THE M.K TATA TRUST, MUMBAI V. CIT (E), MUMBAI

ITA 784/MUM/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2067 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 12-05-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revision of order; Depreciation; Charitable institution
• Section: 263; 11; 143(3); 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.783/Mum./2021 (Assessment Year : 2015–16 ) ITA No.784/Mum./2021 (Assessment Year : 2016–17) The M.K. Tata Trust 3 rd Floor, Army and Navy Building 148, M.G. Road, Near Piramal Chambers Lal Baug, Parel, Mumbai 400 012 PAN – AAATM0320R ................ Appellant v/s Commissioner of Income Tax (Exemption), Mumbai ................ Respondent Assessee by : Shri Rajesh P. Shah Revenue by : Dr. Mahesh Akhade, CIT–DR Date of Hearing – 12.05.2022 Date of Order – 18/05/2022 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeals have been filed by the assessee challenging the impugned orders dated 17.03.2021, passed under section 263 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Exemptions), Mumbai, [“the CIT”] for the assessment year 2015–16 and 2016-17. The M.K. Tata Trust ITA No.783 & 784/Mum./2021 2 2. In ITA No. 784/Mum/2021, assessee has filed revised Form 36 alongwith copy of impugned order dated 17.03.2021 passed under section 263 and assessment order dated 25.11.2018 passed under section 143(3) of the Act, for the assessment year 2016-17, which are taken on record. 3. Since both the appeals pertains to the same assessee and issue involved is also identical, therefore, these appeals were heard together as a matter of convenience and are being adjudicated by way of this consolidated order. Further, as the basic facts in both the appeals are same, we have elaborately mentioned only the facts for the first assessment year (i.e. 2015-16) before us for the sake of brevity. 4. In its appeal for assessment year 2015-16, the assessee has raised following grounds:– “1. On the facts and under the circumstances of the case and in law, the Commissioner of Income Tax, erred in invoking revisionary powers u/s 263 without appreciating the fact that order passed by AO is neither erroneous nor prejudicial to the revenue, hence bad in law. 2. On the facts and circumstances of the case and in law, the learned CIT erred in setting aside the order of the AO and directing assessment de-novo, on the grounds that shares held by the appellant are non-corpus, without appreciating the fact that deed of settlement of 1959 submitted to CIT did mention the shares being settled therein as trust funds which is nothing but corpus and the details of Shareholdings as on date arising out of bonus shares as confirmed by the company (i.e. Tata Sons Ltd). Hence, the action of CIT of invoking revisionary powers is bad in law.” 5. The only grievance of the assessee in both the appeals is against the order dated 17.03.2021 passed by the CIT under section 263 of the Act. The M.K. Tata Trust ITA No.783 & 784/Mum./2021 3 6. The brief facts of the case pertaining to the appeal as emanating from the record are: The assessee is a Public Charitable Trust registered under section 12A of the Act having Registration No. TR/5060. The assessee is also registered with Charity Commissioner, Mumbai vide Registration No. E-1631(Mumbai). The assessee claims to be engaged in charitable activities in the field of education and has thus accordingly claimed exemption under section 11 of the Act. 7. For assessment year 2015-16, the Assessing Officer vide order dated 20.12.2017 passed under section 143(3) of the Act computed total income of assessee at Rs. 4,19,250/- after disallowing claim of depreciation. 8. Subsequently, the CIT vide notice dated 03.02.2021 issued under section 263 of the Act initiated revision proceedings in the case of assessee. The CIT vide aforesaid notice observed that assessee has invested its funds in shares which is prohibited mode of investment prescribed under section 11(5) r.w. section 13(1)(d) of the Act. The CIT further observed that unless such an investment is covered under exceptions provided under section 13(1)(d) of the Act, the assessee is not entitled to claim exemption. The CIT was of the view that since the Assessing Officer has not verified the above aspect, therefore, the order passed by the Assessing Officer was erroneous insofar as it is prejudicial to the interest of Revenue. Accordingly, vide aforesaid notice issued under section 263 of the Act, the assessee was asked to show cause as to why the assessment order passed under section 143(3) be not set-aside under The M.K. Tata Trust ITA No.783 & 784/Mum./2021 4 section 263 of the Act with appropriate directions to the Assessing Officer to re-do the assessment. 9. In reply, the assessee filed detailed submissions before the CIT objecting to initiation of revision proceedings under section 263 of the Act. 10. The CIT vide impugned order dated 17.03.2021 held that the Assessing Officer failed to seek complete details which were required for due verification of the aspect whether the shares were held by the assessee as corpus on 01.06.1973, which is an exempt category. The CIT, inter-alia, by placing reliance on Explanation-(2) to section 263 of the Act held that the Assessing Officer concluded the assessment without due verification and enquiry, and thus the assessment order is erroneous insofar it is prejudicial to the interest of Revenue. Accordingly, the CIT vide impugned order passed under section 263 of the Act set-aside the assessment order and directed the Assessing Officer to make de novo assessment after proper examination of entire gamut of issues involved. Being aggrieved, the assessee is in appeal before us. 11. During the course of hearing, the learned Authorized Representative (“learned A.R.”) submitted that in similar facts and circumstances, the Co- ordinate Bench of the Tribunal in Sir Ratan Tata Trust Vs. DCIT (Exemption) 122 taxmann.com 273 set-aside the order passed under section 263 of the Act. The M.K. Tata Trust ITA No.783 & 784/Mum./2021 5 12. On the other hand, learned Departmental Representative vehemently relied upon the order passed by the CIT. 13. We have considered the rival submissions and perused the material available on record. During the course of hearing, we find that the Assessing Officer, pursuant to directions issued by the CIT vide impugned order passed under section 263 of the Act, accepted the contentions of the assessee and made no further disallowance on the issue on which proceedings under section 263 of the Act were initiated and accordingly passed order dated 12.03.2022 under section 143(3) r.w. section 263 read with section 144B of the Act. Copy of the said order was furnished by the learned A.R. and same was taken on record. 14. In view of the above, as the Assessing Officer has passed the order, and no further addition has been made on the issue on which revision proceedings were initiated, the present appeal being ITA No.783/Mum/2021 filed by the assessee challenging the order passed by the learned CIT under section 263 of the Act for assessment year 2015-16 is rendered academic in nature and therefore, is dismissed as infructuous. 15. Similarly, for assessment year 2016-17, the Assessing Officer vide order dated 13.03.2022 passed under section 143(3) r.w. section 263 read with section 144B of the Act made no further addition on the issue on which revision proceedings under section 263 of the Act were initiated. The M.K. Tata Trust ITA No.783 & 784/Mum./2021 6 Accordingly, ITA No. 784/Mum/2021 is also rendered academic in nature and is dismissed as infructuous. 16. In the result, appeals by the assessee are dismissed. Order pronounced in the open court on 18 th May, 2022. Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 18 th May, 2022 S.K.,Sr. PS Copy of the order forwarded to : (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Assistant Registrar ITAT, Mumbai