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)

22

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

Date of order: 26^th 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 was not considered by the Assessing Officer.

ii)   Once
the claim of the assessee for exemption u/s. 11 was before the Commissioner
(Appeals), he had the powers and jurisdiction to examine all the aspects of
such claim. If the Department was of the opinion that the assessment order
could not have been sustained as the assessee did not fall within the ambit of
section 10(20) the ground on which the Assessing Officer had rejected the claim
and the other legal ground of section 2(15), it should have contended before
the Commissioner (Appeals) to reject the assessee’s claim on such legal ground.