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| The Tax Publishers2019 TaxPub(DT) 3924 (Del-Trib) : (2019) 201 TTJ 0039 INCOME TAX ACT, 1961
Section 263
CIT(E) was not justified in invoking jurisdiction under section 263 on the allegation that AO failed to consider the allowability of the Global Trade Development (GTD) expenses incurred by assessee-society because there was no finding rendered by CIT(E) that the GTD activity expenses were not for furtherance of the aims and objects of assessee- society.
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Revision under section 263 - Erroneous and prejudicial order - Alleged lack of enquiry by AO towards GTD (Global Trade Development) expenses - Scope of
Assessee was a registered society under the Societies Registration Act, 1860 and was the prayer premier trade body and Chamber of Commerce of the IT/BPO Industries in India. Its assessment was framed under section 143(3) after denying certain exemptions, which were claimed on the benefit of mutuality. AO also made disallowances on account of donations made. CIT(E) alleged that assessee had not incurred the Global Trade Development (GTD) activity expenses in accordance with the aims and objects for which it was established and there was no proper enquiry made by AO on that aspect. CIT(E) further alleged that though AO had denied assessee's claim of exemption based on principle of mutuality, but AO failed to give effect thereto in the computation of income and erroneously computed the taxable income at lower figure. Held: CIT(E) did not undertake the exercise of enquiry required to reach the conclusion that the assessment order was erroneous insofar as it was prejudicial to the interest of the revenue because there was no finding that the GTD activity expenses were not for furtherance of the aims and objects of assessee society. For want of an enquiry to reach such a conclusion, the order of CIT(E) was not sustainable. Further, the contention of assessee was that it was not given an opportunity of being heard, as there was no reference to the alleged computational error and the record did not reveal that CIT(E) had given any opportunity to the assessee to explain this aspect. Therefore, for violation of principles of natural justice, the order passed by CIT(E) could not be sustained in so far as the computation error was concerned.
REFERRED : CIT v. Amitabh Bachchan (2016) 384 ITR 200 (SC) : 2016 TaxPub(DT) 2291 (SC) Pr. CIT v. Modicare Ltd. [(ITA No. 759/Del/2016) dated 14-9-2017] : 2017 TaxPub(DT) 4212 (Del-HC), Pr. CIT v. Delhi Airport Metro Express (P.) Ltd. [ITA No. 705/Del/2017 dated 5-9-2017] : 2017 TaxPub(DT) 4058 (Del-HC), ITO v. DG Housing Projects Ltd. (2012) 343 ITR 329 (Del) : 2012 TaxPub(DT) 1727 (Del-HC), and Ambuja Cements Ltd. v. CIT [ITA No. 3563/Mum/2016 for the assessment year 2010-11] : 2017 TaxPub(DT) 4846 (Mum-Trib)
FAVOUR : In assessee's favour
A.Y. :
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