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TMI Blog2016 (10) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 147 of the Act, is not erroneous in so far as it is prejudicial to the interest of the revenue in so far as three issues pointed out by the CIT in his order with regard to corpus donations, applicability of maximum marginal rate and advance given to Gopisetty Mallaiah & Co. In so far as determination of income from house property, the CIT has rightly revised the assessment order, as the A.O. has failed to examine the issue to bring the correct amount of income to the tax. Therefore, we modified the CIT’s order u/s 263 of the Act and upheld the findings of the CIT, with regard to income from house property and set aside order of the CIT in respect of corpus donations, applicability of maximum marginal rate and advance given to Gopisetty Mallaiah & Co. - I.T.A.Nos.212 to 215/Vizag/2014, I.T.A.Nos.216 to 219/Vizag/2014 - - - Dated:- 26-8-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant by : Shri A.C. Gangaiah, AR For The Respondent by : Shri G. Gurusamy, DR ORDER PER G. MANJUNATHA, Accountant Member: These 8 appeals filed by two different assessees are directed against separate, but identical orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years 2007- 08 to 2010-11 without there being any material to show that the donations received by the assessee are corpus donations. The CIT, further, observed that although the A.O. has rejected assessee s exemption claim and had assessed its income under the head income from house property and other sources , the A.O. has not taxed the income at the maximum marginal rate for any of these assessment years when assessee s status is an AOP in the absence of registration u/s 12A of the Act ad also the shares of its members are indeterminate. Similarly, the CIT further observed that on verification of statement of computation of total income filed along with return of income, it is noticed that the assessee has admitted income from house property of ₹ 2,30,551/- whereas the A.O. has assessed income from house property at ₹ 1,77,834/-. The CIT further observed that the assessee has advanced an amount of ₹ 10 lakhs to Gopi Setty Mallaya Company, the President of the assessee AOP. The A.O. has failed to examine the nature of payment made to Gopi Setty Mallaya Company. The A.O. without examining above issues, simply completed assessment by making certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e building and the donors have donated the amount with a specific direction to use the funds for the objects of the trust and accordingly it has rightly treated specific donations received from the public as corpus donations. The A.O. after examining the relevant details has accepted the explanation of the assessee and excluded the corpus donations from the gross income for the purpose of taxation. The assessee further submitted that all these facts were brought to the notice of the A.O. at the time of assessment, the A.O. being satisfied with the details furnished by the assessee completed the assessment, therefore, the assessment order passed by the A.O. cannot be termed as erroneous in so far as it is prejudicial to the interest of the revenue. 6. The CIT after considering the submissions of the assessee held that the assessment order passed by the A.O. u/s 143(3) r.w.s. 147 of the Act is erroneous in so far as it is prejudicial to the interest of the revenue, as the assessing officer has failed to examine the issues pointed out in the show cause notice with reference to necessary details before allowing exemption towards corpus donations and also taxing the income under norm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as it is prejudicial to the interest of the revenue, as the A.O. has examined all the issues pointed out by the CIT, in the show cause notice. The A.R. further submitted that the CIT was not correct in directing the A.O. to conduct further enquiries with regard to the issues which were already examined by the A.O. by issuing detailed questionnaire at the time of assessment. It is further submitted that the A.O. has examined the issue of corpus donations, applicability of maximum marginal rate of tax in respect of surplus income, and advance given to Gopisetty Mallaiah Co.. The A.O. after satisfied with the details furnished by the assessee completed the assessment; therefore, the assessment order passed by the A.O. cannot be termed as erroneous in so far as it is prejudicial to the interest of the revenue. The Ld. A.R. further submitted that the CIT cannot take up revision on the issues, which were already examined by the A.O. by holding that the issues were not examined by the A.O. according to the satisfaction of the CIT. Once the A.O. has called for specified details about the issues on which the CIT wants further verification, a general presumption is drawn that the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and his order should be upheld. 11. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The CIT assumed jurisdiction to revise the assessment order for the reason that the A.O. has not conducted proper enquiry before completion of assessment, thereby the assessment order passed by the A.O. u/s 143(3) r.w.s. 147 of the Act, is erroneous in so far as it is prejudicial to the revenue. The CIT revised the assessment order for the reason that the A.O. has completed the assessment without examining the various issues which caused prejudice to the interest of the revenue. The CIT, further, was of the opinion that the A.O. has completed the assessment without examining the issue with regard to allowability of exemption to corpus donations, applicability of maximum marginal rate of tax to AOP, determination of income from house property and advance given to Gopisetty Mallaiah Co., President of the Society. The CIT, further, observed that the assessee claims to have received corpus donations, but on verification of the details furnished by the assessee, it reveals that the A.O. has not called for relevant detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming to the conclusion that the A.O. has not conducted proper enquiry of the issues before completion of the assessment. 13. The CIT, assumed jurisdiction to revise the assessment order on the ground that there is a lack of enquiry on the part of the A.O. in examining the issues referred to in the show cause notice. The CIT questioned the issues right from verification of corpus donations to examination of advance given to member of society. As regards corpus donations is concerned, the CIT was of the opinion that the A.O. allowed exemption to corpus donations without examining declarations issued by the donors whether those donations are given with a specific directions or not. We do not find any merits in the findings of the CIT, for the reason that as admitted by the CIT in his order vide Para 5.5, the A.O. vide letter dated 28.10.2011 at point no.10 has called for the details of donors, etc. Once the A.O. has called for the details about corpus donations, a general presumption is drawn that the A.O. has verified all the details and also satisfied with the explanations furnished by the assessee. The CIT cannot presume that the A.O. has not examined the issues unless he poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sues which were subject matter of revision u/s 263 of the Act, have been examined by the A.O., at the time of assessment, then the CIT has no jurisdiction to entertain fresh enquiry on the same issues, because he had a different opinion on the issues. In our considered view, the issues pointed out by the CIT except income from house property, have been thoroughly examined by the A.O. at the time of assessment, therefore, the CIT was not correct in coming to the conclusion that the A.O. has not examined the issues before completion of assessment. 15. The CIT, has power to revise the assessment order u/s 263 of the Act, but to invoke the provisions of section 263 of the Act, the twin conditions must be satisfied i.e. (1) the order of the CIT is erroneous (2) further it must be prejudicial to the interest of the revenue. Unless both the conditions are satisfied, CIT cannot assume jurisdiction u/s 263 of the Act. It is not necessary that every order which is erroneous may be prejudicial to the interest of the revenue or vice-versa. In some cases, the order passed by the A.O. may be erroneous but it may not be prejudicial to the interest of the revenue. Unless the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest of the revenue are not coexists. In the present case, the A.O. has conducted enquiry before allowing deduction towards wages and centering expenses and also examined the points on which the CIT wants further verification. The assessing officer after carefully examined the books of accounts and relevant vouchers furnished by the assessee passed the assessment order as indicated in his order, which is clearly evident from the assessment order. The contention of the CIT was that the A.O. has not conducted proper enquiry and also not applied his mind before allowing the deduction. But, we do not agree with the CIT for the reason that there is a distinction between lack of enquiry and inadequate enquiry. If there is an inadequate enquiry that would not by itself give occasion to the CIT to assume jurisdiction u/s 263 of the Act, merely because he has a different opinion in the matter. The CIT can do this only, when there is a lack of enquiry by the assessing officer. In the present case, the assessment order is detailed one and also, the A.O. has passed a remarks in the assessment order on two issues, on which the CIT assumed jurisdiction, i.e. disallowance of round some expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, on perusal of the facts available on record, we find that the A.O. has conducted detailed enquiry and also examined the issue of deduction claimed u/s 80IB of the Act and other issues pointed out by the A.O. The assessee explained that though filing of audit report in form no.10CCB is mandatory in nature, it is not necessary to file the same along with return of income in view of the changes in filing of income tax return from paper return to e-filing of income tax returns. In the new system of e-filing of income tax returns, filing of physical copy of any reports or statements is done away with. Similarly, as regards the eligibility of job work charges for claiming deduction u/s 80IB of the Act, which was examined by the A.O. and allowed deduction after satisfied with the activity of the assessee. Therefore, we are of the view that the assessment order passed by the A.O. u/s 143(3) of the Act dated 20.11.2009 it is not erroneous in so far as it is prejudicial to the interest of the revenue. 18. Considering the facts and circumstances of this case and also respectfully following the ratios of the coordinate bench, we are of the view that the assessment order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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