2018 (3) TMI 2025 - HC - Income Tax

Taxability of unutilized accumulated funds under Section 11(2) of the Income-tax Act, as income under Section 11(3). - AO gave effect to the substantive order of the CIT(A) and brought to tax the amounts u/s 11(3) - assessee s appeal to the CIT(A) was rejected primarily on the ground that it had withdrawn its previous appeal questioning the assumption u/s 263. HELD THAT - It is not disputed that the assessee s appeal (appeal to the ITAT) against the order of the CIT(A) is pending before the ITAT. Having regard to these peculiar circumstances, it is clarified that the ITAT should consider the substantive merits of the appeal with respect to the assessee s taxability of amounts u/s 11(3) of the Act without in any manner holding adversely against it, for the withdrawal of the previous appeal (which was concerned only with the question of assumption of taxability u/s 263 of the Act.

Summary

The High Court clarified that the ITAT should consider the substantive merits of the appeal regarding the assessee's taxability under Section 11(3) of the Income Tax Act, without holding the withdrawal of the previous appeal against them. The appeal was disposed of accordingly.