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TMI Blog2022 (8) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... e eyes of law. It is quashed. - Decided in favour of assessee. - I.T.A. No. 456/KOL/2021 - - - Dated:- 20-7-2022 - Shri Rajpal Yadav, Vice-President (KZ) And Shri Manish Borad, Accountant Member Shri Vinod Kumar Jain, FCA, appeared on behalf of the assessee Md. Ghayas Uddin, CIT(DR), appeared on behalf of the Revenue ORDER Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Exemptions), Kolkata dated 25th March, 2021 passed under section 263 of the Income Tax Act, 1961 for assessment year 2016-17. 2. The assessee has taken eleven grounds of appeal, but these are not in consonance with Rule 8 of Income Tax Appellate Tribunal Rules. They are argumentative in nature. In brief, grievance of the assessee is that the ld. CIT has erred in taking cognizance under section 263 of the Income Tax Act and thereby setting aside the assessment order dated 25.08.2021 passed under section 143(3) of the Income Tax Act by treating it as erroneous as well as prejudicial to the interest of the revenue. 3. The brief facts of the case are that the assessee is a Societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned whether it funds was used towards the objective of the trust. In view of die above, the assessment order passed by the Assessing Officer is found to be erroneous and is prejudicial to the interests of the revenue. As such, the assessment order is proposed to be reviewed in exercise of power conferred under section 263 enhancing/ modifying the assessed income on the above said issues and any other issue revealed during the proceedings. You are requested to offer your .comments regarding acceptability of the above observation and furnish a written explanation in support of your claim (if not agreed with the view) and supporting documents within seven (07) days of receipt of this notice through e-mail/Income tax Portal. Yours faithfully, Sd/- (Pankaj Kumar) Commissioner of Income Tax /Exemptions), Kolkata 5. On receipt of this notice, the assessee has filed detailed submission and it has explained the utilisation of Corpus Donation. The explanation of the assessee is available on page 23, which reads as under:- Sub.: Reply to proceedings u/s 263 of Income Tax Act, 1961 for A.Y. 2016-17 Dear Sir, The above assessment has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t utilising the same for the purposes for which donation was made. In view of above facts, claim of Rs.1,76,63,614/- from Corpus fund should not be an allowable application. The issue is therefore set aside and restore back to the Assessing Officer to pass an order considering the fact discussed above and compute the income accordingly. Ordered accordingly . 7. While impugning the order of the ld. CIT, ld. counsel for the assessee took us through page no. 42 of the paper book, wherein the order of the Director, Secondary Education, Rajasthan, Bikaner is available. According to the assessee, on the asking of the Government of Rajasthan, the Trust has made a contribution of Rs.1,41,57,500/- for School Building. The assessee has not only produced the correspondence between the Trust and various Government Departments of Rajasthan but also produced the Site Plan of the School and demonstrated with complete details as to how a sum of Rs.1,41,00,000/- was transferred to the Government of Rajasthan for utilisation of Smt. Kamla Devi Budhia- Rajyakiya Uchha Madhyamik Vidyalaya. All these details have been placed on the paper book. For reference we are taking Office Order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this subsection shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view with which the CIT does not agree. If cannot be treated as an erroneous order, unless the view taken by the AO is unsustainable under law. (vi) If while making the assessment, the AO examines the accounts, makes enquiries, applies his mind to the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between lack of inquiry and inadequate inquiry . If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. It is only in cases of lack of inquiry , that such a course of action would be open . 13. In the case of Gee Vee Enterprise vs. Commissioner of Income Tax reported in 99 ITR page 375, the Hon ble court has expounded the approach of ld. Assessing Officer while passing assessment order. The observation of the Hon ble court on pages 386 of journal read as under:- it is not necessary for the Commissioner to make further inquiries before cancelling the assessment order of the Income-tax Officer. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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