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2016 (4) TMI 250

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..... on only on the basis of suspicion and doubts held that the assessment order is erroneous and prejudicial to the interest of the Revenue and directed the AO to examine the issue afresh setting aside the order which is not permissible - Decided in favour of assessee - ITA No. 2011/DEL/2015 - - - Dated:- 2-3-2016 - Sh. G.D. Agrawal V.P. and Sh. C.M. Garg, J.M For The Appellant : Sh. Salil Aggarwal, Adv, Sh. Sanjeev Jain, CA For The Respondent : Sh. Sanjeev Shankar, CIT, DR ORDER Per C.M. Garg, JM This appeal by the assessee has been filed against the order of the Commissioner of the Income Tax (Exemptions) CIT-E, New Delhi order dated 27/03/2015 passed under section 263 of the Income Tax Act 1961, (for short the Act). 2. The sole ground raised by the assessee-appellant reads as under: 1. That the learned CIT(Exemptions) has erred in invoking the jurisdiction under section 263 of the Act in the instant case. 2. That the learned CIT(Exemptions) has erred in holding that the assessment order passed U/s 143(3) of the Act on 29.10.2013 by the Assessing Officer is erroneous in as much as it is prejudicial to the interest of the Revenue. b .....

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..... the assessee submitted during the assessment proceeding vide reply dated 08.08.2015 all the details regarding the same replying to the question No. 12 posed by the AO which is available at page 47 of the assessee paper book and assessee also filed confirmation regarding the said donations about all eleven donors were filed alongwith reply dated 8.8.2013 to the questionnaire issued to the assessee which are also available at pages 75 to 105 of the assesee s paper book. The Ld Counsel also submitted that the AO for A.Y 2011-12 has allowed exemption u/s 11(1)(d) of the Act to the assessee which is vivid from the copy of the said assessment order dated 29.10.2013 available at page 41 42 of the assessee s Paper book. 4 The Ld counsel vehemently pointed out that the CIT(E) at page 4 in para 3 and at page 6 para 5 of the impugned order the ld. CIT(A) has alleged that there was inadequate inquiry in this regard and without drawing any conclusive findings held that the order is erroneous and prejudicial to the interest of revenue and directed the AO to examine the issues afresh which is not a proper and legal approach as per decisions of Hon ble Delhi High Court in the case of DIT Vs .....

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..... ainst the AO that he accepted the claims of the assessee without any inquiry and on wrong application of fact and law. 8 The Ld counsel also placed his reliance on the judgment of Hon ble Jurisdictional High Court of Delhi in the case of CIT Vs Vikas Polimers 341 ITR 537 (Delhi) and decision in the case of CIT VS Anil Kumar Sharma 335 ITR 83 (Delhi) and submitted that while AO has raised quires from the assessee and assessee submitted its reply along with relevant documents then the AO is allowing the claim of the assessee in this situation review of said conclusion of the Act under section 263 of the Act is not permissible as the same would amount to reviewing of an order without any legal ground as required by the provision of section 263 of the Act. 9 Replying to the above the Ld CIT DR submitted that section 263 of the Act has two elements viz. the order should be erroneous and secondly prejudicial to the interest of the revenue. The Ld CIT DR pointed out that the impugned assessment order was framed without adequate enquiry hence the CIT(E) was quite correct and justified in invoking the provisions of section 263 of the Act. The Ld CIT DR pointed out that there was a ser .....

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..... R, and pointed out that it is not a case of no enquiry or lack of enquiry as the AO made detailed enquiry by way of issuing questionnaire on all the relevant points including four issues raised by the CIT(E) in the impugned notice U/s 263 of the Act. The Ld Counsel also pointed that after considering the reply of the assessee to the questionnaire filed on 8.8.2013 the AO also enquired about the relevant facts and evidence and after considering the same passed assessment order which cannot be alleged as erroneous of prejudicial to the interest of the revenue. The Ld Counsel also contended that merely because the AO did not adjudicate the issues in so many words as expected by the CIT(E) the order cannot be labeled as erroneous and prejudicial to the interest of the revenue, if final conclusion of the AO is sustainable and the same is as per provisions of the Act. 13 On careful considerations of the above submissions at the out set we respectfully take cognizance of the prepositions rendered by Hon ble Calcutta High Court in the case of CIT Vs Maithan International (Supra) which reads as under: It is not the law that the Assessing Officer occupying the position of an gator a .....

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..... ent receipt from the students using hostel facilities have direct nexus with the main object of the society, therefore receipts from room rent which were regularly allowed to the assessee in the previous assessment year cannot held as business income of the assessee without bringing out any sound allegation or new facts on record. In this situation, it is apparent that the AO made enquiry in this regard and on the basis of details submitted by the assessee the AO rightly followed rule of consistency and allowed the same. Conclusion of the AO in this regard cannot be held unsustainable and against the provisions of the Act. 16 On careful consideration of third issue of investment in land the assessee replying to the questioner submitted the copy of the registered sale deed which was executed in favour of the society and all details of payments contained therein were found in order then it was not necessary to conduct any further enquiry regarding prevalent market rate and the collector rate of the area or surrounding area so as to ascertain if there has been any under statement or overstatement in the land purchase. It is pertinent to note that from relevant paragraph 3.2 of the .....

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..... ld. CIT(A) should conduct enquire himself to record finding that assessment order was erroneous and prejudicial to the interest of the Revenue specially when the conclusion of the AO is not contrary to the provisions of the Act and the same is according to the law and sustainable. Their Lordship held that the ld. CIT(A) should not have set aside the order and directed the AO to conduct the enquiry without any conclusion. From the vigilant reading of the impugned order we observe that the ld. CIT(E) without any conclusive findings and observation only on the basis of suspicion and doubts held that the assessment order is erroneous and prejudicial to the interest of the Revenue and directed the AO to examine the issue afresh setting aside the order which is not permissible as per proposition laid down by the Hon'ble High Court in the case of Jyoti Foundations [supra]. 18 On the basis of foregoing discussions we have no hesitation to hold that the CIT(E) proceeded to issue notice U/s 263 of the Act without considering the assessment record and in the impugned order he wrongly held the assessment order as erroneous and prejudicial to the interest of the revenue without any basi .....

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