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TMI Blog2024 (7) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... correct enquiries that he wants to be done by the AO. Thus, clearly shows that this is nothing but an attempt of the ld.CIT(E) to dislodge an opinion as arrived at by the AO without pointing out any error in such opinion arrived. CIT(E) has invoked his powers u/s. 263 of the Act on the assessment order passed u/s. 143(3) r.w.s. 144B of the Act, the same has already been rectified vide an order dated 29.07.2021 u/s. 154 r.w.s. 143(3) of the Act, thus, the order passed u/s. 263 of the Act is unsustainable and on this ground also the order passed by the ld. CIT(E) u/s. 263 of the Act stands quashed. - Shri George Mathan, Judicial Member And Shri Manish Agarwal, Accountant Member For the Assessee : Shri S.K. Agrawalla, CA For the Revenue : Shri Sanjay Kumar, CIT-DR ORDER PER BENCH : This is an appeal filed by the assessee against the order dated 15.03.2024, passed by the ld. CIT(Exemption), Hyderabad at Bhubaneswar, in DIN Order No.ITBA/COM/F/17/2023-24/1062703542(1) for the assessment year 2018-2019. 2. It was submitted by the ld. AR that the assessee is a charitable institution which is running educational institution. The assessee had filed its return of income for the relevant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt fee was considered. It was the submission that the revisonary order passed for the assessment year 2017-2018 was the subject matter of an appeal before the coordinate bench of this Tribunal in ITA No.48/CTK/2022, dated 13.09.2022, wherein the coordinate bench of this Tribunal had held that the order passed u/s. 263 of the Act was liable to be quashed on account of no enquiry by the ld. CIT(E). The coordinate bench for the assessment year 2017-2018 in para 7 to 8 in its order has held as follows :- 7. At the outset, what is to be understood is that the assessment in the present case has been done under the faceless scheme. A perusal of the notice issued u/s. 142(1) of the Act shows that a query in respect of development fees has been raised. A perusal of the reply filed by the assessee in response to the notice u/s. 142(1) of the Act shows that the issue of development fees has been responded in full. The response type whether it is full or partial is system generated. It is not in the control of the assessee. A perusal of the attachment mentioned in the compliance report shows that three files have been uploaded. It is after receiving the response from the assessee that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd there is nothing shown to show that the calculation as done by the assessee is erroneous. It is also not being rejected by the ld. CIT(E) but has just proceeded to hold that the assessment order is erroneous and prejudicial to the interest of revenue and set aside the same. This is not permissible. A perusal of para 14 of the decision of the Hon'ble Jurisdictional High Court of Orissa in the case of Orissa State Police Housing Welfare Corporation Ltd., reported in [2022] 139 taxmann.com 207 (Orissa), as read out by the ld. CIT-DR, categorically shows that after hearing the assessee, to pass an order by making such enquiry as he deems necessary . In the present case, clearly no enquiry has been done by the ld. CIT(E). The Hon'ble Jurisdictional High Court of Orissa in the said case further goes on to hold that the purpose of such an enquiry would be to arrive at a subjective view that the order of the AO was erroneous insofar as it is prejudicial to the interest of Revenue . Here, the ld. CIT(E) has done nothing to arrive at the subjective view that the order of the AO was erroneous insofar as it is prejudicial to the interest of revenue. In fact, this is a case where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. In the order dated 14th March 2022, the CIT (E) did not refer to the explanation offered by the Assessee in reply to the SCN. Nor had the CIT (E) undertaken an enquiry or made any calculation to indicate how the application of the fund towards capital expenditure had been accounted for. 8. The CIT (E) simply stated that the impugned assessment order was erroneous and prejudicial in the interest of Revenue. 9. The ITAT has in the impugned order discussed in detail the explanation offered by the Assessee regarding application of funds. Inter alia, it was noticed that CIT (E) had taken the total revenue earned, granted 15% accumulation, without considering the capital expenditure to the tune of Rs. 258 crores. As noted by the ITAT, if the said bill taken into account the taxable income would be a loss. It would have been observed the 15% accumulation granted to the Assessee. Further, even after treating the development fees of Rs. 111 crores as revenue income, the net figure would still be a loss. 10. As noted by the ITAT, if only the CIT (E) had undertaken an inquiry, he would have come to the above conclusion and there would have been no need to act to the taxable income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquiry was not carried out while allowing the claim of application of the income, shows that the ld. CIT(E) was well aware that examination had been done by the AO. The order of the ld. CIT(E) also does not speak of the correct enquiries that he wants to be done by the AO. Thus, clearly shows that this is nothing but an attempt of the ld.CIT(E) to dislodge an opinion as arrived at by the AO without pointing out any error in such opinion arrived. The power u/s. 263 of the Act, admittedly, for revising an order which is erroneous and prejudicial to the interest of revenue. It cannot be used for directing a detailed verification through reassessment nor can it be used for re-examination of issues which have already been examined and an opinion in respect of which the AO has already reached to the conclusion without pointing out how such opinion is not as per law or is perverse to the facts. This being so, we are of the view that the order passed u/s. 263 of the Act is unsustainable in the facts of the case. Consequently, the order passed u/s. 263 of the Act by the ld. CIT(E) for the impugned assessment year stands quashed in view of the reasonings given above as also the reasoning gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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