Case Law Details
ITO Vs Old Girtonians Association Property Fund (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT) Mumbai dismissed an appeal by the Income Tax Department against the Old Girtonians Association Property Fund regarding assessment year 2016-17. The appeal challenged the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] from the National Faceless Appeal Centre (NFAC), Delhi, which had quashed the reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961. The department contended that the CIT(A) incorrectly quashed the reassessment, arguing that the fund’s activities fall under the seventh limb of Section 2(15), which would disqualify it from tax exemption under Section 11. Additionally, the department raised concerns about the potential for double taxation, as the exempt amount was not utilized within the statutory time limit. However, the department’s representative acknowledged that the appeal was now infructuous, referencing CBDT Circular No. 9/2024, which increased the minimum monetary limit for filing appeals before the ITAT to ₹60 lakh. Given that the tax effect in this case was ₹57,92,897, below the updated threshold, the tribunal found the appeal to be non-maintainable and dismissed it accordingly. The appellant’s representative concurred with the department’s submission, leading the ITAT to conclude that the appeal did not meet the requisite monetary criteria for further review. All pending applications related to the appeal were also dismissed in the tribunal’s final order, pronounced on October 15, 2024.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. This appeal is filed by the appellant/assessee against the order dated 02.07.2024 of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] for the A.Y. 2016-17.
2. The department is in appeal before us and has raised following grounds of appeal:
1. “Whether, on the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) was justified in quashing the proceedings u/s 148 of the Act in view of the case being re-opened in light its activities of the assessee involved in the 7th limb which attracts proviso to section 2(15) and the assessee is not entitled to exemption u/s 11 of the Act?
2. Whether, on the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) was justified in giving relief and quashing the proceedings u/s 148 of the Act on the basis the assessee would have to suffer double taxation in view of the exempt amount offered for taxation in view of failure to utilize the exempt proceeds accumulated within the statutory time limit required by law?5.
3. Whether, on the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) was justified in quashing the proceedings u/s 148 of the Act considering them as change of opinion when on facts and circumstance the case which has been re-opened on the basis of fresh interpretation of law with respect to the proviso to section 2(15) of the Act in the judgement by the Hon’ble Supreme Court in in ACIT (Exemptions) Vs. Ahmedabad Urban Development Authority [2022] 143 taxmnn.com 278 (SC) .?”
3. During the arguments, the Ld. DR very fairly submitted that the department appeal has become infructuous by virtue of circular no. 9/2024 dated 17.09.2024, wherein the monetary limit for tax effect for filing appeal before Income Tax Appellate Tribunal has been raised upto Rs. 60 lacs. It is submitted that the tax effect in this appeal is below 60 lacs and as such the appeal has become infructuous and same may be disposed off accordingly.
4. We have also heard the Ld. AR on behalf of the assessee, who has supported the submissions of the Ld. DR, and stated that since the appeal is not maintainable and has become infructuous.
5. We have considered the submissions and examined the record. In view of the enhancement of the monetary limit for filing the departmental appeal wherein the tax effect for filing the appeal should be Rs. 60 Lacs or above and the tax effect in this appeal has been shown to be Rs. 57,92,897/-; in view of these facts and the submissions made by the Ld. DR, the appeal filed by the department is accordingly dismissed having become infructuous.
6. In the result, appeal filed by the department is accordingly dismissed having become infructuous.
Order pronounced on 15.10.2024
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