M/S. DEVI SHAKUNTALA THKARAL CHARITABLE FOUNDATION, Bhopal V. Deputy Commissioner of Income Tax (EXEMPTION), Bhopal

ITA 322/Ind/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5265 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-02-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: GIRISH AGRAWAL; NISHA LAHOTI A RS
• Keywords: Revision of order; Opportunity of being heard; Principle of natural justice; Question of law; Prejudicial to interest; Revenue expenditure; Set aside
• Section: 143(3); 12AA; 143(2); 139(1); 13; 22; 263; 139

Judgement Text

[ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.322/IND/2018 ASSESSMENT YEAR: 2013-14 M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION BHOPAL / VS. DCIT (EXEMPTION) BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AAATD2943B APPELLANT BY SHRI GIRISH AGRAWAL & MISS NISHA LAHOTI, A.RS RESPONDENT BY SHRI S.B. PRASAD, D.R. DATE OF HEARING: 17.02.2020 DATE OF PRONOUNCEMENT: 20.02.2020 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE LD. CIT(EXEMPTION) DATED 21.3.2018 PERTAINING TO THE [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 2 ASSESSMENT YEAR 2013-14. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ORDER U/S 263 OF THE ACT PASSED BY THE LEARNED CIT(EXEMPTION) IS BAD IN LAW AND WITHOUT JURISDICTION, HENCE BE CANCELLED. 2. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT ERRED IN HIS FINDINGS THAT THE ASSESSMENT ORDER OF THE A.O. DATED 3.3.2016 PASSED U/S 143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF THE REVENUE. SUCH FINDINGS OF THE LEARNED CIT BE QUASHED AND HIS ORDE R U/S 263 BE CANCELLED. 3. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CLAIM OF ACCUMULATION U/S 11(2) AT RS.5.50 CRORES WAS ALLOWE D BY THE LEARNED A.O. IN THE SCRUTINY ASSESSMENT AFTER MAKING ENQUIRIES AND VERI FICATION OF THE CLAIM AND, THEREFORE, THE ORDER OF THE ASSESSING OFFICER IS NO T ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, HENCE THE O RDER OF THE CIT U/S 263 IS UNLAWFUL AND, THEREFORE, BE CANCELLED. 4. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THAT THE ASSESSEE HAD SATISFIED ALL THE RELEVANT CONDITIONS AS PRESCR IBED U/S 11(2) OF THE ACT AND, THEREFORE, THE CLAIM OF DEDUCTION OF RS.5.50 CRORES U/S 11(2) IS A FULLY ADMISSIBLE CLAIM HENCE THE A.O. WAS FULLY JUSTIFIED IN ALLOWIN G THE CLAIM IN THE ASSESSMENT. 5. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT ERRED AND NOT JUSTIFIED IN SETTING ASIDE THE ASSESS MENT OF THE A.O. U/S 143(3) DATED 3.3.2016 DE-NOVO. 2. THE ONLY EFFECTIVE GROUND IS AGAINST INITIATION OF PROCEEDINGS U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). THE BRIEF FACTS ARE THAT IN THIS CASE ASSESSMENT U/S 143(3) OF THE ACT WAS FRAMED VIDE ORDER DATED 3.3.2016. THE A.O. ACCEPTED THE RETURN F ILED BY THE ASSESSEE. HOWEVER, LD. CIT SET ASIDE THIS ORD ER AND [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 3 DIRECTED THE A.O. TO REFRAME THE ASSESSMENT ORDER DE- NOVO. AGAINST THIS, THE ASSESSEE HAS PREFERRED PRESENT APPEAL. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT TH E LD. CIT WAS NOT JUSTIFIED IN REVISING THE ORDER. HE SUBMITTED THAT THE A.O. HAD EXAMINED THE ISSUE. HE FURTHER SUBMITTED THAT THE LD. CIT FAILED TO APPRECIATE THE FACT OF THE CASE IN RIGHT PERSPECTIVE. LD. COUNSEL R EITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER: SUBMISSION : A. PROVISIONS OF SECTION 263 CAN BE INVOKED ONLY WHEN THE TWIN CONDITIONS ARE SATISFIED I.E. ORDER SHOULD BE BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 1. PROVISIONS OF SECTION 263 READS (1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT , AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFI CER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE RE VENUE ................ 2. IN THE INSTANT CASE, LD. CIT (EXEMPTION), BHOPAL VI DE THE SHOW CAUSE NOTICE ISSUED U/S 263 HAS STATED THAT THE ACCUMULAT ION U/S 11(2) OF THE ACT WAS NOT ALLOWABLE TO THE ASSESSEE. [PB 04] [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 4 3. FOR ACCUMULATION OF INCOME, THE CONDITIONS LAID DOW N U/S 11(2) READ WITH RULE 17 OF THE INCOME TAX RULES, 1962 HAVE TO BE SATISFIED TO GET EXEMPTION. THE CONDITIONS AS ENUMERATED IN SECTION 11(2) ARE AS FOLLOWS CLAUS E OF SECTION 11(2) CONDITION AS PER THE RELEVANT CLAUSE OF SECTION 11(2) FULFIL MENT OF THE CONDITIONS MENTIONED BY SECTION 11(2) (A) STATEMENT IN PRESCRIBED FORM IS SUBMITTED TO ASSESSING OFFICER STATING THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND PERIOD FOR WHICH THE INCOME IS TO BE ACCUMULATED OR SET APART WHICH SHALL IN NO CASE EXCEED FIVE YEARS FORM 10 HAS BEEN SUBMITTED TO THE ASSESSING OFFICER STATING THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART. THE INCOME SO ACCUMULATED OR SET APART SHALL BE SO KEPT TILL 31.03.2018. (I.E. WITHIN 5 YEARS FROM 31.03.2013 IMPUGNED YEAR) [PB 34] (B) THE MONEY SO ACCUMULATED OR SET APART IS INVESTED OR DEPOSITED IN THE FORMS OR MODES SPECIFIED IN SECTION 11(5) THE MONEY SO ACCUMULATED OR SET APART HAS BEEN INVESTED IN FDR WITH ORIENTAL BANK OF COMMERCE. [PB 18] (C) THE STATEMENT REFERRED TO IN CLAUSE (A) IS FURNISHED ON OR BEFORE THE DUE DATE SPECIFIED U/S 139(1) FOR FURNISHING THE RETURN OF INCOME FORM 10 HAS BEEN SUBMITTED ON 20.09.2013. DUE DATE OF FURNISHING OF RETURN OF INCOME FOR A.Y. 2013-14 (IMPUGNED YEAR) WAS 30.09.2013. FROM THE ABOVE TABLE IT IS EVIDENT THAT ALL THE THR EE CONDITIONS AS MENTIONED IN SECTION 11(2) HAVE BEEN FULLY SATISFIE D BY THE ASSESSEE. THUS, THE CLAIM OF ASSESSEE U/S 11(2) IS IN ACCORDA NCE TO LAW AND VALIDLY CLAIMED BY ASSESSEE. 4. LD. AO IN THE ASSESSMENT PROCEEDINGS HAS CORRECTLY ALLOWED THE CLAIM OF ASSESSEE U/S 11(2). ASSESSMENT ORDER PASSED U/S 143 (3) IS IN ACCORDANCE TO LAW ALLOWING THE CLAIM OF ASSESSEE U/S 11(2). 5. ONE OF THE TWIN CONDITIONS FOR INVOKING THE PROVISI ONS OF SECTION 263 I.E. PREJUDICIAL TO THE INTEREST OF REVENUE IS NOT SATIS FIED . THUS, PROVISIONS OF SECTION 263 CANNOT BE INVOKED. ORDER PASSED BY L D. PR. CIT -2, INDORE U/S 263 HAS NO LEGAL SANCTITY. [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 5 6. IT IS A WELL SETTLED LAW THAT TO INVOKE THE PROVISI ONS OF SECTION 263 BOTH THE CONDITIONS THAT THE ORDER MUST BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE MUST BE SATISFIED. RELIANCE IS PLACED ON THE FOLLOWING JUDICIAL PRECEDENTS A. HONBLE JURISDICTIONAL HIGH COURT OF MADHYA PRADESH IN THE CASE OF H.H. MAHARAJA RAJA PAWER DEWAS [1983] 15 TAXMAN 363 ORDER PRONOUNCED ON 13.11.1981 PARA 10 HOWEVER, THE FIRST ARGUMENT, VIZ., THAT AN ASSESSMENT ORDER WITHOUT CO MPLIANCE WITH THE PROCEDURE LAID DOWN IN SECTION 144B IS ERRONEOU S BUT NOT PREJUDICIAL TO THE INTERESTS OF THE REVENUE CONFERRI NG REVISIONAL JURISDICTION ON THE COMMISSIONER UNDER SECTION 263(1 ), HAS FORCE. UNDER SECTION 263(1) TWO PRE-REQUISITES MUST BE PRE SENT BEFORE THE COMMISSIONER CAN EXERCISE THE REVISIONAL JURISDICTI ON CONFERRED ON HIM. FIRST IS THAT THE ORDER PASSED BY THE ITO MUST BE ERRONEOUS. SECOND IS THAT THE ERROR MUST BE SUCH THAT IT IS PR EJUDICIAL TO THE INTERESTS OF THE REVENUE. IF THE ORDER IS ERRONEOUS BUT IT IS NOT PREJUDICIAL TO THE INTERESTS OF THE REVENUE, THE CO MMISSIONER CAN NOT EXERCISE THE REVISIONAL JURISDICTION UNDER SECT ION 263(1) .. THERE CANNOT BE ANY PREJUDICE TO THE REVENUE ON ACCOUNT OF THE ITO'S FAILURE TO FOLLOW THE PROCEDUR E PRESCRIBED UNDER SECTION 144B, AND UNLESS THE PREJUDICE TO THE INTERESTS OF THE REVENUE IS SHOWN, THE JURISDICTION UNDER SECTION 26 3(1) CANNOT BE EXERCISED BY THE COMMISSIONER, EVEN THOUGH THE ORDE R IS ERRONEOUS. THE ARGUMENT THAT SUCH AN ORDER MAY POSSIBLY BE CHA LLENGED IN APPEAL BY THE ASSESSEE, AND FOR THIS REASON IT IS P REJUDICIAL TO THE INTERESTS OF THE REVENUE, HAS NO MERIT. SECTION 263(1) CLEARLY CONTEMPLATES THAT THE ORDER OF ASSESSMENT ITSELF SH OULD BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND THI S PREJUDICE HAS TO BE PROVED BY REFERENCE TO THE ASSESSMENT ORDER ONLY . IT CANNOT BE ARGUED THAT THERE IS SOME POSSIBILITY OF THE ASSESS MENT ORDER BEING CHALLENGED OR REVISED IN APPEAL AND, THEREFORE, ON ACCOUNT OF THIS CONTINGENCY, THE ORDER BECOMES PREJUDICIAL TO THE I NTERESTS OF THE REVENUE. [EMPHASIS SUPPLIED] [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 6 B. HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. [2000] 243 ITR 83 ORDER PRONOUNCED ON 10.02.2000 HEAD NOTE ' SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDERS PREJUDICIAL TO INTERESTS OF REVENUE - ASSESSMENT YEA R 1983-84 - WHETHER IN ORDER TO INVOKE SECTION 263 ASSESSING OF FICER'S ORDER MUST BE ERRONEOUS AND ALSO PREJUDICIAL TO REVENUE AND IF ONE OF THEM IS ABSENT, I.E., IF ORDER OF INCOME-TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO REVENUE OR IF IT IS NOT ERRONEOUS BU T IS PREJUDICIAL TO REVENUE, RECOURSE CANNOT BE HAD TO SECTION 263(1) - HELD, YES - WHETHER IF DUE TO AN ERRONEOUS ORDER OF ITO, REVENU E IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO INTERESTS OF REVENUE - HELD, YES - ASSESSEE-COMPANY ENTERED INTO AGREEMENT FOR SALE OF ESTATE OF RUBBER PLANTATION - AS PURCHASER COULD NOT PAY INSTALMENTS AS SCHEDULED IN AGREEMENT, EXTE NSION OF TIME FOR PAYMENT OF INSTALMENTS WAS GIVEN ON CONDITION OF VE NDEE PAYING DAMAGES FOR LOSS OF AGRICULTURAL INCOME AND ASSESSE E PASSED RESOLUTION TO THAT EFFECT - ASSESSEE SHOWED THIS RE CEIPT AS AGRICULTURAL INCOME - RESOLUTION PASSED BY ASSESSEE WAS NOT PLAC ED BEFORE ASSESSING OFFICER - ASSESSING OFFICER ACCEPTED ENTR Y IN STATEMENT OF ACCOUNT FILED BY ASSESSEE AND ACCEPTED SAME - COMMI SSIONER UNDER SECTION 263 HELD THAT SAID AMOUNT WAS NOT CONNECTED WITH AGRICULTURAL ACTIVITIES AND WAS LIABLE TO BE TAXED UNDER HEAD 'INCOME FROM OTHER SOURCES' - WHETHER, WHERE ASSESSING OFFI CER HAD ACCEPTED ENTRY IN STATEMENT OF ACCOUNT FILED BY ASSESSEE, IN ABSENCE OF ANY SUPPORTING MATERIAL WITHOUT MAKING ANY ENQUIRY, EXE RCISE OF JURISDICTION BY COMMISSIONER UNDER SECTION 263(1) WA S JUSTIFIED - HELD, YES C. HONBLE GUJARAT HIGH COURT IN THE CASE OF SMT. MINALBEN S. PARIKH [1995] 215 ITR 81 ORDER PRONOUNCED ON 17.10.1994 PARA 12 FROM THE AFORESAID, IT CAN WELL BE SAID THAT THE W ELL-SETTLED PRINCIPLE IN CONSIDERING THE QUESTION AS TO WHETHER AN ORDER IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE OR NOT IS TO ADDRESS O NESELF TO THE QUESTION WHETHER THE LEGITIMATE REVENUE DUE TO THE EXCHEQUER HAS BEEN REALISED OR NOT OR CAN BE REALISED OR NOT IF H IS ORDERS UNDER CONSIDERATION ARE ALLOWED TO STAND. FOR ARRIVING AT THIS CONCLUSION, IT [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 7 BECOMES NECESSARY AND RELEVANT TO CONSIDER WHETHER THE INCOME IN RESPECT OF WHICH TAX IS TO BE REALISED, HAS BEEN SU BJECTED TO TAX OR NOT OR IF IT IS SUBJECTED TO TAX, WHETHER IT HAS BE EN SUBJECTED TO TAX AT A RATE AT WHICH IT COULD YIELD THE MAXIMUM REVEN UE IN ACCORDANCE WITH LAW OR NOT. IF INCOME IN QUESTION HAS BEEN TAXED AND LEGITIMATE REVENUE DUE IN RESPECT OF THAT INCOM E HAD BEEN REALISED, THOUGH AS A RESULT OF ERRONEOUS ORDER HAV ING BEEN MADE IN THAT RESPECT, IN OUR OPINION, THE COMMISSIONER CANN OT EXERCISE POWERS FOR REVISING THE ORDER UNDER SECTION 263 MER ELY ON THE BASIS THAT THE ORDER UNDER CONSIDERATION IS ERRONEOUS. IF THE MATERIAL IN THAT REGARD IS AVAILABLE ON THE RECORD OF THE ASSES SEE CONCERNED, THE COMMISSIONER CANNOT EXERCISE HIS POWERS BY IGNORING THAT MATERIAL WHICH LINKS THE INCOME CONCERNED WITH THE TAX REALI ZATION MADE THEREON. THE TWO QUESTIONS ARE INTER-LINKED AND THE AUTHORITY EXERCISING POWERS UNDER SECTION 263 IS UNDER AN OBL IGATION TO CONSIDER THE ENTIRE MATERIAL ABOUT THE EXISTENCE OF INCOME AND THE TAX WHICH IS REALIZABLE IN ACCORDANCE WITH LAW AND FURTHER WHAT TAX HAS IN FACT BEEN REALISED UNDER THE ALLEGED ASSESSM ENT ORDERS. [EMPHASIS SUPPLIED] D. HONBLE KARNATAKA HIGH COURT IN THE CASE OF V. G. KRISHNAMURTHY [1985] 20 TAXMAN 65 ORDER PRONOUNCED ON 19.03.1984 PARA 10 SECTION 263 CAN BE INVOKED BY THE COMMISSIONER ONLY WHEN HE PRIMA FACIE FINDS THAT THE ORDER MADE BY THE ITO WAS ERRONEOUS AND WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE . BOTH THESE FACTORS MUST SIMULTANEOUSLY EXIST. AN ORDER THAT IS ERRONEOUS MUST ALSO HAVE RESULTED IN LOSS OF REVENUE OR PREJUDICIA L TO THE INTERESTS OF THE REVENUE. UNLESS BOTH THESE FACTORS CO-EXIST OR EXIST SIMULTANEOUSLY, THE COMMISSIONER CANNOT INVOKE OR R ESORT TO SECTION 263. IT CANNOT BE EXERCISED TO CORRECT EVERY CONCEIVABL E ERROR COMMITTED BY AN ITO. BEFORE THE SUO MOTO POWER OF REVISION CAN BE EXERCISED, THE COMMISSIONER MUST AT LEAST PRIMA FAC IE FIND BOTH THE REQUIREMENTS OF SECTION 263, NAMELY, THAT THE ORDER SOUGHT TO BE REVISED IS PRIMA FACIEERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THE OTHER FACTOR WAS ABSENT, THE [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 8 COMMISSIONER CANNOT EXERCISE THE SUO MOTO POWER OF REVISION UNDER SECTION 263. [EMPHASIS SUPPLIED] 7. IN THE INSTANT CASE, SINCE ONE OF THE CONDITIONS FO R INVOKING THE PROVISIONS OF SECTION 263 THE ASSESSMENT ORDER I.E. ERRONEOUS IS NOT SATISFIED . SINCE THE TWIN CONDITIONS ARE NOT SATISFIED THE I MPUGNED ORDER OUGHT TO BE QUASHED. 8. WITHOUT PREJUDICE TO ABOVE , PROVISIONS OF SECTION 11(3) ARE TRIGGERED IN FOLLOWING CIRCUMSTANCES CLAUS E OF SECTION 11(3) CONDITION AS PER THE RELEVANT CLAUSE OF SECTION 11(3) WHEN INCOME REFERRED TO IN SECTION 11(2) IS FULFILMENT OF THE CONDITIONS MENTIONED BY SECTION 11(3) A APPLIED TO PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS PURPOSES AS AFORESAID OR CEASES TO ACCUMULATED OR SET APART FOR APPLICATION THERETO INCOME REFERRED TO IN SECTION 11(2) HAS BEEN UTILISED BY ASSESSEE ITSELF FOR PURCHASE OF LAND AT VILLAGE BAGHMUGALLIYA, PATWARI HALKA NO. 42, HOSANGABAD ROAD, BHOPAL. B CEASES TO REMAIN INVESTED OR DEPOSITED IN ANY OF THE FORMS AS MENTIONED IN SECTION 11(5) INCOME REFERRED TO IN SECTION 11(2) HAS BEEN INVESTED IN FDR C IS NOT UTILIZED FOR THE PURPOSE FOR WHICH IT IS SO ACCUMULATED OR SET APART DURING THE PERIOD REFERRED TO IN SECTION 11(2)(A) OR IN A YEAR IMMEDIATELY FOLLOWING THE EXPIRY THEREOF INCOME REFERRED TO IN SECTION 11(2) HAS BEEN UTILISED FOR PURPOSE OF PURCHASE OF LAND AND CONSTRUCTION OF SCHOOL BUILDING BY THE ASSESSEE ITSELF, AT BHOPAL. A REGISTERED AGREEMENT TO SALE HAS BEEN ENTERED IN THE NAME OF ASSESSEE D IS CREDITED OR PAID TO ANY TRUST OR INSTITUTION REGISTERED U/S 12AA OR TO ANY FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION REFERRED TO IN SECTION 10(23C)(IV), 10(23C)(V), 10(23C)(VI) OR 10(23C)(VIA) INCOME REFERRED TO IN SECTION 11(2) HAS BEEN CREDITED TO A THIRD PARTY M/S. GIRIJA COLONIZERS FROM WHOM LAND HAS BEEN PURCHASED BY THE ASSESSEE IN ITS OWN NAME FOR CONSTRUCTION OF SCHOOL BUILDING. THE PAYMENT IS NOT CREDITED TO ANY TRUST OR INSTITUTION AS MENTIONED IN SECTION 11(3)(D) FROM THE ABOVE TABLE IT IS EVIDENT THAT NONE OF THE CONDITIONS AS MENTIONED IN SECTION 11(3) HAVE BEEN TRIGGERED IN T HE INSTANT CASE. EVEN IF IT HAD BEEN SO, ADDITION IF ANY WOULD HAVE BEEN MADE IN THE YEAR IN WHICH THE ANY OF THE ABOVE MENTIONED CLAUSES OF SEC TION 11(3) ARE NOT [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 9 SATISFIED. IN THE INSTANT CASE, NONE OF THE CLAUSES OF SECTION 11(3) HAVE BEEN TRIGGERED. 9. THE TERMS APPLIED, ACCUMULATED AND SPENT HAVE DIFFERENT CONNOTATIONS WHICH ARE DETAILED AS UNDER A. APPLIED THE EXPRESSION APPLIED IS A BROADER TERM THAT COMPRISES NOT ONLY THE AMOUNT SPENT BUT ALSO EXTENDS TO AMOUN T LAID OUT AND ACCUMULATED FOR FUTURE SPENDING. THIS EXPRESSION UP HOLDS ALL EXPENDITURE INCURRED FOR THE PURPOSES OF CHARITABLE OR RELIGIOUS. B. ACCUMULATED IN COMMON PARLANCE IT MEANS SURPLUS CARRIED FORW ARD FOR FUTURE SPENDING. IT MEANS THE INCOME IS SET APA RT DURING THE YEAR FOR FUTURE SPENDING FOR CHARITABLE OR RELIGIOUS PUR POSES. C. SPENT SIGNIFIES ACTUALLY PAID. THERE MUST BE AN OUTGOI NG EXPENDITURE TO QUALIFY THIS. B. BASIS TO INVOKE THE PROVISIONS OF SECTION 263 VIS- -VIS DIRECTION GIVEN IN THE ORDER PASSED U/S 263 1. SHOW CAUSE NOTICE U/S 263 WAS ISSUED BY LD. CIT(EXEMPTION) STATING T HAT THE ACCUMULATION U/S 11(2) WAS NOT ALLOWABLE AND THE SAME WAS NOT DISALLOWED IN THE SCRUTINY ASSESSMENT BY LD. AO. [PB 04] 2. LD. CIT(EXEMPTION) WHILE PASSING THE ORDER U/S 263 SET ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 03.03.2016 AND DIRECTED ASSESSING OFFICER TO REFRAME THE ASSESSMENT ORDER D ENOVO AND AFTER VERIFYING THE METHOD OF ACCOUNTING ACTUALLY FOLLOWE D ON YEAR TO YEAR BASIS . [ORDER PASSED U/S 263 PAGE 5] 3. ASSESSEE SUBMITS THAT SHOW CAUSE NOTICE ISSUED BY L D. CIT(EXEMPTION) DID NOT RAISE THE ISSUE OF ASSESSMENT ORDER ITSELF BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE NOR WAS T HE ASSESSEE CONFRONTED WITH THE DURING THE REVISIONARY PROCEEDI NGS. NO OPPORTUNITY WAS GIVEN TO MEET THE GROUND ON WHICH THE ORDER U/S 263 HAS BEEN [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 10 PASSED BY LD. CIT(EXEMPTION). IT WILL BE AGAINST TH E PRINCIPLE OF NATURAL JUSTICE THAT AN ASSESSEE WHO HAS NOT BEEN CONFRONTED WITH ANY GROUND BE SADDLED WITH THE LIABILITY THEREOF. HONBLE APEX COURT IN THE CASE OF TOYO ENGG. INDIA LIMITED [2006] 7 SCC 592 HAD NOTED THAT THE DEPARTMENT CANNOT TRAVEL BEYOND THE SHOW CAUSE NOTICE. 4. RELIANCE IS PLACED ON FOLLOWING JUDICIAL PRECEDENTS A. HONBLE DELHI HIGH COURT IN THE CASE OF CONTIMETERS ELECTRICALS (P.) LIMITED [2009] 178 TAXMAN 422 ORDER PRONOUNCED ON 02.12.2008 PARA 10 TE TRIBUNAL CONSIDERED THE RIVAL CONTENTIONS AND RE FERRED TO THE SUPREME COURT'S DECISION IN THE CASE OF COMMISSIONER OF CUSTOMS V. TOYO ENGG. INDIA LTD. [2006] 7 SCC 592 W HEREIN THE SUPREME COURT NOTED THAT THE DEPARTMENT CANNOT TRAV EL BEYOND THE SHOW-CAUSE NOTICE . THE TRIBUNAL WAS OF THE VIEW THAT THE GROUND THAT THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS LAID DOWN UNDER SECTION 80-IA DID NOT FORM PART OF THE SHOW-CAUSE NOTICE. THE TRIBUNAL ACCEPTED THE ARGUMENT OF THE ASSESSEE THAT THE COMM ISSIONER OF INCOME-TAX DID NOT EVEN CALL FOR ANY EXPLANATION ON THIS ISSUE AND, THEREFORE, THE ASSESSEE DID NOT HAVE ANY OPPORTUNIT Y TO MEET THIS GROUND . THE TRIBUNAL WAS OF THE VIEW THAT IT WOULD BE AGA INST THE PRINCIPLES OF NATURAL JUSTICE THAT A PERSON WHO HAS NOT BEEN CONFRONTED WITH ANY GROUND BE SADDLED WITH THE LIAB ILITY THEREOF. CONSEQUENTLY THE TRIBUNAL HELD THAT AS THE SAID ISS UE DID NOT FORM PART OF THE SHOW-CAUSE NOTICE AND THE ASSESSEE WAS NOT EVEN CONFRONTED WITH IT, EVEN BEFORE THE CIT, IT CANNOT FORM THE BASIS FOR REVISION OF THE ASSESSMENT ORDER UNDER SECTION 263 PARA 11 ON THIS ASPECT OF THE MATTER ALSO, WE ARE SATISFIED WITH THE FINDINGS AND THE APPROACH TAKEN BY THE INC OME-TAX APPELLATE TRIBUNAL . NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. [EMPHASIS SUPPLIED] [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 11 5. IN THE INSTANT CASE, ASSESSEE WAS NOT CONFRONTED WI TH THE ISSUE ON THE BASIS OF WHICH THE ASSESSMENT ORDER PASSED U/S 143( 3) HAS BEEN SET ASIDE THEREBY DIRECTING ASSESSING OFFICER TO REFRAME THE ORDER DENOVO AND THE ISSUE ON WHICH THE METHOD OF ACCOUNTING REG ULARLY FOLLOWED IS BEING QUESTIONED. THIS WOULD BE AGAINST THE PRINCIP LE OF NATURAL JUSTICE. HENCE, THE IMPUGNED ORDER OUGHT TO BE QUASHED. C. APPLICATION OF MIND BY LD. AO VIS--VIS LD. CIT(EXE MPTION) 1. ASSESSMENT PROCEEDINGS U/S 143(3):- IN THE INSTANT CASE, ASSESSMENT PROCEEDINGS WERE INITIATED AND NOTICE U/S 143(2) WA S ISSUED ON 18.09.2014. VARIOUS NOTICES AND QUESTIONNAIRES WERE ISSUED IN RESPONSE TO WHICH REPLIES AND SUPPORTING DOCUMENTS WERE DULY SUBMITTED BEFORE LD. AO. IN THE ASSESSMENT PROCEEDINGS A SPECIFIC QUESTION W AS RAISED ON ADMISSIBILITY OF CLAIM MADE BY ASSESSEE U/S 11(2). IN RESPONSE TO WHICH NECESSARY DOCUMENTS AND SUBMISSION WAS MADE. LD. AO AFTER CONSIDERING AND EXAMINING ALL THESE DOCUMENTS ALLOW ED THE CLAIM OF ASSESSEE. ASSESSMENT ORDER WAS PASSED U/S 143(3) ON 03.03.2016 ACCEPTING THE RETURNED INCOME AS ASSESSED INCOME. 2. REVISIONARY PROCEEDINGS U/S 263:- SHOW CAUSE NOTICE U/S 263 WAS ISSUED ON 13.03.2018 STATING THAT THE ACCUMULATION U/S 11(2) OF THE ACT WAS NOT ALLOWABLE TO ASSESSEE. THE SAME WAS NOT DIS ALLOWED IN THE SCRUTINY ASSESSMENT. REPLY TO THE ABOVE MENTIONED SHOW CAUSE NOTICE WAS SUBMITTED ON 19.03.2018. IN THIS ASSESSEE SUBMITTED THAT ACCU MULATION OF FUND U/S 11(2) HAS BEEN CORRECTLY ALLOWED BY LD. AO AFTER EX AMINING THE SAID CLAIM DURING THE ASSESSMENT PROCEEDINGS. LD. CIT(EXEMPTION) REJECTED THE SUBMISSION OF ASSESS EE AND PASSED THE ORDER U/S 263 ON 21.03.2018 SETTING ASID E THE ASSESSMENT ORDER PASSED U/S 143(3) ON 03.03.2016. LD. CIT(EXEM PTION) DIRECTED ASSESSING OFFICER TO REFRAME THE ASSESSMENT ORDER D ENOVO AND AFTER [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 12 VERIFYING THE METHOD OF ACCOUNTING ACTUALLY FOLLOWE D ON YEAR TO YEAR BASIS. [ORDER U/S 263 PAGE 5] 3. LD. AO INITIATED ASSESSMENT PROCEEDINGS ON 18.09.20 14 AND PASSED ORDER U/S 143(3) ON 03.03.2016. LD. CIT(EXEMPTION) ISSUED SHOW CAUSE NOTICE U/S 263 ON 13.03.2018 AND PASSED ORDER U/S 263 ON 21.03.2018. 4. ALL THE NECESSARY DOCUMENTARY EVIDENCES WERE PLACED ON RECORD BEFORE LD. AO. LD. AO HAD MADE ENQUIRIES AND EXAMINED THE DOCUMENTS SUBMITTED. THUS, IT IS NOT A CASE OF NON-APPLICATIO N OF MIND BY THE LD. AO. INVOKING PROVISIONS OF SECTION 263 IS NOT IN AC CORDANCE WITH THE LAW BY THE LD. CIT(EXEMPTION). 5. RELIANCE IS PLACED ON FOLLOWING JUDICIAL PRECEDENTS A. HONBLE JURISDICTIONAL HIGH COURT OF MADHYA PRADESH IN THE CASE OF RATLAM COAL ASH CO. [1987] 34 TAXMAN 443 ORDER PRONOUNCED ON 17.08.1987 HELD IT IS WELL SETTLED THAT WHERE THE ITO MADE THE ASSESSMENT IN UNDUE HURRY, ACCEPTING WHAT THE ASSES SEE STATES IN THE RETURN WITHOUT MAKING ANY ENQUIRIES IN THE CIRCUMST ANCES OF THE CASE, THE COMMISSIONER WOULD BE JUSTIFIED IN HOLDING THE O RDER OF THE ITO TO THE ERRONEOUS. HOWEVER, IN THE INSTANT CASE, THE TRIBUNAL HAD FOUND THAT THE ASSESSEE HAD FURNISHED ALL THE REQUISITE I NFORMATION AND THAT THE ITO CONSIDERING ALL THE FACTS HAD COMPLETE D THE ASSESSMENT. IT WAS FURTHER HELD THAT IN THE CIRCUMS TANCES OF THE CASE IT COULD NOT BE HELD THAT THE ITO HAD MADE ASSESSME NT WITHOUT MAKING PROPER ENQUIRIES. ACCORDINGLY, THE TRIBUNAL WAS JUSTIFIED IN REVERSING THE ORDER PASSED BY THE COMMISSIONER. [EMPHASIS SUPPLIED] B. HONBLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR SHARMA [2010] 194 TAXMAN 504 ORDER PRONOUNCED ON 24.04.2010 PARA 7 IN VIEW OF THE ABOVE DISCUSSION, IT IS APPARENT THAT T HE TRIBUNAL ARRIVED AT A CONCLUSIVE FINDING THAT, THOUGH THE ASSESSMENT ORDER DOES NOT [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 13 PATENTLY INDICATE THAT THE ISSUE IN QUESTION HAD BE EN CONSIDERED BY THE ASSESSING OFFICER, THE RECORD SHOWED THAT THE A SSESSING OFFICER HAD APPLIED HIS MIND. ONCE SUCH APPLICATION OF MIND IS DISCERNIBLE FROM THE RECORD, THE PROCEEDINGS UNDER SECTION 263 WOULD FELL INTO THE AREA OF THE COMMISSIONER HAVING A DIFFERENT OPI NION. WE ARE OF THE VIEW THAT THE FINDINGS OF FACTS ARRIVED AT BY T HE TRIBUNAL DO NOT WARRANT INTERFERENCE OF THIS COURT. THAT BEING THE POSITION, THE PRESENT CASE WOULD NOT BE ONE OF 'LACK OF INQUIRY' AND, EVEN IF THE INQUIRY WAS TERMED AS INADEQUATE, FOLLOWING THE DEC ISION IN SUNBEAM AUTO LTD.'S CASE (SUPRA), 'THAT WOULD NOT B Y ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER S ECTION 263 OF THE SAID ACT, MERELY BECAUSE HE HAS A DIFFERENT OPI NION IN THE MATTER'. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONS IDERATION. CONSEQUENTLY, THE APPEAL IS DISMISSED. [EMPHASIS SUPPLIED] C. HONBLE JURISDICTIONAL HIGH COURT OF MADHYA PRADESH IN THE CASE OF MEHROTRA BROTHERS [2004] 270 ITR 157 SECTION 263 OF THE INCOME-TAX ACT, 1961 REVISION OF ORDERS PREJUDIC IAL TO INTEREST OF REVENUE - COMMISSIONER INVOKED PROVISION OF SECTION 263 AGAINST ASSESSMENT ORDER PASSED IN CASE OF ASSESSEE-FIRM ON GROUND THAT ASSESSING OFFICER DID NOT MAKE PROPER ENQUIRY REGAR DING GENUINENESS OF CERTAIN CASH CREDITS FOUND IN BOOKS OF FIRM HOWEVER, TRIBUNAL HELD THAT SINCE ASSESSEE HAD EXPLAINED SATISFACTORI LY CASH CREDIT IN BOOKS OF ACCOUNT AND DISCHARGED BURDEN AND DEPARTME NT HAD NOT BROUGHT OUT MATERIAL OR EVIDENCE TO REBUT SAME, CAS H CREDITS WERE NOT INCOME OF ASSESSEE-FIRM AND, ACCORDINGLY, SET A SIDE ORDER OF COMMISSIONER PASSED UNDER SECTION 263 WHETHER IN VIEW OF FINDING OF FACT RECORDED BY TRIBUNAL, NO SUBSTANTIAL QUESTI ON OF LAW AROSE OUT OF IMPUGNED ORDER HELD, YES WHETHER, THEREFORE, INSTANT APPEAL WAS TO BE DISMISSED HELD, YES [EMPHASIS SUPPLIED] D. HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. [2000] 243 ITR 83 ORDER PRONOUNCED ON 10.02.2000 HEAD NOTE ' SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDERS PREJUDICIAL TO INTERESTS OF REVENUE - ASSESSMENT YEA R 1983-84 - WHETHER IN ORDER TO INVOKE SECTION 263 ASSESSING OF FICER'S ORDER MUST BE ERRONEOUS AND ALSO PREJUDICIAL TO REVENUE AND IF ONE OF THEM IS [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 14 ABSENT, I.E., IF ORDER OF INCOME-TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO REVENUE OR IF IT IS NOT ERRONEOUS BU T IS PREJUDICIAL TO REVENUE, RECOURSE CANNOT BE HAD TO SECTION 263(1) - HELD, YES - WHETHER IF DUE TO AN ERRONEOUS ORDER OF ITO, REVENU E IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO INTERESTS OF REVENUE - HELD, YES - ASSESSEE-COMPANY ENTERED INTO AGREEMENT FOR SALE OF ESTATE OF RUBBER PLANTATION - AS PURCHASER COULD NOT PAY INSTALMENTS AS SCHEDULED IN AGREEMENT, EXTE NSION OF TIME FOR PAYMENT OF INSTALMENTS WAS GIVEN ON CONDITION OF VE NDEE PAYING DAMAGES FOR LOSS OF AGRICULTURAL INCOME AND ASSESSE E PASSED RESOLUTION TO THAT EFFECT - ASSESSEE SHOWED THIS RE CEIPT AS AGRICULTURAL INCOME - RESOLUTION PASSED BY ASSESSEE WAS NOT PLAC ED BEFORE ASSESSING OFFICER - ASSESSING OFFICER ACCEPTED ENTR Y IN STATEMENT OF ACCOUNT FILED BY ASSESSEE AND ACCEPTED SAME - COMMI SSIONER UNDER SECTION 263 HELD THAT SAID AMOUNT WAS NOT CONNECTED WITH AGRICULTURAL ACTIVITIES AND WAS LIABLE TO BE TAXED UNDER HEAD 'INCOME FROM OTHER SOURCES' - WHETHER, WHERE ASSESSING OFFI CER HAD ACCEPTED ENTRY IN STATEMENT OF ACCOUNT FILED BY ASSESSEE, IN ABSENCE OF ANY SUPPORTING MATERIAL WITHOUT MAKING ANY ENQUIRY, EXE RCISE OF JURISDICTION BY COMMISSIONER UNDER SECTION 263(1) WA S JUSTIFIED - HELD, YES [EMPHASIS SUPPLIED] E. HONBLE DELHI HIGH COURT IN THE CASE OF SUNBEAM AUTO LIMITED [2010] 189 TAXMAN 436 ORDER PRONOUNCED ON 11.09.2009 HEAD NOTE SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDER PREJUDICIAL TO INTEREST OF REVENUE - ASSESSMENT YEAR 2001-02 - WHETHER IF WHILE MAKING ASSESSMENT, ASSESSING OFFIC ER HAS MADE AN INADEQUATE ENQUIRY , THAT WOULD NOT, BY ITSELF, GIV E OCCASION TO COMMISSIONER TO PASS ORDER UNDER SECTION 263, MEREL Y BECAUSE HE HAS DIFFERENT OPINION IN MATTER, IT IS ONLY IN CASE S OF 'LACK OF INQUIRY' THAT SUCH A COURSE OF ACTION WOULD BE OPEN - HELD, YES - ASSESSEE- COMPANY WAS ENGAGED IN BUSINESS OF MANUFACTURING AN D SUPPLYING AUTO PARTS - IN ASSESSMENT FOR RELEVANT ASSESSMENT YEAR, IT HAD BEEN ALLOWED DEDUCTION OF EXPENDITURE INCURRED ON TOOLS AND DYES AS REVENUE EXPENDITURE - COMMISSIONER, HOWEVER, SET AS IDE ASSESSMENT ORDER IN EXERCISE OF HIS POWERS UNDER SECTION 263 O N GROUND THAT [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 15 ASSESSING OFFICER HAD ALLOWED AFORESAID EXPENDITURE WITHOUT MAKING PROPER ENQUIRY - HE, ACCORDINGLY, REMITTED MATTER B ACK TO ASSESSING OFFICER TO RE-EXAMINE ISSUE - WHETHER WHEN FACTS CL EARLY SHOWED THAT ASSESSING OFFICER HAD UNDERTAKEN EXERCISE OF EXAMIN ING AS TO WHETHER EXPENDITURE INCURRED BY ASSESSEE IN REPLACEMENT OF DYES AND TOOLS WAS TO BE TREATED AS REVENUE EXPENDITURE OR NOT AND ON BEING SATISFIED WITH ASSESSEE'S EXPLANATION, HE ACCEPTED SAME, IT COULD BE SAID TO BE A CASE OF LACK OF INQUIRY - HELD, NO - WHETHER FURTHER, ON FACTS AND LAW, VIEW TAKEN BY ASSESSING OFFICER WAS ONE OF POSSIBLE VIEWS AND, THEREFORE, ASSESSMENT ORDER PASSED BY AS SESSING OFFICER COULD NOT BE HELD TO BE PREJUDICIAL TO INTEREST OF REVENUE - HELD, YES - WHETHER, THEREFORE, TRIBUNAL WAS JUSTIFIED IN SETTI NG ASIDE ORDER OF COMMISSIONER - HELD, YES [EMPHASIS SUPPLIED] F. HONBLE DELHI HIGH COURT IN THE CASE OF HINDUSTAN MARKETING & ADVERTISING CO. LIMITED [2011] 196 TAXMAN 368 ORDER PRONOUNCED ON 21.09.2010 HEAD NOTE SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDERS PREJUDIC IAL TO INTEREST OF REVENUE - ASSESSMENT YEARS 1983-84 AND 1984-85 - AS SESSEE- COMPANY WAS INCORPORATED WITH AN OBJECT OF CARRYING ON BUSINESS OF MARKETING AGENTS AND TO RENDER MARKETING SERVICES, ETC. - FOR RELEVANT ASSESSMENT YEARS, ASSESSEE FILED ITS RETURNS AND AS SESSMENTS WERE FRAMED - COMMISSIONER SET ASIDE ASSESSMENT ORDERS H OLDING THAT ITO HAD NOT MADE ADEQUATE AND DETAILED INVESTIGATIONS/E NQUIRIES IN RESPECT OF A MAJOR AREA OF ASSESSEE-COMPANYS OPERAT ION AND SOURCE OF ITS INCOME - TRIBUNAL QUASHED REVISIONAL ORDER P ASSED BY COMMISSIONER - WHETHER IN VIEW OF FACT THAT ITO HAD MADE REASONABLY DETAILED ENQUIRIES, HAD COLLECTED RELEVA NT MATERIAL AND DISCUSSED VARIOUS FACETS OF CASE WITH ASSESSEE, ORD ER OF COMMISSIONER TO DIRECT FRESH ASSESSMENT BY GOING DE EPER INTO MATTER WOULD NOT FORM A VALID OR LEGAL BASIS TO EXE RCISE JURISDICTION UNDER SECTION 263 - HELD, YES - WHETHER, THEREFORE, IMPUGNED ORDER OF TRIBUNAL WAS TO BE UPHELD - HELD, YES [EMPHASIS SUPPLIED] D. LACK OF ENQUIRY VERSUS INADEQUATE ENQUIRY CONDUCTED BY LD. AO : [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 16 1. LD. AO DURING THE ASSESSMENT PROCEEDINGS RAISED A S PECIFIC QUERY ON ADMISSIBILITY OF CLAIM U/S 11(2). IN RESPONSE TO WH ICH RELEVANT DOCUMENTS INCLUDING FORM 10 WERE SUBMITTED. LD. AO CONDUCTED NECESSARY ENQUIRIES AND WAS SATISFIED WITH THE SUBM ISSION OF ASSESSEE. IF QUERY WAS RAISED DURING SCRUTINY AND WAS ANSWERED T O THE SATISFACTION OF LD. AO THEN MERE NON-DISCUSSION OR NON-MENTION THER EOF IN THE ASSESSMENT ORDER COULD NOT LEAD TO ASSUMPTION THAT LD. AO DID NOT APPLY HIS MIND OR HE HAD NOT MADE INQUIRY ON THE SU BJECT MATTER 2. LD. AO ALLOWED THE CLAIM ON BEING SATISFIED WITH TH E EXPLANATION OF ASSESSEE, ON AN ENQUIRY MADE DURING THE COURSE OF A SSESSMENT PROCEEDINGS. THUS, THE DECISION OF LD. AO CANNOT BE HELD TO BE ERRONEOUS. IT IS THE PRACTICE THAT WHENEVER ANY CLA IM OF THE ASSESSEE IS ACCEPTED, ASSESSING OFFICER MAY NOT DISCUSS THE SAM E IN HIS ASSESSMENT ORDER. 3. DISTINCTION IS TO BE APPRECIATED BETWEEN LACK OF ENQUIRY AND INADEQUATE ENQUIRY . IF THERE WAS ANY ENQUIRY, EVEN INADEQUATE THAT WO ULD NOT BY ITSELF GIVE OCCASION TO LD. CIT(EXEMPTION) TO PASS ORDER U/S 263, MERELY BECAUSE HE HAS DIFFERENT OPINION IN THE MATTER. IT IS ONLY IN CASES OF LACK OF ENQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN FOR THE LD. PR. CIT. 4. RELIANCE IS PLACED ON FOLLOWING JUDICIAL PRECEDENTS A. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF KRISHNA CAPBOX (P) LTD [2015] 60 TAXMANN.COM 243 ORDER PRONOUNCED ON 23.02.2015 HEAD NOTE SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDERS PREJUDICIAL TO INTEREST OF REVENUE (ERRONEOUS ORDER) - ASSESSMENT YEAR 2008-09 - ASSESSEE FILED ITS RETURN - CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICE WAS ISSU ED - ASSESSING OFFICER MADE CERTAIN QUERIES, WHICH WERE REPLIED BY ASSESSEE AND AFTER INQUIRY, BEING SATISFIED IN RESPECT TO QUERIE S REPLIED BY ASSESSEE, ASSESSING OFFICER ACCEPTED DECLARED INCOM E AND PASSED ASSESSMENT ORDER - COMMISSIONER, HOWEVER, ISSUED A NOTICE UNDER SECTION 263 ON GROUND THAT ASSESSING OFFICER HAD NO T MADE INQUIRY ON [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 17 CERTAIN ASPECTS AND ACCEPTED VERSION OF ASSESSEE WI THOUT MAKING ANY INQUIRY OR VERIFICATION, WHICH WAS SUBSTANTIALLY PR EJUDICIAL TO REVENUE - ACCORDINGLY, HE PARTLY SET ASIDE ASSESSMENT - TRIBUNAL HELD THAT ONCE INQUIRY WAS MADE, A MERE NON-DISCUSSION OR NON-MENT ION THEREOF IN ASSESSMENT ORDER COULD NOT LEAD TO ASSUMPTION THAT ASSESSING OFFICER DID NOT APPLY HIS MIND OR THAT HE HAD NOT M ADE INQUIRY ON SUBJECT AND THIS WOULD NOT JUSTIFY INTERFERENCE BY COMMISSIONER BY ISSUING NOTICE UNDER SECTION 263 - WHETHER SINCE DEPARTMENT COULD NOT PLACE ANYTHING TO SHOW THAT FINDINGS RECORDED B Y TRIBUNAL WERE PERVERSE OR CONTRARY TO RECORD, INVOKING OF REVISIO N PROCEEDINGS WAS UNJUSTIFIED - HELD, YES [PARA 13] [IN FAVOUR OF ASSESSEE] [EMPHASIS SUPPLIED] B. HONBLE DELHI HIGH COURT IN THE CASE OF VIKAS POLYMERS [2010] 194 TAXMAN 57 ORDER PRONOUNCED ON 16.08.2010 HEAD NOTE SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDERS PREJUDICIAL TO INTERESTS OF REVENUE - ASSESSMENT YEA R 1982-83 - WHETHER FOR EXERCISING POWER UNDER SECTION 263, IT IS A PREREQUISITE THAT COMMISSIONER MUST GIVE REASONS TO JUSTIFY EXERC ISE OF SUO MOTU REVISIONAL POWERS BY HIM TO REOPEN A CONCLUDED ASSE SSMENT AND EXERCISE OF POWER BEING QUASI-JUDICIAL IN NATURE, RE ASONS MUST BE SUCH AS TO SHOW THAT ENHANCEMENT OR MODIFICATION OF ASSE SSMENT OR CANCELLATION OF ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLED FOR, AND MUST IRRESISTIBLY LEAD TO CONC LUSION THAT ORDER OF ASSESSING OFFICER WAS NOT ONLY ERRONEOUS BUT WAS AL SO PREJUDICIAL TO INTEREST OF REVENUE - HELD, YES - WHETHER BEFORE EX ERCISING REVISIONAL POWERS, ASSESSEE MUST BE CALLED, HIS EXPLANATION SO UGHT FOR AND EXAMINED BY COMMISSIONER, AND THEREAFTER, IF COMMIS SIONER STILL FEELS THAT ORDER IS ERRONEOUS AND PREJUDICIAL TO INTEREST OF REVENUE, COMMISSIONER MAY PASS REVISIONAL ORDERS - HELD, YES - WHETHER IF A QUERY WAS RAISED DURING COURSE OF SCRUTINY BY ASSES SING OFFICER, WHICH WAS ANSWERED TO SATISFACTION OF ASSESSING OFF ICER, BUT NEITHER QUERY NOR ANSWER WAS REFLECTED IN ASSESSMENT ORDER, THAT WOULD NOT, BY ITSELF, LEAD TO CONCLUSION THAT ORDER OF AS SESSING OFFICER CALLED FOR INTERFERENCE AND REVISION - HELD, YES [EMPHASIS SUPPLIED] [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 18 C. HONBLE DELHI HIGH COURT IN THE CASE OF ASHISH RAJPAL [2009] 320 ITR 674 ORDER PRONOUNCED ON 14.05.2009 HEAD NOTE SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORD ERS PREJUDICIAL TO INTEREST OF REVENUE - ASSESSMENT YEAR 2002-03 - WHETHER MERELY BECAUSE AN ASSESSMENT ORDER DOES NOT REFER TO QUERI ES RAISED BY ASSESSING OFFICER DURING COURSE OF SCRUTINY AND RES PONSE OF ASSESSEE THERETO, IT CAN BE SAID THAT THERE HAS BEEN NO ENQU IRY AND, HENCE, ASSESSMENT IS ERRONEOUS AND PREJUDICIAL TO INTEREST OF REVENUE - HELD, NO - WHETHER IT IS REQUIREMENT OF SECTION 263 THAT AS SESSEE MUST HAVE AN OPPORTUNITY OF BEING HEARD IN RESPECT OF THOSE ERRORS WHICH COMMISSIONER PROPOSES TO REVISE - HELD, YES - WHETHER TO ACCORD SUCH AN OPPORTUNITY AFTER SETTING ASIDE ASSE SSMENT ORDER WOULD MEET MANDATE OF SECTION 263 - HELD, NO - WHET HER WHERE NOTICE ISSUED BY COMMISSIONER BEFORE COMMENCING PRO CEEDINGS UNDER SECTION 263 REFERRED TO FOUR ISSUES AND FINAL ORDER PASSED REFERRED TO NINE ISSUES, REVISIONAL PROCEEDINGS WER E VITIATED AS A RESULT OF BREACH OF PRINCIPLES OF NATURAL JUSTICE - HELD, YES [EMPHASIS SUPPLIED] D. HONBLE MUMBAI BENCH OF ITAT IN THE CASE OF ANIL SHAH [2007] 162 TAXMAN 39 ORDER PRONOUNCED ON 21.01.2006 HEAD NOTE SECTION 263, READ WITH SECTION 80HHC, OF THE INCOM E-TAX ACT, 1961 - REVISION - OF ORDERS PREJUDICIAL TO INTEREST OF REVE NUE - ASSESSMENT YEAR 2000-01 - WHETHER IF ALL RELEVANT DETAILS HAVE BEEN FILED BY ASSESSEE AND ASSESSING OFFICER ALLOWS ASSESSEES CL AIM, DECISION OF ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS SI MPLY BECAUSE IN HIS ORDER HE DOES NOT MAKE ANY ELABORATE DISCUSSION IN THAT REGARD - HELD, YES [EMPHASIS SUPPLIED] 5. LD. CIT(EXEMPTION) HAS INVOKED THE PROVISIONS OF SE CTION 263 MAINLY FOR THE REASON THAT ACCUMULATION U/S 11(2) WAS NOT ALLO WABLE AND WAS TO BE DISALLOWED IN THE SCRUTINY ASSESSMENT BY LD. AO. BU T CONSIDERING THE FACTS OF INSTANT CASE THE ALLEGATION IS FACTUALLY N OT CORRECT. 6. RELIANCE IS PLACED ON FOLLOWING JUDICIAL PRECEDENT [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 19 A. HONBLE JURISDICTIONAL BENCH OF INDORE ITAT IN THE CASE OF NAROTTAM MISHRA [2015] 25 ITJ 206 - EVEN THIS IS NOT THE CASE OF THE LD. CIT THAT CERTAIN EVIDENCES WERE OVERLOOKED WHICH WERE V ERY MUCH ON RECORD OR IN THE KNOWLEDGE OF THE AO . EVEN THIS IS NOT THE CASE OF LD. CIT THAT CERTAIN NEW FACTS OR EVIDENCES WERE BROUGH T TO THE NOTICE OF THE REVENUE DEPARTMENT WHICH WERE HAVING A DIREC T IMPACT ON THE INCOME ASSESSED BY THE AO. NEITHER THERE WAS AN ESCAPEMENT OF EVIDENCE NOR THERE WAS ANY EVIDENCE NOW BROUGHT TO THE NOTICE OF THE REVENUE DEPARTMENT, THEREFORE IF THAT WAS NOT T HE POSITION, THEN WE ARE NOT INCLINED TO GIVE OUR APPROVAL TO SU CH DIRECTIONS . IT IS WELL SETTLED THAT IF THE SAME INQUIRY BY THE ASSESSING OFFICER IN ALL ORIGINAL PROCEEDINGS EVEN IF IT INAD EQUATE THAT CANNOT FLOUT THE COMMISSIONER WITH JURISDICTION U/S 263 ME RELY BECAUSE HE CAN FORM ANOTHER OPINION . [EMPHASIS SUPPLIED] E. ENQUIRY TO BE CONDUCTED BY PR.CIT BEFORE MAKING AN ORDER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 : 1. SECTION 263(1) .....................AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIR CUMSTANCES OF THE CASE JUSTIFY............... TO INVOKE PROVISIONS OF SECTION 263, PR. CIT IS REQ UIRED TO CONDUCT SUCH ENQUIRIES AS HE DEEMS TO BE NECESSARY. 2. SHOW CAUSE NOTICE ISSUED U/S 263 STATES THE FOLLOWI NG REASON FOR INVOKING PROVISIONS OF SECTION 263 ACCUMULATION U/S 11(2) OF THE ACT WAS NOT ALLOWABLE TO THE ASSESSEE. HOWEVER, THE SAM E WAS NOT DISALLOWED IN THE SCRUTINY ASSESSMENT BY THE AO 3. FROM THE ABOVE IT IS EVIDENT THAT IN THE ASSESSMENT PROCEEDINGS LD. AO RAISED A SPECIFIC QUERY ABOUT ADMISSIBILITY OF CLAI M U/S 11(2). IN RESPONSE [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 20 TO WHICH RELEVANT DOCUMENTS WERE SUBMITTED. NO ENQUIRY WAS CONDUCTED BY LD. CIT(EXEMPTION) TO ASCERTAIN THE CL AIM MADE U/S 11(2) AND ITS ACTUAL UTILIZATION. LD. CIT(EXEMPTION) CHOSE TO INVOKE THE PROVISIONS OF SECTION 263 ON THE BASIS OF DOCUMENTS WHICH WERE ALREADY ON RECORD AND DEALT WITH BY LD. AO IN THE ASSESSMEN T PROCEEDINGS. 4. SECTION 263 CONFERS A POWER TO THE LD. CIT(EXEMPTIO N) TO MAKE FURTHER ENQUIRY BEFORE PASSING THE FINAL ORDER. THIS POWER OF FURTHER ENQUIRY IS TO ENABLE TO REACH A CONCLUSION THAT THE ORDER OF T HE ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERE ST OF THE REVENUE. LD. CIT(EXEMPTION) OUGHT TO HAVE MADE THE NECESSARY ENQ UIRY. HE HAS FAILED TO DO SO. INSTEAD HE HAS DIRECTED THE LD. AO TO REFRAME THE ASSESSMENT ORDER DENOVO AND TO VERIFY THE METHOD OF ACCOUNTING ACTUALLY FOLLOWED ON YEAR TO YEAR BASIS. RELIANCE IS PLACED ON THE DECISION OF RAGHAV CHANDRA ITA NO. 425/IND/2014 (INDORE TRIB) DATED 04.08.2015 CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF TH E CASE, SUBMISSIONS MADE, DOCUMENTS ON RECORD AND JUDICIAL PRECEDENTS, APPEAL OF THE ASSESSEE BE ALLOWED AND THE ORDER PASSED U/S 263 BE QUASHED. 3. LD. CIT(DR) OPPOSED THESE SUBMISSIONS AND HAS TAKEN US THROUGH THE VARIOUS PROVISIONS OF LAW. LD. CIT(D R) SUBMITTED THAT THE A.O. FAILED TO TAKE NOTE OF THE PRO VISIONS IN VOGUE. HE HAS DRAWN OUR ATTENTION TO THE PROVISIO NS OF SECTION 11(2)&(3) OF THE ACT TO BUTTRESS HIS ARGUMEN TS. [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 21 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FOR THE SAKE OF CLARITY, SE CTION 11(2) & 11(3) OF THE ACT ARE REPRODUCED AS UNDER: (2) WHERE EIGHTY-FIVE PER CENT OF THE INCOME REFER RED TO IN CLAUSE ( A ) OR CLAUSE ( B ) OF SUB-SECTION (1) READ WITH THE EXPLANATION TO THAT SUB-SECTION IS NOT APPLIED, OR IS NOT DEEMED TO HAVE BEEN APPLIED, TO CHARITABL E OR RELIGIOUS PURPOSES IN INDIA DURING THE PREVIOUS YEAR BUT IS ACCUMULATED OR SET APART, EITHER IN WHOLE OR IN PART, FOR APPLICATION TO SUCH PURPOSES IN INDIA, SUCH INC OME SO ACCUMULATED OR SET APART SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PR EVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME, PROVIDED THE FOLLOWING CONDI TIONS ARE COMPLIED WITH, NAMELY: ( A ) SUCH PERSON FURNISHES A STATEMENT IN THE PRESCRI BED FORM AND IN THE PRESCRIBED MANNER TO THE ASSESSING OFFICER, STATING THE PURPOS E FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PERIOD FOR W HICH THE INCOME IS TO BE ACCUMULATED OR SET APART, WHICH SHALL IN NO CASE EX CEED FIVE YEARS; ( B ) THE MONEY SO ACCUMULATED OR SET APART IS INVESTE D OR DEPOSITED IN THE FORMS OR MODES SPECIFIED IN SUB-SECTION (5); ( C ) THE STATEMENT REFERRED TO IN CLAUSE ( A ) IS FURNISHED ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139 FOR FURNISHING THE RETURN OF INCOME FOR THE PREVIOUS YEAR: PROVIDED THAT IN COMPUTING THE PERIOD OF FIVE YEARS REFERRED TO IN CLAUSE ( A ), THE PERIOD DURING WHICH THE INCOME COULD NOT BE APPLIED FOR THE PURPOSE FOR WHICH IT IS SO ACCUMULATED OR SET APART, DUE TO AN ORDER OR INJUNCTION OF ANY COURT, SHALL BE EXCLUDED. EXPLANATION. ANY AMOUNT CREDITED OR PAID, OUT OF INCOME REFERRED TO IN CLAUSE ( A ) OR CLAUSE ( B ) OF SUB-SECTION (1), READ WITH THE EXPLANATION TO THAT SUB-SECTION, WHICH IS NOT APPLIED, BUT IS ACCUMULATED OR SET APA RT, TO ANY TRUST OR INSTITUTION [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 22 REGISTERED UNDER SECTION 12AA OR TO ANY FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION REFERRED TO IN SUB-CLAUSE ( IV ) OR SUB-CLAUSE ( V ) OR SUB-CLAUSE ( VI ) OR SUB- CLAUSE ( VIA ) OF CLAUSE ( 23C ) OF SECTION 10 , SHALL NOT BE TREATED AS APPLICATION OF INCOME FOR CHARITABLE OR RELIGIOUS PURPOSES, EITHER DURING THE PERIOD OF ACCUMULATION OR THEREAFTER. (3) ANY INCOME REFERRED TO IN SUB-SECTION (2) WHICH (A) IS APPLIED TO PURPOSES OTHER THAN CHARITABLE OR REL IGIOUS PURPOSES AS AFORESAID OR CEASES TO BE ACCUMULATED OR SET APART FOR APPLIC ATION THERETO, OR (B) CEASES TO REMAIN INVESTED OR DEPOSITED IN ANY OF TH E FORMS OR MODES SPECIFIED IN SUB-SECTION (5), OR (C) IS NOT UTILISED FOR THE PURPOSE FOR WHICH IT IS SO ACCUMULATED OR SET APART DURING THE PERIOD REFERRED TO IN CLAUSE ( A ) OF THAT SUB-SECTION OR IN THE YEAR IMMEDIATELY FOLLOWING THE EXPIRY THEREOF, (D) IS CREDITED OR PAID TO ANY TRUST OR INSTITUTION REG ISTERED UNDER SECTION 12AA OR TO ANY FUND OR INSTITUTION OR TRUST OR ANY UNIVERSI TY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTIT UTION REFERRED TO IN SUB- CLAUSE ( IV ) OR SUB-CLAUSE ( V ) OR SUB-CLAUSE ( VI ) OR SUB-CLAUSE ( VIA ) OF CLAUSE ( 23C ) OF SECTION 10 , SHALL BE DEEMED TO BE THE INCOME OF SUCH PERSON OF THE PREVIOUS YEAR IN WHICH IT IS SO APPLIED OR CEASES TO BE SO ACCUMULATED OR SET APART OR CEASES TO REMAIN SO INVESTED OR DEPOSITED OR CREDITED OR PAID OR, AS TH E CASE MAY BE, OF THE PREVIOUS YEAR IMMEDIATELY FOLLOWING THE EXPIRY OF THE PERIOD AFORESAID. 5. LD. CIT INVOKED THE PROVISIONS ON THE BASIS AS SET OUT IN THE SHOW CAUSE NOTICE, WHICH IS AS UNDER: [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 23 [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 24 6. DURING THE COURSE OF HEARING, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SHOW CAUSE NOTICE WAS ISSUED ON 13.3.2018 AND FIXING THE DATE OF HEARING ON 16.3.2018. HE [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 25 SUBMITTED THAT THE LD. CIT HAS NOT CARRIED OUT THE ENQUIRIES AS PER THE PROVISIONS OF SECTION 263 OF THE ACT. LD.D.R. HAS NOT REBUTTED THIS SUBMISSION. AS PER TH E RECORDS, IT IS EVIDENT THAT THE SHOW CAUSE NOTICE WAS ISSUED ON 16.3.2018 AND THE IMPUGNED ORDER WAS PASSED ON 21.3.2018. THEREFORE, THE ISSUE OF INITIATION OF TH E PROCEEDINGS IS CONCERNED, WE DO NOT SEE ANY INFIRMIT Y IN TO THE SAME AS THE A.O. FAILED TO TAKE NOTE OF THE PROVISI ONS OF SECTION 11(2) & 11(3) OF THE ACT. THE CONTENTION O F THE ASSESSEE IS THAT THE PROVISIONS OF SECTION 11(3) SUB CLAUSE (D) OF THE ACT SPEAKS THAT IS CREDITED OR PAID TO ANY TRUST OR INSTITUTION REGISTERED U/S 12AA OR TO ANY FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDUC ATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTI ON REFERRED TO IN SUB CLAUSE (4) OR SUB CLAUSE (5) OR SUB CLAUSE (6) OR SUB CLAUSE (6A) OF CLAUSE (23C) OF SECTION 10 OF THE ACT. IN THE PRESENT CASE, NO SUCH SUM WAS CREDITED O R PAID [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 26 TO ANY TRUST OR INSTITUTION. IT IS CONTENDED THAT AMO UNT WAS MERELY SET APART BUT NOT IN FACT CREDITED OR PAID TO ANY TRUST OR INSTITUTION REGISTERED U/S 12AA OF THE ACT . WE FIND MERIT INTO THIS CONTENTION OF THE ASSESSEE. THEREFO RE, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE SAME TO THE F ILE OF THE LD. CIT TO DECIDE IT AFRESH AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND EXAMINING THE RECORDS. GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTIC AL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 . 02.2020. SD / - (MANISH BORAD) SD/ - (KUL BHARAT) A CCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED : 20/02/2020 VG/SPS [ITA NO.322/IND/2018] [M/S. DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION , BHOPAL] 27 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE