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2021 (12) TMI 1171 - AT - Income TaxRevision u/s 263 by CIT - accumulation u/s. 11(2) - HELD THAT - Assessee had applied ₹ 4,50,172/- this year as part of application of amount to the tune of ₹ 2,76,18,535/-. And it had filed the revised schedule rectifying the Schedule-I (page 26 PB) which created the confusion. We note that the assessee has shown surplus to the tune of ₹ 8,53,939/- and has been set apart u/s. 11(2) of the Act. So the fault pointed out by the Ld. CIT(E) based on the mistake of fact which crept into while filing column 4 of Schedule-I cannot change the fact that assessee had set apart ₹ 8,53,939/- as surplus u/s. 11(2). The question of assessee applying ₹ 4,50,172/- before the beginning of F.Y. i.e. before 01.04.2016, when there is no deficit in preceding year has not been answered by the Ld. CIT(E)/DR. So the apprehension of Ld. CIT(E) that assessee has thus claimed double deduction is erroneous and on wrong assumption of fact - we do not find any omission on the part of AO while framing the assessment order on this issue - AO rightly did not draw any adverse inference on the issue which was pointed out as a fault by the Ld. CIT(E). Therefore, we find that the Ld. CIT(E) has erroneously usurped the revisional jurisdiction u/s. 263 of the Act and resultantly the same is quashed. Appeal of the assessee is allowed.
Issues:
1. Revisionary jurisdiction of Ld. CIT(E) under section 263 of the Income Tax Act. 2. Admissibility of application claimed by the assessee for assessment year 2017-18. Issue 1: Revisionary jurisdiction of Ld. CIT(E) under section 263 of the Income Tax Act: The appeal was against the order of Ld. CIT(Exemptions), Kolkata for the assessment year 2017-18. The assessee contended that Ld. CIT(E) did not have the revisionary jurisdiction under section 263 of the Act as the AO's order was not erroneous or prejudicial to revenue. The Ld. CIT(E) issued a Show Cause Notice pointing out an alleged fault in the assessment order by allowing an exemption incorrectly. The assessee responded, explaining the alleged mistake and providing supporting documents. However, Ld. CIT(E) disagreed with the explanation and set aside the issue to the assessing officer for verification. The ITAT Kolkata, after hearing both parties, found that the mistake in the Schedule-I was rectified by the assessee, and the alleged double deduction claim was unfounded. Therefore, the ITAT concluded that the Ld. CIT(E) erroneously exercised revisional jurisdiction under section 263, and the appeal of the assessee was allowed. Issue 2: Admissibility of application claimed by the assessee for assessment year 2017-18: The Ld. CIT(E) alleged that the assessee wrongly claimed an application amount in the assessment year 2017-18, resulting in double exemption. The assessee argued that the mistake in Schedule-I was rectified, and the amount applied was part of the total claimed. The ITAT analyzed the documents provided by the assessee, including Schedule-I, Schedule EC, and computation of income. The ITAT found that the assessee had applied the amount correctly and had set apart another sum as surplus under section 11(2) of the Act. The ITAT concluded that the Ld. CIT(E)'s apprehension of double deduction was erroneous, and the AO did not err in framing the assessment order. Therefore, the ITAT held that the revisional jurisdiction exercised by Ld. CIT(E) was unwarranted, and the appeal of the assessee was allowed. In conclusion, the ITAT Kolkata ruled in favor of the assessee, quashing the revisional jurisdiction exercised by Ld. CIT(E) under section 263 of the Act. The ITAT found that the alleged mistake in claiming the application amount was rectified by the assessee, and there was no basis for the apprehension of double deduction. The assessment order by the AO was upheld, and the appeal of the assessee was allowed.
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