Case Law Details
Saurashtra Trust Janmabhoomi Bhavan Vs CIT (ITAT Mumbai)
ITAT Mumbai held that plausible view of AO cannot be held as erroneous by ld. CIT(E) without conducting necessary enquiries or verification. Accordingly, initiated of revision jurisdiction u/s 263 on mere conjectures, suspicions and surmises, which is not permitted.
Facts- This is an appeal preferred by the assessee trust against the order of the Ld. Commissioner of Income Tax (Exemptions) [CIT(E)] passed u/s. 263 of the Income Tax Act, 1961. The main grievance of the assessee is against invocation of revisional jurisdiction by Ld. CIT(E) without satisfying the essential condition precedent as required under Section 263 of the Act.
Notably, post completion of assessment u/s 143(3), the Ld. CIT(E), desired to exercise his revisional jurisdiction u/s 263 of the Act and noted that even though the AO has denied exemption u/s 11 of the Act and assesseed the total income at Rs.6,67,42,920, he found fault with the action of the AO accepting the service charges received by it as rental income. According to Ld. CIT(E), the assessee trust has claimed deduction of Rs.74,73,225/-under section 24(a) of the Act on “service charges” received by it to the tune of Rs.2,49,10,751/- during the year. And wondered as to how the “service charge” can be included in property income and standard deduction can be claimed and allowed by AO, which action of AO was erroneous and that the assessment order has been passed without basic verification about the allowability of claim under section 24(a) of the Act which is erroneous in so far as it was prejudicial to the interest of revenue. And so, he issued notice u/s 263 of the Act.
Conclusion- Since the AO view after enquiring is plausible view it could not have been interfered with unless the Ld CIT(E) has conducted during revisional proceedings enquiry or verified the facts in order to come to a conclusion that AO’s view was erroneous/un-sustainable in law. As noticed (supra) once AO has conducted enquiry (on an issue) then the Ld Pr. CIT before holding the order of AO to be erroneous, should have conducted necessary enquiries or verification in order to show that the finding given by the AO on that issue is erroneous/unsustainable in law.
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