance under Section 40A(ia) was upheld by the Tribunal and not challenged further in the High Court. Leave encashment was held not to be a contingent liability. Expenditure on police stations, disallowed by the assessee itself, was correctly not allowed. The Tribunal's decision not to adjudicate a refund claim was also upheld. Exemplary costs were imposed on the department for arbitrary action. For the department's appeal, the court held that pre-incorporation expenses paid for taking over the company were capital in nature and allowable. Expenses for tree cutting and debris removal were justified as necessary for project execution. Depreciation on EDP equipment as computer equipment and on public roads as buildings was allowed, referencing a prior decision of the same court which found that public roads are covered under the definition of 'road' and that optical fibers are part of the computer system. The assessment order was not annulled.
The Tribunal held that the CBDT Circular No. 21/2015, dated 10.12.2015, is binding on subordinate officers and is applicable retrospectively to pending appeals. The court noted that Section 268A(4) of the Income Tax Act, as amended, also supports the prohibition of appeals below certain values. The intention of the legislation and the CBDT is to reduce pendency and curb frivolous litigation. The court drew an analogy to Section 96(4) of the Code of Civil Procedure, which prohibits appeals in certain small cause suits. Given that the tax effect in the present case is less than Rs. 20 lac, which is the monetary limit for filing appeals before the High Court as per the circular, the appeal is not maintainable. The court also acknowledged that appeals falling under exceptions mentioned in para 8 of the circular could be contested on merits, but this appeal did not fall into those categories. The substantial questions of law, if any, are left open for future proceedings. The appeal is dismissed as not pressed.
The High Court held that the issue was squarely covered by its previous decisions, specifically Commissioner of Income Tax-II vs. Krishi Upaj Mandi Samiti and Commissioner of Income Tax vs. Mahima Shiksha Samiti. In Krishi Upaj Mandi Samiti, the Court had held that depreciation on assets owned by a charitable institution is a necessary deduction on commercial principles and must be deducted to arrive at the income available. The Court agreed with the Bombay High Court's view in Director of Income Tax v. Framjee Cawasjee Institute and CIT vs. Institute of Banking Personnel. The judgment also noted that the amendment to Section 11(6) is prospective and that jurisdictional High Court judgments are binding. Therefore, depreciation was rightly allowed. The Court also referenced that for the Mahima Shiksha Samiti case, the Tribunal's view on other issues, like job work charges and foreign trips, was based on appreciation of facts and not a question of law, leading to dismissal of the appeal in limine. In the present appeals, the substantial question of law was answered in favour of the assessee.
The High Court held that the appeals filed by the Revenue are dismissed. The Court reasoned that the definition of 'built-up area' under Section 80IB(14)(a) includes projections and balconies but does not explicitly mention 'terrace'. While the Revenue argued that 'terrace' is equivalent to a 'balcony' or 'projection', the Court found this contention unconvincing. Relying on the Madras High Court's judgment in CIT vs. M/s. Ceebros Property Development (P) Ltd., the Court observed that an open terrace, even if sold privately to the unit owner, does not form part of the 'built-up area' for the purpose of Section 80IB(10)(c). The Court also noted that the Gujarat High Court's decision in CIT vs. Amaltas Associates also supports the view that 'terrace' is not included. The Court concluded that 'terrace' is distinct from a 'balcony' and typically covers a room, whereas a balcony is an additional facility. Therefore, the AO's stand to include terrace area as part of the built-up area was not upheld.
The High Court held that for issue No. 1, the revisional powers under Section 263 are to be exercised only when an order is erroneous and prejudicial to the interest of the revenue, and a mere change of opinion is not sufficient. However, in this case, the CIT was justified in exercising suo motu revisional powers under Section 263 because the assessee's claim, which prima facie indicated expenses incurred, was withdrawn, giving rise to a necessity for further inquiry in the interest of revenue. The notice under Section 69C could not be simply dropped upon withdrawal of the claim. Therefore, the CIT's conclusion regarding this issue was upheld. For issue No. 2, the Court accepted the assessee's contention that the word 'assessee' in Section 54B does not mandate the investment to be in the assessee's own name, citing Delhi High Court's view in Sunbeam Auto Ltd. The Court also held that expenses like tubewell and others are for the betterment of agricultural land and should be considered part of the investment in land for the purpose of Section 54B. Consequently, all issues were answered in favour of the assessee and against the department.
The High Court held that the appellant was not served with the notice, as evidenced by the fact that another notice was issued in 2010. This finding addresses the first question of law. Consequently, the High Court quashed and set aside the order of the Tribunal and remitted the matter back to the Tribunal for a fresh hearing. The High Court explicitly stated that it had not expressed any opinion on the merits of the appeal and that the Tribunal should decide the issues afresh without being influenced by the order of remand. The court did not provide findings on the second and third issues, as the matter was remitted back before those could be adjudicated on merits.
The High Court held that the Tribunal ought not to have remitted the matter for reassessment, as the Assessing Officer had clearly ignored the law declared by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO. The Court found that the Tribunal's order effectively granted the Assessing Officer an extended period of limitation, which is not the object of the Income Tax Act. The Court reasoned that while the power 'to do' an act must be exercised within the statutory period of limitation, the power 'to redo' an exercise, when a matter is remitted by a higher forum, does not fall under the purview of limitation in the same manner. However, in this specific case, the Assessing Officer's failure to follow the Supreme Court's directive in GKN Driveshafts, which mandates disposing of objections before proceeding with the assessment, rendered the reassessment proceedings and the consequential assessment order null and void. The questions were answered in favour of the assessee and against the Department. The appeal was allowed.
The High Court, in appeal No. 210/2017, held that the CIT(A) and Tribunal were correct in deleting the addition of Rs. 91,59,305/-. The Court noted that the Supreme Court in Ghanshyam (HUF) observed that receipt of enhanced compensation is liable to be taxed in the year of receipt, and in view of the DSL Enterprises (P) Ltd. case, the amount credited on the escalation head was rightly shown as a liability. The issue was considered squarely covered in favour of the assessee by paragraph 28 of the Ghanshyam (HUF) judgment. Consequently, the department's appeal (210/2017) was dismissed. Regarding appeal No. 10/2017, the Court stated that in view of the decision in appeal No. 210/2017, the issue was not being decided and it would be open for the assessee to agitate the issue by way of cross-objection before the Supreme Court if the department prefers an appeal.
The High Court held that the appeal, having a tax effect of less than Rs. 20 lac, is below the monetary limit prescribed for filing appeals before the High Court as per CBDT Circular No. 21/2015. The circular applies retrospectively to pending appeals. Therefore, the appeal is dismissed as not pressed. The Court clarified that any substantial questions of law raised in the appeal are left open for examination in future appropriate proceedings. The Revenue is at liberty to move an application for recalling the order if the appeal falls under any of the exceptions mentioned in the circular.
The High Court held that the ITAT and AO had committed an error in not considering the significantly increased expenses incurred on trip, repairing, and tyre expenses. The Court noted that while the assessee's own trucks were used, leading to increased expenses, the profit had also increased correspondingly. The Court found that the authorities should have considered the average profit of the industry as a basis for estimation. The Court calculated an average net profit rate of 2.12% based on the figures presented. Therefore, both issues were answered in favour of the assessee and against the department. The appeal was allowed, and the assessment was to be made on the basis of the principal average of 2.12%.
The High Court allowed the appeal. It held that in view of the well-settled proposition and the decision of the Supreme Court in *Commissioner of Income Tax Vs. Reliance Petro Products (P) LTD.*, the imposition of penalty under Section 271(1)(c) was not justified merely on the basis of additions made during assessment proceedings. The Court found that the facts did not amount to concealment of income. The reasoning was that for a penalty under Section 271(1)(c) to be leviable, there must be either concealment of particulars of income or furnishing of inaccurate particulars. The Supreme Court in the cited case clarified that making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars, and the element of mens rea, or a deliberate act or omission, is essential for attracting such penalty, unless the case is strictly covered by the provision. The issue was answered in favour of the assessee against the department. The operative direction was to allow the appeal.
The High Court held that the substantial questions of law were required to be answered in favour of the revenue and against the assessee. The Court noted that while the Supreme Court in Lovely Exports (supra) stated it is not for the assessee to explain how the investment is made, in the peculiar facts of this case, where the company is a private entity and the share application was not a public issue, the statements recorded raised serious doubts about the genuineness of the transactions. The Court found that the Managing Director's answer, stating he did not know the company or its people, raised serious doubt. The Court agreed with the Tribunal's reversal of the finding on the issue of application of Rs. 79 lacs entries. However, regarding the application of Rs. 20 lacs, the Court found that the Tribunal had committed a serious error in reversing the CIT(A)'s finding. The Court also clarified that an amount of Rs. 5,97,059 deleted under Section 40A(ia) should remain deleted as no appeal was preferred by the department. Therefore, the issues were answered partly in favour of the assessee and partly in favour of the department. The appeal was partly allowed.
The High Court held that the calculation made by the CIT(Appeals) regarding unexplained sundry debtors and creditors had no logical basis. The court agreed with the ITAT's view that the ratio of unexplained debtors and creditors at the beginning of the block period could be better determined by applying the ratio of disclosed debtors and creditors as per the books of account as on March 31, 1996. This approach was deemed logical and justified, warranting no interference. Regarding the addition of Rs. 75,000/- for the loan to Shri D.P. Agarwal, the court noted that the amount was taken in cash, no amount was outstanding prior to the transaction, and no evidence was furnished to support the claim of it being an advance from the assessee's late father. The concurrent findings of the A.O., CIT(Appeals), and ITAT on this matter were considered findings of fact, not giving rise to a substantial question of law. Therefore, the questions framed were answered accordingly, and the appeal was dismissed.
The High Court held that the issuance of a second notice under Section 148 while the proceedings against the first notice were pending before the CIT(A) was not legal. The Court reasoned that an adjudicating authority could not issue a second show cause notice under Section 148 when the matter concerning the first notice was already sub-judice. Therefore, the second show cause notice was held to be illegal, irrespective of the jurisdictional AO. Consequently, the first issue was answered in favour of the assessee. As the second issue was consequential to the first, it was also answered in favour of the assessee. The Court did not delve into the specific details of the cash credit additions under Section 68, as the primary issue of the validity of the second notice led to the quashing of the proceedings. The appeal was allowed.
The High Court held that the issue of notice to the assessee and its service are jurisdictional requirements that must be mandatorily complied with, not mere procedural requirements. For the AO to exercise jurisdiction to reopen an assessment, notice under Section 148(1) must be mandatorily issued and served upon the assessee in accordance with Section 282(1) of the Act read with Order V Rule 12 CPC and Order III Rule 6 CPC. The onus is on the Revenue to prove proper service. The Court found that the Revenue failed to discharge this onus. The mere fact that an assessee or an unauthorized person participated in reassessment proceedings after becoming aware of them does not constitute a waiver of the requirement of proper service. Reassessment proceedings finalized without effecting proper service are invalid. The Court noted that Section 292BB is prospective and, in any event, the assessee had raised an objection regarding non-service. Therefore, the presumption of service could not be drawn when the notice was sent to an address where the assessee was not residing. The Court concluded that the issue must be answered in favour of the assessee and against the department. The appeal was allowed.
The High Court held that the assessee could not withdraw the claim made in the original return by filing a revised return under Section 139(5). The Court observed that Section 139(5) allows for filing a revised return to correct omissions or wrong statements, but it does not permit the withdrawal of a claim that was originally made correctly, especially after the period for filing the original return or revised return has expired. The Court noted that the assessee had taken advantage of Section 139(5) to avoid penalties and could not subsequently argue that the revised return was non-est. The Court also addressed Section 80A(5), stating that the return referred to therein is the return filed for the relevant year under consideration by the AO. Since the revised return did not contain the claim, the assessee could not claim any benefit. Therefore, all issues were answered in favour of the department and against the assessee. The revised return was not permissible, and a 'revised return of a revised return' is not contemplated by the legislature. The Court found that the assessee, having filed a return after the prescribed limitation period under Section 139(5), could not alter the position. The operative direction was that the appeal stands dismissed.
The High Court held that the appeals did not involve any substantial questions of law. The Court found no infirmity in the ITAT's finding. The reasoning was that the assessee society had given an interest-free loan to another society, which was neither an investment nor a deposit, and therefore, the provisions of Section 13(3) of the Act were not applicable. The Court also noted that a similar issue for assessment year 2004-2005 had been decided by the Tribunal in favour of the assessee, and no appeal was preferred against that order. Additionally, the Delhi High Court in Director of Income-Tax (Exemption) vs. Acme Educational Society was cited as having examined a similar issue and decided in favour of the assessee. Consequently, the question of law was answered in favour of the assessee against the department. The appeal was dismissed.
The High Court held that the first proviso to Section 12A(2) of the Income Tax Act is applicable retrospectively. The reasoning was that this proviso was introduced to cure an anomaly and unintended hardship faced by trusts and institutions, making the section more workable and purposive. It was considered a curative proviso, declaratory of the previous law, and aimed at providing relief. The Court, in the absence of any contrary decision cited by the department, respectfully followed decisions in Sree Sree Ramkrishna Samity and SNDP Yogam, which held the proviso to be retrospective. Furthermore, the Court held that appellate proceedings are a continuation of original proceedings and thus, proceedings pending in appeal are deemed to be 'assessment proceedings pending before the Assessing Officer' as contemplated by the proviso. Consequently, the subsequent grant of registration was held to operate retrospectively for all relevant years under consideration. The appeal was dismissed.
The High Court held that in view of the well-settled provisions of law and the arguments presented by both parties, the matter required to be remitted back to the Tribunal. The Court found that the Tribunal's discretion under Rule 29 of the ITAT Rules, 1963, to admit additional evidence, especially when it is substantial, material, and in the interest of justice, needed further consideration. The Tribunal's broad powers under Section 254 of the Income Tax Act to pass such orders as it thinks fit, including considering questions of law arising in assessment proceedings even if not raised earlier, were also emphasized. The High Court directed the learned Tribunal to pass an appropriate order after considering the law referred to by the High Court and to hear the appeal on merits. If required, the Tribunal was also empowered to remit the matter back to the Assessing Officer for an appropriate order. No issue was expressly left undecided.
The High Court held that the appeals would not abate due to the death of the assessee. It relied on Section 159 of the Income Tax Act, 1961, and its interpretation that proceedings under the Act do not abate. The Court found that the objection regarding abatement was without substance. The Court also noted that the ITAT's observations, confirmed by the CIT(A), indicated that the books of account were not rejected, leading to the conclusion that Section 69B was wrongly invoked. Consequently, the Court found no reason to interfere with the orders of the lower authorities. The issues were answered in favour of the assessee and against the department. The operative direction was that the appeals stand dismissed.
The High Court upheld the ITAT's decisions on all issues. Regarding depreciation on public roads, the Court agreed with the ITAT that the assessee's development of roads, toll booths, and staff facilities, as per the agreement, constituted a capital asset. The Court noted that the definition of 'building' in the Income Tax Act and subsequent legal interpretations supported this view, distinguishing it from public roads in the common parlance. On depreciation for EDP equipment, the Court concurred with the ITAT that optical fibers used exclusively for computer configuration are part of the computer system and thus eligible for higher depreciation. For the disallowance under Section 43B(f) for leave encashment, the Court agreed with the ITAT that this provision had been struck down by the Calcutta High Court in the case of Exide Industries Ltd. & Others vs. Union of India & Others, making the disallowance unsustainable. Concerning Section 14A, the Court found that the ITAT had correctly held that the Assessing Officer failed to establish a nexus between borrowed funds and investments, and the assessee had demonstrated sufficient own interest-free funds. The Court also agreed with the ITAT's view on capitalizing pre-incorporation expenses and site development costs. Finally, regarding penalties under Section 271(1)(c), since other issues were decided in favour of the assessee, the penalty issue was also decided against the Revenue.
The High Court held that the instant appeal, with a tax effect indisputably less than Rs. 20 lac, deserved to be dismissed as not pressed, in light of CBDT Circular No. 21/2015. The Court noted that the circular's instructions applied retrospectively to pending appeals. While dismissing the appeal, the Court clarified that any substantial questions of law raised in the appeal were left open to be examined in an appropriate future proceeding. The Revenue was granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions specified in the circular. Accordingly, the appeal was dismissed as not pressed.
The High Court held that the Tribunal's decisions were justified and answered all issues in favour of the assessee. Regarding the first issue, the Court found that payments to persons referred to in Section 13(3) did not disqualify the assessee from Section 11 benefits if the university was a statutory creation controlled by the same trustees and the transfer was for educational purposes. The Court reasoned that Section 13 must be considered with its explanation, and merely having common trustees or directors in another institution does not automatically bring it under Section 13. For the second issue, the Court held that the amendment to Section 11(6) is prospective, and prior to April 1, 2015, depreciation was rightly allowed, following jurisdictional High Court judgments. On foreign travelling expenses, the Court agreed with the Tribunal that these were for student exchange programs and educational purposes, thus covered under the trust's objects. The Court also affirmed that the Tribunal's findings on these matters were based on appreciation of facts and did not raise substantial questions of law. Consequently, all appeals filed by the Revenue were dismissed.
The High Court held that the instant appeal, with a tax effect indisputably less than Rs. 20 lakh, deserves to be dismissed as not pressed, in light of CBDT Circular No. 21/2015. The circular, which applies retrospectively to pending appeals, sets a monetary limit of Rs. 20,00,000 for filing appeals before the High Court. While the circular provides exceptions for certain issues (e.g., constitutional validity, Board's orders being held illegal, revenue audit objections accepted, or additions relating to undisclosed foreign assets/bank accounts), the court did not find these exceptions applicable or argued in this specific instance. The court clarified that the substantial questions of law raised in the appeal, if any, are left open to be examined in future appropriate proceedings. The Revenue was granted liberty to move an application for recalling the order if the appeal falls under any of the exceptions mentioned in the circular.