Case Law Details
ORDER
N.V. Vasudevan, Judicial Member –
This is an appeal by the Assessee against the order dated 19.12.2011 of Director of Income-Tax (Exemption), Bangalore, (“DIT”) passed u/s.263 of the Act relating to AY 2009-10.
2. The Assessee is a charitable institution registered u/s.12A of the Income Tax Act, 1961 (“the Act”). For AY 2009-10, the Assessee filed a return of income declaring Nil income. By an order dated 18.3.2011 passed u/s.143(3) of the Act, the AO accepted the income so returned by the Assessee.
3. The DIT in exercise of his powers u/s.263 of the Act perused the assessment records of the Assessee for AY 2009-10 and was of the view that the order of the AO dt.18.3.2011 passed u/s.143(3) of the Act was erroneous and prejudicial to the interests of the Revenue. The DIT noticed that the Assessee trust was engaged in construction business and real estate activities and its total turnover was to the tune of Rs.194.24 crores and had earned a profit of Rs.57.38 crores. The Assessee trust had claimed exemption u/s.80-IB(10) of the Act in respect of the aforesaid profits. The AO had allowed the same. According to DIT, Charitable trusts are not eligible for deduction u/s.80-IB(10) of the Act and therefore the action of the AO in allowing the aforesaid claim of the Assessee was erroneous and prejudicial to the interests of the revenue. Accordingly a show cause notice dated 18.10.2011 was issued by the DIT proposing revision of the order of the AO u/s. 263 of the Act.
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