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TMI Blog2023 (11) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued on the assumption that as on the date of issuance of notice, the assessee trust is not an approved fund. 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3 of Part B of Schedule-IV of the Income Tax Act, 1961 dated 31-03-2014 shows that the approval of the fund was only withdrawn with effect from the date of passing of the aforesaid order, which was on 31-03-2014.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 on 24-03-2014, the fund was an approved fund and therefore, the case of the assessee was reopened on the basis of incorrect assumption of fact that as on the date of issuance of reassessment notice the assessee fund was not approved . Accordingly, since the reasons for the opening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to appreciate that Schedule IV Part B, Rule 11(1)(c) gives power to Board to limit even other contributions (i.e. other than ordinary annual contribution) but the Board has not framed the rule limiting this other contributions, and therefore also the order of the AO taxing Rs. 84,00,000/- is bad. 5. The CIT(A) failed to appreciate that order dated 31.03.2014 of CIT (Rajkot) cannot and does not apply to this year. 6. The CIT(A) erred in not following the ratio of Mumbai Tribunal decision in ACIT vs. Glaxosmithline Pharmaceuticals in ITA No 644/Mum/2007. 7. The CIT(A), if he wanted to go by the order of the Commissioner, ought to have waited for the order of Central Board of Direct Taxes, which would decide whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, evidently, as on the date of issuance of notice of reopening of assessment on 24-03-2014, the fund was an approved fund and therefore, the case of the assessee was reopened on the basis of incorrect assumption of fact that as on the date of issuance of reassessment notice the assessee fund was not approved . Accordingly, since the reasons for the opening of assessment itself were based on an incorrect assumption of facts, the reassessment notice and consequential assessment proceedings are liable to be set aside. The counsel for the assessee further submitted that order dated 31-03-2014 withdrawing the approval of the fund does not mention any specific date from which the aforesaid approval is valid. Accordingly, in absence of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions and perused the material on record. While we are in agreement with the reasoning given by the Ld. DR that the non-satisfaction of conditions of approval can lead to deemed withdrawal of approval from the date on which the violation was committed by the assessee trust, however, the aforesaid reason must also find mention in the reasons for reopening of assessment notice issued to the assessee. We observe that on perusal of the reasons for reopening of assessment, the case of the assessee has been reopened on the basis that excess fund amounting to ₹ 84 lakhs does not form part of the approved fund and hence is not exempt from taxation. Therefore, the aforesaid amount of ₹ 84 lakhs needs to be brought to tax. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect. (4) The Commissioner shall neither refuse nor withdraw approval to any superannuation fund or any part of a superannuation fund unless he has given the trustees of that fund a reasonable opportunity of being heard in the matter. 6. From a perusal of the relevant extracts of Rule 2 of Part B of Schedule-IV of the Income Tax Act, 1961, it is evident that the order for withdrawal of approval of the superannuation fund must mention the date from which withdrawal is to take effect. Accordingly, since in the instant facts, the order for withdrawal of approval dated 31-03-2014 did not make any specific mention of the date from which the order for withdrawal of approval shall take effect, the same shall take only effect from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that 1/3rd share of the assessee from the actual sale consideration of Rs. 1,18,95,000/therefore, was not brought to tax. These reasons are interconnected and interwoven. In fact, even if these reasons are seen as separate and severable grounds, both being factually incorrect, Revenue simply cannot hope to salvage the impugned notice. Through the affidavit-in-reply a faint attempt has been made to entirely shift the center of the reasons to a completely new theory viz. the possible applicability of section 50C of the Act. The reasons recorded nowhere mentioned this possibility. Reasons recorded, in fact, ignored the fact that the sale consideration as per the sale deed was Rs. 50 lakhs and that the assessee had by filing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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