AO Can’t Initiate New Controversy in Garb of Giving Effect to Order of Tribunal | HC

Case Details: Ayyappa Seva Samgham Bombay v. Deputy Commissioner of Income Tax - [2024] 161 taxmann.com 439 (Bombay)

Judiciary and Counsel Details

• • K.R. Shriram & Dr. Neela Gokhale, JJ.
  • S.C. Tiwari & Ms Rutuja N. Pawar for the Petitioner.
  • Ms Swapna Gokhale for the Respondent.

Facts of the Case

The assessee was a charitable organization registered under section 12A. During the relevant assessment year, the assessee deposited cash in the bank account. The Assessing Officer (AO) completed the assessment by taxing the cash deposited as ‘unexplained money’ under section 69A. The order of assessment was revised by the AO under section 263, and the exemption under section 11 was denied.

The matter went to the Tribunal, and the Tribunal held that the cash deposited by the assessee was not assessable as ‘unexplained money’. The assessee’s income should be computed as ‘Nil’. The AO was directed to issue a refund to the assessee of all taxes paid for the relevant assessment year.

Pursuant to the directions of the Tribunal, the AO issued an order giving effect to its order. However, he also called upon the assessee to furnish a complete set of Form 10B and to justify why the claim of exemption under section 11 of the Act should be allowed. Aggrieved by the order, the assessee filed a writ petition to the Bombay High Court.

High Court Held

The High Court held that the AO, in the garb of giving effect to the order of the Tribunal, initiated a new controversy. Since before the Tribunal, there was no controversy as regards the date of filing of return and Form 10B, the AO cannot initiate a new controversy. In these circumstances, the order-giving effect was quashed and set aside.

List of Cases Reviewed

• • Jindal Photo Films Ltd. v. Dy. CIT [1999] 105 Taxman 386/[1998] 234 ITR 170 (Delhi) (para 8)
  • Credit Suisse Business Analysis (India) (P.) Ltd. v. Asstt. CIT [2016] 72 taxmann.com 131 (Mum. – Trib.) (para 17) followed.

List of Cases Referred to

• • Jindal Photo Films Ltd. v. Dy. CIT [1999] 105 Taxman 386/[1998] 234 ITR 170 (Delhi) (para 8)
  • Ayyappa Seva Samgham Bombay Trust v. CIT(A) [IT Appeal No. 135 (Mum.) of 2023, dated 15-5-2023] (para 12)
  • Credit Suisse Business Analysis (India) (P.) Ltd. v. Asstt. CIT [2016] 72 taxmann.com 131 (Mum. – Trib.)