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TMI Blog2018 (7) TMI 2058X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice for withdrawal of approval. Tribunal has specifically considered this aspect and found that the language of show cause notice does not exhibit any thought process of CIT(E) but it reveals that it was issued and signed by the DCIT Hqrs as per the instructions and directions of the CIT (E). Tribunal even went further on this point and observed that the matter would have been different if the show cause notice brings out the thought process and application of mind by the ld. CIT (E), but was only signed by the DCIT Hqrs. Hence the Tribunal found that the CIT (E) delegated the power to the DCIT Hqrs to issue the show cause notice which is not permissible as per the provisions of the Act. In view of the detailed finding based on the analysis of the facts and provisions of law, the Miscellaneous Application filed by the revenue has no substance as the revenue is raising the contentions on the merits of the issue and not pointed out any apparent mistake which can be rectified as per the provisions of section 254(2) of the Act. The scope and jurisdiction to rectify the mistake under section 254(2) is very limited and circumscribed. The Tribunal can rectify the mistake which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue has not pointed out any apparent mistake in the order of the Tribunal which can be rectified under section 254(2) of the IT Act. However, the revenue is raising the objections against the decision taken on merits. The Tribunal has decided the issue on merits after considering all the contentions and arguments which were raised by the revenue at the time of hearing and, therefore, the allegations made in the miscellaneous application are not pointing out any mistake apparent on record. In support of his contention, he has relied upon the following decisions of the Hon'ble Supreme Court :- T.S. Balaram, ITO vs. Volkart Bros., 82 ITR 50 (SC) ACIT vs. Saurashtra Kutch Stock Exchange Ltd. 305 ITR 227 (SC) 4. Having considered the rival submissions as well as the material on record, we note that the main grievance in the miscellaneous application filed by the revenue is against the finding of the Tribunal on the issue of validity of show cause notice and consequential order passed by the ld. CIT (E) under section 10(23C)(vi) of the Act. We find that though the revenue has raised the issue that once the prior approval was taken from the ld. CIT (E) for issuing the show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding u/s 10(23C)(vi) r.w.s. 13th proviso to the said section only competent authority can issue a show cause notice giving an opportunity to the assessee to reply and explain its case. Since show cause notice is not issued by the competent authority, therefore the same is not valid and in the absence of a valid note the provision assumed by the ld. CIT(E) is bad and void and lad and hence, the order passed u/s 10(23C)(vi) of the Act is not sustainable. In support of his contention, he has relied upon the following decisions:- • Kolkata ITAT decision dated 20.03.2015 in case of Arun Kanti, order (ITA No. 1516/Kol/2014) • Kolkata ITAT Bench decision dated 15.01.2016 in case of M/s Assam Bangal Carriers, order (ITA No. 706/Kol/2016) • Hon'ble Allahabad High Court decision dated 02.07.2012 in case of Rajesh Kumar Pandey, order (ITA No. 47/2011) The ld. AR has also relied upon the various other decisions in support of his contention and submitted that the order passed in pursuant to invalid show cause notice is not sustainable. 8. Next contention of the ld. AR is that the assessments for prior years i.e. assessment years 2011-12, 2012-13 were completed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be from the date of grant of approval i.e. with retrospective effect. 10. We have considered the rival submissions as well relevant material on record. The first objection of the assessee is regarding the validity of show cause notice that it was not signed by the competent authority and therefore, it is invalid. The power and jurisdiction to withdraw the approval granted u/s 10(23C)(vi) of the Act is provided under 13th proviso to the said section which reads as under:- "Provided also that where the fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) is notified by the Central Government 7[or is approved by the prescribed authority, as the case may be,] or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via), is approved by the prescribed authority and subsequently that Government or the prescribed authority is satisfied that- (i) such fund or institution or trust or any university or other educational institution or any hospital or other medical institution has not- (A) applied its income in accordance with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income Tax (Exemptions), Jaipur on 25.07.2016 at 12.30 P.M. in the Income Tax office (Exemptions) room No. 303, 3rd floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur. You may attend either personally or through an authorized representative in this behalf (holding valid Power of Attorney). Any failure to comply may lead to the conclusion that the assessee has nothing further to say from his side in this regard, and the case may therefore, be accordingly decided." The language and tenor of the show cause notice do not exhibit any thought process of ld. CIT(E) but it reveals it was issued and signed by DCIT(Hqr.) as per instructions and directions of ld. CIT(E). The matter would have been different if the show cause notice brings out the thought process and application of mind by the ld. CIT(E) but was only signed by the DCIT (Hqr.). In case in hand it is apparent that the ld. CIT(E) delegated its powers to DCIT (Hqr.) to issue show cause notice and therefore, it is based on the satisfaction of the DCIT (Hqr.) and not of ld. CIT(E). para 2 and 6 of the impugned show cause notice clearly manifest that it was issued by the DCIT (Hqr.) and not by the CIT(E). The langu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not get land converted. Your good self has mentioned that this advance given cannot be said for charitable activities and there is violation of section 11(5) of the IT Act, 1961. Sir, this advance is given for acquisition of land for opening of school and in accordance with the sole object of the society. Further clause (x) of the section 11(5) permits "investment in immovable property" as one of the modes of investment of funds, so there is no violation of section 11(5) of the Act. Further vide reply dated 10.08.2015 submitted as under: "The above party has informed us the final hearing of Gutab Kothari V/s State has completed and they are waiting for decision, however we have informed them that either they should give us land by end of this month or return our money. Please note that they are no way connected to us or neither we have any business relation with them except for this particular deal." Further vide reply dated 02.09.2016 submitted as under:- Regarding outstanding amount as informed in our letter dated 10.08.2016 that we had given time to party either to give land or refund the money before the end of August, 2016, now they have requested that the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Pandey (2012) 25 taxmann.com 242 (All.). The Ld. counsel for the assessee further referred to the decision of the Tribunal in the case of Satish Kumar Kashri v. ITO 104 ITD 382 (Pat). ITA No.706/Kol/2013 M/s. Assam Bengal Carriers. A.Yr.2008-09 4 6. Ld. DR on the other hand submitted that above is not the material defect and he submitted that there is no reason to set aside the order u/s. 263 of the Act, on this account. 7. We have carefully considered the submissions and perused the record. We find that Section 263(1) of the Act provides as under:- "The CIT may call for and examine the record of any proceeding under this Act, and if he considers that any order passed by the AO is erroneous insofar as it is prejudicial to the interest of Revenue he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing fresh assessment." Now we can also refer to the notice u/s. 263 of the Act issued to the assessee. This notice was signed as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued u/s. 263 of the Act should be issued by the Ld. CIT. In this case, it is undisputed that notice was issued by ACIT, Hqrs, Burdwan who is not competent to assume jurisdiction u/s. 263 of the Act. Hence, the notice was not under the seal and signature of Ld. CIT. Hence, as per the precedents referred to above, the assumption of jurisdiction u/s. 263 of the Act in this case is not valid. Accordingly, the order u/s. 263 of the Act passed in these cases are quashed." 8. Facts of the present case being identical to the case referred to above, respectfully following the aforesaid decision we hold that the assumption of jurisdiction u/s 263 of the Act in the present case is not valid. Order u/s 263 of the Act is accordingly quashed and the appeal of the assessee is allowed. In view of the above conclusion, the other grounds of appeal are not taken into consideration." The Hon'ble Allahabad High Court in case of CIT vs. Rajesh Kumar Pandey (supra) while dealing with the validity of notice and applicable of the provisions of section 299BB has observed as under:- "299BB Notice deemed to be valid in certain circumstances- Where as assessee has appeared in any proceeding or co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght process of ld. CIT(E) but it reveals that it was issued and signed by the DCIT Hqrs as per the instructions and directions of the ld. CIT (E). The Tribunal even went further on this point and observed that the matter would have been different if the show cause notice brings out the thought process and application of mind by the ld. CIT (E), but was only signed by the DCIT Hqrs. Hence the Tribunal found that the ld. CIT (E) delegated the power to the DCIT Hqrs to issue the show cause notice which is not permissible as per the provisions of the Act. In view of the detailed finding based on the analysis of the facts and provisions of law, the Miscellaneous Application filed by the revenue has no substance as the revenue is raising the contentions on the merits of the issue and not pointed out any apparent mistake which can be rectified as per the provisions of section 254(2) of the Act. The scope and jurisdiction to rectify the mistake under section 254(2) is very limited and circumscribed. The Tribunal can rectify the mistake which is manifest and apparent on the face of the record and not something which requires a long drawn reasoning. Hence the decision taken on merits canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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