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2021 (7) TMI 772 - AT - Income TaxRevision u/s 263 - Whether order passed by the AO is hit by provisions to section 263 of the Act or not? - AO has allowed benefit of section 11 & 12 of the Act to the trust, without appreciating fact that activity carried out by the assessee i.e micro financing is hit by proviso to section 2(15) and hence, entire income should be taxed as an AOP - HELD THAT:- The assessment order passed by the AO is neither erroneous nor prejudicial to the interests of revenue, because the AO has examined the issue at the time of assessment proceedings and has taken one of the possible view, which is supported by higher judicial forum and hence, the view taken by the AO cannot be held to be erroneous and prejudicial to the interests of revenue. Unless the view taken by the AO is unsustainable in law, there is no scope for the PCIT to term the assessment order passed by the AO is erroneous, insofar as it is prejudicial to the interests of revenue. As regards other two points questioned by the PCIT including consultation charges paid to trustees and also loan given to M/s. Viswas Promoters Ltd., Madurai, we are of the considered view that these two issues were not part of show cause notice issued by PCIT and hence, he does not have any power to examine issues other than those find place in show cause notice. Even otherwise, two issues questioned by the PCIT has already been examined by the Assessing Officer, which is evident from fact that the Assessing Officer has issued detailed questionnaire along with notice issued u/s.142(1) dated 13.07.2018, where he has called for details about payments made to related parties and also list of advances made to members. In response, the assessee has filed relevant details. AO after examining details filed by assessee, has accepted fact that activities carried out by the assessee are charitable in nature, which is not hit by proviso to section 2(15) of the Act. Therefore, we are of the considered opinion that the learned PCIT has erred in revising assessment order u/s. 263 of the Act. In this view of the matter and considering facts and circumstances of the case and also by following decision of Chennai Bench of the Tribunal in assessee’s own case in [2017 (8) TMI 1640 - ITAT CHENNAI] - we are of the considered view that assessment order passed by the Assessing Officer is neither erroneous nor prejudicial to the interests of revenue and hence, learned PCIT has erred in revising assessment order passed by the Assessing Officer u/s.263 - Appeal filed by the assessee is allowed.
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