This article delves into the details of ITA No. 1881/DEL/2020, involving ACIT Circle-43(1), New Delhi, and Merilina Foundation, New Delhi. The case concerns the Assessment Year (AY) 2011-12, was filed on November 20, 2020, and the final order was pronounced on November 16, 2022. The core issue revolves around the validity of reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961.
The case was reopened under Section 147 of the Income Tax Act, and a notice under Section 148 was issued to Merilina Foundation. In response, the assessee filed its return of income, declaring a total income of Rs. 6,41,08,170. The Assessing Officer (AO) framed the assessment under Section 143(3) read with Section 147 of the Act, rejecting the claim of deduction under Section 54F amounting to Rs. 4,82,40,602 and assessed the income at Rs. 11,23,48,770.
Aggrieved by the AO’s decision, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], who deleted the additions made by the AO. However, the CIT(A) did not address the ground raised by the assessee regarding the validity of reopening the assessment.
Both the Revenue and the assessee filed appeals and cross-objections, respectively, before the Income Tax Appellate Tribunal (ITAT). The assessee contended that the CIT(A) erred in not addressing the validity of the reassessment proceedings. The Revenue supported the AO’s original assessment.
The ITAT, comprising Shri N.K. Billaiya, Accountant Member, and Shri Kul Bharat, Judicial Member, noted that the CIT(A) did not adjudicate the specific ground regarding the validity of the reassessment under Section 148, which goes to the root of the case. Both parties agreed that the matter should be restored to the CIT(A) for a fresh decision on this ground.
Based on the submissions and facts presented, the ITAT set aside the CIT(A)’s order and restored the matter to the CIT(A) to decide the validity of the reassessment proceedings afresh. The tribunal noted that if the reassessment is found invalid, the other grounds would become academic.
The final order, pronounced on November 16, 2022, reads:
In the result, the appeal of the Revenue and the cross-objection filed by the assessee are allowed for statistical purposes.
Signed by:
Shri N.K. Billaiya, Accountant Member
Shri Kul Bharat, Judicial Member
This judgment emphasizes the importance of addressing jurisdictional issues in reassessment proceedings and ensures that such matters are adjudicated thoroughly before any substantive issues are considered.
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