M/s Surajmal Cemorial Education Society, New Delhi V. CIT(E), New Delhi

ITA 2136/DEL/2016

• Counselvise Citation: 213620114 RSA 2016
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-05-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 19-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Keywords: Principle of natural justice; Rule of consistency; Assessment record
• Section: 143(3); 80G; 12A; 131; 263; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 2136/DEL/2016 ASSESSMENT YEAR: 2012-13 M/S SURAJMAL MEMORIAL EDUCATION VS. COMMISSIONER O F INCOME SOCIETY, TAX (EXEMPTIONS), C-4, JANAKPURI, NEW DELHI NEW DELHI 110 058 (PAN: AACTS5981Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SALIL AGGARWAL, ADV. & SH. SANJEEV JAIN, CA RESPONDENT BY : MS. SULEKHA VERMA, CIT( DR) DATE OF HEARING : 26-05-2016 DATE OF ORDER : 30-05-2016 ORDER PER H.S. SIDHU, J.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 23.03.16 PASSED U/S 263 OF THE INCOME T AX ACT, 2961 (HEREINAFTER REFERRED AS THE ACT) BY THE COM MISSIONER ITA NO. 2136/DEL/2016 2 OF INCOME TAX(EXEMPTION), NEW DELHI ON THE FOLLOWIN G GROUNDS:- 1. THAT THE LEARNED CIT(EXEMPTIONS) HAS ERRED IN INVOKING THE JURISDICTION UNDER SECTION 263 O F THE ACT IN THE INSTANT CASE. 2. THAT THE LEARNED CIT(EXEMPTIONS) HAS ERRED IN HOLDING THAT THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 24.03.14 BY THE ASSESSING OFFICER IS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. B) THAT THE LEARNED CIT HAS ERRED IN HOLDING THAT THE ASSESSING OFFICER HAS NOT ADDRESSED THE ISSUES RAISED IN THE NOTICE U/S 263 OF THE ACT AND THAT THE ASSESSEES CLAIM OF EXEMPTION OF INCOME UNDER VARIOUS SECTIONS AND PROVISIONS OF LAW HAS BEEN ACCEPTED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND AND WITHOUT BRINGING ON RECORD NECESSARY DETAILS AND MAKING NECESSARY INQUIRIES. THAT THE LEARNED CIT HAS ERRED IN DRAWING THE ITA NO. 2136/DEL/2016 3 AFORESAID CONCLUSION WITHOUT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HAS MADE ALL DUE AND NECESSARY INQUIRIES ON ALL THE ISSUES RAISED IN THE NOTICE U/S 263 AND HAS PASSED THE ORDER ONLY AFTER BEING SATISFIED WITH THE EXPLANATION AND EVIDENCES FILED BY THE ASSESSEE AND AFTER EXAMINING THE BOOKS OF ACCOUNTS, BILLS VOUCHERS ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. C) THAT THE LEARNED CIT(EXEMP.) HAS ERRED IN DRAWING ADVERSE INFERENCE AGAINST THE ASSESSEE ONLY ON THE BASIS OF SUSPICION WITHOUT POINTING OUT ANY SPECIFIC DISCREPANCY IN VARIOUS DETAILS AND DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IN RESPONSE TO QUESTIONNAIRE ISSUED BY HIM AND DULY EXAMINED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. D) THAT THE LEARNED CIT (EXEM.) HAS ERRED IN PASSING THE IMPUGNED ORDER U/S 263 OF THE ACT WITHOUT HAVING ANY VALID BASIS / MATERIAL ON RECORD ITA NO. 2136/DEL/2016 4 TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. E) THAT THE LEARNED CIT (EXEM.) HAS ERRED IN INVOKING THE JURISDICTION U/S 263 OF THE ACT ONLY O N THE BASIS OF WHIMS AND FANCIES AND HAS ALSO ERRED IN SETTING ASIDE THE ORDER OF THE A.O. FOR MAKING FISHING AND ROVING INQUIRIES. F) THAT THE LEARNED CIT (EXEMP.) HAS ERRED IN PASSING THE IMPUGNED ORDER WITHOUT VERIFYING THE DETAILS AND DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE BEFORE THE A.O. WHICH ARE AVAILABLE ON THE ASSESSMENT RECORD. 3. THAT THE APPELLANT CRAVES THE RIGHT TO AMEND, APPEND, DELETE ANY OR ALL GROUNDS OF APPEAL. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME AS NIL ON 19.9.2012 AFTER CLAIMING APPLICA TION OF INCOME AS PER PROVISIONS OF SECTION 11 AND 12 OF TH E ACT. THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT. TH E CASE OF ITA NO. 2136/DEL/2016 5 THE ASSESEE WAS SELECTED FOR SCRUTINY THROUGH CASS AND NOTICE U/S. 143(2) WAS ISSUED ON 16.8.2013. IN R ESPONSE TO THE SAME AUTHORISED REPRESENTATIVES OF THE ASSES SEE APPEARED AND FILED THE DETAILS OF RECORD AS REQUIRE D BY THE AO FROM TIME TO TIME. IN THE ASSESSMENT ORDER DAT ED 24.3.2014 PASSED U/S. 143(3) OF THE I.T. ACT, THE A O HAS STATED THAT THE ASSESSEE SOCIETY IS REGISTERED U/S. 12A OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 31.3.197 3 AND HAS ALSO NOTIFIED U/S. 80G OF THE ACT VIDE ORDER DA TED 14.1.2008. THE NECESSARY DETAILS WERE CALLED FOR AN D SUBMITTED FROM TIME TO TIME AS PER THE ORDER SHEET ENTRIES. THE BOOKS OF ACCOUNTS ALONGWITH SUPPORTING VOUCHERS / BILLS WERE PRODUCED AND TEST CHECKED. AFTER VERIFICATION, THE AO OBSERVED THAT THE ASSESSEE SOCIETY IS FOUND ELIGIBL E FOR BENEFITS OF SECTION 11 & 12 OF THE ACT AND HELD THA T THE TOTAL APPLICATION OF INCOME WAS REQUIRED TO BE MADE UPT O 85% I.E. RS. 23,54,28,688/-, WHICH STANDS SATISFIED AND ASSESSMENT WAS ALLOWED THE BENEFIT OF SECTION 11 & 12 OF ITA NO. 2136/DEL/2016 6 THE ACT AND ASSESSMENT WAS BEING MADE AT NIL INCOME . U/S. 143(3) OF THE I.T. ACT ON 24.3.2014. 3. SUBSEQUENTLY, ON EXAMINATION OF ASSESSMENT RECO RD LD. CIT(E) HAS OBSERVED THAT THE AO HAS NOT PROPERLY EXAMINED CERTAIN ISSUES RELATING TO THE ASSESSMENT OF THE CASE. THEREFORE, A NOTICE U/S. 263 WAS ISSUED TO T HE ASSESSEE ON 19.2.2015 REQUIRING IT TO SHOW CAUSE AS TO WHY THE ASSESSMENT ORDER SHOULD BE SET ASIDE U/S. 263 O F THE ACT TO BE MADE AFRESH. IN RESPONSE TO THE SAME, ASSESSE E FILED ITS REPLY DATED 11.3.2015 OBJECTING TO THE PROCEEDI NGS INITIATED U/S. 263 OF THE ACT. AFTER CONSIDERING TH E REPLY FILED BY THE ASSESSEE-SOCIETY, THE LD. COMMISSIONER OF INC OME TAX(E) HAS PASSED THE IMPUGNED ORDER U/S. 263 OF THE I.T. ACT DATED 23.3.2016 BY HOLDING THE ASSESSMENT ORDER DATED 24.3.2014 PASSED U/S. 143(3) OF THE ACT WAS PASSED IN A HURRIED AND CASUAL MANNER WITHOUT APPLICATION OF MI ND, WITHOUT MAKING PROPER INQUIRIES. THEREFORE, HE H ELD THAT THE ASSESSMENT ORDER DATED 24.3.2014 IS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF REVENUE AND SET AS IDE THE ITA NO. 2136/DEL/2016 7 SAME WITH THE DIRECTIONS TO THE AO TO EXAMINE THE ISSUES AND PASS A FRESH ASSESSMENT IN ACCORDANCE WITH LAW AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSE E. 4. AGAINST THE ABOVE ORDER OF THE LD. CIT(E) DATED 23.3.2016 PASSED U/S. 263 OF THE I.T. ACT, THE ASSE SSEE APPEALED BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIALS PLACE D ON RECORD BEFORE US. THE LEARNED COUNSEL OF THE ASSES SEE SUBMITTED THAT THE ORIGINAL ASSESSMENT FOR RELEVANT ASSESSMENT YEAR 2012-13 WAS FRAMED U/S 143(3) OF TH E ACT ON 24.03.14 AND THEREAFTER THE CIT(E) HAD ISSUED A NOTICE U/S 263 OF THE ACT ON 19.02.15 EXPRESSING HIS INTEN TION TO SET ASIDE THE ORDER PASSED U/S 143(3) ON THE BASIS OF FOUR ISSUES THAT WERE RAISED BY HIM IN THE NOTICE. THE A.R. FOR THE ASSESSEE DREW OUR ATTENTION TO THE COPY OF THE NOTICE PLACED AT PAGE NO.26 OF THE ASSESSEES PAPER BOOK A ND SUBMITTED THAT ALL THE FOUR ISSUES RAISED IN THE NO TICE DATED 19.02.15 WERE SIMILAR TO THE ISSUES RAISED BY THE C IT(E) IN ITA NO. 2136/DEL/2016 8 THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY PRECEE DING YEAR NAMELY ASSESSMENT YEAR 2011-12 WHERE ALSO THE CIT(E) HAD PASSED AN ORDER U/S 263 OF THE ACT AND T HAT SUCH NOTICE AND ORDER U/S 263 OF THE ACT STOOD QUASHED B Y THE ORDER DATED 2.03.16 PASSED BY G BENCH OF DELHI IT AT IN ITA NO. 2011/DEL/2015. HE FURTHER SUBMITTED THAT A COP Y OF THIS ORDER IS PLACED AT PAGE NO.227 TO 235 OF THE PAPER BOOK AND DRAWING OUR ATTENTION TO THE SAME HE POINTED OUT TH AT THE HONBLE ITAT WHILE ALLOWING THE APPEAL OF THE ASSES SEE HAD QUASHED THE NOTICE U/S 263 FOR THAT YEAR AND HAD AL SO QUASHED THE ORDER U/S 263 FOR THAT YEAR. IT WAS FU RTHER POINTED OUT BY THE LEARNED COUNSEL THAT ALL THE FOU R ISSUES RAISED BY THE CIT(E) IN HIS NOTICE U/S 263 FOR THE INSTANT YEAR ARE SIMILAR TO THE ISSUES ON WHICH THE ORDER U /S 263 WAS PASSED FOR THE IMMEDIATELY PRECEEDING YEAR. HE FURTHER CONTENDED THAT THERE WAS NO VALID BASIS IN THE INST ANT YEAR TO HOLD THAT THE ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER U/S 143(3) WAS EITHER ERRONEOUS OR PREJUDIC IAL TO THE INTEREST OF THE REVENUE. HE DREW OUR ATTENTION TO THE ITA NO. 2136/DEL/2016 9 DETAILED QUESTIONNAIRE ISSUED BY THE ASSESSING OFFI CER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A COPY WHERE OF HAS BEEN PLACED IN THE ASSESSEES PAPER BOOK AT PAGES N O. 57 TO 61 AND POINTED OUT THAT ALL REQUIRED INQUIRIES WERE DULY CONDUCTED BY THE ASSESSING OFFICER INCLUDING IN RES PECT OF ALL THE FOUR ISSUES RAISED BY THE CIT(E) IN HIS NOTICE U/S 263 OF THE ACT FOR THE INSTANT YEAR. THE LEARNED COUNSEL P OINTED OUT THAT REGARDING THE FIRST ISSUE OF CORPUS DONATIONS THE ASSESSEE HAD SUBMITTED ITS REPLY TO THE A.O. VIDE I TS REPLY DATED 26.02.14 PLACED IN ASSESSEES PAPER BOOK AT P AGES NO.66-67 ALONG WITH ALL THE SUPPORTING DOCUMENTS IN CLUDING CONFIRMATIONS, COMPLETE ADDRESSES, PAN NUMBERS, COP IES OF ACCOUNT PAYEE CHEQUES AS ALSO ACKNOWLEDGMENTS OF RE TURNS, AUDITED ACCOUNTS, AUDIT REPORTS ETC. OF ALL DONORS, COPIES WHEREOF ARE PLACED AT PAGES NO.84 TO 169 OF THE ASS ESSEES PAPER BOOK. IT WAS POINTED OUT BY HIM THAT ALL THE SE DETAILS HAD BEEN FILED BY THE ASSESSEE BEFORE THE A.O. IN R ESPONSE TO THE SPECIFIC QUERY RAISED BY THE A.O. IN HIS NOT ICE DATED 23.01.14, A COPY WHEREOF IS PLACED AT PAGE NO.57 TO 60 OF ITA NO. 2136/DEL/2016 10 THE ASSESSEES PAPER BOOK. IT WAS FURTHER CONTENDE D BY HIM THAT ALL SUCH DONATIONS WERE CORPUS DONATIONS AND E ACH OF THE DONOR HAD CONFIRMED BEFORE THE A.O. THAT THE AM OUNTS DONATED BY THEM WERE TOWARDS CORPUS DONATION FOR TH E ASSESSEE SOCIETY AND THUS WERE COVERED BY THE PROVI SIONS OF SECTION 11(1)(D) OF THE ACT. IT WAS CONTENDED BY H IM THAT THE ALLEGATION OF THE LEARNED CIT(E) THAT EVIDENCE REGARDING GENUINENESS OF THE TRANSACTION AND CAPACITY OF THE DONORS HAD NOT BEEN SUBMITTED, IS THEREFORE UNJUSTIFIED AN D NOT BORNE OUT OF MATERIAL AVAILABLE ON RECORD OF THE AS SESSING OFFICER. IT WAS FURTHER CONTENDED BY HIM THAT THIS WAS THE CASE WHERE THE A.O. HAD DULY MADE THE REQUIRED INQU IRIES FOR VERIFICATION OF THE CORPUS DONATION AND IT WAS ONLY WHEN THE A.O. WAS SATISFIED WITH THE DETAILS AND VOLUMIN OUS DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE IN RELA TION TO THE CORPUS DONATION RECEIVED BY THE ASSESSEE SOCIET Y, THAT THE A.O. HAD ACCEPTED THE SAME AND HAD RECORDED A F INDING IN THE ASSESSMENT ORDER PASSED BY HIM THAT THE CORP US DONATION OF RS.2,36,40,000/- IS ALLOWED AS EXEMPT U /S ITA NO. 2136/DEL/2016 11 11(1)(D) OF THE ACT. THE LEARNED COUNSEL FOR THE A SSESSEE FURTHER CONTENDED THAT THE CIT(E) IN HIS ORDER PASS ED U/S 263 OF THE ACT HAS ALSO NOT FOUND ANY DISCREPANCY I N ANY OF THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE IN SUPPORT OF THE CLAIM OF CORPUS DONATIONS AND IT IS MERELY H IS SURMISE THAT THE A.O. DID NOT VERIFY THE PARTICULARS OF THE PERSONS WHO WERE STATED TO HAVE GIVEN CORPUS DONATIONS WITH A VIEW TO VERIFY AS TO WHETHER SUCH DONATIONS WERE TAKEN F ROM STUDENTS FOR TAKING ADMISSION IN THE INSTITUTE RUN BY THE ASSESSEE SOCIETY UNDER THE MANAGEMENT QUOTA. IT WA S CONTENDED BY HIM THAT THIS WAS MERELY A SUSPICION O F THE CIT(E) AND IT WAS NOT BASED ON ANY MATERIAL ON RECO RD. THE A.R. POINTED OUT THAT THE A.O. HAD DULY MADE ALL TH E REQUIRED INQUIRIES AND HAD ACCEPTED THE CLAIM OF TH E ASSESSEE ONLY WHEN HE WAS SATISFIED WITH THE VOLUMI NOUS DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE, WHEREI N NO DISCREPANCY WAS FOUND BY THE CIT(E). IT WAS FURTHE R CONTENDED BY HIM THAT A REVISION ORDER U/S 263 OF T HE ACT COULD NOT BE MADE BY THE CIT(E) ONLY TO CARRY OUT F ISHING ITA NO. 2136/DEL/2016 12 AND ROVING INQUIRIES WITH THE OBJECTIVE OF SUBSTITU TING HIS OWN VIEWS WITH THAT OF THE ASSESSING OFFICER WITHOU T BRINGING ON RECORD ANY MATERIAL TO SHOW THAT THE VIEW TAKEN BY THE A.O. WAS NOT SUSTAINABLE IN LAW. THE A.R. FURTHER CONTENDED THAT ANY FURTHER INQUIRY/VERIFICATION COULD BE MADE BY THE A.O. IN RELATION TO SUCH CORPUS DONATIONS ONLY WHEN HE IS NOT SATISFIED WITH THE DOCUMENTARY EVIDENCES FILED BY T HE ASSESSEE AND THAT IN THE INSTANT CASE THERE WAS NO SUCH MATERIAL ON THE BASIS OF WHICH THE A.O. COULD HAVE HAD ANY DOUBTS ON THE MATERIAL FILED BEFORE HIM BY THE ASSE SSEE IN SUPPORT OF CLAIM OF CORPUS DONATIONS. HE FURTHER C ONTENDED THAT EVEN THE CIT(E) HAS NOT BROUGHT ON RECORD ANY SUCH MATERIAL ON THE BASIS OF WHICH IT COULD BE ALLEGED THAT ANY FURTHER INQUIRY WAS REQUIRED TO BE MADE AND THEREFO RE THE ACCEPTANCE OF THE CLAIM OF THE ASSESSEE BY THE A.O. IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F REVENUE. 5.1 REGARDING THE SECOND ISSUE RELATING TO ROOM REN T RECEIPTS AMOUNTING TO RS.41,93,810/- RAISED BY THE CIT(E) IN HIS SHOW CAUSE NOTICE, THE A.O. SUBMITTED THAT T HESE ITA NO. 2136/DEL/2016 13 ROOM RENT RECEIPTS WERE IN RESPECT OF HOSTEL FEE RE CEIVED BY THE ASSESSEE SOCIETY FROM ITS OWN STUDENTS IN THE V ARIOUS INSTITUTES RUN BY IT AND WAS INCIDENTAL TO THE ACTI VITY OF EDUCATION CARRIED OUT BY THE ASSESSEE SOCIETY. HE FURTHER SUBMITTED THAT THE ASSESSEE SOCIETY HAD BEEN EARNIN G SUCH HOSTEL FEES FROM ITS STUDENTS IN ALL THE EARLIER YE ARS AND OUR ATTENTION WAS DRAWN TO THE COMPARATIVE CHART OF HOS TEL FEE RECEIPTS PLACED AT PAGE NO.170 OF THE ASSESSEES PA PER BOOK. IT WAS FURTHER CONTENDED BY THE LEARNED A.R . THAT THE ALLEGATION OF THE CIT(E) IN THE NOTICE U/S 263 THAT THE ASSESSEE HAS NOT FILED DETAILS TO EXPLAIN THE NATUR E OF THESE RECEIPTS AND WHETHER THESE ARE ELIGIBLE U/S 11 OF T HE ACT, IS ALSO FACTUALLY WRONG AND NOT BORNE OUT OF ANY MATER IAL ON RECORD. THE A.R. POINTED OUT THAT THE ASSESSING OF FICER IN HIS QUESTIONNAIRE DATED 23.1.14 HAS RAISED A SPECIF IC QUERY IN QUESTION NO.26 WHEREBY HE HAS REQUIRED THE ASSES SEE TO JUSTIFY THE HOSTEL RECEIPTS IN THE LIGHT OF AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT. HE FURTHER SUBMITTED THAT REPLY TO THIS QUERY HAD BEEN SUBMITTED BY THE ASSESSEE DU RING THE ITA NO. 2136/DEL/2016 14 COURSE OF ASSESSMENT PROCEEDINGS VIDE ITS LETTER DA TED 18.02.14 PLACED AT PAGES NO.64TO65 OF THE ASSESEES PAPER BOOK WHEREIN IT WAS EXPLAINED THAT AS THE ASSESSEE SOCIETY IS ENGAGED IN PROVIDING EDUCATION AND THEREFORE TH E HOSTEL RECEIPTS ARE DULY COVERED U/S 2(15) OF THE ACT AND ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. THE A.R. CONTENDE D THAT THIS EXPLANATION STOOD ACCEPTED BY THE ASSESSING OF FICER WHEN HE NOTED IN THE ASSESSMENT ORDER THAT THE ASSE SSEE HAS EARNED INCOME FROM ROOM RENT RECEIPTS IN ADDITI ON TO TUITION FEES, ADMISSION FEES ETC. IT WAS FURTHER C ONTENDED BY HIM THAT SUCH INCOME WAS EARNED BY THE ASSESSEE IN ALL THE EARLIER YEARS ALSO AND HAS BEEN CONSISTENTLY ACCEPT ED TO BE ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT BEING AN A CTIVITY INCIDENTAL TO EDUCATION CARRIED OUT BY THE ASSESSEE SOCIETY IN ALL THE EARLIER YEARS. IT WAS FURTHER CONTENDED BY HIM THAT THE CIT(E) IN HIS ORDER PASSED U/S 263 HAS ALSO NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT HOSTEL FACILITY WAS PROVIDED TO ANY OTHER STUDENTS EXCEPT FOR THE STUDE NTS OF THE ASSESSEE SOCIETY. IT WAS CONTENDED BY HIM THAT THE ITA NO. 2136/DEL/2016 15 HOSTEL FACILITY AVAILABLE IN THE ASSESSEES INSTITU TES WAS LIMITED AND THEREFORE THE ASSESSEE SOCIETY HAD PROV IDED THIS FACILITY ONLY TO ITS OWN STUDENTS. THERE WAS THUS NO MATERIAL ON THE BASIS OF WHICH THE CIT(E) COULD HAVE DRAWN A NY ADVERSE INFERENCE AGAINST THE ASSESSEE ON THIS ISSU E WHEN THE SAME STOOD ACCEPTED IN THE CASE OF THE ASSESSEE IN ALL THE EARLIER YEARS. 5.2 REGARDING THE THIRD ISSUE RAISED BY THE CIT( E) RELATING TO CAPITAL WORK IN PROGRESS OF LAND AT BAHADURGARH, THE A.R. POINTED OUT THAT THE A.O. HAD DULY MADE INQUIRIES I N RELATION TO ALL ADDITIONS TO FIXED ASSETS DURING THE INSTANT YEAR WHEN HE RAISED TWO QUESTIONS NAMELY QUESTION NO.8 AND Q. NO.21 IN HIS SHOW CAUSE NOTICE DATED 23.01.14 REQUIRING T HE ASSESSEE TO SUBMIT THE DETAILS OF ALL ASSETS PURCHA SED AND ADDITIONS TO FIXED ASSETS ALONG WITH BILLS / VOUCHE RS. HE DREW OUR ATTENTION TO THE AUDITED ACCOUNTS OF THE A SSESSEE SOCIETY FILED BEFORE THE ASSESSING OFFICER AND REFE RRED TO PAGE NO.45 OF THE PAPER BOOK WHICH IS A SCHEDULE OF FIXED ASSETS OF THE SOCIETY ENCLOSED WITH THE AUDITED BAL ANCE ITA NO. 2136/DEL/2016 16 SHEET WHEREIN HE POINTED OUT THAT LAND AT BAHADURGA RH HAD BEEN SHOWN AND WHERE ADDITION OF RS.1,19,03,750/- W AS DECLARED. IT WAS POINTED OUT BY HIM THAT ADDITION TO THE LAND AT BAHADURGARH WAS MADE DURING THE INSTANT YEA R WHEN THE ADJOINING LAND WAS PURCHASED BY THE ASSESSEE SO CIETY IN ADDITION TO THE LAND PURCHASED BY IT IN THE SAME LO CATION IN THE IMMEDIATELY PRECEEDING YEAR FOR EXPANSION OF TH E ASSESSEES EDUCATIONAL ACTIVITY. THE A.R. POINTED OUT THAT THE ASSESSEE HAD DULY SUBMITTED A COPY OF THE REGIS TERED SALE DEED BEFORE THE ASSESSING OFFICER AND A COPY T HEREOF IS PLACED AT PAGES NO.78 TO 83 OF THE ASSESSEES PAPER BOOK. IT WAS CONTENDED BY HIM THAT THE OBSERVATION OF THE CIT(E) THAT NO EVIDENCE IN SUPPORT OF THE EXPENDITURE HAS BEEN SUBMITTED IS FACTUALLY WRONG, WHEN THE ASSESSEE HAS DULY SUBMITTED THE COPY OF THE REGISTERED SALE DEED AND THUS THE ENTIRE DETAIL REGARDING INVESTMENT OF RS.1,19,03,75 0/- IN LAND AT BAHADURGARH IN THE FORM OF SALE DEED IN FAV OUR OF THE APPELLATE SOCIETY WAS FURNISHED. THE A.R. FURTHER SUBMITTED THAT THE DETAILS OF PAYMENT MADE FOR PURCHASE OF TH IS LAND ITA NO. 2136/DEL/2016 17 WERE DULY GIVEN IN THE REGISTERED SALE DEED AND IT CLEARLY PROVED THAT THE ASSESSEE SOCIETY HAD PAID THE SALE CONSIDERATION THROUGH CHEQUES DRAWN ON ITS BANK ACC OUNT WITH INDIAN OVERSEAS BANK, JANAKPURI, NEW DELHI. I T WAS FURTHER CONTENDED BY THE A.R. THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS THE DETAILS OF BANK ACCOUNTS AS WELL AS BANK STATEMENTS WERE DULY VERIFIED BY THE ASSESS ING OFFICER ALONG WITH BOOKS OF ACCOUNTS AND THEREFORE THERE IS NO VALID BASIS FOR THE CIT(E) TO HOLD IN THE IMPUGN ED ORDER THAT THE SOURCE OF ACQUISITION OF LAND AT BAHADURGA RH HAS NOT BEEN VERIFIED. THE A.R. FURTHER CONTENDED THAT THE SOURCE OF ACQUISITION AS WELL AS UTILISATION FOR THE AIMS AND OBJECTS OF THE ASSESSEE SOCIETY WAS DULY VERIFIABLE FROM THE C OPY OF REGISTERED SALE DEED FILED BY THE ASSESSEE. HE FUR THER POINTED OUT THAT SIMILAR ISSUE HAD ALSO BEEN RAISED IN THE IMMEDIATELY PRECEEDING YEAR NAMELY ASSESSMENT YEAR 2011- 12 IN THE CASE OF THE ASSESSEE SOCIETY WHEN THE ASS ESSEE HAD PURCHASED ADJOINING LAND IN THAT YEAR AND THE H ONBLE ITAT IN THAT YEAR HAD FOUND IN PARA 16 OF ITS ORDE R THAT ITA NO. 2136/DEL/2016 18 WHEN THE ASSESSEE HAD SUBMITTED THE COPY OF THE REG ISTERED SALE DEED WHICH WAS EXECUTED IN FAVOUR OF THE ASSES SEE SOCIETY AND ALL DETAILS OF PAYMENT CONTAINED THEREI N WERE FOUND IN ORDER THEN IT WAS NOT NECESSARY TO CONDUCT ANY FURTHER INQUIRY REGARDING PREVALENT MARKET RATE AND THE COLLECTOR RATE OF THE AREA OR SURROUNDING AREA SO A S TO ASCERTAIN IF THERE HAS BEEN ANY UNDER STATEMENT OR OVER STATEMENT IN THE LAND PURCHASE. IT WAS CONTENDED B Y HIM THAT ON THE BASIS OF THE ORDER OF ITAT FOR ASSESSME NT YEAR 2011-12 IN THE CASE OF THE ASSESSEE ITSELF, THE CON CLUSION OF THE A.O. ON THIS ISSUE DURING THE INSTANT YEAR ALSO COULD NOT BE HELD TO BE UNSUSTAINABLE OR ERRONEOUS AND PREJUD ICIAL TO THE INTEREST OF REVENUE. IT WAS FURTHER CONTENDED BY HIM THAT IT WAS FOUND BY THE ITAT IN ASSESSMENT YEAR 20 11-12 ON SIMILAR FACTS THAT THE A.O. HAD CONDUCTED THE RE QUIRED AND ADEQUATE INQUIRY AND THAT THE ORDER COULD NOT B E SAID TO BE EITHER ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. ITA NO. 2136/DEL/2016 19 5.3 AS REGARDS THE FOURTH ISSUE IN RELATION TO EXP ENSES OF RS.20,13,652/- INCURRED ON STATUE, THE A.R. SUBMITT ED THAT ALL DOCUMENTARY EVIDENCES RELATING TO THE SAME WERE DULY FILED BEFORE THE A.O. WHEN THE A.O. HAD REQUIRED TH E ASSESSEE TO SPECIFICALLY GIVE DETAILS OF ADDITIONS TO FIXED ASSETS ALONG WITH BILLS / VOUCHERS ETC. IN HIS QUES TIONNAIRE ISSUED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE A.R. POINTED OUT THAT A COPY OF THE LEDGER ACCOUNT IN RESPECT OF THE STATUE AND ALL THE BILLS WHICH ARE PLACED AT PAGES NO. 192 TO 203 OF THE PAPER BOOK WERE DULY SUBMITTED BE FORE THE ASSESSING OFFICER. IT WAS FURTHER SUBMITTED BY HIM THAT THE STATUE OF SHRI SURAJMAL WAS INSTALLED BY THE AS SESSEE SOCIETY DURING THE INSTANT YEAR AND ALL THE EXPENSE S ON STATUE WERE INCURRED IN RELATION TO SUCH STATUE. T HE A.R. FURTHER POINTED OUT THAT A COPY OF THE MEMORANDUM O F ASSOCIATION OF THE ASSESSEE SOCIETY WAS ALSO FILED BEFORE THE A.O. WHICH IS AVAILABLE AT PAGES NO. 171 TO 191 OF THE PAPER BOOK. HE DREW OUR ATTENTION TO PAGE NO.171 WHERE IT WAS POINTED OUT THAT UNDER THE AIMS & OBJECTS OF THE AS SESSEE ITA NO. 2136/DEL/2016 20 SOCIETY IT WAS CLEARLY STATED THAT THE SOCIETY IS A NON POLITICAL AND NON SECTARIAN ORGANISATION FORMED TO PERPETUATE THE MEMORY OF THE GREAT INDIAN HERO AND PATRIOT SURAJMA L OF BHARATPUR. IT WAS CONTENDED BY THE A.R. THAT THE N AME OF THE ASSESSEE SOCIETY WAS ALSO AFTER THE SAME INDIAN HERO AND PATRIOT SHRI SURAJMAL OF BHARATPUR AND THEREFOR E THE EXPENDITURE INCURRED BY THE ASSESSEE SOCIETY ON INS TALLATION OF HIS STATUE WAS IN ACCORDANCE WITH AIMS & OBJECTS OF THE ASSESSEE SOCIETY. THE A.R. FURTHER SUBMITTED THAT EVEN IN THE IMMEDIATELY PRECEEDING YEAR QUERY HAD BEEN RAIS ED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS RELATION TO THE ADVANCES GIVEN IN RESPE CT OF STATUE OF MAHARAJA SURAJMAL AND A SPECIFIC REPLY WA S GIVEN TO THE A.O. VIDE LETTER DATED 28.10.13, A COPY WHER EOF IS PLACED AT PAGE NO.204 TO 206 OF THE ASSESSEES PAPE R BOOK. HE FURTHER CONTENDED THAT EVEN THOUGH THE ISSUE REL ATING TO THE MAKING OF STATUE OF MAHARAJA SURAJMAL WAS ON RE CORD IN THE IMMEDIATELY PRECEEDING YEAR NAMELY ASSESSMENT Y EAR 2011-12, NO OBJECTION HAD BEEN TAKEN BY THE CIT(E) IN THAT ITA NO. 2136/DEL/2016 21 YEAR WHILE ISSUING THE NOTICE U/S 263 OR EVEN WHILE PASSING THE ORDER U/S 263 OF THE ACT FOR THAT YEAR. HE THU S SUBMITTED THAT THERE WAS NO JUSTIFICATION FOR THE C IT(E) TO HOLD THAT THE ORDER OF THE ASSESSMENT WAS EITHER ER RONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE AS ALL TH E NECESSARY INQUIRIES HAD BEEN DULY CONDUCTED BY THE ASSESSING OFFICER ON THIS ISSUE AND THAT THE EXPENDITURE HAVING BEEN INCURRED AS PER THE AIMS & OBJECTS OF THE ASSESSEE SOCIETY W AS DULY VERIFIABLE FROM THE MEMORANDUM OF ASSOCIATION OF TH E ASSESSEE SOCIETY. 5.4 THEREAFTER THE LEARNED COUNSEL CONTENDED THAT THIS IS A CASE WHERE VOLUMINOUS DOCUMENTARY EVIDENCES HAVE BE EN FILED BY THE ASSESSEE IN RESPECT OF ALL THE FOUR IS SUES RAISED BY THE CIT(E) IN THE SHOW CAUSE NOTICE U/S 263 AND THAT ALL THESE EVIDENCES WERE FILED BY THE ASSESSEE BEFORE T HE A.O. IN RESPONSE TO SPECIFIC QUERIES OF THE A.O. RAISED IN HIS QUESTIONNAIRE ISSUED TO THE ASSESSEE DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, AND THE A.O. HAS FRAMED THE ASSESSMENT AFTER DUE EXAMINATION OF THE SAME AND TH EREFORE ITA NO. 2136/DEL/2016 22 IT CANNOT BE SAID THAT THE ASSESSMENT WAS FRAMED BY THE A.O. WITHOUT CARRYING OUT NECESSARY VERIFICATION OR WITHOUT APPLICATION OF MIND. IT WAS FURTHER CONTENDED BY H IM THAT THE CIT(E) HAS ALLEGED THAT NO INDEPENDENT INQUIRIE S AND VERIFICATIONS WERE CARRIED OUT WITHOUT POINTING OUT ANY SPECIFIC DISCREPANCY IN THE DOCUMENTARY EVIDENCES F ILED BY THE ASSESSEE AND ALSO WITHOUT POINTING OUT ANY ERRO R OF LAW OR FACTS ON PART OF THE ASSESSING OFFICER IN ACCEPT ING SUCH DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE IN RESP ONSE TO SPECIFIC QUERIES RAISED BY THE ASSESSING OFFICER DU RING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS FURTHER A RGUED BY THE A.R. THAT THE CIT(E) HIMSELF HAD NOT DRAWN ANY CONCLUSIVE FINDING ON ANY OF THE ISSUES RAISED BY H IM AND HAS MERELY HELD THE ASSESSMENT ORDER TO BE ERRONEOU S AND PREJUDICIAL TO THE INTEREST OF REVENUE BY DIRECTING THE A.O. TO EXAMINE THE ISSUES AFRESH AND THAT IT RESULTS IN TO AN ORDER TO CARRY OUT ROVING AND FISHING INQUIRIES WHICH IS NOT PERMISSIBLE IN LAW. HE RELIED ON THE DECISIONS OF HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. JYOTI FOUND ATION ITA NO. 2136/DEL/2016 23 REPORTED IN 357 ITR 388 AS ALSO THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. MALABAR INDUST RIES REPORTED IN 243 ITR 83. THE A.R. ALSO RELIED ON THE ORDER OF G BENCH OF DELHI ITAT IN THE CASE OF THE ASSESSEE SOCIETY FOR ASSESSMENT YEAR 2011-12 IN ITA NO. 2011/DEL/201 5. HE PRAYED FOR QUASHING THE NOTICE U/S 263 AS WELL AS T HE ORDER PASSED THE U/S 263 OF THE ACT. 5.5 THE LEARNED CIT(DR) APPEARING FOR THE REVENUE SUBMITTED THAT FROM A PERUSAL OF THE IMPUGNED ASSES SMENT ORDER IT APPEARED THAT THE A.O. HAD ISSUED A ROUTIN E QUESTIONNAIRE AND HAD FRAMED THE ASSESSMENT ONLY ON THE BASIS OF DETAILS AND INFORMATION SUBMITTED BY THE A SSESSEE WITHOUT CARRYING OUT ANY INDEPENDENT INQUIRY AND VERIFICATION. SHE FURTHER REFERRED TO THE ORDER OF THE CIT(E) AND SUBMITTED THAT THE CIT(E) HAD FOUND THE ASSESSM ENT ORDER TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE ON ALL THE FOUR ISSUES RAISED BY HIM IN HIS NOTICE U/S 263 OF THE ACT. THE LEARNED DR SUPPORTED THE ACTIO N OF THE CIT(E) BY POINTING OUT THAT THE ASSESSMENT ORDER WA S ITA NO. 2136/DEL/2016 24 PASSED BY THE A.O. IN UNDUE HURRY AND WITHOUT VERIF ICATION OF THE DETAILS SUBMITTED BY THE ASSESSEE AND THAT I T WAS A FIT CASE FOR INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. IT WAS CONTENDED BY THE D.R. THAT THE ASSESSING OFFICE R HAD NOT EVEN ISSUED ANY NOTICE U/S 131 TO ANY OF THE DO NORS, WHOSE CONFIRMATION WAS SUBMITTED AND THE SOURCE OF ACQUISITION OF LAND WAS ALSO WAS NOT EXAMINED BY HI M. THE D.R. ALSO DREW OUR ATTENTION TO PARA 5 OF THE CIT(E ) ORDER WHEREIN THE CIT(E) HAS FOUND THAT THE ASSESSEE HAS NOT PRODUCED ANY SUPPORTING DOCUMENTS BEFORE HIM. SHE CONTENDED THAT IN VIEW OF THIS FACT THE CIT(E) COUL D NOT HAVE GIVEN ANY FINDING ON THE VARIOUS DOCUMENTARY EVIDEN CES CLAIMED TO HAVE BEEN FILED BY THE ASSESSEE BEFORE T HE A.O. AND THAT THE DIRECTION OF THE CIT(E) WAS MERELY TO PASS A FRESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW AFTER ALLOWING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. SHE AL SO STATED THAT NO PREJUDICE IS CAUSED TO THE ASSESSEE BECAUSE OF THIS ORDER OF CIT(E). THE LEARNED D.R. ALSO FILED A COM PILATION OF THE CASE LAWS IN SUPPORT OF HER CONTENTIONS THAT TH E CIT(E) ITA NO. 2136/DEL/2016 25 WAS JUSTIFIED IN PASSING THE IMPUGNED ORDER U/S 263 OF THE ACT. SHE RELIED ON THE JUDGMENT OF HONBLE DELHI H IGH COURT IN THE CASE OF GEEVEE ENTERPRISES (199 ITR 374), DU GGAL & COMPANY (220 ITR 456), DLF POWER LIMITED (245 ITR 44 6). SHE ALSO RELIED ON THE ORDER OF DELHI ITAT IN THE CASE OF SHRI VIRENDER KUMAR GUPTA (ITA NO. 2995/D/2009) AND KAVA DI NARSIMHA (ITA NOS. 953 TO 958 AND 960/D/2011) IN SU PPORT OF HER CONTENTIONS. THE LEARNED D.R. CONTENDED THA T THE ORDER PASSED BY CIT (E) U/S 263 OF THE ACT SHOULD B E UPHELD. 5.6 THE LEARNED A.R. IN REJOINDER POINTED OUT THAT IT IS NOT A CASE OF NO INQUIRY OR LACK OF INQUIRY AS ALL RELEVA NT AND REQUIRED INQUIRIES THAT SHOULD HAVE BEEN MADE IN TH IS CASE WERE INFACT CARRIED OUT BY THE A.O. WHEN HE ISSUED QUESTIONNAIRE ON ALL THE RELEVANT POINTS INCLUDING THE FOUR ISSUES RAISED BY THE CIT(E) IN THE NOTICE U/S 263 O F THE ACT. IT WAS FURTHER SUBMITTED BY HIM THAT ONCE THE A.O. WAS SATISFIED WITH THE DOCUMENTARY EVIDENCES FILED BY T HE ASSESSEE TO SUPPORT THE FACT OF CORPUS DONATIONS RE CEIVED BY IT, THEN IT WAS NOT THE REQUIREMENT OF LAW THAT THE A.O. WILL ITA NO. 2136/DEL/2016 26 HAVE TO ISSUE NOTICES U/S 131 OF THE ACT NECESSARIL Y TO EACH OF THE DONORS. FOR THIS PROPOSITION HE RELIED ON T HE JUDGMENT OF PATNA HIGH COURT IN THE CASE OF BAHRI B ROTHERS REPORTED IN 154 ITR 244. HE FURTHER ARGUED THAT TH E SOURCE OF ACQUISITION OF LAND WAS VERIFIABLE FROM THE REGI STERED SALE DEED FILED BY THE ASSESSEE AND WAS ALSO VERIFIABLE FROM THE AUDITED ACCOUNTS OF THE ASSESSEE AS ALSO THE BANK A CCOUNTS AND BOOKS OF ACCOUNTS WHICH WERE DULY PRODUCED AND EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE A.R. FURTHER SUBMITTE D THAT THE LEARNED CIT(E) HAD ALSO ERRED IN DRAWING ADVERS E INFERENCE AGAINST THE ASSESSEE BY HOLDING IN PARA 5 OF THE IMPUGNED ORDER THAT THE ASSESSEE HAD NOT PRODUCED SUPPORTING DOCUMENTS IN HIS OFFICE. HE CONTENDED T HAT THE ENTIRE SUPPORTING DOCUMENTS WERE AVAILABLE ON THE ASSESSMENT RECORD, AND THE LEARNED CIT(E) OUGHT TO HAVE EXAMINED THE SAME BEFORE ISSUE OF NOTICE U/S 263 AN D EVEN DURING THE COURSE OF THE PROCEEDINGS U/S 263 OF THE ACT. HE ALSO CONTENDED THAT THE JUDGMENTS RELIED UPON BY TH E ITA NO. 2136/DEL/2016 27 LEARNED D.R. WERE NOT APPLICABLE IN THE FACTS OF TH E ASSESSEES CASE AS IN THIS CASE THE ASSESSMENT ORDE R WAS PASSED AFTER MAKING ALL INQUIRIES AND VERIFICATION WHICH SHOULD HAVE BEEN MADE AND THAT THE ASSESSMENT ORDER COULD NOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WHEN NONE OF THE CONCLUSIONS OF THE A.O . WERE FOUND TO BE UNSUSTAINABLE IN LAW AND ALSO WHEN THER E WAS NO FINDING REGARDING ASSUMPTION OF ANY WRONG FACT OR W RONG APPLICATION OF LAW BY THE A.O. WHILE PASSING THE AS SESSMENT ORDER. 5.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORDS. WE FIND THAT THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD. REPORTED IN 243 ITR 83 HAS HELD AS UNDER:- A BARE READING OF SECTION 263 OF THE INCOME TAX ACT, 1961, MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURIDCITION BY THE COMMISSIONER SUO MOTO UNDER IT, IS THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDI CIAL ITA NO. 2136/DEL/2016 28 TO THE INTEREST OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT-IF THE ORDER OF THE INCOME-TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE-RECOURSE CANNOT BE HAD TO SECTION 263(1) OF THE ACT. THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHARASE PREJUDICIAL TO ITA NO. 2136/DEL/2016 29 THE INTERESTS OF THE REVENUE IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UNDERSTOOD I N ITS ORDINARY MEANING IT IS OF WIDE IMPORT AND IS NO T CONFINED TO LOSS OF TAX. THE SCHEME OF THE ACT IS TO LEVY AND COLLECT TAX IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS ORDER OF THE INCOME-TAX OFFICER, THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER, CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW ITA NO. 2136/DEL/2016 30 WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. 5.8 IN THE INSTANT CASE WE FIND THAT THAT THE ASSES SING OFFICER HAS MADE THE REQUIRED INQUIRIES ON ALL THE FOUR ISSUES RAISED BY THE LD. CIT(E) IN THE IMPUGNED NOTICE U/S 263, WHEN THE A.O. ISSUED QUESTIONNAIRE DATED 23.01.14. IT IS FURTHER SEEN FROM A PERUSAL OF THE DOCUMENTS FILED BY THE ASSESSEE IN ITS PAPER BOOK THAT THE ASSESSEE HAS DU LY FILED ITS REPLY ALONG WITH SUPPORTING DOCUMENTARY EVIDENC ES IN RESPECT OF ALL THE ISSUES RAISED BY THE LD. CIT(E) I N HIS NOTICE AND ORDER U/S 263. WE NOTE THAT THE AO HAS TAKEN NO TE OF ROOM RENT RECEIPTS, CORPUS DONATIONS AS WELL AS ADD ITIONS TO FIXED ASSETS IN THE ASSESSMENT ORDER PASSED BY HIM, WHICH CLEARLY INDICATES THAT ALL THESE FOUR ISSUES WERE D ULY CONSIDERED BY HIM WHILE PASSING THE ASSESSMENT ORDE R. THEREFORE IT CANNOT BE SAID THAT IT IS A CASE OF NO INQUIRY ON ITA NO. 2136/DEL/2016 31 THE ISSUES RAISED BY THE CIT(E). A PERUSAL OF THE IMPUGNED ORDER U/S 263 ALSO SHOWS THAT IT IS NOT A CASE OF I NCORRECT ASSUMPTION OF FACTS OR INCORRECT APPLICATION OF LAW . WE ARE ALSO UNABLE TO AGREE WITH THE LEARNED D.R. THAT THE A.O. HAS NOT MADE ANY INDEPENDENT INQUIRY OR VERIFICATION OF DETAILS AND DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. A PER USAL OF THE COPIES OF DOCUMENTARY EVIDENCES FILED BY THE AS SESSEE AS PLACED BY IT IN THE PAPER BOOK SHOW THAT THE A.O . ACCEPTED THE CLAIM OF CORPUS DONATIONS ON THE BASIS OF CONFIRMATIONS AND DOCUMENTARY EVIDENCES WHICH CONTA INED THE COMPLETE NAMES, ADDRESSES, PAN NUMBERS, COPIES OF ACCOUNT PAYEE CHEQUES, AUDITED ACCOUNTS, AUDIT REPO RTS AND OTHER DOCUMENTS PROVING THE IDENTITY AND CREDIT WOR THINESS OF ALL THE DONORS. THE GENUINENESS OF THE DONATION IS ALSO PROVED FROM THE SPECIFIC DIRECTION IN EACH OF THE C ONFIRMATION THAT THE AMOUNT HAS BEEN PAID BY THEM TOWARDS CORPU S DONATION AND THE ASSESSING OFFICER HAS THEREFORE CO RRECTLY ALLOWED EXEMPTION U/S 11(1)(D) OF THE ACT BY MAKING A ITA NO. 2136/DEL/2016 32 SPECIFIC NOTE THEREOF IN THE ASSESSMENT ORDER PASSE D BY HIM. IN VIEW OF THE VOLUMINOUS DOCUMENTARY EVIDENCES FIL ED BY THE ASSESSEE IN SUPPORT OF THE CLAIM ON CORPUS DONA TION, IT CANNOT BE SAID THAT THE FACT OF CORPUS DONATION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER WITHOUT VERIFICAT ION, MORE SO WHEN THE LEARNED CIT(E) HAS NOT POINTED OUT ANY SPECIFIC DISCREPANCY IN THE DOCUMENTARY EVIDENCES IN RESPECT OF ANY DONOR. IT IS A SETTLED LAW THAT ONCE THE QUASI JUD ICIAL POWER VESTED IN A.O. HAS BEEN EXERCISED BY HIM IN ACCORDA NCE WITH LAW AND IN EXERCISE OF SUCH POWER HE HAS ARRIVED AT A CONCLUSION, THEN MERELY BECAUSE THE CIT DOES NOT FE EL SATISFIED WITH THE CONCLUSION IT CANNOT BE SAID THA T THE ASSESSMENT ORDER IS ERRONEOUS. IN THE INSTANT CASE THE A.O. HAS REQUIRED THE ASSESSEE TO FURNISH CONFIRMATIONS OF EACH OF THE DONORS ALONG WITH THEIR PAN NUMBER AND ADDRESSE S AND THE ASSESSEE HAS COMPLIED WITH BY FILING DOCUMENTAR Y EVIDENCES TO PROVE THE IDENTITY AND CREDIT WORTHINE SS OF THE DONORS AS ALSO THE GENUINENESS OF THE CORPUS DONATI ONS GIVEN BY THEM. THEREFORE IT CANNOT BE SAID THAT TH E ORDER OF ITA NO. 2136/DEL/2016 33 THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE ON THIS ISSUE. 5.9 REGARDING THE ISSUE OF ROOM RENTS, IT IS FOUND THAT THE ASSESSEE SOCIETY IS ENGAGED IN THE ACTIVITY OF PROV IDING EDUCATION AND THEREFORE THE PROVISION OF HOSTEL TO THE STUDENTS IS AN INCIDENTAL ACTIVITY AND THEREFORE TH E ROOM RENT RECEIPTS FROM HOSTEL ARE FOUND TO BE COVERED BY SEC TION 2(15) OF THE ACT AND THE ORDER OF ASSESSMENT CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE WHEN THE CLAIM OF THE ASSESSE WAS ACCEPTED ONLY AFT ER MAKING INQUIRY ON THIS POINT. IT IS ALSO SEEN THAT SUCH ROOM RENT RECEIPTS HAVE BEEN EARNED BY THE ASSESSEE SOCI ETY IN ALL THE EARLIER YEARS ALSO AND EXEMPTION U/S 11 OF THE ACT HAS ALWAYS BEEN ALLOWED. ACCORDINGLY EVEN AS PER T HE RULE OF CONSISTENCY NO ADVERSE INFERENCE CAN BE DRAWN AG AINST THE ASSESSEE SOCIETY ON THIS ISSUE. 5.10. THE ASSESSEE SOCIETY IN SUPPORT OF THE INVEST MENT MADE BY IT IN LAND AT BAHADURGARH HAS SUBMITTED A C OPY OF REGISTERED SALE DEED. A PERUSAL OF THIS REGISTERED SALE DEED ITA NO. 2136/DEL/2016 34 SHOWS THAT THE DETAILS OF PAYMENT MADE BY THE ASSES SEE SOCIETY FOR ACQUISITION OF THE LAND ARE DULY STATED IN THE SALE DEED ITSELF WHERE THE DETAILS OF BANK ACCOUNT OF TH E ASSESSEE SOCIETY FROM WHICH PAYMENTS HAVE BEEN MADE ARE DULY REFLECTED. IT IS FURTHER SEEN THAT THE INVESTMENT MADE BY THE ASSESSEE SOCIETY IN THIS LAND IS DULY INCLUDED IN THE FIXED ASSETS SCHEDULE FORMING PART OF THE AUDITED ACCOUNT S WHICH ARE DRAWN FROM THE BOOKS OF ACCOUNTS EXAMINED BY TH E ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE WE ARE UNABLE TO AGREE WITH THE CONTENTION OF THE D.R. THAT THE SOURCE OF ACQUISITI ON OF LAND HAS NOT BEEN VERIFIED. IN OUR OPINION THE CONCLUSI ON OF THE ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS AN D PREJUDICIAL TO THE INTERESTS OF THE REVENUE AS HE H AS ACCEPTED THE SAME ON THE BASIS OF REGISTERED SALE D EED IN FAVOUR OF THE ASSESSEE SOCIETY AND THIS CANNOT BE S AID TO BE UNSUSTAINABLE IN LAW, MORE SO WHEN NO MATERIAL ON R ECORD HAS BEEN BROUGHT ON RECORD BY THE CIT(E) TO PROVE T HE CONTRARY. ITA NO. 2136/DEL/2016 35 5.11 SIMILARLY THE EXPENDITURE ON STATUE IS FOUND TO HAVE BEEN INCURRED AS PER THE AIMS & OBJECTS OF THE ASSE SSEE SOCIETY STATED IN ITS MEMORANDUM OF ASSOCIATION. W E AGREE WITH THE CONTENTION OF THE LEARNED A.R. THAT THE AS SESSMENT ORDER CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIA L TO THE INTERESTS OF REVENUE ON THIS GROUND AS THE EXPENDIT URE HAS BEEN INCURRED AS PER THE AIMS & OBJECTS OF THE ASSE SSEE SOCIETY TO PERPETUATE THE MEMORY OF SHRI SURAJMAL I N WHOSE NAME THE ASSESSEE SOCIETY WAS SET UP AND THE ASSESS ING OFFICER HAS ACCEPTED THE EXPENDITURE ON STATUE ONLY AFTER EXAMINATION OF ALL BILLS AND VOUCHERS OF THIS EXPEN DITURE. 6. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND PRECEDENTS, WE ARE OF THE VIEW THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN THIS CASE IS NEI THER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. THE LEARNED CIT(E) BEFORE HOLDING THE ASSESSMENT OR DER TO BE ERRONEOUS HAS NEITHER CONDUCTED ANY INQUIRY OR VERIFICATION TO SHOW THAT THE FINDING GIVEN BY THE ASSESSING OFFICER IS ERRONEOUS NOR HAS FOUND THAT THE VIEW OF THE ITA NO. 2136/DEL/2016 36 ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. ON THE CONTRARY IT APPEARS THAT THE LEARNED CIT(E) HAS SIMPLY EXPRESSE D THE VIEW THAT THE A.O. SHOULD HAVE CONDUCTED INQUIRY IN A PARTICULAR MANNER AS DESIRED BY HIM. SUCH A COURSE OF ACTION OF THE LEARNED CIT(E) IS NOT IN ACCORDANCE W ITH THE MANDATE OF PROVISIONS OF SECTION 263 OF THE ACT. I N THIS CASE THE A.O. IS FOUND TO HAVE PASSED THE ASSESSMENT ORD ER AFTER MAKING ALL INQUIRIES OR VERIFICATIONS WHICH SHOULD HAVE BEEN MADE INCLUDING ON ALL FOUR ISSUES RAISED BY THE CIT (E) AND THEREFORE THE ASSESSMENT ORDER PASSED BY A.O. CANN OT BE HELD AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL T O THE INTEREST OF REVENUE. THE CASE OF THE ASSESSEE IS FOUND TO BE SQUARELY COVERED IN ITS FAVOUR BY THE VARIOUS DECIS IONS OF HONBLE JURISDICTIONAL HIGH COURT INCLUDING THE JUD GMENT IN THE CASE OF CIT VS. JYOTI FOUNDATION REPORTED IN 35 7 ITR 388 WHEREIN IT HAS BEEN HELD THAT IT IS ONLY IN THE CAS E OF NO INQUIRY THAT THE PROVISIONS OF SECTION 263 OF THE A CT CAN BE VALIDLY INVOKED AND THAT ONCE THE CONCLUSION OF THE ASSESSING OFFICER AFTER MAKING ALL NECESSARY INQUIR IES AND ITA NO. 2136/DEL/2016 37 VERIFICATIONS WHICH SHOULD HAVE BEEN MADE, IS NOT C ONTRARY TO THE PROVISIONS OF THE ACT AND IS NOT SOMETHING W HICH IS UNSUSTAINABLE IN LAW, THEN THE ORDER CANNOT BE HELD TO BE ERRONEOUS. IT IS ALSO AN UNDISPUTED FACT IN THIS CA SE THAT THE LD. CIT(E) HAS NOT CONDUCTED ANY INQUIRY OR VERIFIC ATION HIMSELF TO RECORD THE FINDING THAT THE ASSEEMENT OR DER WAS ERRONEOUS. WE ARE ALSO NOT IMPRESSED BY THE FINDING OF THE CIT(E) AND THE CONTENTION OF LD. DR THAT THE CIT(E) COULD NOT HAVE CARRIED OUT ANY VERIFICATION AND INQUIRY AS TH E ASSESSE HAS NOT FILED ANY DOCUMENTARY EVIDENCES BEFORE HIM IN 263 PROCEEDINGS , WHICH ARE CLAIMED TO HAVE BEEN FILED BEFORE THE A.O. IN ASSESSMENT PROCEEDINGS. THE FACT REMAIN S THAT PROCEEDINGS U/S 263 OF THE ACT CAN BE INITIATED ON LY WHEN THE CIT CALLS FOR AND EXAMINES THE RECORD OF ANY PR OCEEDING UNDER THE ACT AND THEREFORE HE CANNOT BE HEARD TO S AY THAT THE ASSESSE HAS NOT FILED COPIES OF SUCH RECORD BEF ORE HIM. IN VIEW OF ABOVE, IT IS HELD THAT THE ASSESSMENT O RDER PASSED U/S 143(3) OF THE ACT BY THE A.O. IN THIS CA SE CANNOT BE SAID TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDI CIAL TO THE ITA NO. 2136/DEL/2016 38 INTERESTS OF THE REVENUE. ACCORDINGLY THE NOTICE U /S 263 DATED 19.02.15 AND THE ORDER U/S 263 DATED 23.03.16 PASSED BY CIT(E) DELHI IN THIS CASE ARE QUASHED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/5/2016. SD/- SD/- (O.P. KANT) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 30/05/2016 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR