There is a difference between question of law and a “substantial question of law” : Delhi HC

Issue

Present Appeal has been filed before the Delhi HC challenging the order dated 10th February, 2020 passed by the Income Tax Appellate Tribunal (hereinafter referred to as ‘ITAT’) in ITA No. 6566/Del/2015 for Assessment Year 2007-08.

The questions of law proposed by the appellant-revenue in the present appeal: –

(1) Whether in the facts and circumstances of the present case, ITAT was justified in the eyes of law in allowing the appeal of the assessee by ignoring the fact that the assessee has failed to comply with the precondition mentioned in Rule 5D of the Income Tax Rules, 1962 for registration u/s 35(1)(ii) of the Act?

(2) Whether in the facts and circumstances of the present case ITAT was justified in the eyes of law in holding that the reopening of the assessment was wholly unjustified?

(3) Whether the impugned order passed by Income Tax Appellate Tribunal is perverse both on law and facts?

Facts

• The Appellant submits that the ITAT erred in allowing the appeal of the assessee by ignoring the fact that it had not filed the list of donors along with auditor’s report for Assessment Year 2007-08 and as such had failed to comply-with the precondition mentioned in Rule 5D(4) of the Income Tax Act, 1961 (for short ‘Act’) for registration under Section 35(1)(ii) of the Act. He emphasizes that the ITAT erred in holding that the reopening of the assessment was wholly unjustified.
• A perusal of the paper book reveals that the original assessment was completed under Section 143(3) of the Act and there was no failure on the part of the appellant to disclose fully and truly all material facts necessary for assessment.
• The statement of donations as received was very much available before the Assessing Officer at the time of original assessment and consequently the assumption of jurisdiction under Section 147 of the Act after four years based on the ground that it was not filed along with the audit report is bad in law and has been assumed on technical ground not mandatory in nature.

Findings

The stipulation under Rule 5D (4) of the Act that the statement of donations shall be filed along with audit report is not a mandatory condition and is considered to have been complied with the moment the details of donation were filed before the Assessing Officer prior to the completion of assessment. Both the CIT (A) and ITAT have given concurrent findings to the said effect.

Judgement

Delhi HC held that there is a difference between question of law and a “substantial question of law”. Consequently, this Court finds that there is no perversity in the findings of the CIT(A) and ITAT. Accordingly, the present appeal is dismissed.

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