2024 (11) TMI 1254 - AT - Income Tax

Revision u/s 263 against the reassessment order passed by the National E-Assessment Centre, Delhi, u/s. 147 r.w.s. 144B - Determination of period of limitation - HELD THAT - The issued dealt with by AO in the re-assessment proceedings and the order passed u/w. 147 and the one dealt in the revisionary proceedings u/s.263 and the order passed thereon by ld. CIT(E) are altogether un-related and different in their character. CIT(E) has sought to revise the re-assessment order on a subject matter which had not come to the notice of the AO in the re-assessment proceedings since the issue dealt by him as recorded in the reasons to believe was on a different footing. For the issue raised by the ld. CIT(E) to invoke revisionary proceedings u/s.263, it had to necessarily relate to intimation passed u/s.143(1) which falls beyond the bracket of two years prescribed u/s. 263 of the Act. Facts in this respect are undisputed and uncontroverted as narrated above. We thus, are in agreement with the contentions raised by the ld. Counsel of the assessee. We draw force from the decision of Lark Chemicals Ltd. 2013 (9) TMI 959 - BOMBAY HIGH COURT as well as Indira Industries 2018 (6) TMI 840 - MADRAS HIGH COURT both of which had considered in the case of Alagendran Finance Ltd. 2007 (7) TMI 304 - SUPREME COURT Accordingly, at the threshold of the jurisdictional issue, relating to impugned revisionary order barred by limitation, we allow the appeal of the assessee and quash the revisionary order passed u/s. 263 of the Act.

Summary

Issues:
Challenge to the jurisdiction of the CIT(E) in invoking section 263 of the Income-tax Act on the grounds of an erroneous assessment order.

Detailed Analysis:

1. Background:
The appeal was filed by the assessee against the order of the CIT(Exemptions), Mumbai, invoking section 263 of the Income-tax Act against the reassessment order passed by the National E-Assessment Centre, Delhi, for Assessment Year 2016-17.

2. Facts of the Case:
The assessee, a charitable trust registered under various acts, filed its return of income reporting total income at Nil. Re-assessment proceedings were initiated based on information regarding capitation fees and false claims of exemption. The assessing officer concluded that corpus donation received by the assessee should be treated as a general donation, resulting in a re-computation of exemptions.

3. Jurisdictional Challenge:
The CIT(E) noted discrepancies in the accumulation amounts claimed by the assessee and issued a show cause notice under section 263. The assessee contended that the revisionary proceedings were time-barred, as the issues raised were not part of the re-assessment proceedings.

4. Legal Arguments:
The assessee argued that the CIT(E) lacked jurisdiction to invoke revisionary proceedings beyond the prescribed time limit of two years. Citing judicial precedents, the assessee contended that the issues raised were not part of the re-assessment order and thus, the revisionary proceedings were invalid.

5. Decision:
After considering the arguments and judicial precedents, the tribunal found that the issues in the revisionary proceedings were unrelated to the re-assessment order. Relying on previous court decisions, the tribunal concluded that the revisionary order was barred by limitation and allowed the appeal of the assessee, quashing the revisionary order passed under section 263 of the Act.

6. Conclusion:
The tribunal ruled in favor of the assessee, holding that the revisionary order was beyond the prescribed time limit and lacked jurisdiction. The appeal of the assessee was allowed, and the revisionary order was quashed.

This detailed analysis highlights the key legal issues, arguments presented, and the tribunal's decision, emphasizing the jurisdictional challenge and the time-barred nature of the revisionary proceedings.