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2019 (5) TMI 1158 - ITAT DELHIRevision u/s 263 - non-consideration of the allowability of the Global Trade Development (GTD) expenses after due verification - though the AO had denied the assessee’s claim of exemption of income on account of principal of mutuality, he failed to give effect thereto in the computation of income - activity of NASSCOM - HELD THAT:- On a perusal of the objects of the society in the light of the nature of GTD Expenses and the nature and purpose of such expenses, it is difficult to say how allowance of such expenses was unsustainable. As submitted on behalf of the assessee that the assessee receives Government grant and subsidies and the unfunded amount have been carried forward to the subsequent years as could be seen from the paper book. It could be seen from the income and expenditure amount for the year ended March 31st, 2010, the GTD expenses were shown at ₹ 274,56,234/- was declared and it is so inconsonance with the practice for earlier years. CIT(A)(E) in this matter did not undertake the exercise of enquiry required to reach the conclusion that the assessment order was erroneous insofar as it is prejudicial to the interest of the revenue because firstly, there is no finding that the GTD activity expenses were not for furtherance of the aims and objects of the assessee society or that the assessment order is erroneous for any reasons to be recorded by the Ld. CIT(E). For want of an enquiry to reach such a conclusion we find it difficult to sustain the impugned order in so far as GTD expenses are concerned. Exemption on the principal of mutuality denied - violation of principles of natural justice - HELD THAT:- Coming to the aspect of the computation error adverted to by the CIT(E) in respect of the denial of exemption the contention of the assessee is that the assessee was not given an opportunity of being heard on this aspect and there was no such mention in the notice issued to the assessee u/s 263 of the Act. On a perusal of the copy, notice that Page No. 36 of the paper book, we find that there is no reference to this computational error and the record does not reveal that the CIT(E) had given any opportunity to the assessee to explain this aspect. Obligation to give an opportunity to the assessee of being heard on the point on the basis of which the Ld. Commissioner found the assessment order erroneous insofar as it is prejudicial to the interest of Revenue is definitely cast on the Commissioner as laid down by the Hon’ble Apex Court in the case of Amitabh Banchchan [2016 (5) TMI 493 - SUPREME COURT] . It is, therefore, clear that for violation of principles of natural justice,the impugned order cannot be sustained in so far as the computation error is concerned. - Decided in favour of assessee.
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