Case Law Details
CIT Vs Slum Rehabilitation Authority (Bombay High Court)
Conclusion: Revision under section 263 was invalid in case order of assessment merged with the order of Appellate CIT in its entirety as CIT did not have jurisdiction to revise such order of assessment in view of clause (c) of Expln. 1 to sub-section (1) of section 263.
Held: Assessee – slum rehabilitation authority had filed return of income claiming benefit under Section 11 in relation to its income claiming itself to be engaged in charitable activity. AO passed an order of assessment under Section 143(3) in which this claim was examined and held that assessee was not a Local Authority within the meaning of Section 10(20) thus, assessee’s claim for exemption under Section 11 could not be entertained. Assessee carried the matter in appeal. CIT (A) allowed the appeal and granted the benefit of exemption. CIT took the order of assessment in suo motu revision in exercise of powers under Section 263 on the ground that by virtue of Section 2(15) the activities of assessee could not be considered as charitable in nature. He set aside the order and directed the assessment to be made afresh after considering the proviso to Section 2(15). Assessee challenged the revisional order of Commissioner before Tribunal. Tribunal allowed such appeal hence, Revenue had challenged in the present appeal. It was held order of assessment could not be stated to be prejudicial to the interests of revenue since in any case, AO had rejected assessee’s claim of exemption under section 11 might not be with reference to section 2(15). Moreover, order of assessment merged with the order of Appellate CIT in is entirety, and the CIT did not have jurisdiction to revise such order of assessment in view of limitation placed in clause (c) of Expln. 1 to sub-section (1) of section 263. Therefore, invocation of jurisdiction under section 263 was invalid and Tribunal had committed no error in passing the order .
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
1. This appeal is filed by the Revenue to challenge the judgment of the Income Tax Appellate Tribunal (“the Tribunal” for short). Following questions are presented for our consideration:-
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