Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (12) TMI 383 - AT - Income TaxJurisdiction of CIT for invocation of section 263 – nature of the income from Yoga, ayurvedic treatment etc. as business income or not – Necessary enquiries conducted or not by AO - assessee submitted that submitted that the assessee is not liable to file audit report u/s. 44AB of the Act as it has filed the audit report in Form 10B as a charitable trust. - Held that:- As held in Malabar Industries Co. Ltd., Vs. CIT [2000 (2) TMI 10 - SUPREME Court] - the Commissioner can exercise revision jurisdictional u/s 263 if he is satisfied that the order of the assessing officer sought to be revised is erroneous and also prejudicial to the interests of the revenue – in SIEMENS ENGINEERING & MANUFACTURING CO. OF INDIA LIMITED Versus UNION OF INDIA & ANR. [1976 (4) TMI 204 - SUPREME COURT OF INDIA] it has been held that while making assessment on assessee, the ITO acts in a quasi-judicial capacity - an assessment order is amenable to appeal by the assessee and to revision by the Commissioner u/s 263 and 264 - If without discussing the nature of the transaction and materials on record, the AO had made certain addition to the income of the assessee, the same would have been considered erroneous by any appellate authority as being violative of the principles of natural justice which require that the authority must indicate the reasons for an adverse order. The AO does not show any application of mind on his part - He simply accepted the income declared by the assessee - This is a case where the AO mechanically accepted what the assessee wanted him to accept without any application of mind or enquiry - The evidence available on record is not enough to hold that the return of the assessee was objectively examined or considered by the AO - It is because of such non consideration of the issues on the part of the AO that the return filed by the assessee stood automatically accepted without any proper scrutiny - The assessment order placed is clearly erroneous as it was passed without proper examination or enquiry or verification or objective consideration of the claim made by the assessee - it was a fit case for the Commissioner to exercise his revisional jurisdiction u/s 263 which he rightly exercised by cancelling the assessment order and directing the AO to pass a fresh order considering the issues raised by the CIT- the assessee should have no grievance in the action of Commissioner in exercising the jurisdiction u/s. 263 of the IT Act. The assessment order dated 30/11/2011 is silent on the enquiry conducted by the Assessing officer with regard to yoga, ayurvedic treatment etc. - There is no discussion on this issue - The order of the AO is erroneous and prejudicial to the interests of the revenue on the reason that there is wrong assumption of facts – the order of the CIT is modified as instead of making addition directly, and treating income from yoga as business income, the AO is directed to conduct necessary enquiry with regard to yoga, ayurvedic treatment etc. and thereupon decide the same – thus, the matter needs fresh disposal – Decided partly in favour of assessee.
|