ADVERTISING AGENCIES ASSOCIATION OF INDIA,MUMBAI V. COMMISSIONER OF INCOME TAX (EXEMPTION ), MUMBAI

MA 16/MUM/2025

AI Insights

The case involves the Advertising Agencies Association of India, a charitable trust, which sought to recall an earlier Tribunal order that dismissed their appeal against the Commissioner of Income-tax's revision under section 263 of the Income Tax Act. The Commissioner had deemed the original assessment order as erroneous and prejudicial to the revenue because it did not adequately address the nature of expenses related to the 'Goa Fest', an event organized by the assessee. The Tribunal's earlier decision upheld the Commissioner's revision, leading to the current application for recall by the assessee, which was ultimately dismissed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714700 (ITAT-MUMBAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-08-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Other Referred Cases: CIT v/s Slum Rehabilitation Authority, Oil India Ltd. v/s CIT, Salora International Ltd. v/s Addl. CIT, Allied Engineers v/s CIT (Karnal), Sony Pictures Networks India P. Ltd. v/s ITAT, ACIT v/s Saurashtra Kutch Stock Exchange Ltd., BSES Rajdhani Power Ltd. v. Principal Commissioner of Income-tax, Delhi-2
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADITYA RAI
• Assessee Lawyers: NISHIT GANDHI
• Keywords: Set aside; Opportunity of being heard; Depreciation; Principle of natural justice; Assessment record; Charitable institution; Revision of order; Prejudicial to interest
• Section: 147; 143(3); 263; 11; 12A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND ANIKESH BANERJEE, JUDICIAL MEMBER M.A. No.16/Mum/2025 (Arising out of ITA No.2370/Mum/2024) (Assessment year: 2018-19) Advertising Agencies Association of India, B-502, Marathon Futurex, N.M. Joshi Marg, Lower Parel, Mumbai-400 013 PAN: AAATA5800E vs Commissioner of Income-tax, Exemption, Mumbai 6th Floor, Cumballa Hill MTNL, TE Building, Pedder Road, Dr. G.D. Marg, Cumballa Hill, Mumbai. APPLICANT RESPONDENT Assessee by : Shri Nishit Gandhi, CA Respondent by : Shri Aditya Rai (SR DR) Date of hearing : 27/06/2025 Date of pronouncement : 07/08/2025 O R D E R Per Anikesh Banerjee (JM): By this miscellaneous application, the assessee seeks to recall the order of the Tribunal, passed in ITA No.2370/Mum/2024 dated 22/07/2024, on the following grounds: - “(a) At the outset, the Appellant (the Applicant herein) submits that, certain important facts remained to be considered before passing the impugned order. They are as follows: Printed from counselvise.com 2 MA16/Mum /2025 Advertising Agencies Association of India i. The entire claim of exemption was denied by the NFAC and therefore admittedly there is no prejudice caused to the revenue; ii. Even the CIT(E), the Respondent herein, has nowhere stated in his order that there is any loss of Revenue; iii. That the assessment order merged into the order of the CIT (A) and therefore the same could not be subjected to Revision u/s 263 since the entire claim of exemption u/s 11 was before the CIT(A) who even has powers of enhancement; iv. That an appeal on the very same issue of claim of exemption u/s 11 (albeit on another ground) was before the Hon'ble Tribunal in quantum proceedings being ITA 4425/M/23 and therefore could not have been revised u/s 263. (b) In the humble submission of the Applicant, once these facts are considered, the power to invoke the revisionary jurisdiction could not be exercised. In the humble submission of the Applicant, an enquiry and finding as to these facts remained to be incorporated in the impugned order of the Hon'ble Tribunal. (c) The Applicant further submits that certain very fundamental propositions going to the very root of the matter remained to be adjudicated upon/ dealt with by the Hon'ble Tribunal. For the sake of ready reference the same are reproduced as below: i. The issue on which the Ld. CIT invoked section 263 (allowance of claim of exemption u/s 11) was pending before the Hon'ble Tribunal and already considered and decided by the Ld. CIT(A). On such an issue no revision u/s 263 can be made [Ref. Clause (c) of Explanation 1 to section 263(1)]; ii. Admittedly no prejudice is caused to the Revenue in as much as the entire exemption is denied and therefore no revision of such an order could be done; It is not even the case of the Revenue that the assessment order is erroneous in as much as the NFAC has adjudicated and denied the entire exemption claimed based on their understanding of the extant provisions of the Act; iv. In this case, the revision u/s 263 was initiated to ultimately re-consider and re- adjudicate the exemption u/s 11 albeit on another ground. However, the entire exemption u/s 11 has already been denied in the order u/s 143(3) which was affirmed Printed from counselvise.com 3 MA16/Mum /2025 Advertising Agencies Association of India by the Ld. CIT(A). Therefore, once a matter is decided by the Ld. CIT(A), the CIT cannot invoke the power u/s 263 to set aside another aspect of the same matter [Ref. CIT v/s Slum Rehabilitation Authority- (2019) 421 ITR 521 (Bombay), Oil India Ltd. v/s CIT (1982) 138 ITR 836 (Calcutta), et. al.] v. CIT cannot hold an order to be erroneous merely because he could have written a better assessment order. A perfect assessment is a myth. The Power of review is not invocable to cover up the alleged deficiencies in the assessment order [Ref. [Ref. Salora International Ltd. v/s Addl. CIT (2005) 2 SOT 705 (Delhi) (Trib.) wherein it was held that, \"Merely because from a perfectionist point of view, it is felt that some more enquiries and verifications could have been made by Assessing Officer while making assessment/assessment order cannot be declared to be erroneous and prejudicial to interest of revenue...\" vi. Reliance was further placed on Allied Engineers v/s CIT (Karnal) (2009) 180 Taxman 70 (Del) (Mag) to submit that, \"Where an Assessing Officer acting in accordance with law passes some order, same cannot be branded as erroneous by the Commissioner if he is of other view or in the opinion of the Commissioner the order passed by the Assessing Officer is weak or should have made detailed order. Section 263 does not visualize a case of substitution of judgement of Commissioner for that the Assessing Officer who passed the order, unless the order of Assessing Officer is held to be erroneous causing prejudice to the interest of revenue...\" vii. The CIT has nowhere stated in his order that there is any loss of Revenue and in the absence of such finding, the revision u/s 263 is not valid [Ref. CIT v/s Thangamaligai - (2003) 259 ITR 129 (Madras) last but one paragraph] (d) In the humble submission of the Applicant these fundamental arguments remained to be adjudicated upon. It has been held by the Hon'ble Jurisdictional High Court in the case of Sony Pictures Networks India P. Ltd. v/s ITAT-(2019) 411 ITR 447 (Bombay) that, non- consideration of the basic submission made at the hearing as recorded, is a mistake apparent from the record. (e) Further various jurisdictional High Court Judgements were also relied on at the time of hearing. It has been held that non-consideration of the Judgement of the Hon'ble Jurisdictional High Court is also a mistake apparent from record as held by the Hon'ble Supreme Court in the case of ACIT v/s Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC).” Printed from counselvise.com 4 MA16/Mum /2025 Advertising Agencies Association of India 2. Before going into the merit of the miscellaneous application, it is equally important to go into the facts of the case and the decision arrived at by the Tribunal. 3. The assessee is a charitable trust and registered under section 12A of the Act. The assessee filed the return of income for the impugned assessment year 2018- 19. The assessee was bound to submit the form 10 along with the return of income. But the assessee filed Form 10 belatedly by one year. The assessee declared the income at Nil after claiming deduction under section 11(1)(a) amounting to Rs.1,50,05,051/-. The Assessing Officer framed the assessment under section (3) r.w.s. 144B of the Act. Due to delay in filing requisite form, the deduction U/s 11 was denied and the amount of Rs.1,50,05,051/- was added to the income of the assessee. The ld. AO only rejected the deduction under section 11 and completed the assessment without taking any other view in the assessment order. The ld CIT by invoking provision 263 of the Act treated the assessment order as erroneous and prejudicial to the revenue. The ld. CIT on perusal of assessment record, it is found that the assesse had conducted “Goa Fest” in Goa annually wherein the leader of advertising industries is invited to deliver their presentation on the industry. The participation in this event is through subscription only. The ld. CIT has treated this activity as business activity and not of charitable nature. The issue was never adjudicated by the ld.AO in the assessment order. So, the expenses of “Goa Fest” is directed to further verification and setting aside the assessment order as erroneous & prejudicial to the revenue. The Tribunal dismissed the appeal filed by the assessee by holding as under: - Printed from counselvise.com 5 MA16/Mum /2025 Advertising Agencies Association of India “6. We heard the rival submission unconsidered the documents available in the record. The ld. AR respectfully relied on the order of the coordinate bench bearing ITA No. 2072/MUM/2016 has also dealt with the expenses of“Goa Fest 2010” and determined this activity as charitable in nature within the ambit of Section 2(15) of the Act. The ld. AR also relied on the order of the Hon’ble High Court at Calcutta in the case of Oil India Ltd (supra) all the cases are distinguishable.The ld. AR relied on assessee’s own case where the “Goa fest 2010” is taken as charitable in nature U/s 2(15) of the Act. The grievance is raised by the ld. CIT that the verification of “Goa Fest”in impugned assessment is not adjudicated or verified by ld.AO during passing of impugned assessment order.Every assessment year is separate in the eye of Income tax Act. But the moot question in this appeal is that weather section 263 is applicable in case of assessee related to impugned assessment order. The impugned assessment order was passed only to rejection of claim U/s 11 for delay in submission of Form 10 in impugned assessment year during filing of ROI. The ld. AR was unable to bring any evidence that during the assessment proceeding the issue of “Goa Fest” was duly verified or adjudicated by the ld. AO. The ld.AR further respectfully relied on the order of the coordinate bench of ITAT-Jaipur in the case of M/s Agrani Buildestate (supra). We are unable to convince ourselves in view of any specific provision U/s 263 of the Act. Further, that case is also distinguishable in view of the fact that it has case of incorrect assumption of fact. Further, in that case there was adequate details furnished on whom the mind was applied by the ld. AO. Considering the power of the ld. CIT in Section 263 the order Printed from counselvise.com 6 MA16/Mum /2025 Advertising Agencies Association of India of Hon’ble High Court of Delhi is discussed for clear understanding, in the case of BSES Rajdhani Power Ltd. v. Principal Commissioner of Income-tax, Delhi-2, [2017] 88 taxmann.com 25 (Delhi). The relevant paragraphs are reproduced as below: - “15. As far as the first aspect with respect to exercise of power under Section 263 is concerned, the issue stands concluded, in the light of the amendment with effect from 1989, by insertion of Explanation (c) to Section 263 (1). The non-consideration of the larger claim for Rs. 298.93 crores as depreciation and the consideration of only a part of it (Rs. 644,81,091) by the assessing officer, who did not go into the issue with respect to the whole amount, was an error, that could be corrected under Section 263. Aruba (supra) is decisive, in that the provision of Section 263 (1) Explanation (c) was introduced to cater to precisely this kind of mischief. 16. On the aspect of show cause notice, i.e., the second and third questions framed, the court is of the opinion that the ruling in Amitabh Bachhan (supra) is decisive; it upholds the power of the Commissioner to consider all aspects which were the subject matter of the AO's order, if in his opinion, they are erroneous, despite the assessee's appeal on that or some other aspect. The Court held that: \"Reverting to the specific provisions of Section 263 of the Act what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the Revenue is the basic pre-condition for exercise of jurisdiction under Section 263 of the Act. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the Section to give the assessee an opportunity of being heard. It is in the context of the above position that this Court has repeatedly held that unlike the power of reopening an assessment under Section 147 of the Act, the power of revision under Section 263 is not contingent on the giving of a notice to show cause. In fact, Section Printed from counselvise.com 7 MA16/Mum /2025 Advertising Agencies Association of India 263 has been understood not to require any specific show cause notice to be served on the assessee. Rather, what is required under the said provision is an opportunity of hearing to the assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on which revision of the assessment order is tentatively being proposed. Such a notice is not required. What is contemplated by Section 263, is an opportunity of hearing to be afforded to the assessee. Failure to give such an opportunity would render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principles of natural justice. Reference in this regard may be illustratively made to the decisions of this Court in Gita Devi Aggarwal vs. Commissioner of Income Tax, West Bengal and others [1] and in The C.I.T., West Bengal, II, Calcutta v. M/s Electro House [2].Paragraph 4 of the decision in The C.I.T., West Bengal, II, Calcutta v. M/s Electro House (supra) being illumination of the issue indicated above may be usefully reproduced hereunder: \"This section unlike Section 34 does not prescribe any notice to be given. It only requires the Commissioner to give an opportunity to the assessee of being heard. The section does not speak of any notice.\" 17. This Court is of the opinion that the revisional order, to the extent that it did not provide any pre-decisional opportunity to address the issues it dealt with, could not be sustained; the ITAT has granted relief of a limited nature on that score. However, we do not agree that those issues were incapable of consideration as they were gone into by the AO. Accordingly, the CIT, in exercise of his power under Section 263 will proceed to consider the assessee's submissions only on those two aspects, before making his order.” The said order of the Hon’ble High Court of Delhi is challenged by the assessee before the Hon’ble Apex Court & the SLP is dismissed, [2023] 152 taxmann.com 139 (SC). We have duly considered all other judgments cited by the ld. AR, finding them distinguishable. It is our finding that the ld. CIT appropriately invoked Section 263 of the Act concerning the impugned assessment order. We conclude that Printed from counselvise.com 8 MA16/Mum /2025 Advertising Agencies Association of India the impugned assessment order was erroneous and prejudicial to the interests of revenue, for the application of \"Goa Fest.\" Therefore, the assessee's appeal is dismissed.” 4. The Ld. DR argued and stands in favour of the order of the bench. 5. We have heard the rival submissions and perused the material available on record. This Miscellaneous Application has been filed by the assessee seeking recall of the order of the Tribunal passed in ITA No. 2370/Mum/2024 dated 22/07/2024. The primary contention of the assessee is that certain material facts and legal propositions were not considered by the Tribunal while passing the impugned order, thereby constituting a mistake apparent from the record. The assessee has raised various arguments, inter alia, that: • The entire exemption under section 11 was already denied by the NFAC and affirmed by the CIT(A), resulting in no prejudice to the Revenue. • The assessment order had merged with the order of the CIT(A), hence it could not be revised under section 263. • The issue of exemption under section 11 was pending before the Tribunal in quantum appeal. • Several judicial precedents were relied upon to assert that where no prejudice to the Revenue is demonstrated and the issue has already been considered, revision under section 263 is not tenable. • The non-consideration of these facts and legal submissions constitutes a mistake apparent from the record, warranting recall of the order. Printed from counselvise.com 9 MA16/Mum /2025 Advertising Agencies Association of India However, we find no merit in the above contentions for the following reasons: The impugned order of the Tribunal has dealt with the applicability of section 263 in the specific context of the “Goa Fest” expenditure, which was neither examined nor adjudicated by the Assessing Officer during the assessment proceedings. It is a settled principle that each assessment year is separate, and the Ld. CIT is empowered under section 263 to revise an order that is erroneous and prejudicial to the interest of the revenue if relevant issues are left unexamined by the Assessing Officer. The Tribunal, after considering the arguments and decisions cited by the assessee, has already held that the Ld. AO failed to verify the nature of activities related to “Goa Fest” and, hence, the order was erroneous and prejudicial to the interests of the Revenue. The reliance placed by the assessee on various judgments, including jurisdictional High Court rulings, has been duly considered in the impugned order, and found to be distinguishable on facts. The assessee has failed to bring any material on record to demonstrate that there was any mistake apparent from the record in the order passed by the Tribunal. The arguments raised by the assessee in this Miscellaneous Application pertain to reappreciation of facts and legal contentions, which falls beyond the limited scope of rectification under section 254(2) of the Act. It is a settled position in law that rectification under section 254(2) is permissible only for mistakes apparent from the record and not for review or re-adjudication of the matter. Printed from counselvise.com 10 MA16/Mum /2025 Advertising Agencies Association of India Accordingly, we do not find any mistake apparent from the record in the order passed by the Tribunal. Hence, the Miscellaneous Application filed by the assessee is dismissed. 6. n the result, the miscellaneous application, MA 16/Mum/2025 filed by the assessee is dismissed. Order pronounced in the open court on 07th day of August 2025. Sd/- sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, िदनांक/Dated: 07/08/2025 Pavanan Copy of the Order forwarded to: 1. अपीलाथ /The Appellant , 2. ितवादी/ The Respondent. 3. आयकर आयु\u0014 CIT 4. िवभागीय ितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 5. गाड फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai Printed from counselvise.com 11 MA16/Mum /2025 Advertising Agencies Association of India Details Date Initials Designation 1 Draft dictated on PC on 01.07.2025 Sr.PS/PS 2 Draft Placed before author 02.07.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order Printed from counselvise.com "