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2023 (12) TMI 395 - AT - Income TaxRevision u/s 263 - assessment of trust - PCIT concluded that the assessee s case squarely falls within the ambit of proviso to section 2(15) of the Act and that since the aforesaid aspects were not properly examined by the ld. AO while framing the assessment - HELD THAT - We find that this tribunal for Asst Year 2010-11 2019 (1) TMI 880 - ITAT DELHI had passed an order in assessee s own case in favour of the assessee where the revision order u/s 263 of the Act passed by the PCIT on identical grounds were quashed. Moreover, the Hon ble Jurisdictional High Court in assessee s own case had decided the issue in favour of the assessee in 2018 (3) TMI 1702 - DELHI HIGH COURT holding the activities of the assessee to be charitable in nature. Hence on merits, the issue is already decided in favour of the assessee by the order of this tribunal in earlier years after duly considering the proviso to section 2(15) of the Act. There is absolutely no reason for the ld. AO to take a divergent stand when the matters on merits are already settled by this tribunal in assessee s own case. Infact the ld. AO had followed judicial discipline, which has been completely and conveniently ignored by the ld. PCIT in the instant case. Apart from this, we also find that the ld. AO had indeed made specific enquiries on the very same issues that were raised by the ld. PCIT in his revision order. Sufficient enquiries were indeed made by the various assessing officers in the course of assessment proceedings under faceless regime. It is not in dispute that the assessee had indeed filed complete details regarding the queries raised by the various assessing officers. Infact most of the queries raised were even repetitive in nature and details were filed by the assessee repeatedly. Moreover, we find that the AO under the faceless regime had even asked for the scrutiny assessment orders for the Asst Years 2016-17 and 2017-18 which were also filed by the assessee before him. Merely for substitution of a view by the ld. PCIT on matters already on record, revision proceedings u/s 263 of the Act cannot be initiated by the ld. PCIT. Further revision proceedings u/s 263 of the Act cannot be initiated for inadequate enquiry and the same could be done only for lack of enquiry. We hold that the issues raised by the ld. PCIT is already decided in favour of the assessee on merits and further since adequate enquiries were already carried out by the ld. AO in the course of assessment proceedings, the order of the ld. AO cannot be termed as erroneous - Assessee appeal allowed.
Issues Involved:
1. Legality of the Revision Order under Section 263. 2. Adequacy of inquiries and verification by the National e-Assessment Centre (NeAC). 3. Applicability of proviso to Section 2(15) of the Income-tax Act, 1961. Issue 1: Legality of the Revision Order under Section 263 The assessee contested that the Revision Order dated 19.10.2022 under Section 263 by the Commissioner of Income Tax (Exemptions) was "bad in law" and should be quashed. The assessee argued that the Assessment Order by NeAC was framed after considering various decisions from past years and making required inquiries and verification. The Tribunal found that the issues raised by the Principal Commissioner of Income Tax (PCIT) were already decided in favor of the assessee in earlier years by both the Tribunal and the Hon'ble Jurisdictional High Court. Therefore, the Tribunal held that the order of the Assessing Officer (AO) cannot be treated as erroneous merely because the view taken by the AO was not acceptable to the PCIT. Issue 2: Adequacy of Inquiries and Verification by NeAC The PCIT claimed that NeAC failed to make requisite inquiries and verification. The Tribunal noted that sufficient inquiries were indeed made by various assessing officers during the assessment proceedings under the faceless regime. Notices under Section 142(1) were issued multiple times, and the assessee had filed complete details regarding the queries raised. The Tribunal concluded that the AO had made specific inquiries on the issues raised by the PCIT and that the assessment was completed after a thorough review process. Therefore, the Tribunal held that revision proceedings under Section 263 cannot be initiated for inadequate inquiry but only for lack of inquiry. Issue 3: Applicability of Proviso to Section 2(15) of the Income-tax Act, 1961 The PCIT argued that the assessee's activities fell within the ambit of proviso to Section 2(15) of the Act, treating the Indian International Centre (IIC) as a commercially run hotel. The Tribunal observed that the assessee's case had already been decided in its favor on merits by the Tribunal and the Hon'ble Jurisdictional High Court in earlier years. The Tribunal noted that the AO had followed judicial discipline by accepting the assessee's contentions and completing the assessment accordingly. The Tribunal held that the PCIT's revision order was not justified as the issues on merits were already settled in favor of the assessee. Conclusion: The Tribunal quashed the revision order passed by the PCIT under Section 263, holding that the AO's order was neither erroneous nor prejudicial to the interests of the revenue. The appeal of the assessee was allowed.
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