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2022 (11) TMI 825 - AT - Income TaxValidity of Reopening of assessment u/s 147 - assessee submitted that the assessee had taken specific ground regarding validity of re-opening of the assessment - HELD THAT - On a pointed query from the Bench of the Tribunal that there is no decision by the Ld.CIT(A) on the ground of validity of re-opening of the assessment, Ld. Sr. DR agreed that matter may be restored to the file of Ld.CIT(A) and direct the Ld.CIT(A) to adjudicate the grounds raised by the assessee. There is no dispute with regard to the fact that the assessee had raised specific ground related to validity of re-opening of the assessment u/s 148 of the Act however, this ground is not adjudicated by Ld.CIT(A) since the issue of jurisdiction goes to the root of any proceedings. We therefore, looking to the facts of the present case, the impugned order is set aside and the ground raised by the assessee are restored to the file of Ld.CIT(A) to decide it afresh by way of a speaking order. Thus, ground raised by the assessee in this cross-objection is allowed for statistical purposes.
Issues:
1. Validity of assessment under section 147 of the Income Tax Act for the assessment year 2011-12. 2. Whether the income of the "Discretionary Trust" should be assessed independently or in the hands of the beneficiary. 3. Adjudication of the ground related to the validity of reassessment under section 147 of the Act. Issue 1: Validity of assessment under section 147 of the Income Tax Act for the assessment year 2011-12: The appeal and cross-objection were directed against the order of Ld. CIT(A)-15, Delhi, dated 21.08.2020. The AO had re-opened the case under section 147 of the Act, leading to a notice u/s 148 being issued to the assessee. The AO disallowed a deduction under section 54F, resulting in an increased income assessment. The Ld.CIT(A) deleted the additions made by the AO but did not address the validity of the reassessment. The assessee contended that the issue of jurisdiction cannot be considered general and argued for quashing the assessment on grounds of validity. The Tribunal agreed that the Ld.CIT(A) did not decide on the validity of reassessment, a crucial issue going to the root of the proceedings. Consequently, the impugned order was set aside, and the matter was remanded to the Ld.CIT(A) for fresh adjudication on the validity of reassessment under section 147 of the Act. Issue 2: Whether the income of the "Discretionary Trust" should be assessed independently or in the hands of the beneficiary: The Revenue raised grounds questioning whether the income of the "Discretionary Trust" should be assessed independently or in the hands of the beneficiary. The issue of assessing the trust separately or clubbing the taxable income with the beneficiaries was raised. The CIT(A)'s findings, based on presumptive facts, were also challenged. The Tribunal, after setting aside the impugned order related to the validity of reassessment, remanded these grounds to the Ld.CIT(A) for fresh consideration post-adjudication of the reassessment's validity. The appeal of the Revenue was allowed for statistical purposes, awaiting the Ld.CIT(A)'s decision on these issues. Issue 3: Adjudication of the ground related to the validity of reassessment under section 147 of the Act: The cross-objection filed by the assessee highlighted that the Ld.CIT(A) did not address the ground concerning the validity of reopening the assessment. As the legality of the assessment order was deemed crucial, the Tribunal remanded this ground to the Ld.CIT(A) for fresh adjudication following the assessment's validity. The appeal of the Revenue was also allowed for statistical purposes, awaiting the Ld.CIT(A)'s decision on this issue. In conclusion, both the appeal of the Revenue and the cross-objection filed by the assessee were allowed for statistical purposes, emphasizing the importance of addressing the validity of reassessment under section 147 of the Act in the proceedings.
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