Commissioner Of Income Tax (Exemptions v. Honourable Mr. Justice Bhargav D. Karia

C/TAXAP/70/2021 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 70 of 2021 ================================================================ COMMISSIONER OF INCOME TAX (EXEMPTIONS) VersusGANDHINAGAR URBAN DEVELOPMENT AUTHORITY ================================================================Appearance:MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE THE CHIEF JUSTICE MR. JUSTICE VIKRAM NATHand HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 12/03/2021 ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1.This Tax Appeal is at the instance of the Revenue and the same is filed under Section 260A of the Income Tax Act, 1961 (for short ‘the Act’) against the order dated 31.07.2020 passed by the Income Tax Appellate Tribunal, “A” Bench, Ahmedabad in ITA No.1560/Ahd/2017 for A.Y.2009-10. 2.Following substantial question of law is raised in this appeal : “Whether on the facts and circumstances of the case and in law, the Appellate Tribunal was justified in holding the re-assessment proceedings to be wrong and void ab initio without appreciating that assessment was validly reopened on the basis of information and after recording proper reasons?” 3.The assessee is a Trust engaged in the urban development activity as per the Government Regulations and its income is exempted under Section 11 of the Act, 1961. Therefore, the assessee-Trust for the A.Y.2009-10 filed return of income declaring total income of Rs.NIL on 30[th] September, 2009. The Assessing Officer completed the assessment under Section 143(3) of the Act, 1961 accepting the returned income. 4.An assessment order dated 09.09.2011 was passed wherein, it is mentioned by the Assessing Officer that “After discussion and from the data made available during the course of hearing nothing adverse has been found. Assessment is made on the returned income.” During the course of assessment proceedings all the information called for under Section 142(1) of the Act, 1961 relating to the important activities, income, plaint, exempt under Section 11(2) of the Act, 1961 etc. were submitted as well as books of accounts along with bills and vouchers were produced before the Assessing Officer for verification. 5.Notice dated 28[th] March, 2014 under Section 148 of the Act, 1961 was issued by recording reasons that the assesse earned income by rendering service for fee or consideration, hence, the activities of the assessee cannot be treated as charitable activities resulting into denial of exemption under Section 11 of the Act, 1961 in view of the provisions of Section 2(15) read with Section 13(8) of the Act, 1961. 6.The Assessing Officer in the assessement order dated 16.03.2015 passed under Section 143 read with Section 147 of the Act, 1961 disallowed the claim of the assessee for exemption under Section 11(1)(2) of C/TAXAP/70/2021 ORDER the Act, 1961 and made an addition of Rs.3,88,53,890/- and also disallowed the claim under Section11(1)(a)oftheAct,1961for Rs.1,28,91,137/- and assessed total income of Rs.5,17,45,027/-. 7.The assessee thereafter, being aggrieved by the re-assessment order preferred an appeal before the CIT (Appeals). The assessee raised the legal ground and challenged the Notice under Section 148 of the Act, 1961 for re-opening the assessment along with the other grounds raised on merits before the CIT (Appeals). C/TAXAP/70/2021 ORDER the Act, 1961 and made an addition of Rs.3,88,53,890/- and also disallowed the claim under Section11(1)(a)oftheAct,1961for Rs.1,28,91,137/- and assessed total income of Rs.5,17,45,027/-. 7.The assessee thereafter, being aggrieved by the re-assessment order preferred an appeal before the CIT (Appeals). The assessee raised the legal ground and challenged the Notice under Section 148 of the Act, 1961 for re-opening the assessment along with the other grounds raised on merits before the CIT (Appeals). 8.The CIT (Appeals) by order dated 27[th] April, 2017 decided the legal ground regarding the validity of re-opening in favour of the assessee and held the assessment to be null and void ab-initio. The CIT (Appeals), however, on merits held that the assessee is not entitled to exemption under Section 11 of the Act, 1961. 9.The Revenue being aggrieved by the order passed by the CIT (Appeals) preferred ITA No.1560/Ahd/2017. The assessee also preferred Cross-Objections belatedly for denial of the exemption under Section 11 of the Act, 1961. 10.The Tribunal after considering the facts of the case to the effect that the assessee is a statutory body set up by the Government of Gujarat for the purpose of developing the Gandhinagar urban area in controlled and disciplined manner under the Gujarat Town Planning and Urban Development Act, 1976. The income of the assessee mainly grants from the Government which are utilized for development of various public welfare projects. The Tribunal dismissed the Appeal filed by the Revenue confirming the order passed by the CIT (Appeals) on the legal ground that Notice under Section 148 of the Act, 1961 could not have been issued as the Assessing Officer has simply gone through the record already available to him on the basis of which scrutiny assessment was framed under Section 143(3) of the Act, 1961. The Tribunal has considered that there is no change in the facts and circumstances nor new things/effect was derived or came to the notice of the Assessing Officer and therefore, merely on the basis of the change of opinion, the assessment could not be re-opened. The Tribunal has also taken note of the fact that the Assessing Officer himself has recorded the findings in the original assessment that after discussion and from the data made available from the course of hearing nothing adverse was found and all the information called during the course of assessment was provided by the assessee. The assessee also submitted books of accounts supported by bills and vouchers for verification. The Tribunal has also found that even in the reasons recorded in the Notice under Section 148 of the Act, 1961 there is no mention of any adverse fact so as to re-open the original assessment nor any information or fresh evidence was in possession of the Assessing Officer. The Tribunal therefore, came to the conclusion that the assessment was re-opened merely on the basis of the same set of facts which were available on record. The Tribunal accordingly, confirmed the findings of CIT (Appeals) that action of the Assessing Officer in re- opening the assessment was wrong and null and void. opening the assessment was wrong and null and void. 11.We have considered the facts of the case as well as the concurrent findings arrived at by both CIT (Appeals) and the Tribunal for quashing and setting aside the Assessment Order on the ground that Notice under Section 148 of the Act, 1961 was issued without jurisdiction and therefore, action of the Assessing Officer re-opening the assessment was wrong and null and void. From the facts on record it emerges that the assessee furnished all the information called under Section 142(1) of the Act, 1961 at the time of original assessment under Section 143(3) of the Act, 1961 and there is no tangible material available on record with the Assessing Officer to re-open the assessment. In such circumstances, both the CIT (Appeals) and the Tribunal have rightly held that action of the Assessing Officer in re-opening the assessment was not correct. 12.In view of the foregoing reasons, there is no infirmity in the impugned order passed by the Tribunal requiring any interference. No question of law much less any substantial question of law can be said to have arisen from the impugned order of the Tribunal. The Appeal therefore, lack merits and is accordingly, dismissed. (VIKRAM NATH, CJ) PALAK (BHARGAV D. KARIA, J)