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2016 (4) TMI 1041 - AT - Income TaxRevision u/s 263 - AO has not examined the genuineness of the trust and application of fund for charitable purposes - reference to DVO - Held that:- We find that there is no whisper in the notice issued by the Commissioner of Income Tax under sec. 263 of the Act for the same. No material has been brought before us to show that the assessee was allowed any opportunity of hearing in respect of the above issue before passing the impugned order. The Commissioner of Income Tax has nowhere recorded in the impugned order that the assessee was allowed any opportunity of hearing in respect of the above issue and what was the submissions of the assessee, if any, in respect of the said issue. In the above circumstances, we find force in the contention of the assessee that the order of the Commissioner of Income Tax in respect of the above issue is bad in law. Our view finds support from the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Contimeters Electricals P. Ltd. [2008 (12) TMI 4 - HIGH COURT DELHI ], where it was held that the issue which did not form part of the show-cause notice and the assessee was not confronted with it, the same cannot form basis for revision of assessment order under sec. 263 of the Act. The order under sec. 263 cannot travel beyond the show-cause notice. Coming to the issue of investment in construction, we find that the construction was not completed during the year under consideration. The construction was continued in the next Financial Year relevant to the Assessment Year 2010-11 also. The Assessing Officer in the assessment made for the Assessment Year 2010-11 under sec. 143(3) on 14/03/2013, discussed his finding in respect of DVO’s report. The contention of the assessee that this Assessment Year of 2010-11 has become final, and was before the Commissioner of Income Tax while passing the impugned order on 10/02/2014, is not disputed by the Revenue. From the records available before us, it is obvious that the DVO inspected the property after 31/03/2010 and the expenditure was incurred by the assessee in the construction in Financial Year 2009-10 also. Therefore, it was not possible on the part of the DVO to quantify the exact expenditure which was incurred in the Financial Year 2008-09. Moreover, we find that no defect in the books of account maintained by the assessee for the year under consideration could be pointed out either by the Assessing Officer or by the Commissioner of Income Tax. In our considered view, the reference made to the DVO itself was not valid in the instant case. Still further, we find force in the contention of the Authorized Representative of the assessee that the issue involved in this appeal is Revenue neutral. The contention of the assessee is supported by the finding of the Assessing Officer recorded in the assessment of the Assessment Year 2010-11. The Assessing Officer quoted with approval, the submission of the assessee, to the effect that the investment made in the construction qualifies as exemption under sec. 11 of the Act being utilized for charitable purposes. The Departmental Representative could not controvert the above contention of the assessee and could not show how the issue under appeal resulted in any prejudice to the interest of the Revenue. - Decided in favour of assessee
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