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TMI Blog2024 (1) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the assessee preferred against the order of the DIT(E) u/s 263 of the Act wherein as clarified that the ITAT should consider the substantive merits of the appeal with respect to the assessee's taxability of amounts under Section 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 under Section The appeal is disposed of in the above terms. It can be seen from the above findings of the Hon'ble High Court [supra] that the contention of the assessee has to be considered within the provisions of section 11(3) of the Act. Therefore, in the interest of justice and fair play and in line with the directions of the Hon'ble High Court of Delhi [supra], we restore this appeal to the file of the ld. CIT(A). The ld. CIT(A) is directed to decide the appeal afresh considering the claim of the assessee in light of provisions of section 11(2) and 11(3) of the Act after affording reasonable and adequate opportunity of being heard to the assessee. Appeal of the assessee allowed for statistical purposes. - Shri Saktijit Dey, Vice President, And Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 3.2 Without prejudice, the CIT(A) erred on facts and in law in not appreciating that out of accumulated funds under section 11(2), sum of Rs. 7,09,91,548 was utilized in the subsequent assessment years where benefit of exemption under section 11 of the Act was allowed to the appellant, and the same could not be brought to tax under section 11(3) of the Act. 3.3 Further, without prejudice, the CIT(A) erred on fats and in law in not appreciating that out of the accumulated funds under section 11(2) of the Act, aggregating to 12,16,04,117 as on 01.04.2008, an amount of Rs. 2,98,52,572, remaining unutilized, had been suo-motu offered to tax as income of the assessee in the assessment year 2014-15, and the same was not liable to tax under section 11(3) of the Act during the relevant assessment year. . 3. Though the assessee has raised additional grounds, but at the very outset, the ld. counsel for the assessee stated that under instructions, he is not pressing the additional grounds. Therefore, the same are dismissed as not pressed. 4. Coming to the merits of the grounds, we note the following facts emanating from the orders of the authorities below. 5. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.03.2014 passed by the ld. OIT (E) against which no appeal has been filed in the ITAT. In the return of income filed, the assessee on its own had not claimed exemption u/s 11 based on circular no. 11/2008 since the assessee association had dealt with non-members. Subsequently on going through the assessment records, the ld. DlT (E) noticed that there was total unutilized balance of Rs. 12,16,04,117/-. During the period under consideration, since the assessee had ceased to be involved in charitable activity, the amount so accumulated also teased to be accumulated or set apart for application for charitable purpose. It was noted that as the unutilized amount was not charged to tax, this mistake resulted in under- assessment of income by Rs. 12,16,04,1 17/ -. After giving an opportunity of being heard to the assessee, an order was passed under section 263 by the ld, DlT (E) held as under: 6. It is seen that the AO did not examine the issue of taxability of the unutilized amount accumulated u/s. 11(2) of the Act once the assessee has ceased to be a charitable organization. By assessee's own admission, it is mutual organization. A mutual organization cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the ITO to give effect to a . reuisional order or an appellate order, only such issues can be agitated in such appeal which hate not attained finality by virtue of earlier orders of the revisional! or appellate authorities. J t is not open. in such an appeal to agitate any point which has already been decided by the revisional or the appellate authorities in their order. 4.5 In the case under consideration, no appeal has been filed against the order of the ld. ClT(E) under section 263 and hence the issue regarding taxing the unutilized accumulated balance has become final. In view of the decision of the Hon'ble Bombay High Court in the case of .Herdillia Chemi ;ls Lt .vs. Commissioner of Income-tax (supra), this issue cannot be agitated in appeal. 12. Order of the ld. CIT(A) is dated 23.03.2-017 which means that at the time of passing of the order, order of the Hon'ble High Court of Delhi was not available, which is available before us. 13. We have carefully perused the order of the Hon'ble High Court of Delhi preferred by the assessee against the order of this Tribunal in ITA No. 2861/DEL/2014 order dated 12.01.2017 by which the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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