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TMI Blog2023 (4) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... tiny. The order passed by the A.O. cannot be termed as erroneous and prejudicial to the interests of Revenue. The order passed under section 263 being illegal and without jurisdiction be quashed and set aside. 2. On the facts and in the circumstances of the case and in law the assessee was entitled to claim deduction under section 80P(2)(a)(l) of the Act as it satisfies all the conditions enumerated in it. It be held accordingly. 3. On the facts and in the circumstances of the case and in law the assessment cannot be termed as erroneous and prejudicial to the interests of Revenue since A.O. had no power to travel beyond the issues on which assessment has been taken up for scrutiny. The assessment has been taken made by the A.O. was within the four covners of law. The Pr. CIT was not justified to disturb the assessment which is finalised according to law. The order passed under section 263 be quashed and set aside. 4. On the facts and in the circumstances of the case and in law the reliance placed on the Supreme Court Judgment reported as Tolgar's Co-op Sale Society (2010) 188 taxmann.com 282 (SC) is misplaced as the same was decided on the facts of that case only. It had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Society is required to substantiate the principle of mutuality with respect to the loans taken from members to loan advanced/ investment made by it. To come to a conclusive discussion, the AO should have verified whether the loans/ deposit taken are given back to the members as loans/ advances or not. The assessment order does not indicate whether this exercise has been done or not. The non-verification of principle of mutuality by the Assessing Officer has rendered the view taken by him regarding allowability of deduction u/s 80P of the Act is legally unsustainable. Since the view taken by the Assessing Officer is unsustainable, the assessment order passed by the Assessing Officer is liable for revision u/s 263 of the Act........ b. Also, the assessee has claimed that it accept deposits from its members only. However, no requisite details were furnished by the assessee either before the Assessing Officer or during the present proceedings. The Assessing Officer also has not verified this aspect............ 10. Since the assessee's large claim of deduction under chapter Vl-A was the reason of selection of its case for scrutiny; the Assessing Officer was required to conduct in-de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee for deduction under section 80P of the Act. The ld.Pr.CIT in his order has specifically mentioned that assessee's case was selected for verification of deduction under Chapter-VIA of the Act. Therefore, it was the duty of the AO to verify the deductions under Chapter-VIA claimed by assessee. However, as we have already mentioned AO has not carried out any enquiry. The relevant section 263 is reproduced here as under : "Revision of orders prejudicial to revenue. 263. (1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation 1.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Supreme Court. Explanation.-In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded." ....Emphasis supplied." 6. Thus, section 263, Explanation 2 explains the meaning of the word "erroneous in so far as prejudicial to the interest of revenue". As per Explanation-2, any order passed without making enquiry or any relief without inquiring into the claim, makes the order erroneous and prejudicial to the interest of the Revenue. 7. In this case, as discussed in earlier paragraphs, no enquiry has been made by the Assessing Officer during the assessment proceedings regarding the eligibility of the assessee for deduction under section 80P of the Act. Therefore, the assessment order is erroneous a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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