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2018 (4) TMI 696

assessed income comes to the very same figure at which it was originally assessed by the AO vide order dated 27/12/2011. Thus, the assessed income as per the original assessment dated 27/12/2011 vis--vis assessed income as per the order passed u/s.143(3) r.w.s. 263 dated 30/10/2015 comes to the very same figure of ₹ 528,65,24,460/-. Accordingly, we observe that no prejudice has been caused to the Revenue in terms of assessed income and tax thereon. Once it is held that no prejudice has been caused to the Revenue, invocation of powers u/s.263 was not justified, in so far as twin condition of Section 263 with regard to order of AO being erroneous as well as prejudicial to interest of revenue is not complied with. See case of Slum Rehabilitation Authority [2016 (1) TMI 798 - ITAT MUMBAI] - Decided in favour of assessee - ITA No.2490/Mum/2014 And ITA NO.5599/Mum/2014 - Dated:- 20-3-2018 - SHRI R.C.SHARMA, AM AND SHRI RAM LAL NEGI, JM For The Assessee : Shri D. Nishant Thakkar For The Revenue : Shri Santanu Kumar Saikia ORDER PER R.C.SHARMA (A.M): ITA No.2490/Mum/2014 This is an appeal filed by assessee against the order of CITMumbai dated 28/03/2014 passed u/s.263 for the A.Y.20 .....

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to first proviso to section 2(15); object/activities need not be business itself but it being in the nature of business, trade or commerce is sufficient for its applicability. Moreover, carrying out of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to trade, commerce or business for a cess or fee or any other consideration, irrespective of the nature of use or application or retention of the income from such activity is clearly hit by the proviso to section 2(15) of the I.T. Act. 5. Further, vide Finance Act, 2012, section 13 (8) was inserted in the Income Tax Act, 1961 with retrospective effect from April 1, 2009. This newly inserted section reads as under: Nothing contained in section 11 or section 12 shall operate so as to exclude any income from the total income of the previous year of the person in receipt thereof if the provisions of the first proviso to clause (15) of section 2 become applicable in the case of such person in the said previous year, 6. In this connection, during the AY 2009-10, the MHADA has shown income of ₹ 114.48 Crs out of sale of houses etc. In addition to this the MHADA has also earne .....

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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 inserted by Finance Act, 2008 w.e.f. assessment year 2009-10 has not been considered and examined. If the proviso would be applied then there might be a situation where assessee's activity may not be held to be for charitable purposes and exemption u/s 11 may not be available. In other words exemption u/s 11 is being sought to be denied on the ground of newly inserted Proviso to section 2(15). Even if such an exercise is done, then the result would be same, that is, again the entire 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 order of the Tribunal can be set aside by the Ld. .....

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tended that in so far as AO has not considered proviso to Section 2(15) which was introduced w.e.f. A.Y.2009-10, the order so passed by AO was erroneous and since AO has wrongly invoked section to disallow assessee s claim, prejudice has been caused to the interest of Revenue. Accordingly, both the conditions of order being erroneous as well as prejudicial to the interest of revenue have been complied with. 12. We have considered rival contentions and gone through the orders of the authorities below. We have also perused the order passed by Co-ordinate Bench in case of Slum Rehabilitation Authority (supra). The facts and circumstances in the case before us are same in so far as CIT has invoked power u/s.263 on the plea that AO has not considered proviso to Section 2(15) while deciding the case, accordingly, he was directed to consider proviso to Section 2(15). We found that the order passed by the AO while giving effect to the direction of CIT, the assessed income comes to the very same figure at which it was originally assessed by the AO vide order dated 27/12/2011. Thus, the assessed income as per the original assessment dated 27/12/2011 vis-à-vis assessed income as per th .....

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use of action and-becomes non-est because of being dependent and flowing from the assessment order which is set aside and non-est, as of now. Thus, for the reasons as above, the appeal is dismissed as being devoid of cause of action and being non-est. 16. As per learned AR, since the order passed by CIT(A) u/s.263 is not sustainable in law, the order of CIT(A) has no legs to stand. 17. It was argued by CIT DR that since the AO has not considered proviso to Section 2(15) introduced w.e.f. A.Y.2009-10, the CIT(A) should be directed to consider amended provisions of Section 2(15) while deciding the appeal afresh. 18. We have considered rival contentions and carefully gone through the orders of the authorities below and found that CIT(A) has dismissed assessee s appeal merely on the plea that the order of the AO against which assessee is in appeal has already been set aside by CIT u/s.263 of the IT Act, therefore, the appeal filed by the assessee becomes non-est because of being dependent and flowing from the assessment order which is set aside by the CIT. However, we have allowed assessee s appeal in ITA No.2490/Mum/2014 against the order passed by CIT u/s.263, only on the technical p .....

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