Case Law Details
Usha K. Jolly Charitable Trust Vs CIT (ITAT Pune)
ITAT Pune held that invocation of revisionary jurisdiction u/s. 263 of the Income Tax Act unjustified when AO examined the claim and took one of the plausible views and hence the assessment order cannot be termed as an “erroneous”.
Facts- The appellant is a charitable trust registered under the provisions of section 12A of the Income Tax Act, 1961. On receipt of the information that the appellant trust made a cash deposit of Rs.1,31,99,95,101/-, AO reopened the assessment by issuing notice u/s. 148 on 29.03.2017. Subsequently, the assessment came to be completed u/s. 143(3) r.w.s. 147 accepting the returned income.
CIT (Exemption) formed an opinion that the appellant trust is not entitled for exemption u/s. 11 of the Act. Therefore, the CIT (Exemption) formed an opinion that the assessment order passed by AO is erroneous and prejudicial to the interests of the Revenue. Accordingly, CIT(Exemption) issued a show cause notice u/s 263. Being aggrieved, the appellant appealed before the tribunal.
Conclusion- The Parliament had conferred the power of revision on the Commissioner of Income Tax u/s 263 of the Act in case the assessment order passed is erroneous and prejudicial to the interests of revenue. In order to invoke the power of revision, the above two conditions are required to be satisfied cumulatively. References in this regard can be made to the decision of the Hon’ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT and in the case of CIT vs. Max India Ltd. The error in the assessment order should be one that it is not debatable or plausible view. In a case where the Assessing Officer examined the claim took one of the plausible views, the assessment order cannot be termed as an “erroneous”.
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