Andhra Pradesh Pollution Control Board Vs DCIT (ITAT Visakhapatnam)
ITAT Visakhapatnam quashes revisionary Order – Unutilised Surplus of statutory body not taxable once covered u/s 10(46)
In a significant relief to the Andhra Pradesh Pollution Control Board (APPCB), the Visakhapatnam ITAT has held that surplus amounts of a statutory body notified u/s 10(46) cannot be taxed by invoking provisions of section 10(23C) or section 11, even if part of the accumulation remains unutilized.
APPCB, a statutory body, had been approved & enjoying exemption u/s 10(23C) since 2010 & was later notified u/s 10(46) by the CBDT (Notification No. 103/2022 dt 24.08.2022) for AYs 2017-18 to 2021-22 pursuant to a Telangana High Court direction. For FY 2015-16, it had accumulated ₹74.38 crore, out of which ₹70.51 crore was utilised by FY 2020-21, leaving ₹3.86 crore unspent. AO, after detailed verification, accepted NIL income in assessment u/s 143(3) r.w.s. 144B, holding unutilized amount exempt u/s 10(46).
CIT(Exemptions) invoked s.263, terming AO’s order erroneous & prejudicial as unutilized accumulation should be taxed u/s 10(23C) proviso & s.11(2)/(5).
Tribunal noted that AO had raised specific queries & examined the issue before accepting the exemption; hence the order was neither erroneous nor prejudicial. Revisionary jurisdiction u/s 263 cannot be used to substitute one possible view with another when the AO has taken a conscious, informed view after inquiry. Tribunal held that when the income was originally earned by the assessee as specified in these notifications issued u/s 10(46), then the accumulation of the said income would not attract the provisions of section 10(23C) r.w.s. 3rd proviso as well as section 11(2) & 11(5). Once the assessee is covered u/s 10(46), then the income of the assessee cannot be assessed under the provisions of section 10(23C) or section 11 to 13 . Tribunal held that the order passed by the CIT (E) u/s 263 is not sustainable in law & liable to be set aside.
