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TMI Blog2004 (12) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... no proper opportunity was given of being heard inasmuch as conclusions/results of personal inspection were not apprised to the appellant. The inspection was carried out at 4.00 p.m. on 29th March, 2004 and order was passed on 31st March, 2004 the 30th day of March, 2004 being holiday on account of Ram Navmi. 5.That the appellant has not been given proper opportunity of being heard; no show-cause notice in terms of disagreement or proposed assessment has been served enabling the appellant to establish the facts of the case. 6.That failure to give an opportunity of being heard after carrying out personal inspection on 29th March, 2004; and passing order on 31st March, 2004 shows a state of mind clouded by pre-conception. 7.That sequence of events establishes certain pre-determined state of mind inasmuch as the proceedings were taken in hand at the fag end of the assessment year and the order was passed at the end of limitation period. 8.That Ld. CIT has failed to take into consideration and appreciating various judicious judgment cited by the assessee and failed to show reasons, if any, for non-applicability thereof. 9.That Ld. CIT has failed to take into consideration the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment completed under section 143(3)/148 of the Act. The ld. CIT, however, was of the view that the assessment orders are erroneous insofar as these are prejudicial to the interests of revenue mainly on the basis that only the business income qualifies for deduction and the balance amount should have been taxed under section 35AC of the Act. The ld. CIT had also visited the premises and was of the view that the Basket Ball Complex is being used by OTG Group for its business interest instead of preparing young basket ballers for national and international level for which purpose various deductions under the provisions of the Income-tax Act including section 35AC are being claimed. He, accordingly, set aside the assessment for the assessment years 1995-96 to 1999-2000 with the direction that the assessment should be framed afresh by the Assessing Officer after proper examination of amount allowable under section 35AC of the Act for which purpose he will make a reference under section 35AC(4) through proper channel to national committee for withdrawing the approval granted by it under section 35AC as the project is not being carried on apparently in accordance with all or any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Baroda) (P.) Ltd. [1972] 83 ITR 377 (SC) (c) CIT v. Smt. Minal Rameshchandra [1987] 167 ITR 507 (Guj.) (d) Senairam Doongarmall v. CIT [1961] 42 ITR 392 (SC) (e) Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC) (f) P. Krishna Menon v. CIT [1959] 35 ITR 48 (SC). 4. In support of ground Nos. 4 to 6, the ld. AR submits that the ld. CIT while arriving at a certain conclusion against the assessee after carrying out inspection of the trust premises ought to have confronted the assessee with the result of his spot inspection, hence, he has violated the principles of natural justice. 5. Ground Nos. 7 and 8 are general in nature. 6. In support of ground No. 9, the ld. AR submits that jurisdiction under section 263 cannot be utilized as an instrument for reopening the concluded proceedings on flimsy grounds and once the Assessing Officer had reopened the assessment proceedings and issued notice to the assessee under section 148, there was absolutely no jurisdiction for the ld. CIT to invoke the provisions laid down under section 263 of the Act. He also places reliance on the judgment of the Hon'ble Gujarat High Court in the case of CIT v. Arvind Jewellers [2002] 124 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35AC is that the claimed expenditure must be incurred from the current year's income; the amount debited in the profit and loss account was never accounted for in the capital account of the assessee and, thus, the donation was never debited to the capital account of the current year's books which establishes that the assessee had not paid any amount from his current year's income which had to be reflected in the capital account; the so-called donations were adjustment entries against the accumulated funds of the earlier years. He places reliance on the following judgments: 1.Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) 2.Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC) 3.Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375 (Delhi) 4.CIT v. Kohinoor Tobacco Products (P.) Ltd. [1998] 234 ITR 5572 (MP). The ld. DR also refers the provisions laid down under sub-section (4) to section 35AC with the submission that these provisions are applicable in the case of the assessee. 13. We have considered the arguments advanced by the parties in view of the material available on record, orders of the lower authorities and the decisions relied on by the parties. It is evident that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be withdrawn under the provisions laid down in sub-section (4) to section 35AC of the Act. Thus, it is altogether different aspect which was to be seen in the case of Corporation (Area) Basket Ball Trust, Indore, and certainly if approval granted by the national committee would have been withdrawn by the national committee from the Corporation (Area) Basket Ball Trust, Indore, for the period, under consideration, the assessee would not have been entitled to the claim of deduction under section 35AC of the Act. 14. During the assessment in the case of the assessee what Assessing Officer was to verify for allowing the claim of deduction under section 35AC was as to whether the institution on which payment of any sum incurred was approved by the National Committee, deduction of the claimed amount of such expenditure was incurred during the years, the certificate of expenditure by way of payment in respect of eligible projects and schemes notified under section 35AC in Form No. 58A were enclosed with return of income and deduction claimed was related to the year in question or not. It is evident from the assessment order in question that the Assessing Officer has discussed all these a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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