TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1093
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....1.2021 setting aside the assessment order dated 30.12.2019 passed under section 144. Pursuant thereto, the case was taken up in faceless mode. Notices under section 142(1) were issued on 04.01.2023 and 20.01.2023 seeking, inter alia, the audit report in Form No. 10B, details of activities, computation of income, income and expenditure account and balance sheet with schedules, details of bank accounts, and copy of registration under sections 12A/12AA. The assessee did not respond to the said notices. A letter dated 31.01.2023, a show cause under section 144 dated 06.02.2023, a centralized communication dated 08.02.2023 by NaFAC, and a further show cause under section 144B(1)(xii)(b) dated 07.03.2023 also remained un-responded. On 13.03.2023 a show cause setting out the proposed variations was issued; the assessee uploaded a reply on 16.03.2023. An additional show cause dated 17.03.2023 regarding disallowance of expenditure was issued; the assessee filed a partial reply on 20.03.2023. A video conference was held on 24.03.2023 and a written follow-up was furnished on 25.03.2023. 2.1 The Assessing Officer recorded that the assessee had not filed its return within section 139(1), and....
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....3 filed a reconciliation statement of bank credits aggregating to Rs. 2,56,24,550/- vis-à-vis items comprising income as per computation Rs. 1,43,75,919/-, corpus donations Rs. 19,70,203/-, loans and advances from Jamali English Medium School Rs. 40,00,000/-, previous year cheques cleared in current year Rs. 25,23,909/-, collections for textbooks and uniforms Rs. 21,06,079/-, and school tour collections Rs. 6,48,100/-. 2.4 While finalising the assessment on 28.03.2023, the Assessing Officer, after noting that the Form No. 10B audit report was not available on the e-filing portal and that bills produced included handmade and self-made vouchers, restricted the disallowance of revenue expenditure to 15 percent, observing that vouchers aggregating to Rs. 17,12,780/- had been produced against the total claim and denied exemption under section 11. The total income was determined at Rs. 82,64,136/-. 2.5 On these facts, the PCIT initiated present revisional jurisdiction under section 263. The order records that the Assessing Officer had himself stated that the assessee did not furnish complete evidence and that the veracity of expenditure remained unverifiable, yet disallowed ....
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....ted 28-03- 2023 is not prejudicial and erroneous to the revenue. 3. The Revision Order passed u/s 263 of the L.T. Act dated 31-03- 2025 setting aside the Assessment Order passed u/s 144 r.w.s. 263 dated 28-03-2023 is bad in law and liable to be quashed. 4. The Appellant reserves the right to add, alter, amend and withdraw any of the above grounds of appeal. 3. During the course of hearing before us, the learned AR of the assessee reiterated the facts and argued that the very foundation of the assessment order passed under section 144 of the Act dated 30.12.2019 was itself void and non-est, since no jurisdictional notice under section 143(2) of the Act had been issued by the Assessing Officer, though the assessee had filed its return of income in response to notice under section 142(1) of the Act. It was contended that issuance of notice under section 143(2) is mandatory, and in absence thereof, the assessment order itself suffers from jurisdictional defect, rendering it nullity in law. 3.1 The AR pointed out that the Assessing Officer himself, in para 2 and 4 of the original assessment order dated 30.12.2019, recognised that the assessee had filed its return....
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....High Court in CIT v. M/s Children's Education Society (2013) 358 ITR 373, wherein it was held that the monetary limit of Rs. 1 crore under section 10(23C)(iiiad) is to be considered per educational institution and not in aggregate for the whole trust. It was further argued that subsequent amendment brought by the Finance Act, 2021 enhancing the limit to Rs. 5 crore with effect from 01.04.2022 only clarified the legislative intent that the monetary threshold was always to be reckoned per institution, and not per assessee as a whole. 3.6 With respect to the objection of the Assessing Officer that the assessee had not claimed exemption under section 10(23C)(iiiad) in the return of income, the AR submitted that such a technicality cannot deprive the assessee of the benefit otherwise available under the law. It was accordingly submitted that since the assessee was otherwise fully eligible for exemption under section 10(23C)(iiiad), the denial of exemption by the Assessing Officer was unjustified and the PCIT erred in invoking revisionary jurisdiction under section 263 of the Act on this ground. 4. On the other hand, the learned Departmental Representative (DR) strongly supported t....
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.... considered the rival submissions and perused the material placed before us, including the orders passed by the Assessing Officer and the Principal Commissioner of Income Tax under section 263 of the Act, together with the paper book and case laws cited. 5.1 At the outset, it is pertinent to note that the assessee had not filed its original return of income under section 139(1) of the Act. The return came to be filed only in response to notice under section 142(1), and even thereafter, the assessee remained non-compliant throughout the proceedings. The Assessing Officer has made repeated references in his order to such non-cooperation and non-furnishing of requisite details. Except for a limited response to the notice issued under section 144 of the Act, no proper explanation or evidence was produced to substantiate the claim of expenditure. It is further noted from the record that the assessee has not filed or submitted its return of income for the earlier assessment year (A.Y. 2016-17) as well. This conduct reinforces the pattern of non-compliance on the part of the assessee and indicates that the failure to furnish return of income and to cooperate in the proceedings is not a....
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....dictional plea, if so advised, in the proceedings relating to the assessment itself, but not in the present appeal against revision under section 263. 5.6 The assessee has further pleaded that its receipts were from three different educational institutions and that since each institution's gross receipts were below Rs. 1 crore, it was entitled to exemption under section 10(23C)(iiiad) of the Act. We find no merit in this contention at this stage. In the first place, the assessee had not made any such claim of exemption in its return of income. Secondly, the assessee remained non-compliant during the assessment proceedings and failed to furnish cogent material or verifiable evidence to substantiate the claim. Thirdly, the permission placed on record at page 127 of the paper book indicates recognition in respect of only one school, and not multiple independent institutions as asserted. We also note, as has been recorded by the PCIT in para 5.3 of his order, that the assessee has already raised a similar ground before the CIT(A) against the assessment order dated 28.03.2023, and the matter is pending consideration before the first appellate authority. In such circumstances and give....