S S Brahma Educational Trust Vs PCIT (ITAT Cuttack)
Summary: ITAT Cuttack allowed the appeal of S S Brahma Educational Trust and quashed the revisionary proceedings initiated by the Principal CIT, Sambalpur under section 263 of the Income Tax Act, 1961. For AY 2015-16, reassessment had been initiated by notice under section 148 dated 30.03.2021 and an order under section 147 read with section 144B was passed on 20.03.2022 accepting the income declared by the assessee.
Subsequently, the Principal CIT invoked section 263, held the reassessment order erroneous and prejudicial to the interests of Revenue, enhanced income by Rs.2,49,82,396/- and directed initiation of penalty proceedings under section 271(1)(c). The assessee contended that it had applied for registration under section 12AA on 14.02.2020 and registration was granted on 29.06.2020 with effect from AY 2020-21. The reassessment was initiated solely because the assessee had not been registered for the impugned assessment year and had not filed a return.
Relying upon the third proviso to section 12A(2), the assessee argued that once registration had been granted, no action under section 147 could be taken for a preceding assessment year merely for non-registration. The Tribunal first held, following Westlife Development Ltd., Aishwarya Rai Bachchan and Jignesh Lilachand Shah, that the jurisdictional validity of the foundational assessment could be examined in appellate proceedings challenging a section 263 order.
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