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2019 (9) TMI 350

..... emption u/s 11 of the Act which was denied by the Assessing Officer and the CIT(A). Following the order of the Tribunal for assessment year 2006-07, the Tribunal in assessee’s own case for assessment year 2007-08, 2009-10, 2010-11 and 2011-12, has allowed the appeal filed by the assessee on the issue of denial of exemption u/s 11 due to violation of the provisions of section 13(1)(c) read with section 13(3) of the IT Act. Merely because the Revenue has not filed any appeal against the order of the Tribunal on account of low tax effect the same in our opinion cannot be held as an adverse view against the assessee. In the case of CIT vs. Arvind Jewellers [2002 (7) TMI 50 - GUJARAT HIGH COURT] has held that where the Assessing Officer ha .....

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..... It filed its return of income on 27th September, 2012 declaring nil income along with audit report u/s 12A(b) in Form No.10B and also balance sheet, Income & Expenditure Account with relevant schedules. The Assessing Officer completed the assessment u/s 143(3) on 12.11.2014 accepting the returned income. 3. Subsequently, the ld.CIT(E) examined the assessment records and found that the Assessing Officer has not properly examined certain issues relating to assessment of the case. He, therefore, issued notice u/s 263 of the Act on 07.01.2005 asking the assessee to show cause as to why the assessment order should not be set aside u/s 263 of the Act to be made afresh. He asked the assessee to file reply on the following queries:- (i) The soc .....

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..... therefore, the same is erroneous and prejudicial to the interests of the Revenue. Accordingly, the ld.CIT(E) set aside the order u/s 263 of the Act with a direction to the Assessing Officer to examine the issue discussed in his order and pass a fresh assessment order in accordance with law and after affording due opportunity of being heard to the assessee. 5. Aggrieved with such order of the CIT(E), the assessee is in appeal before the Tribunal raising the following grounds:- 1. On the facts and in the circumstances of the case, the learned CIT(E) erred in assuming his jurisdiction u/s.263 of the I.T. Act, whereas the mandatory conditions for assuming such jurisdiction are totally absent, with the result that the impugned order passed u/s. .....

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..... iety and Mr. Mohinder Singh have filed cases against each other in the matter. The exact amount of the liability of the Society, if any, in this matter is not quantifiable at this stage. The above information has been stated by the assessee in the notes to Account of the audited accounts filed along with the return on income for the A.Y. 2012-13. Thus, the assessee has taken certain amount as loan from one of the governing body members, and then converted the same as donation in the subsequent year. Again the large sum of ₹ 1,75,00,000/- was treated as unsecured loan in the F.Y 2005-06. This amounts to tying up of Society fund for the benefit of a person who is a specified person within the meaning of sec. 13(3) of the I.T. Act, in re .....

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..... e Gujarat High Court in the case of CIT vs. Arvind Jewellers reported in 259 ITR 502; and the decisions of the Hon'ble Supreme Court in the case of Malabar Industrial Company Ltd. vs. CIT, 243 ITR 83 and in the case of CIT vs. G.M. Mittal Stainless Steel Pvt. Ltd., 263 ITR 255, he submitted that when an issue has already been discussed by the Assessing Officer and has taken a possible view, the CIT cannot invoke jurisdiction u/s 263 of the IT Act merely because he does not agree with the view taken by the Assessing Officer. He accordingly submitted that the action of the CIT(E) assuming jurisdiction u/s 263 of the IT Act is not in accordance with law and, therefore, has to be set aside. 8. The ld. DR, on the other hand, strongly support .....

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..... 10, 2010-11 and 2011-12, has allowed the appeal filed by the assessee on the issue of denial of exemption u/s 11 due to violation of the provisions of section 13(1)(c) read with section 13(3) of the IT Act. It is also the submission of the ld. counsel for the assessee that when the Assessing Officer has taken a possible view, merely because the ld.CIT(E) does not agree with the view taken by the Assessing Officer, the same cannot be a ground for invoking the jurisdiction u/s 263. 10. We find merit in the above argument of the ld. counsel. A perusal of the order of the Tribunal for assessment year 2006-07, copy of which is placed at pages 1 to 16 of the paper book, shows that the Tribunal has threadbare discussed the issue of violation of pr .....

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..... ndustrial Company Ltd. vs. CIT (supra), has held that for invoking the jurisdiction u/s 263 the twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue must be satisfied. If one of them is absent, then, recourse cannot be taken to section 263(1) of the IT Act. The provision cannot be invoked to correct each type of mistake or error committed by the Assessing Officer. Similar view has been taken by the Hon'ble Supreme Court in the case of CIT vs. G.M. Mittal Stainless Steel Pvt. Ltd. (supra). 12. Since, in the instant case, the Assessing Officer, after considering the reply given by the assessee has passed a speaking order on the issue o .....

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