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Tax Publishers Tata Education and Development Trust v. Asstt. CIT [ITA Nos. 1423 and 1424/Mum/2018 and ITA No. 1535/Mum/2018, dt. 24-7-2020] : 2020 TaxPub(DT) 2925 (Mum.-Trib.) Suo moto rejection by Commissioner (Appeals) against rectification done by assessing officer to his assessed return in an appeal *Facts:* Assessee, a long standing reputed educational trust was denied benefit of trust exemption by a reading of section 11(1)(c) by the assessing officer besides of having not produced CBDT confirmation for contributions made to foreign universities for furtherance of educational benefits to deserving Indian students. This was appealed by the assessee to Commissioner (Appeals). Subsequently the assessee reapplied to CBDT and was granted the exemption for a series of assessment years which enshrined the years under appeal as well. Noting this exemption the assessing officer suo moto rectified the return and granted the exemption to the contributions of the assessee. Meanwhile the Commissioner (Appeals) in the appeal reversed the suo moto rectification order of assessing officer citing that the letter of exemption from CBDT was obtained belated + was not mentioned retrospective in application thus on frivolous grounds. Aggrieved the assessee went in higher appeal - Held in favour of the assessee that they were entitled to the exemption. Strictures were passed against the Commissioner (Appeals) for having denied the assessee the benefit of the CBDT's letter. Following are key takeaways in this decision -- 1. Once the assessing officer suo moto passed the rectification order, the Commissioner (Appeals) did not have power to revoke it as that stood merged with the original order. The appeal itself to the Commissioner (Appeals) became non est not requiring any adjudication. To this extent the Commissioner (Appeals) overran his powers. 2. The exemption letter from CBDT mentions it for a span for assessment years -- questioning this as not mentioning retrospective in application pointed to lack of application of mind. 3. Reference be made to Tata Education and Development Trust v ACIT, SA Nos. 147 and 148/Mum/2020 arising out of ITA Nos. 1423 and 1424/Mum/2018 -- Assessment Years 2011-12 and 2012-13, Mumbai ITAT dated 17-6-2020 wherein assessee was required to retain INR 99 crores as reserve to take care of their tax dues as an outcome of the verdict in this stay application. The amendment in section 254(2) proviso 3 vide Finance Act, 2020 warranting a compulsory 20% pre-deposit to appeal to ITAT does it fetters the plenary powers of ITAT's stay granting powers or is it simply being directive to ITAT who thus are still empowered to grant stay even without the 20% pre-deposition on merits even after this amendment is pending adjudication before a higher bench.

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Tata Education and Development Trust v. Asstt. CIT [ITA Nos. 1423 and 1424/Mum/2018 and ITA No. 1535/Mum/2018, dt. 24-7-2020] : 2020 TaxPub(DT) 2925 (Mum.-Trib.)

Suo moto rejection by Commissioner (Appeals) against rectification done by assessing officer to his assessed return in an appeal

Facts:

Assessee, a long standing reputed educational trust was denied benefit of trust exemption by a reading of section 11(1)(c) by the assessing officer besides of having not produced CBDT confirmation for contributions made to foreign universities for furtherance of educational benefits to deserving Indian students. This was appealed by the assessee to Commissioner (Appeals). Subsequently the assessee reapplied to CBDT and was granted the exemption for a series of assessment years which enshrined the years under appeal as well. Noting this exemption the assessing officer suo moto rectified the return and granted the exemption to the contributions of the assessee. Meanwhile the Commissioner (Appeals) in the appeal reversed the suo moto rectification order of assessing officer citing that the letter of exemption from CBDT was obtained belated + was not mentioned retrospective in application thus on frivolous grounds. Aggrieved the assessee went in higher appeal -

Held in favour of the assessee that they were entitled to the exemption. Strictures were passed against the Commissioner (Appeals) for having denied the assessee the benefit of the CBDT's letter.

Following are key takeaways in this decision --

1. Once the assessing officer suo moto passed the rectification order, the Commissioner (Appeals) did not have power to revoke it as that stood merged with the original order. The appeal itself to the Commissioner (Appeals) became non est not requiring any adjudication. To this extent the Commissioner (Appeals) overran his powers.

2. The exemption letter from CBDT mentions it for a span for assessment years -- questioning this as not mentioning retrospective in application pointed to lack of application of mind.

3. Reference be made to Tata Education and Development Trust v ACIT, SA Nos. 147 and 148/Mum/2020 arising out of ITA Nos. 1423 and 1424/Mum/2018 -- Assessment Years 2011-12 and 2012-13, Mumbai ITAT dated 17-6-2020 wherein assessee was required to retain INR 99 crores as reserve to take care of their tax dues as an outcome of the verdict in this stay application. The amendment in section 254(2) proviso 3 vide Finance Act, 2020 warranting a compulsory 20% pre-deposit to appeal to ITAT does it fetters the plenary powers of ITAT's stay granting powers or is it simply being directive to ITAT who thus are still empowered to grant stay even without the 20% pre-deposition on merits even after this amendment is pending adjudication before a higher bench.