9911796707
TMI Blog2023 (11) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing grounds of appeal:- "1. The Commissioner of Income Tax (Appeals) (hereinafter 'CIT(A)') erred in upholding the validity of reopening notice and reassessment order. 2. The CIT(A) erred in holding that interest of Rs 84,00,000/- earned from the approved fund on the contributions from Kandla Port Trust as per actuarial valuation is not entitled to exemption as per law. 3. The CIT(A) failed to appreciate that in this year Rs 84,00,000/- was earned from approved fund as defined in section 2(6) and under section 10(25)(iii) all income received by such fund is exempt, and therefore, assessment order taxing the interest of Rs 84,00,000/- is bad in law. 4. The CIT(A) failed to appreciate that Schedule IV Part B, Rule 11(1)(c) giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee was reopened on the basis that the excess funds do not form part of "approved fund", and hence is not exempt from taxation. Accordingly, as per the "reasons for the opening of the assessment", it is evident that the case of the assessee was reopened on the basis that as on the date of issuance of aforesaid notice, the assessing officer was of the belief that the fund is "not approved". However, a perusal of order passed under Rule 3 of Part B of Schedule-IV of the Income Tax Act, 1961 dated 31-03-2014 shows that the approval of the fund was only withdrawn with effect from the date of passing of the aforesaid order, which was on 31-03-2014. Therefore, evidently, as on the date of issuance of notice of reopening of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the instant facts, the assessee violated the conditions on the basis of which approval had been granted and the AO observed that assessee had not filed copies of accounts and returns of income of the fund within the prescribed timelines and had also received annual contribution from the employer in excess of the prescribed limits under Rule 87 of the IT Rules. Accordingly, since the conditions of approval had been violated by the assessee trust, the approval of the assessee trust is deemed to have been withdrawn from such date of violation by the assessee. Therefore, re-assessment proceedings have been validly initiated. 5. We have heard the rival contentions and perused the material on record. While we are in agreement with the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which, in his opinion, complies with the requirements of rule 3, and may at any time withdraw such approval, if in his opinion, the circumstances of the fund or part cease to warrant the continuance of the approval. (2) The Commissioner shall communicate in writing to the trustees of the fund the grant of approval with the date on which the approval is to take effect, and, where the approval is granted subject to conditions, those conditions. (3) The Commissioner shall communicate in writing to the trustees of the fund any withdrawal of approval with the reasons for such withdrawal and the date on which the withdrawal is to take effect. (4) The Commissioner shall neither refuse nor withdraw approval to any superannuation fund or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdictional Gujarat High Court struck down the notice issued reopening the assessment on the basis of incorrect set of facts, with the following observations: "12. The Assessing Officer may be correct in pointing out that when the sale consideration as per the sale deed is Rs. 50 lakhs but the registering authority has valued the property on the date of sale at Rs. 1,18,95,000/ for stamp duty calculation, section 50C of the Act would apply, of course, subject to the riders contained therein. However, this is not the cited reason for reopening the assessment. The reasons cited are that the assessee filed no return and that 1/3rd share of the assessee from the actual sale consideration of Rs. 1,18,95,000/therefore, was not brought to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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