TaxTMI 
TaxTMI 
2026 (6) TMI 1131
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.... the revenue. 3] The learned CIT (E) erred in not appreciating that the asst. order passed by the learned A.O. was neither erroneous nor prejudicial to the interest of the revenue and therefore, the revision order passed u/s 263 was invalid in law and the same may be declared null and void. 4] The learned CIT (E) failed to appreciate that the issue regarding the advance given by the assessee trust to Dr. Bhagwan Birmole was duly verified by the learned A.O. in the course of asst. proceedings and accordingly, the asst. order passed was neither erroneous nor prejudicial to the interest of the revenue and hence, the revision order passed u/s. 263 is not justified and the same may be declared null and void. 5] The learned CIT (E) erred in not appreciating that the view taken by the learned A.O. was a possible one and therefore, there was no reason to set aside the asst, order on the ground that it was erroneous and prejudicial to the interest of the revenue. 6] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal." 3. Facts of the case, in brief, are that the assessee is a trust engaged in the activity of pr....
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.... Act, the assessee is now in appeal before this Tribunal. 6. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book as well as copy of case laws furnished by the assessee as well as by Ld. DR. In this regard, we find that the assessee is a trust duly registered u/s 12A of the IT Act and vide order dated 21.09.2022 the assessment order u/s 143(3) r.w.s. 144B of the IT Act was passed by determining income of the assessee trust at Rs. 1,14,000/- as against income of Rs. Nil returned by the assessee. During the course of assessment proceedings, various notices were issued by the Assessing Officer & the same were replied by the assessee trust, which is evident from the preamble of the assessment order wherein such dates are mentioned as 29.06.2021, 16.11.2021, 18.02.2022 and 01.03.2022. In this regard, copy of notice issued u/s 142(1) of the IT Act dated 18.02.2022 is produced before us wherein specific queries were raised by the Assessing Officer with regard to the payment of Rs. 1,03,94,000/- to Dr. Bhagwan J. Birmole (Trustee) being initial payment towards proposed purchase of property. For ready reference, the copy of ....
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....ior to passing assessment order for assessment year 2020-21 has conducted full and proper enquiry from the assessee trust with regard to payment of Rs. 1,03,94,000/- to Dr. Bhagwan J. Birmole. We further find that the assessee also replied to all the notices issued by the Assessing Officer including the above notice dated 18.02.2022 which is evident from the copy of acknowledgement of online submissions dated 20.02.2025 furnished before Ld. CIT, Exemption, Pune. In this regard, we also find that copy of various reply furnished before the Assessing Officer which were dated 30.11.2021, 15.02.2022, 25.02.2022, 05.03.2022 and 15.09.2022 also furnished before Ld. CIT, Exemption, Pune wherein complete details of impugned transaction was explained before the Assessing Officer. In this regard, the copy of reply furnished by the assessee trust before Ld. CIT, Exemption, Pune is relevant wherein all the above details were referred. Copy of the same reply is reproduced herein below :- "20/02/2025 From, Birmole Medical Foundation Trust, Birmole Hospital, CUF Road, CUF Nagar, Panvel. To, Income Tax Department, CIT Exemption, Pune....
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....on about nature of payment to Dr. Bhagwan Birmole. C) On 25/02/2022 as per e-ack. no. 255290421250222. The assessee made compliance to the notice dated 18/02/2022 and also explained the provisions of compliance towards Municipal Corporation and Charity Commissioner and also brought on record registration rate prevalent during the year. D) Kindly note the objection to the proposed proceeding u/s 263. Secondly, having furnished various information and explanations with supporting documents which were in response to notices u/s 142(1) and annexures thereto, there is neither a failure on the part of Assessing Officer as well as on the part of assessee to conduct the inquiry and to comply respectively. As such in the absence of any error the assessment completed by the AO is not tentamounting to be prejudicial to the revenue. The issues in the SCN for proposed 263 are already covered by the Assessing Officer by way of conducting the inquiry. As such no revision is possible as the Assessing Officer has formed the opinion after perusing the requisite documents. E) The explanation furnished by way of submission before Assessing Officer in the assessment proceedin....
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.... for the reason for making payment by the trust for proposed purchase of property and formality compliance in that regard to be made if any. The same were explained. It is after perusing the explanation furnished by way of response on various dates by the assessee trust that the AO issued the SCN and restricted the addition to the disallowance u/s 40(a)(ia). Thus, while finalizing the assessment, the AO conducted the inquiry and after satisfying himself with the documents submitted by the trust in the assessment proceedings that he finalized the assessment. d) In this regard the copies of the written submissions with annexures in response to the notices u/s 142(1) and final SCN are e-furnished herewith which are pointer to the fact that the AO conducted the inquiry. e) In view of the above, there is no error on the part of AO and lack of inquiry on the part of AO and there is application of mind and formation of opinion by the AO and therefore there is no error which can be tentamounting to the loss of revenue or prejudicial to the revenue. f) As regards, the amount of Rs. 35,00,000/- repaid during the subsequent year and also further payment of Rs. 58,00....
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....85) 3. Notice dated 18/02/2022 & reply thereto dated25/02/2022 (Page no. 86 to 92) 4. Notice dated 01/03/2022 & reply thereto dated 05/03/2022 (Page no. 93 to 97) 5. Notice dated 12/09/2022 & reply thereto dated15/09/2022 (Page no. 98 to 102)" 8. A perusal of above reply makes it clear that the Assessing Officer has conducted proper detailed and full enquiry regarding the impugned transactions and the assessee trust also answered all the queries which are now doubted by Ld. CIT, Exemption, Pune. In this regard, we find that the ownership of the flats in question was proved before the Assessing Officer. Apart from it, the transaction of Rs. 1,03,94,000/- was also disclosed in the audited books of accounts of Bhagwan J. Birmole (Trustee) and in subsequent years interest of Rs. 12,00,000/- was also paid to the assessee trust by Bhagwan J. Birmole (Trustee). Accordingly, it was the claim of the assessee trust that full and proper enquiry was conducted by the Assessing Officer with regard to the impugned transaction of Rs. 1,03,94,000/- and the assessee trust successfully demonstrated before the Assessing Officer that it was a genuine transaction through ba....