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TMI Blog2021 (7) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... al Commissioner of Income Tax, Central -2, Chennai erred in stating that the activities of the Trust are not genuine. 4. Without prejudice to Ground No 2, the Learned Principal Commissioner of Income Tax, Central-2, Chennai erred in exercising his jurisdiction under section 263 on the impugned Assessment Order u/s 143(3) merely because the AD has completed by Assessment for the subject AY based on the directions of the Hon'ble Tribunal in the appellant's own case for AY 2011-12 and 2012-13, which was challenged by the Department of Revenue and the Assessment for AY 2011-12 and 2012-13 has not reached finality. 5. 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 issuance of proposal to cancel the registration u/s 1 2AA of the Act. 6. 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 tore-do the assessment afresh after verification of lending of money to poor people a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income should be taxed as an AOP. In response to show-cause notice, the assessee vide its letter submitted that assessment order passed by the Assessing Officer is neither erroneous nor pre-judicial to the interests of revenue, because the Assessing Officer has completed assessment, after having considered various materials placed by the assessee during the assessment proceedings, including decision of ITAT, Chennai in assessee's own case for earlier years, where the Tribunal has held that activity carried out by the assessee is charitable in nature, which is not hit by proviso to section 2(15) of the Act. Since the Assessing Officer has examined issue and taken one of the possible view on the issue and allowed benefit of exemption to the assessee u/s.11 & 12 of the Act, the PCIT cannot say that assessment order passed by the Assessing Officer is erroneous, insofar as it is prejudicial to the interests of revenue. 4. The learned PCIT, after considering relevant submissions of the assessee and also by relied upon certain 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vising assessment order u/s.263 of the Act, without appreciating fact that impugned assessment order is neither erroneous nor pre-judicial to the interests of revenue. The AR further submitted that the Assessing Officer has examined the issue at length in light of decision of ITAT., Chennai in assessee's own case for earlier assessment years and by following judicial precedents has allowed benefit of exemption to the assessee u/s.11 & 12 of the Act, after considering the fact that activity carried out by the assessee is in the nature of charitable activity as defined u/s.2(15) of the Act. The AR further submitted that once issue has been considered by the Assessing Officer in assessment proceedings and has adopted one of the possible view, then there is no scope for PCIT to revise said order on the ground that the Assessing Officer has not carried out inquiry ought to have been carried out in accordance with Explanation 2 to section 263 of the Act. 6. The learned DR, on the other hand, supporting order of the learned 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 charit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustries Co.Ltd. Vs. CIT (2000) 243 ITR 83(SC). 8. In this legal background, if you examine the facts of the present case one has to understand as to whether the assessment order passed by the Assessing Officer is erroneous, insofar as prejudicial to the interests of the revenue. In order to consider any order to be erroneous, then it should be passed without considering facts of the case in light of the relevant provisions of the Act. In this case, issue before the Assessing Officer was whether 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. Under the given facts and circumstances of the case, the Assessing Officer has come to the conclusion that micro financing activity carried out by the assessee is in the nature of charitable activity, which is not hit by proviso to section 2(15) of the Act. The said findings of the Assessing Officer was supported by decision of the Tribunal in assessee's own case for assessment year 2011-12 & 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Be that as it may, 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. The Assessing Officer, 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. 11. 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 ITA No.2919 & 2920/Mds/2016 dated 09.08.2 ..... 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