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2023 (9) TMI 1514 - AT - Income TaxValidity of revisionary proceedings u/s 263 - Denial of exemption claimed under section 10(23EC) - CIT held that for the impugned assessment year assessee should not have been granted benefit under Section 10(23EC) of the Act as it is registered under Section 12A of the Act - HELD THAT - With effect from 1/4/2024 exclusion of section 10 (23EC) is included by The Finance Act 2023. We find that the co-ordinate bench in assessee s own case for AYs 2019-20, 2016-17 and 2020-21 2023 (10) TMI 24 - ITAT MUMBAI has categorically held that up to 1st April 2024, the assessee is entitled to exemption under Section 10(23EC) of the Act despite it is registered under Section 12A of the Act. It was so held based on the amendment to the Provision of Section 11(7) of the Act made with effect from 1st April, 2024. Therefore, it is apparent that as per the order of the co-ordinate Bench, there is no error in the order of the learned Assessing Officer. Therefore, as the assessment order cannot be said to be erroneous, the order passed by the learned PCIT under Section 263 of the Act is not sustainable and hence, quashed. Appeal of the assessee is allowed.
Issues:
1. Validity of revisionary proceedings under Section 263 of the Income-tax Act, 1961. 2. Assessment Order passed under section 143(3) r.w.s. 143(3A) and 143(3B) of the Act after due verification. 3. Denial of exemption claimed under section 10(23EC) of the Act of INR 8,55,81,601/- Issue 1: Validity of revisionary proceedings under Section 263: The appeal was filed by NCDEX Investor (Client) Protection Fund Trust challenging the Revisionary order passed under Section 263 of the Income-tax Act, 1961, by the Commissioner of Income Tax (Exemption), Mumbai. The Commissioner held that the assessment order dated 4th March, 2021, passed under Section 143(3) was erroneous and prejudicial to the interest of the Revenue, directing the Assessing Officer to conduct denovo assessment proceedings. The grounds of appeal raised questions on the initiation of revisionary proceedings and the legality of the order under Section 263 of the Act. The Commissioner found discrepancies in the assessee's simultaneous claims under different sections of the Act, leading to the conclusion that the assessment order was erroneous and prejudicial to revenue interests. Issue 2: Assessment Order validity under section 143(3): The Assessee challenged the assessment order passed under section 143(3) r.w.s. 143(3A) and 143(3B) of the Act after due verification. The Assessee claimed that the order was not erroneous and prejudicial to the interest of the Revenue. The Assessee argued that the benefit claimed under Section 10(23EC) of the Act was valid and in accordance with the law. The Assessee highlighted previous assessment years where similar benefits were granted without disturbance under Section 263 of the Act. The Departmental Representative supported the order of the Commissioner. The Tribunal analyzed the contentions and held that the assessment order was not erroneous based on the Assessee's compliance with the relevant provisions. Issue 3: Denial of exemption under section 10(23EC) of the Act: The Assessee claimed exemption under Section 10(23EC) of the Act for income received from statutory contributions. The Commissioner invoked Section 11(7) of the Act, denying the exemption and holding that simultaneous benefits under Section 11 and 12 were not permissible. The Tribunal examined the provisions of Section 10(23EC) and Section 11(7) and referred to a co-ordinate bench decision for clarification. The Tribunal concluded that until 1st April 2024, the Assessee was entitled to exemption under Section 10(23EC) despite being registered under Section 12A. Based on this interpretation, the Tribunal allowed the Assessee's appeal, quashing the order passed under Section 263 of the Act. In conclusion, the Tribunal allowed the Assessee's appeal, holding that the assessment order was not erroneous, and the order passed under Section 263 of the Act was not sustainable. The Tribunal provided a detailed analysis of the issues raised, clarifying the legal provisions and previous decisions that supported the Assessee's position.
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