9911796707
TMI Blog2022 (4) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee are allowed. - ITA No.525/Mum/2021 - - - Dated:- 5-4-2022 - Shri M.Balaganesh, Accountant Member And Shri Kavitha Rajagopal, Judicial Member For the Assessee : Shri Sanjay C. Shah Ms. Kinisha Shah For the Revenue : Shri Salil Mishra ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.525/Mum/2021 for A.Y.2016-17 preferred by the assessee against the revision order of the Pr. Commissioner of Income Tax, Mumbai-17 in appeal dated 23/02/2021 u/s.263 of the Act. 2. The only issue to be decided in this appeal is as to whether the ld PCIT was justified in invoking revisionary jurisdiction u/s 263 of the Act in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. We find that the return of income for the Asst Year 2016-17 was filed by the assessee on 13.9.2016 declaring total income of ₹ 5,53,500/-. The return was selected for Limited Scrutiny exclusively for verification of claim of weighted deduction u/s 35(1)(ii) of the Act by the assessee. The undisputed fact is that the ld AO proceeded to make enquiry with regard to the contribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter, the assessee also files further reply dated 26.10.2018 before the ld AO wherein the following documents were enclosed :- a) Copy of letter dated 05.02.2016 issued by Donee Trust requesting contributions from the assessee. b) Receipt of ₹ 12,00,000/- issued by the Donee Trust. c) Notification No. S.O. 503 dated 04.11.1991 for eligibility of the Donee Trust to receive donation u/s 35(1)(ii) of the Act. d) Notification No. S.O. 11560 dated 24.11.2000 for eligibility of the Donee Trust to receive donation u/s 35(1)(ii) of the Act. e) Notification No. S.O. 1856(E) dated 30.10.2006 for eligibility of the Donee Trust to receive donation u/s 35(1)(ii) of the Act. This Notification specifically provided that the amended provisions of section 35 of the Act now provide for one time approval and that no renewal was necessary. 5. The ld. AO on verification of all the aforesaid documents did not have any occasion to suspect the transactions of the assessee and accordingly accepted the claim of weighted deduction u/s 35(1)(ii) of the Act of the assessee and completed the assessment u/s 143(3) of the Act on 13.11.2018 accepting the returned income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) of the Act had expired on 31.03.2006 itself. Hence the falsity of the documents filed which were relied upon by the ld. AO itself makes his order erroneous warranting revision u/s 263 of the Act. 9. At the outset, we find from the narration of the aforesaid facts and sequence of events, the ld AO had indeed carried out the verification for examination of claim of weighted deduction u/s 35(1)(ii) of the Act. All the relevant documents including the Notification dated 30.10.2006 referred supra wherein the need to seek renewal of approval u/s 35(1)(ii) of the Act was taken away, pursuant to an amendment in the Taxation Laws (Amendment) Act, 2006 which was passed by the Parliament and received the assent of the President on 13.07.2006. The same was enacted as Act No. 29 of 2006. For the sake of convenience, the relevant Circular No. 1/2007 dated 27.4.2007 issued by the CBDT giving the Explanatory Notes on the Amendments brought in Taxation Laws (Amendment) Act, 2006 is reproduced below:- 1. INTRODUCTION 1.1 The Taxation Laws (Amendment) Act, 2006 (hereafter referred to as the Act) as passed by the Parliament, received the assent of the President on the 13th July, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity or college or other institution, shall not be denied merely on the ground that subsequent to payment of such sum by the assessee, the approval granted to any of the aforesaid entities is withdrawn. 9.4 The expression prescribed authority appearing in the second proviso to sub-section (1) of section 35 had been substituted by the expression Central Government by the Finance Act, 1999. While doing so, the word authority appearing towards the end of the said second proviso had been missed to be substituted by the word Government . The Taxation Laws (Amendment) Act, 2006 has, thus, made a corrective amendment in the said second proviso. The word authority has been substituted by the word Government . 9.5 Further, the Act has amended the third proviso to provide that the outer limit of the period of effectivity of a notification for three assessment years shall be applicable in respect of a notification issued by the Central Government under clause (ii) or clause (iii) before the date of assent of the President to the Taxation Laws (Amendment) Bill, 2005. Resultantly, any notification issued on or after the date of assent shall remain in force until approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 to come to the conclusion that adverse inference need to be drawn on the Donee Trust and consequentially claim of deduction u/s 35(1)(ii) of the Act in the hands of the assessee requires re-examination. In our considered opinion, for the purpose of invoking revision jurisdiction u/s 263 of the Act, the ld. PCIT is expected to examine the records as was available with the ld AO at the time of framing of assessment and not subsequent materials / information that had come to the knowledge of the department. In this regard, we would like to place reliance on the decision of Hon‟ble Calcutta High Court in the case of Ganga Properties vs ITO reported in 118 ITR 447 (Cal) wherein it was held as under:- Held The word record had been used in section 263 in a context different from that in section 154. In section 263, the words is erroneous did not mean has subsequently become erroneous . The Commissioner could only call for and examine the record of the proceeding which was before the ITO. Materials which were not in existence at the time of original assessment could not form part of the record of the proceeding and, as such, the Commissioner was not entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments held to maturity. The profit on these investments was computed at ₹ 1.26 crores. Insofar as the aspect of depreciation of ₹ 622.39 lakhs on investments held as stock-in-trade was concerned, the assessee had similarly supplied to the Assessing Officer details of the current investments in response to the query of the Assessing Officer. In addition, it would also have to be noted that, in pursuance of the order passed by the Commissioner of Income-tax under section 263, an assessment order came to be passed on 28-12-2007. During the course of the assessment order, the Assessing Officer noted that the assessee has explained depreciation claimed against the investments held and classified as stock-in-trade. The explanation of the assessee in this connection was accepted and the Assessing Officer came to the conclusion that depreciation of ₹ 622.39 lakhs has been claimed towards investments held and classified as stock-in-trade. We have indicated this only as and by way of an illustration in aid of our finding that there was no basis or justification for the Commissioner of Income-tax to invoke the provisions of section 263. In the order of assessment, the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
