June 2019

Sections 2(15), 10(20), 11, 251 and 263 – Revision – Powers of Commissioner – No jurisdiction to consider matters considered by CIT(A) in appeal – Claim for exemption rejected by A.O. on ground that assessee is not a local authority u/s. 10(20) – CIT(A) granting exemption – Principle of merger – Commissioner has no jurisdiction to revise original assessment order on ground A.O. did not consider definition in section 2(15)

K. B. BHUJLE
Advocate

22

CIT vs. Slum Rehabilitation Authority; 412 ITR 521 (Bom)

Date of order: 26th March, 2019

A.Y.: 2009-10

 

Sections 2(15), 10(20), 11, 251 and 263 – Revision – Powers of Commissioner – No jurisdiction to consider matters considered by CIT(A) in appeal – Claim for exemption rejected by A.O. on ground that assessee is not a local authority u/s. 10(20) – CIT(A) granting exemption – Principle of merger – Commissioner has no jurisdiction to revise original assessment order on ground A.O. did not consider definition in section 2(15)

 

The assessee, the Slum Rehabilitation Authority, claimed benefit u/s. 11 of the Income-tax Act, 1961. The A.O. disallowed the claim and held that the assessee was not a local authority within the meaning of section 10(20) and that in view of the nature of activities carried out by it and its legal status, its claim could not be allowed. The Commissioner (Appeals) allowed the assessee’s appeal and granted the benefit of exemption. The Commissioner in suo motu revision u/s. 263 took the view that the activities of the assessee could not be considered as for “charitable purpose” as defined u/s. 2(15) and directed the assessment to be made afresh accordingly.

 

The Tribunal allowed the appeal filed by the assessee on the ground of merger as well as on the ground that the order of assessment was not prejudicial to the interest of the Revenue.

 

On appeal by the Revenue, the Bombay High Court upheld the decision of the Tribunal and held as under:

 

“i)   The Commissioner in exercise of revisional powers u/s. 263 could not initiate a fresh inquiry about the same claim made by the assessee on the ground that one of the aspects of such claim wa

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