Section 263: Revision unjustified as AO took possible view based on available records

Synthetic & Art Silk Mills Research Association Vs CIT (ITAT Mumbai)

ITAT Mumbai held that revision under section 263 of the Income Tax Act unjustified as AO while allowing the exemption in the order passed under section 144 r.w.s.263 has taken a possible view upon verifying the details available on record.

Facts- The assessee is a Public Charitable Trust registered u/s. 12A of the The assessee is also approved research organization u/s. 35(1)(ii) of the Act. The assessee filed the return of income on 25.09.2013 declaring income at Rs. Nil after claiming exemption u/s. 11 of the Act. The assessee’s assessment was re-opened by issue of notice u/s. 148 of the Act dated 28.03.2018.

Notably, AO vide order dated 14.11.2018 passed u/s. 143(3) r.w.s. 147 of the Act accepted the alternate submission of the assessee held that the assessee’s income is exempt u/s. 10(21) of the Act and accordingly completed the assessment assessing the income at Rs. Nil.

However, CIT (Exemption) was of the view that auditorium hire charges; hoarding site and service charges and licence fee/ rent is not eligible for exemption u/s. 10(21) of the Act. Hence, to this extent the First CIT (Exemption) considered the order of the AO passed u/s. 143(3) r.w.s 147 of the Act to be erroneous and prejudicial to the interest of the Revenue.

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