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2021 (12) TMI 512 - KERALA HIGH COURTRevision u/s 263 by CIT - reassessment direction issued to the AO - issue noted by the CIT (Exemptions) arises under Section 11(1)d and the utilization of corpus donation for revenue expenditure allegedly incurred by the assessee - HELD THAT:- The participation of the assessee is not an empty formality as could be appreciated from the language employed in Section 263 of the Act. Had the assessee placed reply, deliberated on the nuances involved in the circumstances noted by the Commissioner, then, legitimately it could be argued that an adverse order was passed by the Commissioner dehors the objections of the assessee. But the assessee having become an onlooker or complacent of the ongoing procedure, now raises grounds on the findings recorded by the Commissioner before the Tribunal, on the material placed before the Tribunal. This Court is not observing that the Tribunal ought not to have received material sought to be relied on by the assessee. The material brought on record before the Tribunal and a case for reconsideration u/s 263 is made out, the Tribunal would be doing well by sending the matter back to the Commissioner for consideration and decision afresh, instead of adjudicating on the merits of the conclusions recorded by the CIT (Exemptions). By referring to the materials brought on record by the assessee and for allowing the appeal, the reasons recorded by the Commissioner are set aside. The exercise virtually amounts to upsetting the satisfaction recorded by the Commissioner on the material examined by the Tribunal. The material should be allowed to be considered by the Commissioner as the Commissioner is vested with the revisional power against the proceedings made under the Act for exercising his jurisdiction. Though an attempt has been made to independently justify the conclusions recorded by the Tribunal, the mistake we have noticed in the approach of the Tribunal ought not to be ignored by us while examining the legality of the order under appeal and pursue the same approach. In cases like the present, what constitutes the subject matter of appeal before the Tribunal is the correctness or legality of the opinion formed by the Commissioner from the material on record and the reply of the assessee. The conclusion of the Commissioner is the subject matter of appeal, but the Tribunal recorded, in the case on hand, primary satisfaction under Section 263 of the Act. Such a course is impermissible. Hence, we are of the view that the orders of the CIT (Exemptions) and the Tribunal in Annexures-B and C are set aside and the matter is remitted to the Commissioner for consideration and decision afresh in accordance with law.
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