TMI Blog2021 (7) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... en to M/s. Viswas Promoters Ltd., Madurai, we are of the considered view that these two issues were not part of show cause notice issued by PCIT and hence, he does not have any power to examine issues other than those find place in show cause notice. Even otherwise, two issues questioned by the PCIT has already been examined by the Assessing Officer, which is evident from fact that the Assessing Officer has issued detailed questionnaire along with notice issued u/s.142(1) dated 13.07.2018, where he has called for details about payments made to related parties and also list of advances made to members. In response, the assessee has filed relevant details. AO after examining details filed by assessee, has accepted fact that activities carried out by the assessee are charitable in nature, which is not hit by proviso to section 2(15) of the Act. Therefore, we are of the considered opinion that the learned PCIT has erred in revising assessment order u/s. 263 of the Act. In this view of the matter and considering facts and circumstances of the case and also by following decision of Chennai Bench of the Tribunal in assessee s own case in [ 2017 (8) TMI 1640 - ITAT CHENNAI] - we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etting aside the Order of AO and directing the Assessing Officer tore-do the assessment afresh after verification of lending of money to poor people at an exorbitant rate of interest. 7. Without Prejudice to the Ground to 2 and 3, the Learned Principal Commissioner of Income Tax, Central -2, Chennai erred in setting aside the Order of AO and directing the Assessing Officer to re-do the assessment afresh after examining the payment of consultation charges. 8. Without Prejudice to the Ground to 2 and 3, the Learned Principal Commissioner of Income Tax, Central -2, Chennai erred in setting aside the Order of AO and directing the Assessing Officer to re-do the assessment afresh after scrutinizing the issue of loan given to Shri. Seetharaman, Director of M/s. Viswas Promoters Ltd. and receipt of interest, thereon. 9. For that the Learned Principal Commissioner of Income Tax, Central -2, Chennai failed to appreciate that the Assessment Order was completed by the Assessing Officer after taking into consideration the entire supporting evidence produced, filed and placed upon records by the Appellant Company during assessment proceedings, which was extracted in the impugned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n judicial precedents held that assessment order passed by the Assessing Officer is erroneous, insofar as it is pre-judicial to the interests of revenue, because the Assessing Officer has completed assessment without verifying facts in right perspective of law, before allowing benefit of exemption u/s.11 12 of the Act, even though activity carried out by assessee of micro financing to self-help groups is nothing but an adventure in the nature of trade and commerce, which is hit by proviso to section 2(15) of the Act. The learned PCIT has discussed issue at length in light of modus operandi of the assessee trust in advancing loans to self-help groups and charging of interest on such loans and came to the conclusion that the assessee is advancing loans to self-help groups and charging interest @ 24% on said loans, which is exorbitantly higher than the rates charged by commercial banks and hence, activity carried out by the assessee cannot be said that it is charitable in nature and covered under the definition of section 2(15) of the Act. The learned PCIT has also discussed the issue in light of consultation charges paid by the Trust to their relatives and opined that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d PCIT, submitted that activity carried out by the assessee of providing micro financing to self-help groups with higher rate of interest cannot be considered as charitable activity as defined u/s.2(15) of the Act. The learned DR further submitted that activity carried out by the assessee is in the nature of adventure in the nature of trade and commerce, which is hit by proviso to section 2(15) of the Act. Further, various judicial forums has repeatedly held that micro financing activity carried out in commercial line is not a charitable activity, including ITAT., Chennai in the case of ACIT Vs.Grama Vidiyal Trust (71 taxmann.com.88 (2016). He further submitted that the learned PCIT has brought out clear facts to the effect that assessee is carrying out commercial activity in line with any other commercial banks / financial institutions and charging very high rate of interest, which is almost double the rate of interest charged by commercial banks. Therefore, at any stretch of imagination, it cannot be held that activity carried out by the assessee is charitable in nature and assessee is entitled for benefit of exemption u/s.11 12 of the Act. 7. We have heard both the parties, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011-12 2013-14, where the Tribunal has categorically held that trust has rendered service in the nature of providing relief to poor as envisaged under the Act and therefore, benefit of exemption u/s.11 12 cannot be denied to the trust. The Assessing Officer, after considering relevant facts including activity carried out by the assessee and also by following decision of the Tribunal in assessee s own case has taken one of the possible view and has allowed benefit of exemption u/s.11 to the assessee. Therefore, we are of the considered view that view taken by the Assessing Officer is one of the possible view, which is duly supported by the decision of the Tribunal in assessee s own case for earlier years and hence, the PCIT, although he may not agree with the view taken by the Assessing Officer, cannot hold assessment order is erroneous, insofar as it is prejudicial to the interests of revenue. 9. As regards, case laws relied upon by the PCIT of other Tribunals, we find that although there is divergent views on the issue of micro financing, whether it is charitable in nature or commercial activity, but because the Tribunal has taken a view that activity carried out by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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