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TMI Blog2022 (4) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... but the validity of order does, consequently in the present case, the orders of assessment were passed u/s 143(3) irrespective of claims allowed thereby are undisputedly valid and legal orders and thus are subject matter of revision u/s 263. PCIT vouching the assessment records observed that, post culmination of assessments, a survey action u/s 133A was carried out on the assessee establishing on records that, the appellant trust for the assessment years under consideration was in receipt of voluntary donations and donation towards building funds etc., however no proper records were found maintained in showcasing the genuineness thereof, further the survey team also observed that, there were cash expenditure incurred without due supporting in the form of tax invoices / bills etc., substantiating the correctness and genuineness thereof and in the opinion of PCIT these were neither inquired into nor verified by the Ld AO during the course of regular assessment proceedings, which eventually triggered the invocation of revisionary jurisdiction On our careful perusal of paper books it revealed that, the paper book submitted by the appellant during the course of this hearing is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information of assessments and the revisionary orders is tabulated as under; Sr Appeal No Asstt Year Date of Order Passed U/s 263 U/s 143(3) 1 ITA/30/NAG/2021 2015-2016 30/03/2021 15/11/2017 2 ITA/31/NAG/2021 2016-2017 30/03/2021 14/11/2018 4. Before boarding, we shall make a mention that, in the instant case, the assessment order for sought to be revised for AY 2015-2016 was passed on 15/11/2017 and whereas a SCN u/s 263 was issued on 01/05/2019, however the revisionary order was passed on 30/03/2021. Albeit the period of two years from the end of relevant financial year in which the order sought to be revised was ended on 31/03/2020, however in the light of direction of Hon ble Apex Court vide MA 21 29 of 2022, MA 665 of 2021 and Suo-motu WP 3 of 2020, the foresaid 263 order falls within the permitted relaxation period of limitation i.e. between 15/03/2020 to 28/02/2022, consequently the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 11 of the Act. 6.3 Pending such direction before the Ld. AO, the appellant trust opposed the revisionary action of Ld PCIT before us on twofold legal grounds alleging that, order of the Ld AO is neither erroneous nor prejudicial to the interest of the revenue and a claim of exemption u/s 10(23C)(iiiab) of the Act is extra-territorial to revisionary action u/s 263 of the Act. 7. After hearing to the rival contentions of both the parties; perused material placed on records and duly considered the facts of the case in the light of settled legal position and the case laws relied upon by the appellant assessee as well the respondent revenue. 8. It is evidently noticeable from the records are that; 8.1 The appellant is a public trust registered under the provisions of Bombay Trust Act, 1950 and is a registered trust under u/s 12A of the Act besides claiming exemption u/s 10(23C)(iiiab) of the Act. The assessee trust filed its returns of income for the assessment years under consideration which were subjected to scrutiny assessment under CASS by service of notice u/s 143(2) and by issue of notice u/s 142(1) of the Act, the information were sought. In response thereto, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In reply thereof, the assessee trust furnished written submissions referring therein its earlier submission made during the course of assessment proceedings and thereby challenged the revisionary jurisdiction. The appellant through said written submission put forth twofold legal contentions, firstly that, considering its submissions and after necessary inquiry into the transactions and due deliberation the Ld AO had framed the assessment u/s 143(3) of the Act, therefore for the reasons, the exercise of revisionary jurisdiction is bad in law and secondly the exercise revisionary is inapplicable in its case as the trust is not claiming benefit u/s 11 but u/s 10(23C)(iiiab) of the Act. This averment of the appellant did convince the revisionary authority, consequently by an order u/s 263, Ld PCIT held that, the assessment framed u/s 143(3) of the Act was erroneous insofar it was prejudicial to the interest of the revenue for the reasons that, the said assessment were culminated without inquiry and verification of donation, building fund and expenditure incurred by the appellant trust and set aside for framing fresh assessment de-nova after conducting necessary inquiries and providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the precondition to exercise revisionary jurisdiction by the PCIT/CIT suo moto under it is that, the order of AO must be erroneous insofar as it is prejudicial to the interests of the revenue is concern. Consequently, the provision mandates the satisfaction of existence of twofold conditions before invocation and these explicitly are; (i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. If any one of two is absent or unsatisfied, that is where the order of the assessing officer is erroneous but is not prejudicial to the revenue or where order is not erroneous but is prejudicial to the revenue, then the recourse to Section 263(1) of the Act fails. 11.3 Albeit the foresaid twin satisfaction drawn from the assessment records may trigger the revisionary jurisdiction, yet such shall not automatically empower the revisionary tax authorities to conclude the revision proceedings without obeying additional dual riders such as; (i) making or causing to be made such enquiry as necessary and (ii) according an opportunity of being heard to the assessee following the principle of natural justice. 11.4 In the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision u/s 263 of the Act in terms of ration laid down by the Hon ble Jurisdictional High Court of Bombay in CIT Vs Jet Airways India Ltd reported at 331 ITR 236 (Bom). Thus the contention of the Ld AR that, since the assessee trust is enjoying blanket exemption u/s 10(23C)(iiiab) whereby all income received are exempt and hence cannot be subjected to revision u/s 263, is blatantly perverse under the settled law. Per se, the nature, amount and type of claim in the return vis- -vis order passed does not decide the revisionary jurisdiction, but the validity of order does, consequently in the present case, the orders of assessment were passed u/s 143(3) irrespective of claims allowed thereby are undisputedly valid and legal orders and thus are subject matter of revision u/s 263. 12.2 Now coming to second premise, we find that, the Ld PCIT vouching the assessment records observed that, post culmination of assessments, a survey action u/s 133A was carried out on the assessee establishing on records that, the appellant trust for the assessment years under consideration was in receipt of voluntary donations and donation towards building funds etc., however no proper records were foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order passed by the Income-tax Officer, which might set a bad trend or pattern for similar assessments, which on a broad reckoning, the Commissioner might think to be prejudicial to the interests of Revenue Administration. In our view this interpretation is too narrow to merit acceptance. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax Officer, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue (Emphasis supplied) 13. We are, therefore applying the ration drawn by Hon ble Apex Court in Malabar Industries Co (Supra) are of the strong view that, the action of Ld PCIT is perfectly sustainable in law, to the effect holding the order of assessment as erroneous prejudicial to the interest of revenue, ergo we find no infirmity with the direction of 263 revisionary order, thus the legal grounds of the appellant are dismissed. 14. Since the facts and issue in ITA.No.31/NAG/2021 are identical to the facts and issue adjudicated by us in ITA No.30/NAG/2021 in forgoing paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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