TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 838
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....m para 7 of the impugned order which according to the appellant were wrong and erroneous findings, consequently vitiating the revision order completely. 3. The CIT(E)failed to appreciate that the twin conditions prescribed for assuming jurisdiction u/s. 263 of the Act were not satisfied concurrently on the facts and in the circumstances of the case and hence ought to have appreciated that the order of revision under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 4. The CIT(E) failed to appreciate that the having granted one opportunity by issuing a SCN on 06.03.2023 directing a reply / objections from the appellant on or before 13.03.2023, which SCN was based on borrowed satisfaction, the consequential revision order passed should be considered as nullity in law both on the grounds of violation of natural justice and on the ground of want of jurisdiction in view of lack of independent satisfaction on his part to reckon the assessment order as erroneous causing prejudice to the interest of the revenue. 5. The CIT(E)failed to appreciate that conclusion reached in reckoning the appellant trust as not a edu....
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.... that the entire gamut of facts discussed from para 7 of the impugned order was part of the assessment proceedings which were considered and accepted in passing the return of income filed for the assessment year under consideration. 13. The CIT(E) failed to appreciate that the distinction between lack of enquiry and inadequate enquiry was also overlooked before passing the revision order and ought to have appreciated that there could not be any presumption of lack of enquiry on the part of the Assessing Officer much less inadequate enquiry on the facts and in the circumstances of the case thereby vitiating the revision order. 14. The CIT(E) failed to appreciate that there was complete scrutiny of facts relating to the activities referred to in the revision order while passing the assessment order passed by the NaFAC as per the decision of the Supreme Court refereed to therein and hence ought to have appreciated that the decision to direct the NaFAC to revisit the issue should be reckoned as bad in law, especially in view of the decision referred to by the SC being supportive to the stand taken by the appellant trust herein. 15. The Appellant craves leave to file additional gr....
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....assessee's Trust, there is no loss of Revenue to the extent of Rs. 7,03,500/- which rendered the assessment order passed by the AO to be erroneous in so far as it is prejudicial to the interest of the Revenue. 5. In response, the assessee submitted that the assessee's Trust is established in the year 1973 with an object of imparting education in the field of science, culture and music. The assessee conducts music and other cultural events, and in that process generates income from letting out of premise, interest, rent, etc. The assessee's Trust has applied income for the objects of the Trust which are charitable in nature and squarely falls under the definition of education as defined u/s. 2(15) of the Act. Further, the case has been selected for scrutiny to verify the expenditure incurred for charitable or religious purpose and the AO during the course of assessment proceedings, issued notice u/s. 142(1) of the Act, on various dates and called for necessary details, including objects of the Trust and its activities and also application of income for charitable purpose. The assessee has filed various details. The AO after considering relevant facts has rightly accepted exemption ....
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....r break up details of income and expenditure and receipts and payments with reference to each stream of income and application of said income for charitable purpose. The assessee, in response, to notice u/s. 142(1) of the Act, has filed detailed submissions and explained that the objects and activities of the Trust are charitable in nature, and further, it has carried out activities in accordance with its objects. The AO after considering relevant submissions of the assessee has rightly claimed exemption u/s. 11 of the Act. Therefore, the Ld.CIT(Exemptions) is erred in assuming jurisdiction u/s. 263 of the Act. 8. The Ld.Counsel for the assessee further referring to the objects of the Trust submitted that the Trust was in existence for more than 50 years and has carried out various charitable activities, including conducting musical classes for students. The objects of the Trust are squarely falls under the definition of education as defined u/s. 2(15) of the Act. Therefore, the Ld.CIT(Exemptions) is clearly erred in directing the AO to invoke provisions of Sec.2(15) of the Act and consider the objects of the Trust as GPU in nature in light of subsequent decision of the Hon'ble Su....
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....s should be upheld 10. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The provisions of Sec.263 of the Act deals with revision powers of the Commissioner. As per said provisions, if the Ld.CIT(Exemptions) satisfies that the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue, then, the Ld.CIT(Exemptions) can set aside the assessment order passed by the AO with a direction to re-do the assessment afresh. In order to assume jurisdiction u/s. 263 of the Act, the Ld.CIT(Exemptions) must satisfy that twin conditions prescribed therein are satisfied. Unless, the condition prescribed are not satisfied, the Ld.CIT(Exemptions) cannot assume their jurisdiction and set aside the assessment order passed by the AO. In the present case, the Ld.CIT(Exemptions) assumed jurisdiction u/s. 263 of the Act, on the ground that assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue. According to the Ld.CIT(Exemptions), the AO failed to carry out required enquiries he ought to have been carried out in light of objects a....
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....02.2020 & 08.01.2021, has filed complete details of income derived by assessee's Trust and its application for charitable purpose and also explained how exemption claimed u/s. 11 of the Act, is in accordance with law. The AO after considering relevant submissions of the assessee, has accepted the claim of the assessee. Further, the sole basis for taking up the case for scrutiny assessment is to verify expenditure incurred for charitable or religious purpose. When the main purpose for taking up the case for scrutiny assessment is to verify the expenditure, then, in our considered view the Ld.CIT(Exemptions) cannot say that the AO was not having the knowledge of income derived by assessee's Trust and its application for charitable or other purpose. Since, the AO has verified the issue and taken one of the plausible view on the issue of exemption u/s. 11 of the Act, in our considered view, the Ld.CIT(Exemptions) cannot substitute his view and claim that the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue. 12. Having said so, let us come back to the observations of the CIT(Exemptions) with regard to objects and activities of....
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....r the last limb of definition of charitable purpose i.e. any other object of General Public Utility. GPU activities are also a charitable activities, if said activities does not involve carrying on of any trade, commerce or business. Generally, the charging of any amount towards consideration for such an activity (GPU) which is on cost basis or normally above cost, cannot be considered to be trade, commerce or business or any services in relation thereto. It is only when the charges are markedly or significantly above the cost incurred by an assessee in question, that they would fall within the mischief of cess, fess or any other consideration towards trade, commerce or business. In the present case, there is no iota of discussion by the CIT(Exemptions) with regard to carrying out the activities on commercial lines by charging rent on hall used for conducting music programs on par with rent charged by any other persons. The CIT(Exemptions), simply on the basis of gross receipts of the assessee's Trust came to the conclusion that the activities are in the nature of trade, commerce or business. Therefore, we are of the considered view that the observations of the CIT(Exemptions) that....
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....e and expenditure, then, in our considered view, the Ld.CIT(Exemptions) cannot presume that, said information was not in the knowledge of the AO. This is because, the AO might have taken independent view de hors decision taken by the AO for earlier assessment years based on appraisal of relevant facts in light of objects and activities of the Trust. Further, res judicata is not applicable to the Income Tax proceedings. In other words, there is no rule that different view cannot be taken for subsequent years when a view has been taken for earlier assessment years. In our considered view, it is always possible to take a different view, in case, the facts brought on record is apprised in right perspective of law. Therefore, the arguments of the Ld.DR that the AO has failed to take note of earlier assessment orders while completing assessment is incorrect and not acceptable. 15. At this stage, it is relevant to consider the decision of the ITAT in the case of Madras Motors Sports Club (AOP) in ITA No.510/Chny/2023. The Tribunal has considered an identical issue and after considering the decision of the Hon'ble Supreme Court in the case of ACIT(Exemptions) v. Ahmedabad Urban Developmen....