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2015 (8) TMI 1436 - AT - Income TaxReopening of assessment - assessee had filed the return of income in the ACIT Kurnool and notice reveals that it has been issued by the DDIT (Exemptions) Hyderabad - Held that - As decided in assessee s own case once the jurisdiction is vested with the Kurnool Range there cannot be framing of assessment or issue of notice u/s. 148 or framing assessment by any other authority than the Kurnool Range. The argument made before us by the Department is devoid of merit. There cannot be one authority for levying of penalty on assessment at Kurnool and another authority for framing assessment. Being so issue of notice u/s. 148 by the Hyderabad Range of the Department is not correct. As the issue of notice itself is bad in law by the Hyderabad Range of the Department consequent framing of assessment is bad in law. Being so we quash the reopening of assessment for all the above four assessment years. - Decided in favour of assessee.
Issues Involved:
1. Validity of reopening the assessment under section 147 of the I.T. Act. 2. Jurisdiction of the Assessing Officer (A.O.). 3. Treatment of development fund as capitation fee and its exemption under section 11 of the I.T. Act. Issue-Wise Detailed Analysis: 1. Validity of Reopening the Assessment under Section 147 of the I.T. Act: The assessee challenged the validity of the reopening of the assessment under section 147. The Ld. CIT(A) confirmed the validity of the proceedings under section 147. The Tribunal considered the earlier order in the assessee's own case for the A.Ys. 1999-2000 to 2003-2004, where it was held that the reopening of the assessment by the DDIT (Exemptions), Hyderabad was not valid. The Tribunal quashed the reopening of the assessment for the A.Y. 2001-2002, following the decision in the earlier years, stating that the reasons recorded for reopening did not survive, making the reopening bad in law. 2. Jurisdiction of the Assessing Officer (A.O.): The assessee contended that the jurisdiction lies with the A.O. at Kurnool, not with the DDIT (Exemptions), Hyderabad. The Tribunal noted that the assessee had filed its return of income in the O/o. ACIT, Kurnool. The Tribunal referred to its earlier order, which confirmed that the jurisdiction over the assessee was with the JCIT, Kurnool. The Tribunal emphasized that there cannot be different authorities for levying penalty and framing assessment. Thus, the issuance of notice under section 148 by the Hyderabad Range was deemed incorrect, and the consequent framing of assessment was held to be bad in law. 3. Treatment of Development Fund as Capitation Fee and Its Exemption under Section 11 of the I.T. Act: The A.O. treated the development fund collected by the assessee as capitation fee, following the judgment of the Hon'ble Supreme Court in the case of TMA Pai Foundation and others vs. State of Karnataka and others, and the A.P. Educational Institutions (Regulation of Admissions and Prohibition of Capitation Fee) Act, 1983. Consequently, the A.O. denied the exemption under section 11 of the I.T. Act. The Tribunal, however, did not delve deeply into this issue in the given judgment, as the primary focus was on the jurisdiction and validity of the reopening of the assessment. Conclusion: The Tribunal allowed the appeal of the assessee, quashing the reopening of the assessment for the A.Y. 2001-2002 and confirming that the jurisdiction lies with the JCIT, Kurnool, not with the DDIT (Exemptions), Hyderabad. The Tribunal followed its earlier decision in the assessee's own case for the preceding and succeeding assessment years, thereby providing consistency in its rulings. The issue of treating the development fund as capitation fee and its exemption under section 11 was not the focal point of the judgment, as the primary issues were related to jurisdiction and the validity of the reopening of the assessment.
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