C.B. MUBARKA CHARITABLE TRUST, MUMBAI V. CIT (EXEMPTION), MUMBAI

MA 72/MUM/2023

AI Insights

The case involves M/s C.B. Murarka Charitable Trust appealing against the order of the CIT(Exemption) concerning the excess expenditure claimed from the corpus fund, which resulted in a deficit. The Trust argued that their submissions during the revisionary proceedings were not considered and that the AO's decision was sustainable in law. However, the Tribunal found that the AO had not adequately inquired into the claims made by the Trust, leading to a decision that was prejudicial to the interests of the revenue. The Tribunal dismissed the Trust's application, affirming the CIT(Exemption)'s findings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130297 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-03-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 22-01-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 263; 142(1); 254(2)

Judgement Text

P a g e | 1 MA 72/Mum/2023 M/S C.B Murarka Charitable Trust Vs CIT (Exemption) IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M.A. No. 72/Mum/2023 (Arising out of ITA No.638/Mum/2021) (A.Y.2016-17) M/s C.B. Murarka Charitable Trust, B-310, Virwani Industrial Estate, Western Express Highway, Goregaon East Mumbai - 400063 Vs. CIT(Exemption) 617, 6 th Floor, Piramal Chamber, Lal Baug, Parel Mumbai – 400 012 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAATC0036C Appellant .. Respondent Appellant by : Sanjay C Shah Respondent by : Richa Gulati Date of Hearing 31.03.2023 Date of Pronouncement 24.05.2023 आदेश / O R D E R Per Amarjit Singh (AM): The assessee has filed miscellaneous application u/s 254(2) of the Act against the order of the ITAT dated 03.08.2022 vide ITA No. 638/Mum/2021. 2. The assessee submitted that while deciding the appeal of the assessee, the submission filed by the assessee during the course of revisionary proceedings before the CIT(Exemption) was not considered. The assessee also submitted that Sec. 263 cannot be invoked when two views are possible and the AO had taken one view which was sustainable in law. It was also submitted that provisions of Section 263 cannot be invoked in case of inadequate enquiry. It is also stated that P a g e | 2 MA 72/Mum/2023 M/S C.B Murarka Charitable Trust Vs CIT (Exemption) as per law it is at the discretion of the AO as to what level of enquiry he wants to make to accept or to look into the clam of expenditure incurred by the assesse trust. It is also pointed out that judicial decisions relied upon were not considered. 3. Heard both the sides and perused the material on record. The ld. CIT(Exemption) on verification of the assessment record found that assesse had made excess expenditure from the corpus fund resulted in deficit. We have perused the material on record and observed that the AO has neither discussed in the assessment order that how the excess expenditure claimed from the corpus was allowable nor substantiated from the notices issued u/s 142(1) of the Act about any verification carried out during the course of assessment proceedings in respect of deficit noticed in the corpus of the assessee trust. The aforesaid material facts and circumstances found in the case of the assessee are distinguishable from the facts and circumstances from the other cases. We have also considered the material placed by the assessee in the paper book while deciding the appeal filed vide order dated 03.08.2022 4. The assesse had failed to demonstrate that how the AO had verified and allowed the excess claim of the expenditure from the corpus donation. The ld. CIT(Exemption) found that assessee trust was having total income of Rs.1,22,22,358/- whereas assesse has spent an amount of Rs.5,54,13,890/- on the object of the trust resulting in deficit of Rs.43,18,44,050/-. 5. Even during the course of appellate proceedings before us we have considered the whole material placed by the assessee in the paper book and also considered all the notices issued by the A.O u/s 142(1) dated 27.02.2018, 08.10.2018 etc. as discussed in the finding at para 5 of our order but nowhere we find that AO has asked any detail about the deficit in the corpus fund of the assesse trust. P a g e | 3 MA 72/Mum/2023 M/S C.B Murarka Charitable Trust Vs CIT (Exemption) 6. After perusal of the material on record it is evident that AO has not made any inquiry on the issue of deficit corpus fund as pointed out by the ld. CIT(exemption) on the basis of which proceedings u/s 263 were initiated after attracting explanation 2 to Section 263 that order is passed without making inquiries or verifications which should have been made. The explanation 2 to Section 263 is reproduced as under: “[Explanation 2-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner- (a) The order is passed without making inquiries or verification which should have been made, (b) The order is passed allowing any relief without inquiring into the claim (c) The order has not been made in accordance with any order, direction or instruction issued by the Board under section 119, or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.)” 7. In light of the above facts and circumstances, we could not find any material which demonstrate that this crucial issue of deficit amount was verified by the A.O. Therefore, we observe that it is pertinent to mention that the power of rectification under section 254(2) of the act can be exercised only when the mistake which is sought to be rectified is an obvious patent mistake, which is apparent from the record and not a mistake which is required to be established by arguments and long drawn process of reasoning on points on which there may conceivably be two opinions. In view of the above facts and findings in the case of the assessee, we do not find any merit in the Miscellaneous Application of the assessee, therefore, the same is dismissed. P a g e | 4 MA 72/Mum/2023 M/S C.B Murarka Charitable Trust Vs CIT (Exemption) 8. In the result, the miscellaneous appeal filed by the assesse is dismissed. Order pronounced in the open court on 24.05.2023 Sd/- Sd/- (Vikas Awasthy) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 24.05.2023 Rohit: PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.