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TMI Blog2020 (8) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... in law in applying the aforesaid decision to the fact situation of the case and ought to have appreciated that the instant case was a case of lack of enquiry and not inadequate enquiry with regard to claim of the assessee with regard to deduction under Section 80IB(10) of the Act. Tribunal has recorded the finding that the Assessing Officer should have examined the claim for deduction of the assessee in the light of Section 11 - Tribunal thereafter could not have proceeded to examine the matter on merits after setting aside the order under Section 263 of the Act with reference to Section 13(8) of the Act as the merits of the matter was not the subject matter of the appeal before the Tribunal. Substantial questions of law framed by a bench of this court are answered in favour of the revenue and against the assessee. - I.T.A. NO. 382 OF 2012 - - - Dated:- 18-8-2020 - THE HON'BLE MR. JUSTICE ALOK ARADHE And THE HON'BLE MR. JUSTICE H. T. NARENDRA PRASAD FOR THE PETITIONER : Sri. K.V. ARAVIND, ADV FOR THE RESPONDENT : Ms. VANI H, ADV JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and to carry out the assessment afresh in accordance with law after affording an opportunity of hearing to the assessee. 3. Being aggrieved, the assessee filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal', for short). The Tribunal vide order dated 29.06.2012 inter alia held that invocation of Section 263 of the Act on the ground of lack of enquiry with regard to claim of deduction made by the assessee under Section 80IB(10) of the Act cannot be upheld. It was further held that Assessing Officer should have examined the claim for exemption under Section 80IB(10) of the Act in the light of the fact whether the assessee had applied the income for charitable purposes. However, the Tribunal held that Section 13(8) of the Act was incorporated with effect from 01.04.2009 and by virtue of Section 13(8) of the Act, the income of the assessee from developing housing project by virtue of Section 13(8) of the Act would become part of total income under the Act. It was further held that in the light of aforesaid retrospective amendment of the law, the application of income for charitable purposes becomes irrelevant. It was furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the case. It is also argued that inadequacy of enquiry cannot be a ground for invoking Section 263 of the Act. It is also urged that merely because an order passed by the Assessing Officer results in loss in revenue, it cannot be treated as prejudicial to the interest of the revenue. It is also submitted that exemption under Section 80IB(10) of the Act can be claimed by an undertaking involved in developing and housing project, irrespective of it being a charitable trust. It is also argued that the Tribunal has rightly set aside the order passed under Section 263 of the Act. It is also urged that decision relied upon by the revenue in the case of AMITABH BACHAN supra does not support the case of the revenue as in the aforesaid case, the assessee had withdrawn the claim and the Assessing Officer had not examined the original claim made by the assessee and in the aforesaid context it was held that the Assessing Officer should have examined the original claim. In support of aforesaid submissions, reliance has been placed on decisions of Supreme Court in 'COMMISSIONER OF INCOME-TAX (CENTRAL), DELHI VS. HARPRASAD CO.P.LTD.', (1975) 99 ITR 118X (SC), 'MALABAR INDUSTRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this appeal is whether on the anvil of aforesaid well settled principles of law, the impugned order passed by the Tribunal can be sustained. The relevant extract of order passed by the Assessing Officer reads as under: In response to the scrutiny notices the Authorized Representative Sri.S.Basker, CA appeared from time to time, case was discussed details and information called for. The assessee's Authorized Representative has filed the information called for and after verification of the same the assessment is completed as mentioned below: INCOME Income as per Profit and Loss 57,39,68,569 Account Income as per Income and 78,20,892 Expenditure Account 58,17,89,461 Less: 15% set apart for application to charitable or religious purpose 87,268,419 Balance 85% to be applied 494,521,042 Less: Application of Income Expenses (excluding business activity and Depr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO ought to have made enquiries and failure to do so would render the order of the AO erroneous and prejudicial to the interest of the revenue. The further conclusion of the DIT based on the aforesaid decision that the assessee would not be entitled to deduction under Section 80IB(10) of the Act and that the AO should examine the claim for exemption under Section 11 of the Act in the light of the fact whether the assessee has applied income for charitable purpose is also correct. 12. The Tribunal thereafter could not have proceeded to examine the matter on merits after setting aside the order under Section 263 of the Act with reference to Section 13(8) of the Act as the merits of the matter was not the subject matter of the appeal before the Tribunal. In view of preceding analysis, the substantial questions of law framed by a bench of this court are answered in favour of the revenue and against the assessee. The order passed by the Income Tax Appellate Tribunal dated 29.06.2012 is quashed. The order passed by the Director of Income Tax (Exemption), Bangalore dated 19.12.2011 insofar it contains a direction to the Assessing Officer to disallow the deduction under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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