TaxTMI 
TaxTMI 
2019 (4) TMI 64
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....gh the order sought to be revised was passed without making verification which should have been made, deemed to be erroneous in so far as it is prejudicial to the interest of the revenue in view of the Explanation 2 to Sec. 263?" 2. Brief facts are as under:- Respondent assessee, the Slum Rehabilitation Authority had filed return of income for the assessment year 2009-10 and claimed benefit under Section 11 of the Income Tax Act, 1961 ("the Act" for short) in relation to its income claiming itself to be engaged in charitable activity. The Assessing Officer passed an order of assessment under Section 143(3) of the Act on 22.12.2011 in which this claim was examined. He held that the assessee was not a Local Authority within the meaning of Section 10(20) of the Act. He further held that in view of the nature and activities carried out by the assessee and its legal status, the assessee's claim for exemption under Section 11 of the Act cannot be entertained. 3. The assessee carried the matter in appeal. The Appellate Commissioner allowed the appeal and granted the benefit of exemption. The Commissioner of Income Tax took the order of assessment in suo motu revision in exercise....
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....uld have taken in revision. (b) Another facet of this argument was that the assessee's claim of exemption under Section 11 of the Act having been rejected by the Assessing Officer, was subject matter of appeal before the Appellate Commissioner. The Appellate Commissioner having allowed the appeal, on the principle of merger, it was thereafter no longer open for the Commissioner to exercise his jurisdictional powers. In this context learned counsel relied on following decisions:- (1) CIT Vs. Smt. A.S. Narendrakumari [1988] 176 ITR 515 (Bombay); (2) CIT Vs. Nirma Chemicals Works P Ltd [2009] 309 ITR 67 (Guj); (3) Haryana Paper Distributors (P) Ltd Vs. Pr. CIT. [2018] 95 taxmann.com 152 (Gujarat) (ii) The Assessing Officer having rejected the entire claim of the assessee, the order of assessment cannot be said to be prejudicial to the interest of the revenue. (iii) Learned counsel contended that the Commissioner had proceeded on factually erroneous grounds. Our attention was invited to the revisional order passed by the Commissioner to contend that the Commissioner erroneously records that the Assessing Officer had not examined the applicability of Section 2(15) of t....
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....had rejected the assessee's entire claim of exemption under Section 11 of the Act, not with the aid of the proviso to Section 2(15) of the Act but on entirely different ground. Be that as it may, the assessee's claim stood rejected upon which the assessee had filed appeal before the Appellate Commissioner and the Appellate Commissioner allowed the appeal which was also confirmed by the Tribunal. Under these circumstances, in our opinion, the Tribunal was correct in drawing a conclusion that on the principle of merger, it was not open for the Commissioner to take the order of assessment in revision. Once the entire claim of the assessee for exemption under Section 11 of the Act was at large before the Appellate Commissioner, the Commissioner (Appeals) had wide powers and jurisdiction to examine all aspects of the such a claim. It is well settled that the Commissioner (Appeals) has even the power of enhancement of assessment once an appeal is filed by the assessee. The present case was not even one of the enhancement of assessment, it was a case where the claim of the assessee was rejected by the Assessing Officer on one ground. If the Revenue was of the opinion that such order could....
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....own by the assessee. The assessee contended that the purchases were genuine and in any case if such purchases are not believed to be genuine, the profit from such dealing should be calculated at the rate of 4% of the turnover. The Assessing Officer accepted the assessee's later contention, made additions at 4% of the GP on the purchases and granted adjustment of the already offered GP @ 1.79% and made limited additions. The assessee had carried the matter in appeal before the Commissioner (Appeals) and argued that the entire addition should be deleted. When such appeal was pending, the Commissioner issued a notice for revision of the order of assessment on the ground that the Assessing Officer having held that the entire purchases were bogus, he erred in limiting the addition only to a small portion of the same on gross profit rate. When this show cause notice was pending, the Appellate Commissioner decided the assessee's appeal against the order of assessment and held that the Assessing Officer could not have made the addition of Rs. 9.57 lacs on GP basis. In such background, the assessee had challenged the notice of revision issued by the Commissioner of Income Tax. The Court whi....