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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
PER SANDEEP SINGH KARHAIL, J.M.
The present appeals have been filed by the assessee challenging the
impugned orders dated 17.03.2021, passed under section 263 of the
Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income
Tax (Exemptions), Mumbai, [“the CIT”] for the assessment year 2015–16
and 2016-17.
The M.K. Tata Trust ITA No.783 & 784/Mum./2021
In ITA No. 784/Mum/2021, assessee has filed revised Form 36
alongwith copy of impugned order dated 17.03.2021 passed under section
263 and assessment order dated 25.11.2018 passed under section 143(3)
of the Act, for the assessment year 2016-17, which are taken on record.
Since both the appeals pertains to the same assessee and issue
involved is also identical, therefore, these appeals were heard together as a
matter of convenience and are being adjudicated by way of this
consolidated order. Further, as the basic facts in both the appeals are
same, we have elaborately mentioned only the facts for the first
assessment year (i.e. 2015-16) before us for the sake of brevity.
In its appeal for assessment year 2015-16, the assessee has raised
following grounds:–
“1. On the facts and under the circumstances of the case and in law, the Commissioner of Income Tax, erred in invoking revisionary powers u/s 263 without appreciating the fact that order passed by AO is neither erroneous nor prejudicial to the revenue, hence bad in law.
On the facts and circumstances of the case and in law, the learned CIT erred in setting aside the order of the AO and directing assessment de-novo, on the grounds that shares held by the appellant are non-corpus, without appreciating the fact that deed of settlement of 1959 submitted to CIT did mention the shares being settled therein as trust funds which is nothing but corpus and the details of Shareholdings as on date arising out of bonus shares as confirmed by the company (i.e. Tata Sons Ltd). Hence, the action of CIT of invoking revisionary powers is bad in law.”
The only grievance of the assessee in both the appeals is against the
order dated 17.03.2021 passed by the CIT under section 263 of the Act.
The M.K. Tata Trust ITA No.783 & 784/Mum./2021
The brief facts of the case pertaining to the appeal as emanating
from the record are: The assessee is a Public Charitable Trust registered
under section 12A of the Act having Registration No. TR/5060. The
assessee is also registered with Charity Commissioner, Mumbai vide
Registration No. E-1631(Mumbai). The assessee claims to be engaged in
charitable activities in the field of education and has thus accordingly
claimed exemption under section 11 of the Act.
For assessment year 2015-16, the Assessing Officer vide order dated
20.12.2017 passed under section 143(3) of the Act computed total income
of assessee at Rs. 4,19,250/- after disallowing claim of depreciation.
Subsequently, the CIT vide notice dated 03.02.2021 issued under
section 263 of the Act initiated revision proceedings in the case of
assessee. The CIT vide aforesaid notice observed that assessee has
invested its funds in shares which is prohibited mode of investment
prescribed under section 11(5) r.w. section 13(1)(d) of the Act. The CIT
further observed that unless such an investment is covered under
exceptions provided under section 13(1)(d) of the Act, the assessee is not
entitled to claim exemption. The CIT was of the view that since the
Assessing Officer has not verified the above aspect, therefore, the order
passed by the Assessing Officer was erroneous insofar as it is prejudicial to
the interest of Revenue. Accordingly, vide aforesaid notice issued under
section 263 of the Act, the assessee was asked to show cause as to why
the assessment order passed under section 143(3) be not set-aside under
The M.K. Tata Trust ITA No.783 & 784/Mum./2021
section 263 of the Act with appropriate directions to the Assessing Officer
to re-do the assessment.
In reply, the assessee filed detailed submissions before the CIT
objecting to initiation of revision proceedings under section 263 of the Act.
The CIT vide impugned order dated 17.03.2021 held that the
Assessing Officer failed to seek complete details which were required for
due verification of the aspect whether the shares were held by the
assessee as corpus on 01.06.1973, which is an exempt category. The CIT,
inter-alia, by placing reliance on Explanation-(2) to section 263 of the Act
held that the Assessing Officer concluded the assessment without due
verification and enquiry, and thus the assessment order is erroneous
insofar it is prejudicial to the interest of Revenue. Accordingly, the CIT vide
impugned order passed under section 263 of the Act set-aside the
assessment order and directed the Assessing Officer to make de novo
assessment after proper examination of entire gamut of issues involved.
Being aggrieved, the assessee is in appeal before us.
During the course of hearing, the learned Authorized Representative
(“learned A.R.”) submitted that in similar facts and circumstances, the Co-
ordinate Bench of the Tribunal in Sir Ratan Tata Trust Vs. DCIT
(Exemption) 122 taxmann.com 273 set-aside the order passed under
section 263 of the Act.
The M.K. Tata Trust ITA No.783 & 784/Mum./2021
On the other hand, learned Departmental Representative vehemently
relied upon the order passed by the CIT.
We have considered the rival submissions and perused the material
available on record. During the course of hearing, we find that the
Assessing Officer, pursuant to directions issued by the CIT vide impugned
order passed under section 263 of the Act, accepted the contentions of the
assessee and made no further disallowance on the issue on which
proceedings under section 263 of the Act were initiated and accordingly
passed order dated 12.03.2022 under section 143(3) r.w. section 263 read
with section 144B of the Act. Copy of the said order was furnished by the
learned A.R. and same was taken on record.
In view of the above, as the Assessing Officer has passed the order,
and no further addition has been made on the issue on which revision
proceedings were initiated, the present appeal being ITA
No.783/Mum/2021 filed by the assessee challenging the order passed by
the learned CIT under section 263 of the Act for assessment year 2015-16
is rendered academic in nature and therefore, is dismissed as infructuous.
Similarly, for assessment year 2016-17, the Assessing Officer vide
order dated 13.03.2022 passed under section 143(3) r.w. section 263 read
with section 144B of the Act made no further addition on the issue on
which revision proceedings under section 263 of the Act were initiated.
The M.K. Tata Trust ITA No.783 & 784/Mum./2021
Accordingly, ITA No. 784/Mum/2021 is also rendered academic in nature
and is dismissed as infructuous.
In the result, appeals by the assessee are dismissed. Order pronounced in the open court on 18th May, 2022.
Sd/- sd/- OM PRAKASH KANT SANDEEP SINGH KARHAIL ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED: 18th May, 2022 S.K.,Sr. PS Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order
Assistant Registrar ITAT, Mumbai