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2015 (10) TMI 2113 - ITAT LUCKNOW

2015 (10) TMI 2113 - ITAT LUCKNOW - TMI - Revision u/s 263 - no enquiry and no application of mind for allowing huge amount as exempted u/s 11 - an order which is erroneous as well as prejudicial to the interest of Revenue - Held that:- Assessing Officer himself has observed in the assessment order that the assessee’s entire income is not eligible for exemption u/s 11 and even after making this observation, he has allowed deduction of two huge amounts u/s 11 of the Act and under these facts, it .....

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een that that the assessment order is erroneous as well as prejudicial to the interest of Revenue because of the observation of the A.O. in the assessment order that the entire income of the assessee is not exempt and his action of allowing deduction u/s 11 of two huge amounts and therefore, we find no reason to interfere in the order of learned CIT. - Decided against assessee. - ITA No.286/LKW/2014, - Dated:- 10-9-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT .....

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dated 26.12.2011 for A.Y.1996-97 passed in consequence to the remand order of the Hon'ble Income-tax Appellate Tribunal dated 20.09.2010 for computation of exemption under section 11 of the Income-tax Act, "is erroneous in so far as it is prejudicial to the interests of revenue." 2. BECAUSE the Ld. Commissioner of Income-tax-I has erred in law and on facts in holding that the Assessing Officer has wrongly allowed deduction of 25% of income derived from property held in trust i.e. .....

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s the Assessing Officer was making disallowance of forest development expenses of ₹ 1,60,98,000/- and prior period expenses of ₹ 8,43,648/- as per his notice u/s 142 (1) of the Act. 4. BECAUSE the Ld. Commissioner of Income-tax-I has erred in law and on facts in holding as above contrary to the law 'the registration of a trust under section 12A of the Income-tax Act, 1961, once done is a fait accompli and the Assessing Officer has no option but to compute the income under section .....

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of the Act was to be done by the Ld. A.O. in accordance with law as per direction of the Hon'ble Tribunal dated 20.09.2010 which was duly demonstrated "before the Commissioner and he had neither found any error in this regard nor dealt with the objections/explanation of the appellant. 7. BECAUSE the Ld. Commissioner of Income-tax-I has erred in law and on facts in not appreciating the fact that as per Instruction No. 7 of 2011 dated 24.5.2011 issued by the CBDT, assessments in conseque .....

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be pleased to allow the appeal and cancel the order of the Ld. C.I.T. u/s 263 of the Act since the order passed by A.O. in consequence to the order of the Tribunal cannot be revised u/s 263 of the Act as it is neither erroneous since being in accordance with law and direction of the Tribunal nor prejudicial to the interest of revenue since being revenue neutral due to eligibility of the appellant to exemption u/s 11 of the Act. 3. It was submitted by Learned A.R. of the assessee that the notice .....

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183 4. As against this, Learned D.R. of the Revenue supported the order of learned CIT. He also submitted that in assessment year 90-91 also, order was passed by learned CIT u/s 263 and the same was upheld by the Tribunal. He also submitted that in the present case, there was no enquiry by the Assessing Officer and therefore, under these facts, the order of learned CIT u/s 263 is proper and valid and in support of this contention, reliance was placed on the following judicial pronouncements: (i .....

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orporation was not found exempt u/s 11 of the Act but even after making this observation in this Para, while computing the income of the assessee corporation, the Assessing Officer has allowed deduction u/s 11 of the Act of ₹ 953.13 lac and ₹ 2859.40 lac out of total income not found exempt by him of ₹ 3977.67 lac. This is the objection of learned CIT that under these facts, the deduction so allowed by the Assessing Officer is in clear contravention of Assessing Officer s own f .....

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has been committed by the Assessing Officer in carrying out the direction of the Tribunal. This goes to show that the assessee has not given any reply regarding this objection of learned CIT clearly spelt out in the notice issued by him u/s 263 of the Act. On the face of the observation of the Assessing Officer in the assessment order as noted by learned CIT in the notice issued by him u/s 263 of the Act and also in Para 4 of the order passed by him u/s 263 that even after making this observatio .....

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sonable opportunity of being heard to the assessee. 6. Now we examine the applicability of various judgments cited by Learned A.R. of the assessee. 6.1 The first judgment cited by Learned A.R. of the assessee is a Tribunal order in the case of Cargo Handling (P.) Workers Pool (supra). We find that although reliance was placed by Learned A.R. of the assessee on this Tribunal decision but it was not pointed out as to in support of what contention, reliance is placed on this Tribunal decision. We f .....

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nd it was also held that in such a case, where the High Court suspends the order of the Tribunal, then tax authorities are under no obligation to follow such Tribunal order so suspended till the matter is decided by High Court. In the present case, the issue in dispute is regarding validity of the order passed by learned CIT u/s 263 and therefore, we do not find any relevance of this Tribunal decision particularly when it was not pointed out by Learned A.R. of the assessee in course of hearing a .....

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e income of the assessee is not exempt u/s 11 and even after making this observation in the assessment order, he has allowed two huge amounts u/s 11 of the Act and under these facts, it was held by learned CIT in the impugned order passed by him u/s 263 that the order of the Assessing Officer is erroneous as well as prejudicial to the interest of Revenue. When the Assessing Officer has himself observed in the assessment order that the entire income of the assessee is not exempt u/s 11 then there .....

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