SHRI BABA MOHAN RAM KALI KHOLI WALE ,ALWAR vs. CIT(TDS), JAIPUR , JAIPUR

Record reveals that Learned CIT(TDS) initiated proceedings u/s 263 of the Act. Ld. CIT(TDS) of the view that the assessment order dated 29.12.2021 was erroneous in so far as it was prejudicial to the interest of the revenue, particularly, when viewed having regard to Explanation 2 of Section 263 of the Act.

That is why, the appellant is before this Appellate Tribunal.

Arguments heard. File perused.

Assessee is a public trust registered under Rajasthan Public Trust Act, 1959. On its behalf, it has been submitted that the trustees of the said trust are heads of 8 families, which are descendants of Shri Lalu Bhagat, and that these heads are managing the trust. Reference has been made to thescheme framed and approved by Learned District Judge, Jaipur, vide order dated 25.08.2005. As per said scheme, the trustees have a right to receive 75% of the total collection from ‘DanPatra’ (donation box), whereas balance 25% of said collection is required to spent on managing of dharamshala and temple, in addition to other development work.

On the other hand, ld. DR for the department has urged for dismissal of this appeal, while submitting that he stands by the reasons recorded by Learned CIT(TDS) in arriving at the conclusion that the order dated 29.12.2021 is erroneous and prejudicial to the interest of the revenue.

To the written submissions, we find annexed copy of notice dated 15.12.2021 issued by the Assessing Officer(TDS) to the assessee trust, u/s 201(1)/201(1A) and U/s 206C(6)/206C(7) of the Act, relating to the financial year 2014-15.

Learned CIT(TDS) took up the matter, and commenced proceedings u/s 263 of the Act, by issuing to the assessee a show cause notice dated 12.02.2024 calling upon to furnish response thereto. The assessee submitted its response dated 25.02.2024. In the impugned order, Learned CIT(TDS) has observed that he took into consideration the response submitted by the assessee and the decisions cited on its behalf. Ld. CIT (TDS) also referred to certain decisions, which find mention in para 6.6 of impugned order, and ultimately, held that the order dated 29.12.2021 suffered from specific defects, and as such, the same was erroneous and prejudicial to the interest of the revenue. Consequently, Shri Baba Mohan Ram Kali Kholi Wale Learned CIT(TDS) directed the Assessing Officer to make necessary verification and examine in depth the issues noticed by him in the impugned order, in accordance with law, as regards the assessment year 2015-16, of course, after providing reasonable opportunity to the assessee.

Record reveals that before arriving at the abovesaid conclusion,, letter dt. 12.02.2024 was issued by Learned CIT(TDS), to the assessee, by way of show cause notice u/s 263 of the Act. The allegation leveled therein was that the assessee had made certain payments to so-called trustees from its bank account, without deduction of tax under the Act; that the trustees had accounted for 25% receipt of total donations, received in Danpatra, in its Receipts and Payment Account, but the balance 75% of the amount was transferred to the 8 heads of the families of trustees ; that the assessee had failed to submit documentary or corroborative evidence as regards its claim that 75% did not form part of its Receipts and Payment Account. Copy of reply dated 25.02.2024, submitted by the assessee to the aforesaid show cause notice, is also on record. With the paper book, we also find attached copy of reply dated 22.12.2021 submitted by the assessee to the Assessing Officer, in reply to his notice.

Herein, it is not in dispute that the assessee trust came to be constituted as per scheme, presented alongwith petition u/s 38 of Rajasthan Public Trust Act, 1959, and approved by the Learned District & Sessiong Judge, Alwar on 25.08.2005. Copy of the scheme forms part of the said order dated 25.08.2005.

As is available from Clause-(Kha) of Serial No. 5 of the said scheme, 25% of the income of the trust was to be spent on Dharmshala and other development programmes and maintaining of the trust, whereas remaining Shri Baba Mohan Ram Kali Kholi Wale 75% of its income, collected from Danpatras was to be equally divided amongst 8 heads of the trustee families. The above referred to scheme must have been considered by the Assessing Officer (TDS).

As a result, it cannot be said that while passing the order, the Assessing Officer did not conduct proper enquiry or necessary verification. Rather, it can safely be said that the Assessing Officer applied his mind to the material collected during the enquiry and then arrived at a particular conclusion.

It is well settled that clause (a) of Explaination-2 to Section 263 of the Act shall apply, where the assessment order is passed without making enquiry or verification like a reasonable and prudent Officer, and further that the said provision cannot be resorted to by the higher authorities, here the Learned CIT(TDS), to set aside each and every order simply by observing that in his opinion, proper enquiry or verification was not made out, even though actually proper enquiry and verification is made by the Assessing Officer. In this regard, reference may be made to decisions in Malabar Industrial Limited v. CIT, 243 ITR 83, CIT v. Raisons Industries Ltd., 288 ITR 322 (SC) and Sir Dorabji Tata Trust’s case(supra) .