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TMI Blog2024 (9) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... emption) could not impose their views, when the plausible view has been taken by the AO. Every loss of Revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interest of Revenue. Foreign contribution the case was not selected for scrutiny for that point because the case of assessee was selected only for limited scrutiny - AO had no jurisdiction to discuss this issue in the assessment proceedings. The AO has no power to extend the scope of scrutiny under limited scrutiny. When the two views were possible and AO has taken one view with which the CIT(Exemption) may not agree the said order cannot be treated as an erroneous order prejudicial to the interest of Revenue unless the view taken by AO is unsustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of the case, the CIT has erred both on facts and in law in setting aside the issue of rent recovered from the specified persons to the file of the Ld. AO without properly appreciating the explanation of assessee given during the assessment proceedings. (ii) The Ld. CIT has erred in law in passing order under Section 263 ignoring the fact that the AO had made adequate enquiries on the above issue in the course of assessment and the appellant had submitted all relevant information and supporting documents to the satisfaction of the AO. 4. On the facts and circumstances of the case, the order passed by Ld. CIT under Section 263 of the Income Tax Act is unsustainable as power to revise can be invoked in case of lack of enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice u/s 263 of the Act to the assessee. Ld CIT(A) on careful examination of records, it was noticed that the said order was erroneous and prejudicial to the interests of revenue as the AO failed to make requisite verification and enquiries which were expected in the facts and circumstances of the case. 4 The issue raised in the show cause notice are briefly mentioned here under : a) Assessing Officer failed to examine whether the rent recovered from the specified fair market rent prevailing in that locality. b) Assessing Officer failed to notice that the foreign contribution of Rs. 21,83,643/- received by the assessee trust during A.Y. 2017-18 was not disclosed as income in the Income Expenditure A/c. 5. The Ld AR of the assessee has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture Vs. Pr. CIT I.T.A No. 3259/Mum/2017 dated 06.10.2017 6. Narayan Tatu Rane Vs. ITO, ITA 2690/Mum/2018 dated 06.05.2016. 8. The Ld. AO after considering the reply and the evidences of the assessee, preferred not to draw any adverse inference in this regard. The Ld. CIT (exemption) has given a finding in his order under Section 263 of the Act the following manner:- 4. I have considered the submission made by the assessee. When it comes to trusts, enjoying the benefit of exemption of its income from taxation, provisions of Income Tax Act is very strict so that no undue benefit is enjoyed by the persons specified u/s. 13(3). In this case the property of the trust was let out to the specified persons and amount of rent was also recovered. Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee that these grants are project grants and are not voluntary contributions to be treated as income in the hands of the assessee. The term voluntary contribution implies a contribution to be utilized by the receiving done as per its own free will without any specific direction as per it own free will without any specific direction as to its usage. It further observed that once the amount is received with stipulations and conditions as regards its utilizations the same loses the character of voluntary contributions in the hands of the recipient as it can neither spend it for any purpose it desires or in the period on its own will. 6. I have duly considered the reply of the assessee. The assessee has submitted copies of Grant agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interests of the Revenue. If one of them is absence- if the order of the Income-tax Officer is erroneous but it is prejudicial to the Revenue- recourse cannot be had to S. 263 (1) of the act. 12. The instant case was selected for the limited scrutiny on the two points :- i Income or property of the Trust /Institution lent to the specified persons ii Land /building or other property pf the Trust /Institution made available for the use of the specified persons 13. The AO has made the adequate enquiry and accepted the return of the assessee. The Ld CIT (Exemption) could not impose their views, when the plausible view has been taken by the AO. Every loss of Revenue as a consequence of an order of the AO cannot be treated as prejudicial to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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