TaxTMI 
TaxTMI 
2021 (3) TMI 586
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....95/19-20, AY 2013-14/ CIT(A) 13 dt. 19.09.2019, ITA No.96/19-20, AY 2014-15/CIT(A) 13 dt. 23.09.2019, ITA No.93/19-20, AY 2013-14/ CIT(A) 13 dt. 23.09.2019, ITA No.97/19-20, AY 2014-15/CIT(A) 13 dt. 23.09.2019, ITA No.94/19-20, AY 2013-14/ CIT(A) 13 dt. 23.09.2019, ITA No.99/19-20, AY 2014-15/CIT(A) 13 dt. 23.09.2019, ITA No.94/19-20, AY 2013-14/ CIT(A) 13 dt. 23.09.2019, ITA No.98/19-20, AY 2014-15/CIT(A) 13 dt. 23.09.2019, ITA No.132/19-20, AY 2013-14/ CIT(A) 13 dt. 26.09.2019 and ITA No.133/19-20, AY 2014-15/CIT(A) 13 dt. 26.09.2019. Before the CIT(A), the orders under challenge was passed by the ITO, Non-Corporate Ward 11(1), Chennai, rejecting objections to re-opening u/s.147 r.w.s. 148 of the Income Tax Act, 1961 (hereinafter 'the Act') vide his orders in F.No.AAATA6596R/2019-20 dated 09.08.2019, F.No. AAATA6600N/2019-20 dt. 01.07.2019, F.No.AAATA6601N/ 2019-20 dt. 01.07.2019, F.No.AAATA0989J/ 2019-20 dt. 01.07.2019, F.No.AAATA6595N/ 2019-20 dt. 01.07.2019, F.No.AAATA6597Q/2019-20 dt. 01.07.2019 and F.No.AAATA0990R/ 2019-20 dt. 09.08.2019. 2. The only common issue in these appeals of assessees is against the orders of CIT(A) in upholding that the appeals filed by the asses....
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....(Appeals) be cancelled and the reopened proceedings be quashed. ITA No.2849/Chny/2019 for AY 2013-14: 3. Brief facts are that the assessee is a private beneficiary trust. The assessee filed its return of income for the relevant assessment year 2013-14 on 19.03.2013. The return of income was processed by the Income-Tax Department u/s.143(1) of the Act and accepted levying taxes at maximum marginal rate u/s.164(2) of the Act. The assessee preferred appeal before CIT(A) against the processing of return u/s.143(1) of the Act and stated that assessment ought to have been made u/s.161(1) of the Act. The CIT(A) has not accepted the claim of the assessee and dismissed the appeal of the assessee. The assessee preferred appeal before ITAT. The ITAT, in ITA No.2185/Mds/ 2016, vide order dated 27.12.2016 quashed the assessment by holding that the challenge to status and levy of tax at maximum marginal rate does not come within the purview of prima facie adjustment u/s.143(1) of the Act and therefore the processing done by AO u/s.143(1) of the Act was quashed. The Tribunal observed in para No.5 as under:- 5. We have considered the rival submissions on either side and perused t....
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.... trustee in a representative capacity or assessee directly in the hands of the beneficiary. In both the cases, what was taxed was the interest of the beneficiary for the trust properties and not the corpus of the trust properties and therefore, it was held that there is uncertainty in the trust and vesting of income in the hands of the future beneficiaries. Hence, the shares of allocation are to be treated as indefinite and uncertain and therefore the income of the Trusts is liable for taxation at maximum marginal rate u/s 164(1) of the Act." The assessee vide letter dated 09.05.2019, objected to reasons for reopening of assessment for the impugned assessment year. The AO considered these reasons and rejected the objections vide order in F.No.AAATA6596R/2019- 20 dated 09.08.2019. The AO after rejection of objections raised for reopening of assessment, requested the assessee to appear in the re-assessment proceedings initiated for assessment years 2013-14 & 2014-15. 4. Aggrieved against rejection of reasons, assessee preferred appeal before CIT(A). The CIT(A) dismissed the appeal of the assessee by holding that the appeal filed by the assessee against the communication of reje....
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....r recompute the loss or depreciation allowance or any other allowance, as the case may be, for the AY concerned 8.1. From a cursory reading of Section 147 as above, it clearly implies that what is stressed therein is the assessment / reassessment of escaped Income which the AR himself has not disputed to have not taken place till date in the instant impugned case by way of a proper assessment order assessing / reassessing escaped income chargeable to tax which is best illustrated by the inescapable fact that the rows vide 6a & 6b relating to 'assessed income' and 'total additions to income' has been left blank by the appellant itself in the Memo of Appeal in Form No. 35.. Further the so called 'order' dated 01.07.2019 by the AO is in fact rejection of the AR's objection to the reopening u/s 147 is further clearly evident from the subject and reference captioned therein and reproduced as under: "Subject : Reopened assessment u/s 147 of the Income Tax Act, 1961 - Your Own - Asst. Years 2013-14 and 2014-15 - Objections to reopening u/s 147 - Speaking order - Regarding Reference : (i) Notice u/s 148 of the IT Act, 1961 dated 28.03.2019 (ii)Your submissions dated 09.05....
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....before the CIT (Appeals) only and not the Deputy Commissioner(Appeals) as it then stood. 4. The crucial phrases are "denies his liability to be assessed" and "under this Act ' In this part no particular section or provision of the Act has been mentioned. Under the latter part of the section an order of assessment under sub-sec (3) of Sec. 143 or under Sec.144 is appealable. Similarly, the various other clauses of Sec. 246 specifically refer to the particular section, orders passed whereunder were appealable. In this setting, the use of the phrase "under this Act" should not mean under any individual section or provision of this Act. 5. In the case of Sushi 1 Kumar v. Commissioner of Income-tax [1980] 121 ITR 708, a full bench of the AllahabAO High court held that: the term "assessed" occurring in this phrase also needs to be properly construed. 6. Ever since the decision of the Privy Council in CIT v. Khemchand Ramdas [1938] 6 ITR 414 (PC), it is settled that the word "assessment "as used in the I.T. Act is used as meaning sometimes the computation of income, sometimes determination of the amount of tax payable, and sometimes the whole procedure ....
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....s of the appeal." 9.1 However the arguments and the case laws cited / discussed aforesaid are clearly distinguishable from the facts / bone of contention in this case in so far as the issue, is not as to whether the order of the type rendered u/s 246A(1)(a) is appeallable but as to whether when an order u/s 147 has still not been passed or even time barred in the first place, whether the AR can prematurely appeal against such "speaking order" made under Sec. 147, (as termed by him and expressly declared in Form No 35) which as already pointed out is nothing more than a communication rejecting the AR's objection to such reopening implying in no uncertain terms that the AR has construed the communication of rejection of his objections and reassessment order u/s 147 yet to be passed in the instant case interchangeably which is clearly an erroneous understanding of Sec. 147 in the context of the impugned case. The contention of the AR that a pre-assessment order is also appealable under Sec. 246 is hardly even relevant in the instant case since as seen from Form No. 35 the appeal is made against order u/s 147 and not against any pre-assessment order as the AR characterizes it ....
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....6. The ld.counsel for the assessee further relied on the CBDT Circular issued vide its Circular No.269 dated 29.04.1980, as reported in [1980] 126 ITR (ST) 24 at page 27. He referred to question No.5 and answer of the same, which reads as under:- "The use of the non-obstante clause - not withstanding anything contained in sub-section (1) - in sub section (2) of section 246 would show that the appealable orders which would fall within the jurisdiction of the CIT(Appeals) have been excluded for that purpose from sub-section (1) thereof. If any order is not appealable within the provisions of sub-section (2) it would still remain appealable under sub-section (1) with the result that appeals against such pre-assessment orders would lie to the AAC". According to ld.counsel, the use of the non-obstante clause in the provisions of section 246 of the Act, ie., not withstanding anything contained in sub-section (1), in sub-section (2) of section 246 of the Act would show that the appealable orders have been excluded for the purpose of sub-section-1, but in sub-section (2), it is clearly mentioned that it would still remain appealable under sub-section-1 with the result that appe....
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....nder clause (ii) of sub-section (3) of section 115VP or an order against the assessee where the assessee denies his liability to be assessed under this Act or an intimation under sub-section (1) or subsection (1B) of section 143 or sub-section (1) of section 200A or sub-section (1) of section 206CB, where the assessee or the deductor or the collector objects to the making of adjustments, or any order of assessment under sub-section (3) of section 143 except an order passed in pursuance of directions of the Dispute Resolution Panel or an order referred to in sub-section (12) of section 144BAor section 144, to the income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed; (aa) an order of assessment under sub-section (3) of section 115WE or section 115WF, where the assessee, being an employer objects to the value of fringe benefits assessed; (ab) an order of assessment or reassessment under section 115WG; (b) an order of assessment, reassessment or recomputation under section 147 except an order passed in pursuance of directions of Dispute Resolution Panel or an order referred to in s....
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....under sub-section (2) of section 158BFA; (m) an order imposing a penalty under section 271B or section 271BB; (n) an order made by a Deputy Commissioner imposing a penalty under section 271C, section 271CA, section 271D or section 271E; (o) an order made by a Deputy Commissioner or a Deputy Director imposing a penalty under section 272A; (p) an order made by a Deputy Commissioner imposing a penalty under section 272AA; (q) an order imposing a penalty under Chapter XXI; (r) an order made by an Assessing Officer other than a Deputy Commissioner under the provisions of this Act in the case of such person or class of persons, as the Board may, having regard to the nature of the cases, the complexities involved and other relevant considerations, direct. Explanation.-For the purposes of this sub-section, where on or after the 1st day of October, 1998, the post of Deputy Commissioner has been redesignated as Joint Commissioner and the post of Deputy Director has been redesignated as Joint Director, the references in this sub-section for "Deputy Commissioner" and "Deputy Director" shall be substituted by "Joint Commissioner" an....
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....t u/s 147 of the Act. It is also not the case of the assessee that it is denying its liability to be assessed under the Act rather the assessee has voluntarily filed its return of income and offered its status to chargeability to tax as a 'trust' and has paid taxes at the rates applicable for 'individual'. In this bunch of fourteen appeals, wherever the liability to deposit tax was there keeping in view income offered to tax and rates as applicable to individual. The assessee had voluntarily come forward and deposited self assessment tax before filing its return of income with Revenue. 11. The recent decision of Hon'ble Supreme Court in the case of Genpact India Private Limited ( cited supra) which is heavily relied upon by assessee is distinguishable as firstly, in the case of Genpact (supra) the tax-payer denied its liability to be assessed under the provisions of Section 115QA of the Act and secondly in that case, the order passed by the AO was the final assessment order u/s 143(3) of the Act, wherein, interalia, one of the additions as was made by AO was under Section 115QA of the Act. Thus in the case of Genpact India (supra), the order passed by AO was not an interlocutory....
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...., reject the submissions advanced by the appellant and hold that an appeal would be maintainable against the determination of liability under Section 115QA of the Act. 12. What is presently under challenge before us was an interlocutory order passed by the AO disposing off objection to reopening of the concluded assessment u/s 147 of the Act against which appeal filed by assessee before learned CIT(A) stood dismissed on account of non maintainability keeping in view scope of Section 246A of the Act. 13. In the present case before us, the assessee has admitted that it is liable to be assessed under provisions of the Act by filing its return of income with Revenue and paying self assessment tax on the rates applicable to individual. Secondly the order passed by AO was not the final assessment order but merely an interlocutory order disposing off objections filed by assessee against reopening of the concluded assessment u/s 147 of the Act and no amount of tax is determined to be payable by the said interlocutory order towards tax and no final reassessment order u/s 147 of the Act was passed by the AO. Merely because objections raised by the assessee to reopening of the concluded....