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TMI Blog2024 (11) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... der-reported income. In the instant case there is no tax payable by the assessee as the assessee has spent more than 85% of the revenue collected during the year. This fact is not disputed by the revenue. We are therefore of the considered view that Ld.CIT(A) has rightly deleted the penalty and hence we find no infirmity in the order of the Ld. CIT(A) thereby dismissing the appeal filled by the revenue. Revision u/s 263 - as per CIT AO has not disallowed the claim of depreciation on assets, thereby amounting to claim of double deduction of the same amount - HELD THAT:- AO while framing the assessment has disallowed the depreciation u/s 11(6) of the Act and has assessed the income at Rs. NIL as the assessee has applied more than 85% of the income as per section 11. We find merit in the argument of the Ld.AR that since the Assessing Officer has already disallowed the depreciation the order passed under section 263 of the Act by the Ld.CIT(E) directing the AO has no merits. We therefore quash the order passed by the Ld. CIT(E) u/s 263 - Decided in favour of assessee. - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of capital expenditure aggregating to total claim u/s 11 for Rs. 65,07,33,988/- which is more than 85% of total receipts of Rs. 73,04,73,622/- i.e. Rs. 62,09,02,578/-. Thereafter, the Assessing Officer accepted the assessee income at Rs. NIL while finalising the assessment. However, Assessing Officer considered that the assessee has mis-reported the claim of expenditure on account of depreciation and therefore initiated penalty proceedings under section 274 r.w.s. 270A of the Act. The Assessing Officer thereafter issued show-cause notice dated 15.04.2021. In response, assessee submitted its reply on 28.07.2021. Considering the reply submitted by the assessee, Assessing Officer did not accept the justification made by the assessee and therefore imposed penalty of Rs. 4,91,64,956/- which the Assessing Officer states that it is 200% of the amount of tax on the under-reporting of the income. 4. Aggrieved by the order of the Assessing Officer, assessee filed an appeal before Ld. CIT(A). The main contention of the Authorized Representative of the assessee, before the Ld. CIT(A) is assessee has fulfilled the conditions of spending 85% of the total revenue even after disallowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be, is greater than the deemed total income determined in the return processed under clause (a) of sub-section (1) of section 143; (e) the amount of deemed total income assessed as per the provisions of section 115JB or section 115JC is greater than the maximum amount not chargeable to tax, where no return of income has been furnished or where return has been furnished for the first time under section 148; (f) the amount of deemed total income reassessed as per the provisions of section 115JB or section 115JC, as the case may be, is greater than the deemed total income assessed or reassessed immediately before such reassessment; (g) the income assessed or reassessed has the effect of reducing the loss or converting such loss into income. 8. He argued that the assessee does not fulfill any of the conditions and hence there is no under-reporting of any income. Further, he also referred to Sub-section (7) of section 270A of the Act wherein which is stated that penalty shall be leviable on the amount tax payable on under-reported income. Ld.AR further submitted that in the instant case the is no tax payable by the assessee and hence there is no under-reporting income to attrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is supportive to the order of Ld.CIT(A) is also dismissed as infructuous. 12. In the result, cross objection filed by the assessee is dismissed. ITA No. 229/VIZ/2024 (A.Y. 2018-19) (Assessee Appeal) 13. This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax, Exemption, Hyderabad at Vizag [hereinafter in short Ld.CIT(E)] passed under section 263 of Income Tax Act, 1961 (in short Act ) in DIN Order No. ITBA/REV/F/REV5/2023-24/1063374578(1) dated 26.03.2024 arising out of the order passed under section 143(3) of the Act dated 15.04.2021. 14. Brief facts of the case are that, Ld. CIT(E) considered the assessment order passed by the Assessing Officer as erroneous and prejudicial to the interest of the revenue while exercising his powers under section 263 of the Act, stating that Assessing Officer has not disallowed the claim of depreciation on assets, thereby amounting to claim of double deduction of the same amount. He therefore considered the assessment order as erroneous and prejudicial to the interest of the revenue, thereby, directed the Assessing Officer to redo the assessment after verification of the issue in accordance with law as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,95,54,942- under Schedule-ER as revenue application which is not allowable to the assessee trust as per section 11(6) of the Act as under: Sec. 11(6): In this section where any income is required to be applied or accumulated on set apart for application, then, for such purposes the income shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under this section in the same or any other previous year. The assessee had always claimed application of its fund on capital application such as acquiring assets. Even, in this year, the assessee has claimed application on capital account at Rs. 8,36,91,167/-. Therefore, the assessee's claim of depreciation tantamount to double deduction, which was plucked by inserting a new provision, mentioned supra, by the Finance Act, 2014 w.e.f 01.04.2015. However, it will not affect the final outcome of income of the assessee trust as the application on revenue account at Rs. 56,70,42,821/-, after deducting the depreciation claimed, plus application on capital account at Rs. 8,36,91,167/-, cumulative comes at Rs. 65,07,33,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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