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II. Direct Taxes Case Laws:
1. Kulbhushan Khosla Vs. CIT, I.T.A. No. 33/2004, Date of Pronouncement: 14.12.2015, Delhi High Court
Whether
reopening u/s 147 of the Act of an assessment is permissible merely on
the basis of office note of predecessor AO in which a reference was made
to Foreign Tax Department (FTD), in absence of any adverse material
received.
Held_No
In
brief, the AO had made detailed enquiry regarding gifts received by
assessee from foreign donors and completed assessment u/s 143(3) of the
Act. Later on, successor AO reopened the case u/s 147 merely on the
basis that alleged transaction needs verification. The assessee had
challenged reopening of the assessment inter alia on the ground that no
adverse material or new information was received from the FTD up to the
time of the reopening of assessment. The Hon’ble ITAT has held that a
mistake committed by one AO cannot bind the successor AO, who if he
feels that an item of income had escaped assessment, then he bound to
act with reference to a provision of law and not allow the proceedings
to lapse only because the report of the FTD as in the present case is
not receive and uphold order of the CIT(A) & the AO.
The
Hon’ble High Court has held that a detailed enquiry was conducted during
original assessment proceedings, in the absence of any adverse
material, the reopening of the assessment was at best due to change of
opinion of the AO that some income had escaped assessment. This was
impermissible u/s 147 of the Act.
Case
followed: CIT v. Multiplex Trading & Industrial Co. Ltd. (ITA
356/2013, Delhi) and Oriental Insurance Company v. CIT (ITA 174/2013,
Delhi).
(Please click here for judgment)
2. ITO (E) Vs. Bhansali Trust, I.T.A. No. 5948/Mum/2012, Date of Order: 31.08.2015, ITAT - Mumbai
Non-intimation of addition in the object clause of Trust, subsequent
to the grant of registration u/s 12A of the Act, is a valid ground to
deny the exemption u/s 11 of the Act.
Held_No
The AO denied the exemption claimed u/s 11 & 12 of the Act for
reason that objects of the trust had been amended after the grant of
registration u/s 12A of the Act. Whereas, the assessee contented that
even amendments in the objects remain charitable and do not cause any
detriment to the original objects as mentioned in the original Trust
Deed and only their scope has been enlarged. Moreover, the exemption u/s
11 was not denied by the AO during the scrutiny assessment for earlier
years.
Hon’ble ITAT held that there is no change in the tone and tenor of
the objects pursued by the assessee in a real sense. On analysis of the
changes in objects of the Trust deed, we find that the amendment only
seek to provide enabling powers to the Trust to accomplish its original
objects which are in the fields of educational purpose, medical purpose,
relief of poverty and objects of general public utility not involving
carrying on any activity for profit. Thus, the appeal of the Revenue is
dismissed.
(Please click here for judgment)
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