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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Before: ARUN KHODPIA & ARUN KHODPIA & ARUN KHODPIA
O R D E R Per Bench
This is an appeal filed by the assessee against the order This is an appeal filed by the assessee against the order This is an appeal filed by the assessee against the order passed u/s.263 of the Act by the CIT(Exemptions), Hyderabad dated 24.3.2021 u/s.263 of the Act by the CIT(Exemptions), Hyderabad dated 24.3.2021 u/s.263 of the Act by the CIT(Exemptions), Hyderabad dated 24.3.2021 for the assessment year the assessment year 2015-16 .
It was the submission that the assessee is a charitable trust, which It was the submission that the assessee is a charitable trust, which It was the submission that the assessee is a charitable trust, which was enjoying the benefit of registration under section 12A was enjoying the benefit of registration under section 12A was enjoying the benefit of registration under section 12A of the Act right from 3.12.2007. It was the submission that the assessee from 3.12.2007. It was the submission that the assessee from 3.12.2007. It was the submission that the assessee was in the field of education. It was the submission that the return filed by the assessee came education. It was the submission that the return filed by the assessee came education. It was the submission that the return filed by the assessee came
P a g e 1 | 5 Assessment Year : 2015-16 to be processed and the assessment came to be completed u/s.143(3) of the Act on 29.12.2017 accepting the returned income of the assessee and assessing the total income at Nil. It was the submission that subsequently, ld CIT (E), Hyderabad issued a show cause notice dated 25.2.2020 proposing to revise the assessment order passed u/s.143(3) on 29.12.2017 on the ground that the assessee trust has sold capital assets in the form of land, buildings, plant and machinery and furniture and fixtures located at Hyderabad at a consideration of Rs.23.50 crores. It was the submission that the assessee had filed a reply, which has also been extracted by the ld CIT(E) in his order. It was the submission that the submission of the assessee had not been considered by the ld CIT(E) and without doing anything further that issuing one show cause notice and obtaining the reply of the assessee proceeded to hold the assessment order passed by the AO u/s.143(3) of the Act dated 29.12.2017 as erroneous and prejudicial to the interest of the Revenue. It was the submission that nowhere in the order of the ld CIT (E) passed u/s.263 of the Act the submissions of the assessee have been considered much less disposed off. It was the submission that the requirement of section 263 of the Act is that the assessee should be heard. It does not mean that only Perfunctory hearing is to be granted. If a hearing is granted, it should be an effective and the objection of the assessee should be considered in the right perspective. Ld AR was very vehement in his objection to the order passed u/s.263 of the Act. It was P a g e 2 | 5 Assessment Year : 2015-16 the further submission that on the basis of same written details submitted before the ld CIT (E), which were submitted before the AO, in consequential assessment order passed u/s.144 r.ws 263 of the Act, no addition, as contemplated by the ld CIT(E), has been made by the AO. It was the submission that if at all the submission of the assessee would have been considered by ld CIT(E), he would not have proceed to hold the assessment order passed dated 29.12.2017 as erroneous and prejudicial to the interest of the revenue. He was vehement to his stand that the action of the ld CIT(E) has led to the loss of the revenue itself as also tantamount to multiplication of litigation and valuable time alongwith cost on the assessee.
In reply, ld CIT DR vehemently supported the order of the ld CIT (E). It was the submission that an administrative authority is expected to protect the interest of the revenue and if it has led to the litigation, it is not the fault of the administrative CIT, who has invoked his powers of revision. It was the submission that obviously, litigation will involve the cost and time but that does not mean that the ld CIT should not invoke his powers u/s.263 of the Act in appropriate case. It was the further submission that the revision was initiated because the details were not available before the AO and not found on the record. The fact that no addition has been made in the consequential order, it is just goes to show that justice has been done. It was the submission that when correct taxes are levied then also P a g e 3 | 5 Assessment Year : 2015-16 justice is done and when the assessee gets judicious relief, even then the justice is done, therefore, in the interest of justice, revision was rightly done. It was the submission that when consequential order has gone in favour of the assessee, the appeal should be dismissed as infructuous.
We have considered the rival submissions. We are not going into the merits or demerits of the arguments advanced by either side. Just because we notice that the consequential order passed by the AO to give effect to the order passed u/s.263 of the Act has resulted in Nil addition, we are of the view that the order passed u/s.263 is unsustainable and we quash the same.
In the result, the appeal of the assessee is allowed.
Order dictated and pronounced in the open court on 9 /6/2022.