TaxTMI 
TaxTMI 
2018 (4) TMI 696
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....be held null and void. 3. We have gone through the orders of the authorities below and found that in its order u/s.263, CIT observed that the Assessing Officer (AO) has assessed the total income at Rs. 528,65,24,460/-. The reasoning for disallowances made by the AO was on the same account on which disallowance has been made in the previous assessment years viz., the assessee is not a local body covered u/s 10(20) and section 10(20A) of the Act. 4. CIT further observed that the section 2 (15) of the Income Tax Act, 1961 which defines the word "charitable purpose" was amended by the Finance Act, 2008 with effect from April 3, 2009. The amendment was done by inserting of proviso to the provisions of section 2(15) of the l.T. Act, 1961 which reads as under: "Provided that the advance of any other object of general public utility shall not be a charitable purposes, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration, irrespective of the nature of use of application, or retention of the income from suc....
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....llowances made in the earlier year. Since, the AO has framed the assessment order by ignoring the newly inserted provisions of the Act it appears to be an erroneous order. Further, it appears by invoking a wrong section to make a disallowance, the AO has prejudiced the interest of revenue. 8. In view of the above observation, CIT concluded that the order passed by the AO was erroneous as well as prejudicial to the interest of revenue. 9. Learned AR contended that no prejudice has been caused to the Revenue by the order passed by AO u/s. 143(3) dated 27/12/2011 in so far as income assessed by the AO was at Rs. 528,65,24,460/-, however, the income assessed by the AO while giving effect to the order of CIT u/s.263 was also at the same figure. Learned AR also placed on record, the order passed by AO dated 30/10/2015 wherein income was assessed at Rs. 528,65,24,460/-. 10. Learned AR placed on record the order of the Co-ordinate Bench in case of Slum Rehabilitation Authority in ITA No.2435/Mum/2014 dated 30/10/2015, wherein exactly similar issue was considered by the Tribunal and held as under:- 9. We have heard the rival contentions, perused the relevant finding given ....
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....ment order including taxing of the entire exempt income u/s 11 is the subject matter of appeal and there is complete merger with the order of the CIT(A) within the terms and ambit of section 263 read with clause (c) Explanation 1. Thus, if the subject matter of revision u/s 263 is again the denial of exemption u/s 11, though on different footing, then same is beyond the scope of section 263. On these facts, it can be very well held that the issue of exemption u/s 11 which was the subject matter of appeal before CIT(A) and then before the Tribunal, the Ld. DIT do not have the power to consider and decide "such matter" within the scope of section 263. On the second aspect also, which is purely academic, it is seen that, so far as tax effect is concerned, there is no difference at all between the income which was assessed in the original assessment order and the income which is now being sought to be assessed in wake of order u/s 263. Under both the assessments the surplus amount of Rs. 83.98 crores will get taxed. Hence, no prejudice is caused to the revenue so far as tax effect is concerned, except for the fact thatsection 11 is being sought to be examined from a different ....
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....ue is not complied with. Respectfully following the decision of the Co-ordinate Bench as narrated above, we do not find any merit in the order so passed by CIT u/s.263. 13. In the result, appeal of assessee is allowed. ITA No.5599/Mum/2014 14. This is an appeal filed by assessee against the order passed by CIT(A)-1, Mumbai dated 26/06/2014 for the A.Y.2009-10 in the matter of order passed u/s.143(3) of the IT Act. The grounds taken by assessee reads as under:- Appellant denied exemption under s.l 1 ; The learned CIT(A) erred on facts and in law in not considering all the grounds of appeal before him and particularly the claim of the appellant that it be allowed the benefits of s.ll of the I.T..Act.l961, and be accordingly granted exemption under s.l 1. Relief claimed: The C1T(A) be directed to dispose of all the grounds of appeal before him. 2. Appeal not decided on merits The learned CIT(A) erred in law and on facts in not considering merits of the case while disposing of the appeal. Relief claimed: the Appeal may be decided on merits. .: 3. Appeal wrongly disposed of as being non-est ". The learned C....