ARYAN EDUCATIONAL TRUST,BHUBANESWAR vs. CIT EXEMPTION CIRCLE, BHUBANESWAR

This is an appeal filed by the assessee against the order of the ld. CIT(Exemptions), Hyderabad at Bhubaneswar, dated 27.03.2023, passed in ITBA/REV/F/REV5/2022-23/1051421216(1), for the assessment year 2018-2019.

It was submitted by the ld. AR that the appeal of the assessee is delayed by 43 days for which the assessee has filed necessary affidavit for condonation of delay, wherein he has mentioned that the assessee failed to file the instant appeal within the time due to non-receipt of copy of the order passed u/s.263 of the Act in time. The affidavit filed by the assessee has not found to be false. Consequently, the delay of 43 days in filing the appeal is hereby condoned and the appeal is disposed off on merits.

It was submitted by the ld. AR that the return filed by the assessee for the relevant assessment year was taken for limited scrutiny on account of large capital expenditure for charitable purposes. It was the submissions that various details were called for and the assessment was completed on an income of Rs.82,27,422/-. It was the submission that the ld. CIT(E), Hyderabad issued notice u/s.263 of the Act in respect of an expenditure of Rs.75,90,340/-, which was claimed as advance towards civil construction and it was claimed as an application u/s.11 of the Act. It was the submission that the ld. CIT(E), Hyderabad took the view that the amount of Rs.75,90,340/- was not considered by the AO. It was the submission that the revision u/s.263 of the Act was only a reappraisal of the evidence already considered by the AO. The ld. AR drew our attention to the assessment order page 2 wherein written submissions before the ITO, National Assessment Centre has been extracted. It was the submission that the amount of Rs.75,90,340/- was very much before the AO and the same has already been considered by him. It was the submission that consequently the order passed u/s.263 of the Act was only a fishing and roving enquiry and therefore, the same was liable to be quashed.

In reply, ld. CIT-DR submitted that the AO had called for the expenditure in respect of charitable activities and the application. The AO had not called for any documents in respect of the expenditure being Rs.75,90,340/-, which was claimed as an advance paid for civil construction and was consequently claimed as application. It was the submission that to whom, the amount has been paid, why it has been paid and what is the civil construction that have been got done and when it was completed was not coming out of the AO’s assessment order much less examined by the AO. Similarly, the same being an expenditure towards civil construction, TDS also liable to be made and the same has also not been examined by the AO. It was the submission that there was no change of opinion much less fishing and roving enquiry and the order u/s.263 of the Act is liable to be upheld.

We have considered the rival submissions. A perusal of the facts of the present case clearly shows that in the assessment order the AO has called for the details and the large expenditure. The details admittedly have been provided in the form of written submission. The said written submission has also been extracted by the AO in the assessment order. There is nothing available on record to show that the nature of the expenditure or any of the examination as called for by the ld. CIT(E) has been done by the AO. The assessee has also not been able to place any document to show that the details of the breakup of the amount of Rs.75,90,340/- was examined by the AO much less before the AO. This being so, we are of the view that the order passed u/s.263 of the Act is liable to be sustained and we do so.