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TMI Blog2022 (5) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... on record without any application of mind on the same, the same cannot act as estopple for the ld.CIT to exercise power u/s. 263. CIT has duly examined the nature of expenses. The expenses are related to medical grants and other grants and J K flood affected employees - CIT is correct in holding that these expenses cannot be said to be expense wholly and exclusively incurred for the purpose of earning income on dividend and interest income from banks. Provision u/s. 57(iii) are duly applicable on the facts of the case. Though AO has not made any observation, whatsoever, even for arguments sake if it is accepted that AO had adopted a view, the same is patently in contravention of the sanguine provision of law in this regard. So it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, in passing order u/s. 263 of The Income Tax Act, 1961 (The ITA, 1961) without appreciating that the scrutiny assessment order dated 20/12/2017 was neither erroneous nor prejudicial to the interest of the revenue. 2. Learned Pr. CIT - 20, Mumbai erred in law and on facts in treating the Assessment Order u/s. 143 (3) of The ITA, 1961 as being erroneous and prejudicial to the revenue u/s. 263 of The ITA, 1961 without appreciating that, the learned AO has passed the Assessment Order u/s. 143(3} of The ITA, 1961, after application of mind on due inquiries and after requisite verification. 3. Learned Pr. CIT - 20, Mumbai erred in law and on facts in treating the Assessment Order u/s. 143(3) of The ITA, 1961 as being erroneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,06,07,276/-. That since the expenses are not related to the interest income and so the same were not to be allowed u/s. 57 and at the same time the dividend income claimed as exemption also to be verified. That therefore, the AO has not examined the issues involved in proper perspective which is evident from the above. 4. Therefore, ld. PCIT issued notice to the assessee is as under;- On perusal of records, it is seen that your Trust had filed Return of Income for A. Y.2015-16 on 26,08.2015 declaring total income of Rs. Nil and thereafter the case was selected for scrutiny and assessment u/s 143(3) of the Income Tax Act, 1961 was completed on 20. 12.2017 assessing total income at Rs. Nil. During this year under consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u may file the same on or before 19.02.2021. Your case is fixed for hearing on 19.02.2021 at 2.45 PM in the chamber of the undersigned. 5. In response to the above, assessee submitted that the trust functions and activities have remained the same since long. No adverse inference has been drawn earlier. That this year also the functions remained the same and that assessment was framed after thorough enquiry. Hence, it was claimed that since no radical change in respect of assessee s trust for its activity have taken place, there is no provision for revision proceedings. The ld. PCIT was not satisfied, he held as under:- In this case, the assessee earned income from dividend and interest income from banks. The expenses claimed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii). 6. Against the above order, assessee has filed appeal. 7. We have heard both the parties and perused the records. Ld. Counsel of the assessee reiterated the submissions made before the ld. PCIT. He submitted AO has made due enquiry. In this case, he referred to the notice issued by the AO u/s. 142(1) furnished at page No. 79 of the paper book, wherein specifically in point No. 10 following was asked a summarized as under:- Prove that the expenditure deducted u/s. 57 in respect of the income credited under the head income from other sources is true and correct. Provide documentary proof in support of the claim. Substantiate that the expenditure is directly attributable to the income from other sources for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier years. So no adverse inference should be taken this year. 13. In this regard, we note that, it is settled law that there is no res-judicata applicable to income tax proceeding. Hence, if in earlier years something has not been examined and allowed as such, it cannot act as estoppel for the revenue on the issue. As regards the assessee s plea that AO has examined the issue and has given notice on the matter and thereafter taken a view, we are of the considered opinion that we cannot agree with the above proposition as there is no whisper in the order of the AO in this regard. It is settled law that if the AO just keeps the assessee s papers on record without any application of mind on the same, the same cannot act as estopple for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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