Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 1073 - ITAT DELHIRevision u/s 263 - unsecured loan was raised during the year had not been shown in the receipt side - assessee had not furnished the audit report in Form 10B along with the return of income - Since income was claimed exempt u/s 10(23C)(iiiad) of the Act, it was contended that there was no need to file audit report in Form 10B - HELD THAT:- Assessee had duly filed name & address of the lenders, source of source fror the lenders , agricultural land holdings of the lenders to prove their creditworthiness, affidavits of the lenders duly confirming the fact of advancing loans to the assessee trust, PAN of the lenders and bank statements of the lenders before the ld. AO , among other details. Infact the assessee had also furnished the very same reply before the ld. PCIT in response to show cause notice issued by him in the course of revision proceedings u/s 263 of the Act. Hence these facts clearly go to prove that the ld. AO had indeed made adequate enquiries during the course of assessment proceedings and hence the invocation of revision jurisdiction by the ld. PCIT u/s 263 of the Act is not warranted at all in the instant case as it is based on incorrect assumption of fact that no enquiries were carried out by the ld. AO. Hence the initiation of revision proceedings u/s 263 of the Act on this issue is hereby quashed. Eligibility for depreciation on assets as an application of income - We find that though the PCIT is right in stating that depreciation would not be eligible as an application of income after the amendment in 2015 in the Act, it would not have any implication in the assessment as income of the assessee would be exempt u/s 10(23C)(iiiad) of the Act. Hence the order of the AO cannot be termed as prejudicial to the interest of the revenue though it may be erroneous to this extent. Unless the two conditions are satisfied cumulatively, the ld. PCIT would be justified in invoking revision jurisdiction u/s 263 of the Act. Hence initiation of revision jurisdiction u/s 263 of the Act on the issue of depreciation is also quashed. PCIT had sought to take up fresh issues with regard to non-verification of mess expenditure and salary, without even giving the basic pre-requisite show cause notice to the assessee, thereby violating the principles of natural justice. Hence the revision order passed u/s 263 of the Act on these two issues are hereby quashed. Also though the ld. PCIT had made a casual observation that assessee’s gross receipts would exceed Rs 1 crore pursuant to inclusion of unsecured loan and thereby not eligible for exemption u/s 10(23C)(iiiad) of the Act, ultimately the ld PCIT had not directed the ld. AO to look into this aspect and this reason was not the ground on which the order of the ld. AO was treated as erroneous and prejudicial to the interest of the revenue by the ld. PCIT. Hence we refrain to offer our opinion on the said observation made by the ld. PCIT. Appeal of the assessee is allowed.
|