9911796707
TMI Blog2025 (1) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(E)directed the Ld. AO to verify the exemption claimed under Section 11 of the Act. However, the nature of gross receipts had already been examined in the ITAT s ruling, which was duly followed by the Ld. AO. Despite issuing notices under Section 263, the Ld. CIT(E) was unable to identify any new income sources beyond what had already been disclosed by the assessee. Consequently, the Ld. AO adhered to the directions of the higher authority. We respectfully rely on the rulings in Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ], NYK Line (India) Ltd. [ 2012 (2) TMI 283 - BOMBAY HIGH COURT ], and M/s Paul Brothers [ 992 (10) TMI 5 - BOMBAY HIGH COURT ] as well as N.N. Agrawal [ 1991 (1) TMI 119 - ALLAHABAD HIGH COURT ] all of which underscore that Section 263 cannot be invoked merely on the basis of a change of opinion. In our considered view, the direction to verify Section 11 is inapplicable in this case. Accordingly, the revisional order passed by the CIT(E) under Section 263 is unjustified and is hereby quashed. Assessee appeal allowed. - Shri Anikesh Banerjee, Judicial Member And Shri Prabhash Shankar, Accountant Member For the Assessee : Shri S. Sriram Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that the statutory corporations cannot be said to undertake commercial activities. 6. The Appellant craves leave to add, alter, amplify, modify or delete all or any of the aforesaid grounds at or before the hearing. 3. The brief facts of the case are that the assessee is a statutory corporation formed under the Maharashtra Industrial Development Act, 1961 (in short, MID Act ). It is engaged in development of industrial assets by providing basic infrastructural facilities like industrial land, road, streetlight, drainage system, water supply, etc. The assessee is registered as a charitable organization under section 12AA of the Act vide registration No. TR-37971 dated 24/05/2004. Till assessment year 2002-03, the assessee claimed exempted income under section 10(20A)of the Act as an authority for planning / development for improvement of cities / towns. The said exemption was being allowed by the revenue. The assessee applied and obtained registration as Charitable Institution under section 12A of the Act. The assessee made a net surplus from its activity every year and claimed benefit under section 11 of the Act for all the years under consideration for this income. During the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/2018. The Ld.AO made the following observation on the basis of the documents received in pursuance of the notice under section 142(1) of the Act. The observations of the Ld.AO in impugned assessment order is as follows: - 3. Subsequently notices us. 142(1) of the Act was issued on 15.12.2020 along with Questionnaire regarding above reasons were issued to the assessed for calling details and explanation along with documents at mentioned in the notice. In response to the notice u/s 142(1) the assessee submitted the requisite details/information and documents online on e-filing portal on 25.02.2001 and replied asunder:- We now enclose herewith the details as requested in the annexure to the said notice. 1. The Corporation is established under the Act of assembly viz: Maharashtra Industrial Development Act (MID Act) and MID Rules. The section 14 of the said Act clearly states the objects of the Corporation: We enclose herewith the copy of the Act and Rules (Annex: 1) 2. The address of the Head office Udyog Sarathi, Mahakal Caves Road Andheri East. Mumbai 400063. The list of Divisional offices is attached herewith (Annex 2) 3. Attached herewith power of attorney in favor of the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, the ITAT vide order 7.9.2018 has decided the issue related to deposits directly taken to Balance sheet in favour of the assessee corporation thereby the demands raised against the corporation are reduced to Nil. 22. The accounts of the Corporation are maintained at various divisional offices. If the specific details of expenses are identified the requisite details can be compiled and provided to you. We will discuss this at the time of personal hearing. 23. Copy of the Trial Balance is attached herewith as on 31.3.2017 and 31.3.2018. (Аппех 11) 24. The AIR data is not received by us from your office as result we are unable to reconcile the same . 4 The assessee furnished point wise reply, which was examined carefully, the reply seems to be satisfactory. However, another notice u/s 142(1) dated 09.04.2021 annexed with certain queries on which the assessee did not comply was sent to the assessee company. The assessee furnished detailed reply on 15.04.2021, which was examined thoroughly and found satisfactory to the queries made. 5. The reply and details uploaded by the assessee were carefully examined and no adverse inference is drawn from the Anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the higher judicial forum. In this respect, the Ld.AR respectfully followed the order of the Hon ble Supreme Court in case of Malabar Industrial Co Ltd vs CIT (2000) 243 ITR 83 (SC), the Hon ble Supreme Court held that there must be two conditions namely that the order of assessment is erroneous and that the order is prejudicial to the interests of the Revenue which must be satisfied before the Commissioner may invoke his powers u/s. 263 of the Act. The Court held that every loss of tax cannot be said to be prejudicial to the interests of the revenue. If two views are possible, and the AO has adopted one of those views, the order of assessment cannot be prejudicial to the interests of the revenue. However, when the Assessing Officer does not apply his mind to the issue at hand or violates any of the principles of natural justice, the order shall be prejudicial to the interests of the Revenue. Also, an incorrect assumption of facts or incorrect application of law by the AO would make the order of assessment erroneous and prejudicial to the interests of the Revenue. 7. Further, the Hon ble Bombay High Court in NYK Line (India) Ltd v. DCIT [2012] 346 ITR 361 (Bom) and Idea Cellula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A). When the matter travelled to the Hon'ble Tribunal, it gave it s finding in order dated 07-09-2018 in favour of the appellant that it was neither the owner of the lands under consideration nor deemed owner for the purpose of assessing of the income arising therefrom. (Kindly refer to para 15 of the said order on pages 119 and 120 of thepaperbook-1). 4.3 The above order does not contain any adjudication on the issue of appellant's claim of exemption u/s 11 of the Act with regard to proviso to section 2(15) of the Act. Therefore, the appellant's claim in the written submission that in view of the above order the said issue is now academic in nature holds no ground. The second issue has no bearing on the first issue (of exemption u/s 11 of the Act) as the second issue is regarding incomes arising from the lands not owned by the appellant viz rent, lease premium, interest on deposits related to the lands not owned by the appellant but held on behalf of the State Government. 4.4 Lastly, the appellant has argued that the assessment order is not prejudicial to the interest of the Revenue as the issue stands squarely covered in its favour by the order dated 19-10-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rban Infrastructure Development and Finance Corporation [(2006) 284 ITR 582 (Kar)] and CIT vs. Delhi State Industrial Development [(2007) 295 ITR 419 (Del)], where entities acting as agents of the government were not taxed on funds collected on the government s behalf. Accordingly, the ITAT allowed the appeal, ruling that the amounts collected by the assessee as lease premiums and related charges were not taxable in its hands. Although the Revenue challenged the ITAT s order before a higher judicial forum, no adverse order has yet been passed against the ITAT s ruling in the assessee s own case dated 07/09/2018. Thus, the ITAT s decision remains binding on the Ld. AO. The Ld. DR argued that while the ITAT considered the gross receipts as exempt in the hands of the assessee, it made no specific observations regarding Section 11, retaining it for academic purposes only. However, a critical aspect of the decision was that the assessee s role was purely custodial, with ownership of the collected funds (lease premiums, etc.) remaining with the State Government. As the assessee merely acted as an agent, the income could not be taxed in its hands, thereby obviating the need for a detailed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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