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TMI Blog2022 (5) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... has called for the bye-laws of the trust. However, the assessee did not submit the same. 11. The assessee has submitted a reply stating that audit report for F.Y. 2014-15 was, but the same could not be found in the assessment record. Hence, it is difficult to ascertain the existence of corpus fund and investments in land and buildings during F.Y. 2014-15. 2. The assessee in his reply stated that during the FY 2014-15 relevant to AY 2015-16, had received Rs. 34,903/- as bank interest and that was its sole income. But, during the AY 2016-17, he had shown to have received bank "interest as well as rent on building and profit on sale of land amounting to Rs. 40,826/- Rs. 18,49,440/- and Rs. 15,88,000/- respectively. However, that does not mea that the total amount of Rs. 34,37,440/- from rent and profit from sale of land. These two incomes were being arisen out of the fresh investments in land & buildings (Land & Land Development expenses at Remed + Land at Pardhiapali + Building at Remed + Loans and Advances for Land) to the tune of Rs. 1,43,35,446/- + Rs. 73,94,845/- + Rs. 73,85,859/- + Rs. 20,47,400/- = Rs. 3,11,63,550/-. These fresh investments were being made from corpus fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire facts and circumstances of the case and reply of the assessee to show cause notice u/s. 263 of the act. Ld. A.R. vehemently pointed out that in response to show cause notice u/s. 263 of the Act dated 26.3.2021, the assessee filed reply before the CIT(E) but the same was not considered by him and this fact is clearly discernible from the order u/s. 263 of the Act. 6. Further, drawing our attention towards impugned order of Ld. CIT, Ld. A.R. firstly drew our attention towards para 5 at page 4 and submitted that the CIT has wrongly stated that the assessee has not submitted any reply either to show cause notice or in response to the opportunity accorded to it Ld. A.R. submitted that when notice has been issued on 26.3.2021 fixing the date of hearing on 30.3.2021 and the assessee filed reply to that despite hardship created due to shortage of time but the same was not considered by Ld. CIT and he wrongly stated in the impugned order that the assessee has not submitted any reply in response to show cause notice or in response to opportunity accorded to it. Ld. A.R. submitted that immediately after a day i.e. on 31.3.2021, the CIT passed the impugned order in violation of prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Hon'ble Supreme Court in the case of R.B. Shreeram Religious and Charitable Trust vs. CIT (1988) 172 ITR 373 (SC), Ld. A.R. submitted that voluntary contributions specifically received towards the corpus of the trust cannot be brought to tax. He also drew our decision of Mumbai ITAT in the case of Chandraprabhu Jain Swetamber Mandir vs. ACIT (2017) 82 taxmann.com 245 (Mum) and order of ITAT Calcutta in the case of Sri Shankar Bhagwan Estate vs. ITO (1997) 61 ITD 196 (Cal)to support this proposition. 7. Ld. A.R. further placing reliance on the decision of Hon'ble Calcutta High Court in the case of Dawjee Dadabhoy and Co. vs. S.P. Jain, 31 ITR 872 (Cal) and judgment of Hon'ble Gujarat High Court in the case of Addl. CIT vs. Mukur Corporation (1978) 111 ITR 312 (Guj) submitted that the revisionary order passed on irrelevant and incorrect facts are not sustainable. Ld. counsel submitted that during the course of scrutiny assessment proceedings, the AO made sufficient, proper and adequate enquiry, which is clearly discernible from the notice issued by the AO alongwith questionnaire dated 12.9.2017, 24.5.2018, 10.11.2018 and 16.11.2018 placed at APB pages 42 to 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny land. Ld. CIT DR also contended that the assessee trust is earning income from sale of land, which is not charitable activities and in accordance with the objects of the trust. Therefore, the CIT was right in alleging the assessment as erroneous and prejudicial to the interest of revenue being passed without any proper enquiry. Ld. CIT DR submitted that when despite creation of trust since 2008 except purchase and sale of land, no other activities has been carried out by the trust to achieve its objects as mentioned in the trust deed, therefore, the AO was required to go deep into the matter in the capacity of investigator and adjudicator. Therefore, the revisionary order u/s. 263 may kindly be upheld. 9. Placing rejoinder to above, Ld. AR submitted that when there was no receipt of corpus donation and no acquisition of land during the relevant financial period, then there was no requirement of enquiry as per notice issued by the AO placed at pages 42 to 49 and reply thereto placed at pages 50-51, which clearly discernible that the AO has made proper, sufficient and adequate enquiry with regard to the points, therefore, it is not a case of no enquiry. Ld. A.R. further explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity accorded to it. Ld. AR has successfully demonstrated that the assessee filed reply to the show cause notice dated 26.3.2021 and no further opportunity beyond 30.3.2021 was given to the assessee. Therefore, these observations of the CIT(E) are also not sustainable in law. 12. In para 6.(9) the CIT(E) observed that the corpus fund, investment in land and building are required to be added to the total income of the assessee. These observations are also based on irrelevant and incorrect facts and we are compelled to hold that the impugned revisionary order has been passed by considering the fact without application of mind. Ld. A.R. has placed reliance on the decision of Hon'ble Bombay High Court in the case of CIT vs. Gabriel India Ltd., 203 ITR 108 (Bom), wherein, it is held that even after initiating proceedings for revision and hearing the assessee, the CIT could not say that the allowance of the claim of the assessee was erroneous that the expenditure was not revenue expenditure but an expenditure of capital nature. It is also held that there must be material before the Commissioner to satisfy himself that two requisite provided u/s. 263 are present, otherwise pow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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