TMI Blog2016 (4) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessee was not confronted with it, the same cannot form basis for revision of assessment order under sec. 263 of the Act. The order under sec. 263 cannot travel beyond the show-cause notice. Coming to the issue of investment in construction, we find that the construction was not completed during the year under consideration. The construction was continued in the next Financial Year relevant to the Assessment Year 2010-11 also. The Assessing Officer in the assessment made for the Assessment Year 2010-11 under sec. 143(3) on 14/03/2013, discussed his finding in respect of DVO’s report. The contention of the assessee that this Assessment Year of 2010-11 has become final, and was before the Commissioner of Income Tax while passing the impugned order on 10/02/2014, is not disputed by the Revenue. From the records available before us, it is obvious that the DVO inspected the property after 31/03/2010 and the expenditure was incurred by the assessee in the construction in Financial Year 2009-10 also. Therefore, it was not possible on the part of the DVO to quantify the exact expenditure which was incurred in the Financial Year 2008-09. Moreover, we find that no defect in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be cancelled. 4. The order of assessment is valid in law and the course suggested by CIT in 263 order is revenue neutral, there is no loss of revenue. The condition of prejudicial to the revenue is not satisfied. Order under sec. 263 is liable to be quashed. 5. The appellant craves permission to raise any other ground or grounds at the time of hearing of this appeal. 3. In all the grounds of appeal, the assessee has challenged the jurisdiction of the Commissioner of Income Tax in passing the order under sec. 263 of the Act. 4. Authorized Representative of the assessee submitted that the Commissioner of Income Tax issued notice under sec. 263 of the Act on the ground that as per the valuation of building done by the DVO, the investment made by the assessee in Financial Year 2008-09 is shown at ₹ 3,53,79,748/- as against ₹ 1,69,16,213/-. Thus, there is a difference of ₹ 1,84,63,535/- in the investment made in building construction, which was not disclosed. Therefore, he passed the order under sec. 263 of the Act on 10/02/2014 holding that he was satisfied that the assessment completed under sec. 143(3) on 26/11/2011 was made, in haste, witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts and that all the expenses are supported with bills for construction materials and vouchers for labour etc. It was pointed out that the deductions given in the estimate for work not done and the plinth area, rates adopted are on the higher side instead of adopting the local PWD rates which should be applicable in such type of construction for running the college. The assessee trust furnished a valuation report as per which the cost of construction of the building is only ₹ 2,18,93,375/-. It was further submitted that the addition in fixed assets is application of funds for charitable purposes exempt under sec. 11. The cost of construction as shown by the assessee is supported with regular books of accounts maintained. The source of investment has also been explained. Having regard to the facts, no adverse inference is drawn in this regard. Thus he submitted that the Assessing Officer after considering the DVO s report accepted the cost of construction shown by the assessee in its books of accounts. This assessment order dated 14/03/2013 was available with the Commissioner of Income Tax, when he issued notice under sec. 263 of the Act on 13/01/2014. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as nowhere recorded in the impugned order that the assessee was allowed any opportunity of hearing in respect of the above issue and what was the submissions of the assessee, if any, in respect of the said issue. In the above circumstances, we find force in the contention of the assessee that the order of the Commissioner of Income Tax in respect of the above issue is bad in law. Our view finds support from the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Contimeters Electricals P. Ltd. [(2009) 317 ITR 249 (Del.)], where it was held that the issue which did not form part of the show-cause notice and the assessee was not confronted with it, the same cannot form basis for revision of assessment order under sec. 263 of the Act. The order under sec. 263 cannot travel beyond the show-cause notice. To the same effect, is the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Ashish Raj Pal [(2009) 320 ITR 674 (Del.)] and the decision of the Hon'ble Gujarat High Court in the case of CIT Vs. D.N. Dosani (2006) 280 ITR 275 (Guj.). 9. Coming to the issue of investment in construction, we find that the construction was not completed during the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, is found to be applicable. The Departmental Representative could not cite any reason as to why the said decision of the Hon'ble Apex Court is not applicable in the instant case. Therefore, respectfully following the said decision, in our considered view, the reference made to the DVO itself was not valid in the instant case. Still further, we find force in the contention of the Authorized Representative of the assessee that the issue involved in this appeal is Revenue neutral. The contention of the assessee is supported by the finding of the Assessing Officer recorded in the assessment of the Assessment Year 2010-11. The Assessing Officer quoted with approval, the submission of the assessee, to the effect that the investment made in the construction qualifies as exemption under sec. 11 of the Act being utilized for charitable purposes. The Departmental Representative could not controvert the above contention of the assessee and could not show how the issue under appeal resulted in any prejudice to the interest of the Revenue. 10. In the above facts and circumstances, we find that the Commissioner of Income Tax could not point out how the order of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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