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2017 (1) TMI 668 - ITAT MUMBAI

2017 (1) TMI 668 - ITAT MUMBAI - TMI - Revision u/s 263 - Exemption u/s 11 - Held that:- The coordinate bench of this Tribunal while considering the appeal of assessee for AY 2009-10 examined the issue of exemption u/s 11 which may be the subject matter of appeal before CIT(A) or before the Tribunal. and concluded the Ld. DIT do not have the power to consider ‘such matter’ by exercising power under section 263. The Tribunal also examined the second aspect, which is purely academic. The income wh .....

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bunal we hold that the order revised by ld DIT(E) is not prejudicial to the interest of revenue and the same is set-aside by accepting the appeal of the assessee. - ITA No.4049/Mum/2014 - Dated:- 9-11-2016 - SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Appellant : Shri Nishant Thakkar with Ms. Jasmine (AR) For The Revenue : Shri B.B. Rajendra Prasad (CIT-DR) ORDER PER PAWAN SINGH, JM: 1. The present appeal u/s 253 of the Income Tax Act( Act ) is directed by .....

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to s.2(15)with reference to which he invokes s.263 of the Act was verified by the AO in the course of assessment, thus making the order not erroneous. The impugned order be held null and void. Order not prejudicial The learned DIT(E) erred on facts and in law in not appreciating that the order sought to be revised is not prejudicial to the interests of the Revenue. The impugned order therefore to be held null and void. Inconsistent stand of Learned DIT(E) The learned DIT(E) takes inconsistent s .....

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is also having registration u/s 12AA of the Act to seek exemption u/s 11 on the ground that the authority/assessee is carrying out legal obligation within the definition of charitable purpose. The assessee filed return of income for AY 2010-11 declaring total income of Rs. Nil. The assessment was completed on 04.03.2013 u/s 143(3) of the Act assessing the total income of ₹ 171,29,90,270/-. Aggrieved by the order of Assessing Officer (AO) the assessee challenged the action of AO in appeal .....

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e of business, trade or commerce which is sufficient for disqualification. Further, it was concluded that rendering any services in relation to trade, commerce or business from whom consideration is in lieu of services received is sufficient for disqualification. The assessee is providing various infrastructure facilities and deriving income from its principle activities such as rental income and income from sale of land, and properties, and TDR to its customer and charging interest @ 16% to 18% .....

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assessee by decision of this Tribunal in assessee s own case for AY 2009-10. It is argued the ld. DIT(E) revised the order of assessment for AY 2009-10 and the assessee filed appeal before this Tribunal and the appeal was allowed vide ITA No. 2435/Mum/14. On the other hand, ld. DR for the Revenue argued that the case of the year under consideration is entirely different from the fact of AY 2009-10. Ld. The DR for the Revenue argued that the order of AO was erroneous and prejudicial to the intere .....

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is identical to the para13.2 of order of DIT(E) for AY 2009-10 dated 28.03.2014. The ld AR for assessee argued that the order passed by the AO is not prejudicial to the interest of revenue. 4. We have considered the rival contentions of the parties and further perused the order of authorities below. The coordinate bench of this Tribunal while considering the appeal of assessee for AY 2009-10 passed the following order ; 9. We have heard the rival contentions perused the relevant finding given in .....

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the entire exemption u/s 11 stood allowed. In the order giving effect to the appellate order, the income has been finally assessed at "nil". In the second appeal also the subject matter and the issue of exemption u/s 11 again got merged. Now, in the revisionary jurisdiction u/s 263, the Ld. DIT is trying to set aside the original assessment order u/s 143(3) dated 22.12.2011 on the ground that, AO has failed to consider the amended provisions of section 2(15), that is, the Proviso inse .....

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assessment would be completed on the same income of ₹ 83,98,10,894/-. There would be no deviation of the income at all what was assessed originally u/s 143(3) and the income which is now being sought to be assessed as per the order of the Ld. DIT. In such a situation, two aspects needs to be seen, firstly, whether the assessment order which has been completely merged with the Slum Rehabilitation Authority ITA No. 2435/Mum/2014 order of the Tribunal can be set aside by the Ld. DIT u/s 263; .....

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the entire exempt income u/s 11 is the subject matter of appeal and there is complete merger with the order of the CIT(A) within the terms and ambit of section 263 read with clause (c) Explanation 1. Thus, if the subject matter of revision u/s 263 is again the denial of exemption u/s 11, though on different footing, then same is beyond the scope of section 263. On these facts, it can be very well held that the issue of exemption u/s 11 which was the subject matter of appeal before CIT(A) and the .....

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get taxed. Hence, no prejudice is caused to the revenue so far as tax effect is concerned, except for the fact that section 11 is being sought to be examined from a different perspective. Accordingly, we hold that, firstly, the subject matter of revision u/s 263 has been merged with the order of the Tribunal, therefore, Ld. DIT is precluded to revise or set aside such order as it is beyond the second of section 263; and secondly, such an order cannot be held to be 'prejudicial to the interes .....

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