Facts of the case:-
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has quashed an assessment order against the Board of Cricket Control in India where the department challenged an order of the Commissioner of Income Tax (Appeals) deleting an order completed under section 143(3) r/w section 147 of the Income Tax Act, 1961.
Interpretation of law:-
The bench comprising Vice President Pramod Kumar and Judicial Member Saktijit Dey was considering an appeal against the Cricket Board, a cooperative society registered under the Tamilnadu Societies Registration Act 1975, and has, as its objects, promotion of the game of cricket and to foster the spirit of sportsmanship in India.
The return filed by the Board for the assessment year 2006-07 was later re-opened by the Assessing Officer who held that the assessee has claimed TV subventions, infrastructure subsidy, and coaching subsidy, aggregating to Rs 244,29,40,158, paid to the member associations, as deductions but to be reduced from its income which was assessed as business income. He was of the opinion that it was nothing more than the distribution of profits to its member associations. The Assessing Officer was thus of the view that the income has escaped assessment and re-opened the assessment against the assessee.
The bench recalled its decision in a similar case of the assessee wherein the re-assessment was quashed for want of jurisdiction. In the said order, the Tribunal held that “issuance and service of notice under section 143(2) is a foundational requirement for assessment under section 143(3) r.w.s. 147, and, in the absence of the same and notwithstanding the fact that the assessee may have participated in the related assessment proceedings, the reassessment order cannot have legal sanctity. As rightly analyzed by the learned CIT(A), Section 292 BB cannot come to the rescue of the Assessing Officer in such cases.
” Upholding the said findings, the Tribunal dismissed the appeal of the Revenue.