M/s. India Habitat Centre, New Delhi V. DIT (E), New Delhi

ITA 2390/DEL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8016 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 23-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Assessee Lawyers: SURESH ANANTHRAMAN
• Keywords: Cost of acquisition; Difference of opinion; Change of opinion
• Section: 143(3); 12A; 263; 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.2390/DEL/2015 A.Y. : 2010-11 INDIA HABITAT CENTRE, LODI ROAD, NEW DELHI - 110003 (PAN: AAATI0499M) VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS), PRATYAKASH KAR BHAVAN, E- 2, BLOCK, 26 TH FLOOR, DR. SHYAMA PRASAD MUKHERJEEMARG, CIVIC CENTRE, JAWAHARLAL NEHRU MARG, NEW DELHI 110 002 (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SURESH ANANTHRAMAN, CA DEPARTMENT BY : MS. SULEKHA VERMA, CIT(DR) DATE OF HEARING : 25-04-2016 DATE OF ORDER : 18-05-2016 ORDER PER H.S. SIDHU : JM THIS APPEAL BY THE ASSESSE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS), NEW DE LHI DATED 27.3.2015 PASSED U/S. 263 OF THE I.T. ACT PERTAINING TO ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS:- 1. THE ORDER PASSED U/S 263 OF THE ACT IS WITHOUT JURISDICTION. ITA NO. 2390/DEL/2015 2 2. THE REVISIONAL ORDER HOLDING THAT THE ORDER DATED 07.3.2013 PASSED U/S 143(3) OF THE ACT IS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IS PERVERSE AND OPPOSED TO EVIDENCES ON RECORD. 3. THE ASSESSING OFFICER IN THE REGULAR ASSESSMENT HAVING THOROUGHLY EXAMINED THE APPLICABILITY OF THE PRINCIPLE OF MUTUALITY TO THE APPELLANT, THE REVISIONAL ORDER HOLDING THE SAME TO BE ERRONEOUS AND NOT BASED ON APPLICATION OF MIND BY THE ASSESSING OFFICER IS ENTIRELY WRONG. 4. THE FINDING OF THE COMMISSIONER OF INCOME-TAX THAT IT IS CLEAR THAT IN VIEW OF LETTER OF MINISTRY OF URBAN DEVELOPMENT, THE ASSESEE DOES NOT HAVE CONTROL OVER THE ASSETS OF THE SOCIETY, IS PERVERSE AND IS OPPOSED TO EVIDENCES ON RECORD. 5. THE FINDING OF COMMISSIONER THAT THE BENEFIT OF MUTUALITY HAS BEEN GIVEN BY THE AO AFTER DUE APPLICATION OF MIND IS NOT ACCEPTABLE AS THE AO HAS NOT EVEN BROUGHT ON RECORD THE BASIC FACT W.R.T. ITA NO. 2390/DEL/2015 3 ALLOTMENT OF LAND TO THE ASSESSEE, IS OPPOSED TO EVIDENCES ON RECORD. 6. IT IS CONTENDED THAT THE ENTIRE INCOME OF THE APPELLANT IS EXEMPT ON ACCOUNT OF PRINCIPLE OF MUTUALITY. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED ITS R ETURN OF INCOME AS NIL ON 11.10.2019. THE CASE OF THE ASSESE E WAS SELECTED FOR SCRUTINY, NOTICE U/S. 143(2)/142(1) WERE ISSUED ON 14.9.2011. IN RESPONSE TO THE SAME AUTHORISED REP RESENTATIVES OF THE ASSESSEE APPEARED AND FILED THE DETAILS OF RECORD AS REQUIRED BY THE AO FROM TIME TO TIME. IN THE ASSESSMENT ORDER DA TED 07.3.2013 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 I NCOME TAX ACT, 1961 VIDE ORDER DATED 13.1.1989 AND HAS ALSO REPROD UCED THE AIMS AND OBJECTS OF THE ASSESSEE-SOCIETY IN HIS ASSESSME NT ORDER DATED 07.3.2013. AO IN PARA 7 AT PAGE 12 OF THE ASSESSMEN T ORDER HAS MENTIONED THAT THE ASSESSEE HAS CLAIMED THE EXEMPTION UNDER THE CHARITABLE CLAUSE OF THE INCOME TAX ACT VIDE LETTER DATED ITA NO. 2390/DEL/2015 4 26.12.2012 AND 8.1.2013 THAT THE ACTIVITIES OF THE AS SESSEE SOCIETY ARE WITHIN THE PURVIEW OF THE PRINCIPLE OF MUTUALITY. THE AO CONSIDERED THE PROVISIONS OF LAW ALONGWITH THE EVIDENC ES FILED BY THE ASSESSEE ON THIS ISSUE AND HAS HELD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT UNDER THE PROVISION OF PRINCIPLES OF MUT UALITY, THIS REMAINS SUBJECT TO DUE SCRUTINY OF THE ACCOUNTS FROM Y EAR TO YEAR. THE AO REJECTED THE CLAIM OF SECTION 11 & 12 OF THE I.T. ACT AND APPLIED THE PROVISIONS OF INCOME TAX ACT AND HAS HELD THAT THE ASSESSEE SEEMS TO BE COVERED BY THE PRINCIPLE OF MUT UALITY AND IS ENTITLED FOR EXEMPTION ONLY IN RESPECT OF INCOME AC CRUING FROM THE MEMBERS IN THE TERMS OF THE PRINCIPLES OF MUTUALITY. H OWEVER, THOSE RECEIPTS OF INCOME, WHICH ARE ATTRIBUTABLE TO OUTSTANDI NG OR THIRD PARTIES, ARE NOT ALLOWABLE TO THE ASSESSEE, UNDER TH E SAME PRINCIPLE. HE FURTHER OBSERVED THAT CERTAIN AMOUNTS, AS REFLECTED IN THE INCOME-EXPENDITURE ACCOUNT, HAVE ACCURED TO THE AS SESSEE FROM THIRD PARTIES BEING IN THE NATURE OF BANK INTEREST AT AN AMOUNT OF RS. 75,73,939/- AND THEREFORE, THIS AMOUNT, NOT BEIN G COVERED UNDER THE PRINCIPLE OF MUTUALITY, REQUIRES TO BE SUBJ ECTED TO TAX UNDER THE NORMAL PROVISIONS OF THE I.T. ACT. THUS, HE COMPLETED THE ASSESSMENT IN THIS CASE U/S. 143(3) OF THE I.T. A CT ON 07.3.2011 AT AN INCOME OF RS. 75,73,939/-. ITA NO. 2390/DEL/2015 5 3. AFTER PERUSING THE ASSESSMENT ORDER DATED 07.3.20 13 PARTICULARLY THE BALANCE SHEET FILED BY THE ASSESSE E, THE LD. CIT(E) NOTICED THAT FIXED DEPOSITS HAVE BEEN CLASSIFIED UNDE R TWO HEADS ONE UNDER THE HEAD OF IHC BUILDING COMPLEX AND OTHE R ASSETS (SCHEDULE-3) VALUED AT RS. 1,10,37,13,959/- AND ANOTH ER, UNDER THE HEAD OF FIXED ASETS (SCHEDULE-4) VALUED AT RS. 23,53 ,388/-. THE FORMER ASSETS DO NOT BELONG TO THE INDIA HABITAT CEN TRE. THESE BELONG TO VARIOUS CORPORATE MEMBERS IN PROPORTION O F THEIR RESPECTIVE CONTRIBUTION TOWARDS COST OF ACQUISITION O F LAND AND COST OF CONSTRUCTION OF BUILDING. THESE ASSETS ARE SHO WN IN THE BALANCE SHEET OF THEIR RESPECTIVE OWNERS WHO CLAIM DEPRECIATI ON THEREON IN THEIR RESPECTIVE BOOKS OF ACCOUNTS. EVEN SURPLUS ARIS ING IN THE INCOME & EXPENDITURE ACCOUNT OF THE CENTRE IS TAKEN TO THE IHC BUILDING COMPLEX AND OTHER ASSETS HEAD. THEREFORE, IT IS VERY CLEAR THAT LESS THAN ONE PERCENT OF FIXED ASSETS ARE POSSES SED BY THE CENTRE AND, MUTUALITY IF ANY IS TO BE CLAIMED BY THE ASSESSEE IN RESPECT OF INCOME OF THE SOCIETY, IT SHOULD HAVE BEEN C LAIMED ONLY W.R.T. RATIO OF ASSET ACTUALLY OWNED BY IT WHICH IS LESS THAN 1% OF THE TOTAL ASSETS. FURTHER IT WAS NOTICED BY THE LD. CI T(E) THAT AS PER THE LAND ALLOTMENT LETTER OF MINISTRY OF URBAN DEV ELOPMENT, IN THE EVENT OF DISSOLUTION OF THE CENTRE, THE LAND ALLOTTE D TO IT AND THE ASSETS CREATED THEREON WILL BE TRANSFERRED TO AN INSTI TUTION HAVING ITA NO. 2390/DEL/2015 6 SIMILAR AIMS AND OBJECTS WITH THE PRIOR APPROVAL OF THE GOVERNMENT AND FAILING WHICH, TO THE GOVT., ON PAYMEN T OF COMPENSATION DETERMINED BY LESSER IN ITS ABSOLUTE D ISCRETION. THUS, THE ASSESSEE DOES NOT HAVE THE CONTROL OF THE ASSETS OF THE SOCIETY IN THE CASE OF ITS DISSOLUTION. SUCH SOCIETY CANNOT BE TREATED AS MUTUAL SOCIETY. 3.1 LD. CIT(E) HAS OBSERVED THAT THE AO GAVE THE B ENEFIT OF MUTUALITY TO THE ASSESSEE AND CHARGED ONLY INTERES T INCOME INSTEAD OF TAXING THE WHOLE EXCESS OF INCOME OVER EXPENDITUR E, WHICH RESULTED THE MISTAKE IN THE ASSESSMENT OF INCOME OF R S. 2,32,45,608/-. 3.2 THEREFORE, THE NOTICE U/S. 263 WAS ISSUED TO THE ASSESSEE ON 27.1.2015 REQUIRING IT TO SHOW CAUSE AS TO WHY THE AS SESSMENT ORDER SHOULD BE SET ASIDE TO THE MADE AFRESH. IN RES PONSE TO THE SAME, ASSESSEES AR ATTENDED THE PROCEEDINGS ON 16.2 .2015 AND FILED REPLY CONTESTING THE PROPOSED ACTION U/S. 263 P RIMARILY ON THE GROUND THAT THE ASSESSMENT U/S. 143(3) IS NOT LIABLE TO BE CANCELLED U/S. 263 BECAUSE THE SAME HAS BEEN FRAMED BY THE AO AFTER DUE APPLICATION OF MIND AND ALSO THAT NO PREJUDICE HAS B EEN CAUSED TO THE REVENUE. AFTER CONSIDERING THE REPLY FILED BY T HE ASSESSEE- SOCIETY, THE LD. COMMISSIONER OF INCOME TAX(E) HAS P ASSED THE ITA NO. 2390/DEL/2015 7 IMPUGNED ORDER U/S. 263 OF THE I.T. ACT DATED 27.3.20 15 BY HOLDING THE ASSESSMENT ORDER DATED 7.3.2013 PASSED U/S. 143 (3) OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVE NUE BY CITING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE C ASE OF INFOSYS TECHNOLOGIES LTD. REPORTED IN 341 ITR 293 (KAR.). THEREAFTER, LD. CIT(E) SET ASIDE THE ASSESSMENT WITH THE DIRECTIONS TO THE AO TO EXAMINE THE ISSUE IN DETAILS IN VIEW OF THE MEMORAND UM OF ASSOCIATION AND DISSOLUTION CLAUSE. 4. AGAINST THE ABOVE ORDER OF THE LD. CIT(E) DATED 2 7.3.2015 PASSED U/S. 263 OF THE I.T. ACT, THE ASSESSEE APPEALE D BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSE E DRAW OUR ATTENTION TOWARDS THE PAPER BOOK CONTAINING PAGES 1 TO 2 03 IN WHICH HE HAS ATTACHED VARIOUS TYPES OF DOCUMENTARY EVIDENCES. HE FURTHER DRAW OUR ATTENTION TOWARDS THE SHOW CAUSE NOTI CE DATED 27.1.2015 ISSUED U/S. 263 OF THE I.T. ACT BY THE LD. CIT(E) WHICH IS AT PAGE NO. 53-54 OF THE PB. HE DRAW OUR ATTENTION TOW ARDS PAGE NO. 16 TO 19 WHICH ARE THE INCOME TAX RETURNS. HE ST ATED THAT THE ASSESSEE HAS DISCLOSED ABOUT THE MUTUALITY AND NOTICE H AS BEEN ISSUED BECAUSE OF CHANGE OF OPINION, WHICH IS NOT PE RMISSIBLE UNDER THE LAW. HE FURTHER STATED THAT AO HAS MADE THE FULL AND DETAILED ITA NO. 2390/DEL/2015 8 ENQUIRY, AS PER ORDER SHEETS. AO HAS ASKED ABOUT THE PRINCIPLE OF MUTUALITY FOR WHICH THE ASSESSEE HAS GIVEN THE EXPLAN ATION/ SUBMISSIONS AT PAGE NO. 84 TO 86 OF THE PB AND ALSO CITED THE DECISION OF THE HONBLE DELHI HIGH COURT DECISION S I.E. CIT VS. SCOPE 319 ITR 179 (DELHI) AND HONBLE SUPREME COURT OF INDIA DECISION IN THE CASE OF BANKIPUR CLUB LTD. 226 ITR 97 (SC), WHICH ARE AT PAGES 86 TO 89 OF THE PB, FAVOURING THE ASSESSE ES CASE. HE FURTHER STATED THAT THE AO HAS DISCUSSED THE CLAIM OF M UTUALITY VIDE PARA NO. 7 IN HIS ORDER AT PAGE NO. 12 TO 16 AND OBS ERVED THAT ASSESSEE SEEMS TO BE COVERED BY THE PRINCIPAL OF MUTUA LITY AND THEREFORE, IS ENTITLED TO EXEMPTION ONLY IN RESPECT OF INCOME ACCRUING FROM THE MEMBERS IN TERMS OF THE PRINCIPLES OF MUTUALITY. LD. COUNSEL OF THE ASSESSEE STATED THAT IT CANNOT BE SAI D THAT THE AO HAS NOT APPLIED HIS MIND. EVEN ON MERITS THE CASE OF THE ASSESSEE IS ALSO IN FAVOUR OF THE ASSESSEE AS PER THE SUBMIS SIONS MADE AT PAGE NO. 57 TO 72 OF THE PAPER BOOK IN WHICH EACH AND EVERY ASPECT ON THE PRINCIPLE OF MUTUALITY HAS BEEN EXPLAIN ED. LASTLY, LD. COUNSEL OF THE ASSESSEE STATED THAT EXACTLY THE SIMILAR ISSUE HAS BEEN ADJUDICATED AND DECIDED BY THE ITAT, C BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10 PASSED IN I TA NO. 3017/DEL/2014 (AY 2009-10), COPY THEREOF IS ATTACHED AT PAGE NO. 39 TO 52 OF THE PB. IN VIEW OF THE ABOVE, HE STATED TH AT KEEPING IN ITA NO. 2390/DEL/2015 9 VIEW OF THE WRITTEN SUBMISSIONS AS WELL AS THE DOCUM ENTARY EVIDENCE FILED BY HIM AND THE PRECEDENT, THE IMPUGNED ORDER MAY BE CANCELLED AND THE APPEAL FILED BY THE ASSESEE MA Y BE ALLOWED. 7. ON THE CONTRARY, LD. CIT(DR) RELIED UPON THE IMPUG NED ORDER OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) DA TED 27.3.2015 AND STATED THAT THERE ARE VARIOUS POINTS WHI CH HAS BEEN CONSIDERED BY THE ITAT IN ITS ORDER, RELEVANT FOR THE ASSESSMENT YEAR 2009-10. THEREFORE, THE IMPUGNED ORDER HAS BE EN PASSED AS PER LAW. SHE FURTHER STATED THAT THE AO HAS PASSED TH E ASSESSMENT ORDER WITHOUT APPLYING HIS MIND AND WITHOUT MAKING DE TAILED ENQUIRY. HOWEVER, THE LD. CIT(E) HAS RIGHTLY APPLIED HIS MIND AND PASSED THE ORDER UNDER SECTION 263 OF THE I.T. ACT . IN SUPPORT OF HER CONTENTION, SHE FILED A SMALL PAPER BOOK CONTAININ G 1 TO 20 HAVING THE COPY OF THE ORDER OF THE HONBLE DELHI HIG H COURT IN THE CASE OF GEE VEE ENTERPRISES 99 ITR 375 (DEL); COPY OF ORDER OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DUGGAL & CO . 220 ITR 456 (DELHI); ORDER OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF MALABAR INDUSTRIES CO. LTD. 243 ITR 83 (SC) AND THE ORDER OF THE ACIT(E), CIRCLE 1(1), NEW DELHI U/S. 143(3)/263 DATE D 30.3.2016. SHE REQUESTED THAT THE IMPUGNED ORDER OF THE LD. CIT( E) MAY BE UPHELD AND APPEAL OF THE ASSESSEE MAY BE DISMISSED A CCORDINGLY. ITA NO. 2390/DEL/2015 10 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE REC ORDS AVAILABLE WITH US, ESPECIALLY THE ORDER PASSED BY THE REVENUE AUTHORITY ALONGWITH THE DOCUMENTARY EVIDENCE AND THE CASE LAW FILED BY THE ASSESSEES COUNSEL AS WELL AS THE PROVI SIONS OF LAW REFERRED BY THE REVENUE AUTHORITY AND THE LD. COUNSEL OF THE ASSESSEE. HE STATED THAT THE ORDER PASSED BY THE AO IS NOT ERRONEOUS AT ALL, BECAUSE THE AO HAS CONSIDERED THE APPLICABILITY OF PRINCIPLE OF MUTUALITY IN HIS ORDER DATED 07.3.20 13 PASSED UNDER SECTION 143(3) OF THE I.T. ACT. WE HAVE ALSO PERUSED THE PAGES 12 TO 16 OF THE PAPER BOOK ESPECIALLY THE PARA 7 OF THE A SSESSMENT ORDER AS WELL AS THE DETAILED SUBMISSIONS FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS WITH REGARD TO APPL ICABILITY OF PRINCIPLE OF MUTUALITY WHICH IS PLACED AT PAGES 55 -72 OF THE PAPER BOOK. AFTER THOROUGHLY EXAMINED THE AFORESAID DOCU MENTARY EVIDENCES, PRODUCED BY THE ASSESSEE IN THE SHAPE OF PAPER BOOK AND THE CASE LAW CITED IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEAR 2009-10, BEFORE US, WE ARE OF THE CONSIDERED VIEW THAT THE ARGUMENTS ADVANCED BY THE LD. COUNSEL OF THE ASSESSE E IS VERY MUCH PLAUSIBLE AND CONVINCING, BECAUSE THE CLAIM OF THE ASSESSEE REGARDING THE APPLICABILITY OF PRINCIPLE OF MUTUALITY IN ITS RETURN OF INCOME HAS BEEN FILED BY THE ASSESSEE ALONGWITH THE R ETURN OF STATEMENT OF ACCOUNT, MEANING THEREBY THE ASSESSEE HAS C LAIMED ITA NO. 2390/DEL/2015 11 THE APPLICABILITY OF PRINCIPLE OF MUTUALITY IN ITS RETURN OF INCOME. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS ALSO DIRECTED THE ASSESSEE TO EXPLAIN THE APPLICABILITY OF PRINCIPLE OF MUTUALITY WHICH WE HAVE SEEN AT THE ASSESSMENT PROC EEDINGS THEREBY THE ISSUE OF PRINCIPLE OF MUTUALITY HAS BEE N DISCUSSED AND DETAILED ENQUIRY HAS BEEN DONE AT THE LEVEL OF THE A O AND ASSESSEE ALSO FILED ITS DETAILS BEFORE THE AO IN THE ASSESSME NT PROCEEDINGS WITH REGARD TO THE APPLICABILITY OF PRINCIPLE OF MUTU ALITY. AFTER PERUSING THE ASSESSMENT ORDER DATED 07.3.2013 PASSED U/S. 143(3) OF THE I.T. ACT, WE HAVE SEEN THAT AO HAS RIGHTLY CONSI DERED THE APPLICABILITY OF PRINCIPLE OF MUTUALITY IN THE ASSES SMENT ORDER ESPECIALLY THE PARA 7 OF THE ASSESSMENT ORDER. 8.1 WE ALSO FIND FORCE IN THE LD. COUNSEL OF THE ASS ESSEES SUBMISSIONS THAT EXACTLY THE SIMILAR ISSUE HAS BEEN ADJUDICATED AND DECIDED BY THE ITAT, C BENCH IN ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 2009-10 PASSED IN ITA NO. 3017/DEL/2 014 (AY 2009-10), VIDE ORDER DATED 12.2.2015 HAS DECIDED TH E SIMILAR AND IDENTICAL ISSUE RELATING TO PRINCIPLE OF MUTUALITY IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE ABOVE, HE STATED THAT KEEPING IN VIEW OF THE WRITTEN SUBMISSIONS AS WELL AS THE DOCUMENTARY EVID ENCE AND THE CASE LAW CITED BY THE LD. COUNSEL OF THE ASSESS EE, THE ITA NO. 2390/DEL/2015 12 IMPUGNED ORDER MAY BE CANCELLED AND THE APPEAL FILE D BY THE ASSESEE MAY BE ALLOWED. 8.2 KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS AL ONGWITH THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE AS DISCUS SED ABOVE IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE AND THE ASSESSMENT ORDER ALONGWITH THE IMPUGNED ORDER, WE ARE OF THE VIEW THAT THE AO HAS MADE THE DETAILED ENQUIRIES ON THE ISS UE OF PRINCIPLE OF MUTUALITY AND PASSED THE ORDER DATED 0 7.3.2013 U/S. 143(3) OF THE I.T. ACT AS PER LAW. 8.3 WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. GREEN WORLD CORPORATION 314 ITR 81 (SC) HAS HELD AS UNDER:- THE JURISDICTION U/S. 263 CAN BE EXERCISED ONLY WHE N BOTH THE FOLLOWING CONDITIONS ARE SATISFIED: I) THE ORDER OF THE AO SHOULD BE ERRONEOUS; AND II) IT SHOULD BE PREJUDICIAL TO THE REVENUE INTEREST. THES E CONDITIONS ARE CONJUNCTIVE. AN ORDER OF ASSESSMENT PASSED BY THE AO SHOULD NOT BE INTERFERED WITH ONLY BECAUSE ANOTHER VIEW IS POSSIBLE. AN ORDER WOULD BE ERRONEOUS ONLY WHEN THE AO MAKES N O ENQUIRIES DURING THE COURSE OF ASSESSMENT PROCEEDING S. THIS PRINCIPLE WAS NOTICED BY THE DELHI HIGH COURT IN GEEV EE ENTERPRISES VS. ADDL. CIT 99 ITR 375 (DEL.). IN ARR IVING AT THIS ITA NO. 2390/DEL/2015 13 DECISION, THE DELHI HIGH COURT DREW STRENGTH FROM THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN RAMPY ARI DEVI SAROGI VS. CIT 67 ITR 84 (SC) AND TARA DEVI AGARWAL VS. CIT, 88 ITR 324 (SC). THE UNDERLYING PRINCIPLE WHICH EM ERGES FROM THESE JUDGMENTS IS THAT IF AN ASSESSMENT ORDER I S PASSED WITHOUT MAKING ANY ENQUIRIES, THEN SUCH AN ORDER WOUL D BE ERRONEOUS. 8.4 WE ALSO FIND THAT THE AO HAS CONSCIOUSLY TAKEN A VIEW WITH REGARD TO THE PRINCIPLE OF MUTUALITY. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT 243 ITR 83 (SC) HELD AS UNDER:- THE PHRASE PREJUDICIAL TO THE INTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE AO. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE AO CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAM PLE, WHEN AN INCOME TAX OFFICER, ADOPTED ONE OF THE COUR SES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REV ENUE; OR WHERE TWO VIEWS ARE POSSIBLE IN LAW AND THE INCOM E TAX OFFICER HAS TAKEN ONE VIEW 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. 8.5 WE ALSO FIND THAT THE CASE LAWS CITED BY THE LD. CI T(DR) DOES NOT SUPPORT THE CASE OF THE REVENUE. 8.6 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND RESPECTFULLY FOLLOWING THE AFORESAID PRECEDENTS, WE ARE OF THE C ONSIDERED VIEW ITA NO. 2390/DEL/2015 14 THAT THE ASSESSMENT ORDER DATED 07.3.2013 PASSED U/S.1 43(3) IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVEN UE AT ALL AND THE LD. CIT(E) HAS PASSED THE IMPUGNED ORDER DATED 27.3.2 015, IS CONTRARY TO THE LAW AND FACTS ON RECORD, WHICH IS NO T SUSTAINABLE IN THE EYES OF LAW. HENCE, WE CANCEL THE IMPUGNED ORDER DATED 27.3.2015 PASSED BY THE LD. CIT(E) U/S. 263 OF THE I. T. ACT BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE AND UPHE LD THE ASSESSMENT ORDER DATED 7.3.2015 PASSED BY THE AO PASSE D U/S. 143(3) OF THE I.T. ACT. OUR VIEW IS SUPPORTED BY THE RAM PIARI DEVI SAROGI VS. CIT 67 ITR 8 4 (SC) AND TARA DEVI AGARWA L VS. CIT 88 ITR 323 (SC). 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/5/2016. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 18/5/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES