Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (1) TMI 693 - HC - Income TaxRevision u/s 263 by CIT - Eligibility of benefit of exemption to assessee Trust on its income being charitable Trust - As per CIT no verification or enquiry was made by the AO even on reasons for scrutiny selection and exemption was allowed without verification of charitable nature of activities of trust? - HELD THAT:- The respondent Trust is a registered charitable trust. AO for the assessment year 2016-17 accepted the return filed by the trust and granted exemption as applicable under law - CIT took the said order in revision u/s 263 and held that the activities of the trust were not charitable in nature but were commercial activities and therefore denied the exemption. This order was carried in appeal and Tribunal by the impugned judgment reversed the judgment of the Commissioner primarily on the ground that the registration of the Trust u/s 12AA of the Act still continues. Meaning thereby, that the revenue does not dispute the nature of the charitable activities. Secondly, that the commercial activities are not primary activities of the trust and predominant activity of the trust is charitable. The generation of reasonable surplus would not indicate that the trust is not engaged in charitable activities. The Tribunal was also of the opinion that the assessing officer having made proper inquiry and having taken plausible view, the Commissioner in exercise of revisional powers could not have reversed the assessment order. We are broadly in agreement with the view of the Tribunal. It is well settled through a series of judgments that power u/s 263 of the Act can be exercised only when twin conditions of the order of assessing officer being erroneous and prejudicial to the interest of revenue are satisfied. The Jurisdiction of the Commissioner u/s 263 is restricted and cannot be equated with the appellate jurisdiction. The Commissioner does not sit in appeal. The Tribunal also correctly noticed that the registration of the Trust under Section 12 AA of the Act has not been disturbed - no question of law arises.
|