TaxTMI 
TaxTMI 
2017 (3) TMI 1386
X X X X Extracts X X X X
X X X X Extracts X X X X
..../ALLD/2014 4 128 of 2015 2005-06 364/ALLD/2014 2. Though appellants have formulated six substantial questions of law, but after some arguments, we find following three substantial questions of law arising in these appeals. Learned counsel for parties have also agreed and addressed us on these substantial questions of law:- I). Whether order dated 25.03.2014 passed by C.I.T. under Section 263 of Act, 1961 was beyond its jurisdiction, in the facts and circumstances discussed by Tribunal, and whether it (Tribunal) was justified in holding so; II). Whether Assessing Authority could have examined applicability of Sections 11 and 12 when Trust or Institution is already granted registration under Section 12A after following procedure laid down under Section 12AA of Act, 1961; and III). Whether Tribunal was justified in holding that applicability of Sections 11 to 13 was to be governed by C.I.T. (A)'s order dated 21.11.2013, which was passed in appeal against order dated 28.12.2010 and that being so, order dated 01.12.2001 passed by Assessing Authority was in the same line, hence C.I.T. had no jurisdiction to pass order under Section 263 of Act, 1961 quest....
X X X X Extracts X X X X
X X X X Extracts X X X X
....29,625/- 6,67,77,119/- 14,69,75,740/- 25,10,55,354/- 36,79,12,648/- Add: Expenses disallowed 29,62,933/- 35,56,761/- 44,08,599/- 77,34,092/- 74,64,819/- Total income 1,15,86,230/- 2,05,20,740/- 5,15,81,970/- 8,39,39,820/- 12,06,04,570/- Demand raised 12,49,941/- 1,35,47,688/- 3,76,85,344/- 4,37,21,360/- 6,93,66,047/- 8. Assessing Authority disallowed claim of exemption under Section 12A relying on C.I.T.'s order dated 08.03.2010 since that was operating on the date of assessment order passed by Assessing Authority. It further proceeded to assess status of Assessee that of Association of persons, as a business entity, and verified nature of quantum of expenses in relation to activity of Assessee namely imparting education. Assessing Authority disallowed certain expenses for reasons such as expenses being not made for business purpose or lacking in documentary evidence or explanation justifying particular expenditure were capital in nature. 9. The order dated 28.12.2010 was appealed by Assessee before C.I.T.(A). Appeal was allowed partly vide order dated 21.11.2013 and expenditures claimed by Assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... examine the matter under Section 263 of Act, 1961. 14. C.I.T. however passed order dated 25.03.2014 under Section 263 of Act, 1961 and annulled order dated 01.12.2011 passed by Assessing Authority in respect of A.Ys. 2001-2002 to 2005-2006. Aggrieved thereto, Assessees preferred appeals before Tribunal, which have been allowed. The order passed by C.I.T. under Section 263 has been set aside. It is in these circumstances, Revenue has preferred these appeals. 15. C.I.T. passed order dated 25.03.2014 ignoring the fact that another co-ordinate authority in statutory quasi-judicial proceedings has already held Assessee entitled for certain exemption/benefits. Tribunal has noticed this fact, referring to C.I.T.(A)'s order dated 21.11.2013, in its order as under: "The said order remained under challenge before the ld. CIT(A) who vide order dated 21.11.2013 for the assessment year 2003-04 allowed certain relief to the assessee because the registration u/s 12AA have been restored in favour of the assessee and disallowance of expenses were examined in the light of provisions of section 11 of the IT Act. Certificate of the auditor was also considered and at PB-177 and 179 (inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....been decided in appeal preferred by Assessee, to that extent C.I.T. will stand denuded of its power under Section 263. 19. A similar question was considered in Mehra Brothers Partnership Firms Filling Vs. Commissioner of Income Tax and others 2015 (5) ADJ 441 (Division Bench) (Alld.) wherein Court examined the concept of merger as recognized in Act, 1961 in the light of various authorities on the subject. The relevant part of the judgment reads as under: "21. The above general concept of 'merger' in respect to judicial and quasi-judicial orders has been considered and recognised time and again. 22. In Chandi Prasad and Others Vs. Jagdish Prasad and Others [2004 (8) SCC 724], the Court said: "It is trite that when an Appellate Court passes a decree, the decree of the trial court merges with the decree of the Appellate Court and even if and subject to any modification that may be made in the appellate decree, the decree of the Appellate Court supersedes the decree of the trial court. In other words, merger of a decree takes place irrespective of the fact as to whether the Appellate Court affirms, modifies or reverses the decree passed by the trial court." (e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ner of Income-tax (Appeals)'s order ignoring the provisions contained in clause (c) of Explanation to sub-section (1) of section 263 of the Income-tax Act, 1961?" Relying on CIT Vs. Abuda Mills Ltd. (Supra), the Court answered both the aforesaid questions in negative i.e. in favour of Revenue and against Assessee. 29. In EIMCO K.C.P. Ltd. Vs. C.I.T. [(2000) 242 ITR 659 (SC)], a question arose whether Commissioner can exercise power under Section 263 of Act, 1961, while agreeing with the order of assessment against which appeal is pending before Commissioner (A), involving the point upon which notice under Section 263 is issued, the Court up held the notice issued under Section 263 and held that such notice can be issued. 30. The decision in CIT Vs. Abuda Mills Ltd. (Supra) has also been followed by this Court in CIT Vs. Dhampur Sugar Mills Co. Ltd. [(2004) 270 ITR 576 (All)], CIT Vs. Indo Persian Rugs [(2008) 299 ITR 300 (All)] and CIT Vs. Span International [(2004) 270 ITR 538 (All)]. 31. In CIT Vs. Amrit Banaspati Co. Ltd. [(2005) 277 ITR 559 (All)], Court held that in respect of items which have not been considered in appeal, power of Commissioner under Section 2....