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2020 (8) TMI 46 - AT - Income TaxReopening of assessment u/s 147 - Exemption u/s 11 - assessee is a Trust engaged in Urban Development activity as per the Government Regulations - HELD THAT - In the original assessment orders, the AO has also allowed benefit of sections 11 and 12 to the assessee. These orders have been reopened by the AO by issuance notice under section 148 of the Act. We have noticed the above facts while dealing with the issues in the appeal of Revenue on the merit of reopening. The income of the assessee was determined at NIL in the original assessment orders for both the years. Considering the order of co-ordinate Bench in the Asstt.Year 2011-12 2019 (7) TMI 1608 - ITAT AHMEDABAD we are of the view that the assessee is entitled to benefit of sections 11 and 12, and therefore, the issue on merit also deserves to be decided in favour of the assessee.
Issues Involved:
1. Condonation of delay in filing cross objections. 2. Validity of reopening the assessment under section 147/148. 3. Entitlement to exemption under section 11 and 12 of the Income Tax Act. Issue-wise Detailed Analysis: 1. Condonation of Delay in Filing Cross Objections: The assessee filed cross objections (COs) which were time-barred by 212 days. The delay was attributed to a bona fide mistake by the Accounts Officer, who believed no further action was necessary after the CIT(A) quashed the reassessment proceedings. The Tribunal considered the explanation provided, which included affidavits and an application detailing the reasons for the delay. Citing precedents from the Supreme Court, the Tribunal emphasized a liberal interpretation of "sufficient cause" and concluded that the delay was not deliberate. Therefore, the application for condonation of delay was allowed, and the COs were admitted for consideration on merits. 2. Validity of Reopening the Assessment under Section 147/148: The Revenue appealed against the CIT(A)'s decision to quash the reassessment orders for the assessment years 2009-10 and 2010-11. The original assessments were completed under section 143(3), accepting the assessee's claim for exemption under section 11. The AO later issued notices under section 148, citing that the assessee's activities fell outside the scope of section 2(15) and thus were not charitable. The CIT(A) quashed the reassessment on the grounds that no fresh material was presented to justify the reopening, and it was based on a mere change of opinion. The Tribunal upheld the CIT(A)'s decision, reiterating that reassessment cannot be initiated on the same set of facts already available during the original assessment without any new information. 3. Entitlement to Exemption under Section 11 and 12: The assessee, a statutory body established by the Government of Gujarat, argued that its activities were charitable and fell within the scope of section 2(15). The Tribunal referred to its own decision in the assessee's case for the assessment year 2011-12, where it was held that the assessee was entitled to exemption under sections 11 and 12. The Tribunal noted that the facts and circumstances for the assessment years 2009-10 and 2010-11 were identical. Hence, following the precedent, the Tribunal concluded that the assessee was entitled to the claimed exemptions. Consequently, the Revenue's appeals were dismissed, and the assessee's cross objections were allowed. Conclusion: The Tribunal dismissed the Revenue's appeals and allowed the assessee's cross objections, affirming the CIT(A)'s decision to quash the reassessment orders and upholding the assessee's entitlement to exemptions under sections 11 and 12 of the Income Tax Act. The decision emphasized the importance of new material for reopening assessments and the liberal interpretation of "sufficient cause" for condoning delays.
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