INCOME TAX ACT, 1961

Section 10(23C)(vi)

Exemption under section 10(23C)(vi) - Withdrawal - Validity of show-cause notice signed by ITO(Hqrs.) not by CIT(E) - Conditions precedent satisfied

On the issue of withdrawal of exemption under section 10(23C)(vi) the assessee University had challenged the validity of the show-cause notice. In this regard, the AR had sunmitted that the show-cause notice dated 3-5-2016 being signed and issued by the ITO (Hqrs.) and not by the CIT(E), not signed and issued by the prescribed authority and hence, the consequential impugned Order, dt. 14-9-2016 passed by the CIT(E) was without jurisdiction, void ab initio and the impugned order was liable to be quashed on this ground.Held: In the instant case, CIT(E) notings/corrections were clearly apparent from the records so produced before Trubunal by the CIT/DR which reflects his mind and satisfaction to the proposed action. In light of undisputed facts which were clearly emerging from the records, the language and tenor of the show cause notice do clearly exhibit the thought process and application of mind by the CIT(E) with inputs from the ITO (Hqrs.) and the AO, and thus an expression of his satisfaction of the proposed action to withdraw the exemption so granted to the assessee university. Therefore, in Para 2 of the show-cause notice the ITO (Hqrs.) states that “he had been directed to state that your institution had violated the provisions of section 10(23C)(vi)” and thereafter, in Para 6, where he states that 'your case was fixed for hearing before the CIT(E), Jaipur' and finally, his signature on behalf of the CIT(E) have to be seen and read in context of satisfaction recorded by the CIT(E) and not that of ITO(Hqrs) of the proposed action of withdrawal of exemption. The legal proposition so emerging from the said decision in fact supports the case of the revenue. In light of the same, Tribunal was unable to accede to the contention of the AR that present proceedings were vitiated for want of signatures of CIT(A) on the show-cause notice when the entirety of facts clearly demonstrate that the show-cause notice reflects the thought process and application of mind and the satisfaction so recorded of the CIT(E). In the result, the additional ground so raised by the assessee was dismissed.

Applied:Shri Hari Ram Yadav v. Pr.CIT [ITA No. 215/JP/2018, dt. 31-12-2018] : 2019 TaxPub(DT) 488 (Jp-Trib). Relied:Chandra Bhan v. Asstt. CIT [ITA No. 4/Agra/2002, dt. 13-10-2005] : 2006 TaxPub(DT) 814 (Agra-Trib). Distinguished:Modern School Society v. CIt(E) [ITA No. 1118/JP/2016, dt. 20-12-2017] : 2018 TaxPub(DT) 330 (JP-Trib),