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2022 (5) TMI 936 - ITAT PANAJIRevision u/s 263 - exemption u/s 11 - Non - compliance of clause 2(i) of explanation 1 to section 11(1) at the relevant time - HELD THAT:- In response to notices issued u/s 143(2), the appellant made written submission inter-alia copy of income tax return accompanying statement of computation of total income, audited financial statements, copy of audit report issued in form No 10B r.w.r. 17B of the Act etc. And after considering the same, the claim of exemption u/s 11 was worked out by the Ld. AO. Insofar as the exercise of option is concern, the disclosure with their respect was first made in the computation of total income (placed at page 1 of P/B), followed by return of income at “clause 6(iii) of Part-B-TI” (placed at page 6 of P/B) and further in Form No 10B (audit report) “Clause 2 of Annexure to audit report 2” (placed at page 33 of P/B). Nota bene, these all evidential documents were submitted during the course of original assessment proceedings and invariably part of assessment records. This establishes that, during the course of assessment proceedings, explicit queries were raised, and unreserved submission were matured before the Ld. AO, consequent to which inquiries into the claims u/s 11 were conducted in the light of documentary evidence and thereupon in the light of supportive material, drawing even-handed conclusions, the assessment was carried out, leaving no air in the assessment. Revisionary action and order u/s 263 of the Act, both entirely marshal out of a Revenue Audit Objection communicated and there was complete material absentia supporting the assumption of revisionary jurisdiction vis-à-vis conclusion reached by Ld. CIT(Exemption). It is trite law that, while exercising revisional jurisdiction, it must be bear in mind that, the principles of natural justice do not permit the decision of a revisionary authority to be influenced by any other authority or agency, which indeed unfortunately the case squarely is, therefore, we are of the view that, this revisionary proceedings initiated on the thin ice of revenue audit objection report and concluded in absence of deprecative material, is untenable in law. In no case, mere audit information renders the order of assessment erroneous, and the very absence of material before the revisionary authority itself sufficient to hold the action as unsustainable in law and our view is invigorated by the Hon’ble Kolkata High Court in “Jeewanlal limited Vs ACIT” [1975 (12) TMI 34 - CALCUTTA HIGH COURT] - Further the Hon’ble High of Court of Bombay in “CIT Vs Gabriel India Ltd” [1993 (4) TMI 55 - BOMBAY HIGH COURT] has also taken similar view that, unless the revisionary authority forms a conclusion on the basis of concrete evidential material, it cannot reach to the conclusion rendering the order of assessment erroneous and prejudicial to the interests of the Revenue. In the light of aforestated reasoning, since the Ld. CIT(Exemption) solely acted upon the audit objection in absentia of contrary material, we neither find any infirmity with the order of assessment nor any merits in the revisionary order, ergo we quash the revisionary order, thus the legal ground of the appellant is answered in favour of assessee and against the revenue.
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