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TMI Blog2025 (1) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... e case and in law, the Respondent erred in holding that the Assessing Officer concluded the assessment proceedings without making basic enquiries and verifications regarding the nature of Appellant's activities, whereas the same were specifically looked into by the Assessing Officer during the assessment proceedings. 2. That in the facts and circumstances of the case and in law, the Respondent erred in concluding that the income in the form of deposit, lease premium, rent and interest, etc. is liable to tax in the hands of the Appellant. 3. That in the facts and circumstances of the case and in law, the Respondent erred in not following the order 07.09.2018 passed by this Hon'ble Tribunal in the case of the Appellant itself for Assessment Year 2011-12, which categorically held that the income in the form of deposit, lease premium, rent and interest, etc., is not liable to tax in the hands of the Appellant. 4. That in the facts and circumstances of the case and in law, the Respondent erred in concluding that the Appellant-corporation is undertaking commercial activities, and therefore, its activities would not be regarded as charitable activities within the meaning of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the academic purpose, but the income receipts from different heads are not taxed in the hands of the assessee. In earlier years, the revenue has taken the stand that the assessee is not a valid trust, and the activities are commercial in nature; thus, the assessee is not eligible for claim of exemption under section 11 of the Act. Alternatively, the revenue has taken view in earlier years that the activities carried on by assessee is commercial in nature; hence, the Proviso inserted by Finance Act, 2008 in section 2(15) of the Act would be applicable to the case of the assessee. In the backdrop of this aforesaid observation, the revenue in earlier years concluded that since the gross receipts from aforementioned activities carried out by the assessee had exceeded the prescribed limit of Rs. 25 lakhs, by virtue of Provision to section 2(15) of the Act could not be considered to be carrying on any charitable activity within the meaning of said statutory provision. The said issue was duly negated by the order of the co-ordinate bench in assessee's own case bearing ITA No.4474/Mum/2017 dated 07/09/2018. However, for other years, the assessee filed appeals before the coordinate benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestments as such except the surplus funds kept in a Fixed Deposits with the scheduled Banks and advances given as per the instructions of Government of Maharashtra, 11. The MIDC as not accumulated any surplus U/s 11(2) of the Act 12 In view of the answer at 11 above there is no question of exercise of potion u/s 11(1)(a) for utilization of income. 13. Copy of the details of depreciation claimed is attached herewith. (annex 7) The capital expenditure is claimed as application of income to the charitable purpose. The Assessee has claimed this benefit based on the judicial judgments. 14 MIDC has not received any Donation during the year locally Overseas. The Corporation does not have any FCRA registration. 15 The MIDC has not paid any sum to any person referred to in sub section (3) of the section13 16. The MIDC has not given any donations to any person or institution during the year. 17 Details of bank accounts are attached herewith. (Annex 3) 18. The MIDC has not received or advanced any fresh loans during the year except advances given as per the instructions of Government of Maharashtra. 19. Copies of all etds returns for four quarters are attached herewith. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivities conducted by the assessee, it can be understood that the activities of the assessee are not charitable in nature. Therefore, the Ld.CIT(E) observed that the entity engaged in commercial, or business activities and the provisions of section 2(15) of the Act need to be examined by the AO in the light of the nature of activities undertaken by the assessee. Accordingly, by assuming extraordinary jurisdiction of the CIT(E), by invoking provisions of section 263, the impugned assessment order was considered as erroneous and prejudicial to the interest of the revenue. So, the said assessment order was set aside for fresh assessment. 6. The Ld.AR filed written submission which is kept in the record. The Ld.AR argued and stated that the issue was already verified by the Ld.AO by issuance of notice under section 142(1) dated 15/12/2020 annexed in paper book pages 23 to 26 and in this respect, the assessee made the submission in detail by submission dated 04/02/2021 against the notice under section 142(1) dated 15/12/2020 (pages 27- & 28 of the paper book). The issue was further enquired into by the Ld.AO by notice under section 142(1) dated 09/04/2021 which was further replied by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the same assessee. Indeed, the orders of the Tribunal and the High Court are binding upon the AO and since he acts in a quasi-judicial capacity, the discipline of such functioning demands that he/she should follow the decision of the Tribunal or the High Court, as the case may be. He/She cannot ignore it merely on the ground that the Tribunal's order is subject matter of a revision in the High Court and that the High Court's decision is under appeal before the Supreme Court. Permitting him/her to take such a view would introduce judicial indiscipline, which is not called for even in such cases. It would lead to a chaotic situation. This decision was followed by Hon'ble Bombay High Court in CIT v. Paul Brothers (1995) 216 ITR 548 (Bom) to hold that where ITO's order is passed on the basis of a binding decision, revisional power under section 263 cannot be exercised to undo the said order. 9. The Ld.DR vehemently argued and filed a written submission. The relevant part of the written submission is reproduced as below:- "4.2 Coming to the Hon'ble Tribunal's order dated 07-09-2018 in its own case for AY 2011-12, it is seen that the finding is restricted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessment order must be erroneous; and It must be prejudicial to the interest of the Revenue. In this case, the Ld. AO conducted a detailed verification of the relevant matters on various occasions, issuing notices under Section 142(1) of the Act, to which the assessee duly complied. A reasoned and speaking order was passed, with the Ld. AO's observations duly recorded in the order sheet. The impugned assessment order was framed by the Ld. AO in accordance with the decision of the ITAT, Mumbai Bench, in the assessee's own case (ITA No. 4474/Mum/2017, dated 07/09/2018).The primary issue under consideration was whether the lease premium and other charges received by the assessee on behalf of the Government of Maharashtra constituted taxable income. The assessee contended that these receipts were collected purely as an agent of the State Government and, therefore, could not be taxed in its hands. The Assessing Officer and the Commissioner of Income Tax (Appeals) had earlier concluded that the lands were transferred irrevocably to the assessee, thereby making the receipts taxable. However, upon review, the Coordinate Bench of the ITAT determined that the assessee was merely a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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