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2021 (1) TMI 224 - AT - Income TaxRevision u/s 263 - investment in Tata Sons Ltd - as per CIT AO allegedly failed to verify the applicability of section 13(1)(c), 13(1)(d) and 13(2)(h) - what is the nature of scope of the provisions of Explanation 2(a) to Section 263 to the effect that an order is deemed to be “erroneous and prejudicial to the interests of the revenue” when Commissioner is of the view that “the order is passed without making inquiries or verification which should have been made”? - HELD THAT:- As decided in case of SIR DORABJI TATA TRUST [2020 (12) TMI 1121 - ITAT MUMBAI] assessee trust has made investments in Tata Sons Ltd, but that does not mean that Tata Sons Ltd is a property of the assessee trust- a proposition blatantly erroneous in law and in concept. What has been paid to the persons holding office as trustees, though in consideration for other roles played by them such as former directors and employees, has nothing to do with the determination of benefits to the trustees. The pension payments to Ratan N Tata and N A Soonawala, for example, have been held to be wholly and exclusively for the purposes of the business of Tata Sons Ltd and, therefore, the stand that these payments amounted to benefit to the trustees is ex facie incorrect. In any case, as we have noted earlier, all these aspects were duly examined at the assessment stage, and the defects that the learned Commissioner has pointed out in the said examination during the assessment proceedings, for the detailed reasons we have set out earlier, cannot meet our judicial approval. We are, therefore, of the considered view that learned Commissioner was not justified in subjecting the assessment order to revision proceedings on the ground that the Assessing Officer did not examine the matter regarding assessee’s control over Tata Sons Ltd, and whether, by virtue of such alleged control, any of the specified persons under section 13(3) received any benefits, and whether the investments made by the assessee trust were in violation of Section 13(2)(h). Non-verification of accumulation of unspent surplus under section 11(2) was wrongly stated to be allowed though the same was neither asked nor required as the surplus was less than 15%.This nonverification also, even if that be the correct position, cannot be ground enough to invoke the revision proceedings. Non-verification of interest income - Once all these details were on record, and there is not even a suggestion that any part of interest income is not qualified for exemption under section 11, we are unable to uphold the stand of the learned Commissioner that the subject assessment order was erroneous and prejudicial to the interest of the revenue for want of verifications of interest income sources. We disapprove of the action of the learned Commissioner on this point as well. Commissioner has also noted that even though the income from dividend was treated as exempt under section 10(34), the Assessing Officer should have nevertheless examined whether the entire income of the assessee trust was applied for the purposes of the assessee trust.The observations so made by the learned Commissioner show that he has not even applied his mind to the undisputed facts of the case. What was being directed by the learned Commissioner was already done by the Assessing Officer, and, therefore, these directions clearly show that there was a clear and glaring non-application of mind to even undisputed material facts of the case. We hold the impugned revision order as devoid of legally sustainable merits - Decided in favour of assessee.
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