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2024 (12) TMI 311 - AT - Income TaxRevision u/s 263 - claim of exemption u/s. 10(23C)(iiiab) and 10(23C)(iiiac) - HELD THAT - As assessee was given as many as seven opportunities of hearing and despite the same, the assessee remained non-compliant. The assessing officer despite noting specifically that in absence of any details/proof filed by the assessee, it is not possible to verify the above transactions, while finalising the assessment order, did not make any additions with respect to the aforesaid claim of exemption of a sum crores in the assessment order. We are of the considered view that Principal CIT has correctly observed that despite having given/afforded several opportunities of hearing, and despite the assessing officer having taken note of the fact that the assessee had failed to give any material in support of claim of exemption for a sum, since the assessing officer did not make any disallowance with respect to the above claim of exemption in absence of any supporting documents/materials, the assessment order was liable to be set aside as being erroneous and prejudicial to the interests of the Revenue. Appeal of the assessee is dismissed.
Issues:
1. Interpretation of Section 263 of the Income Tax Act regarding the order passed by the Assessing Officer. 2. Claim of exemption under Section 10(23C)(iiiab) and 10(23C)(iiiac) of the Act by the assessee. 3. Assessment of under-reported income by the Assessing Officer. 4. Review of the assessment order by the Principal CIT under Section 263 of the Act. 5. Appeal against the order passed by the Principal CIT. Analysis: 1. The appeal was filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption) invoking Section 263 of the Income Tax Act. The Assessee argued that the order passed by the Assessing Officer was not erroneous or prejudicial to the interest of Revenue, hence Section 263 should not have been invoked. The Assessee challenged the CIT's decision to hold the order as erroneous and prejudicial. 2. The Assessee, a trust, claimed exemption under Section 10(23C)(iiiab) and 10(23C)(iiiac) of the Act. The Principal CIT observed that the Assessee failed to provide necessary documentation to support this claim during assessment proceedings. The Principal CIT found the assessment order to be erroneous as the Assessee did not submit supporting documents despite multiple opportunities. The Principal CIT directed the Assessing Officer to re-examine the exemption claim after proper verification. 3. The Assessing Officer had under-assessed the income by not including the claimed exemption amount in the total income. Despite noting the lack of supporting documents, no disallowance was made. The Tribunal upheld the Principal CIT's decision that the assessment order was erroneous and prejudicial to Revenue due to the lack of verification and documentation. 4. The Principal CIT's review under Section 263 found the assessment order to be flawed as the Assessee failed to provide necessary evidence for the exemption claim. The order was set aside for reassessment with proper verification. The Tribunal upheld the Principal CIT's decision, stating that the Assessee's non-compliance with providing supporting documents rendered the assessment order erroneous. 5. The Assessee appealed against the Principal CIT's order, arguing for the allowance of the exemption claim based on funds received from the State Government. However, the Tribunal upheld the Principal CIT's decision, stating that the Assessee's failure to provide documentation rendered the assessment order erroneous. The appeal was dismissed, affirming the Principal CIT's order under Section 263. This detailed analysis covers the interpretation of relevant sections of the Income Tax Act, the assessment process, the review under Section 263, and the final decision of the Tribunal regarding the exemption claim and the assessment order.
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