No sec263 revision if reassessment proceedings were dropped by AO after taking one of possible views

Where Assessing Officer after making due enquiries found assesee's claim for exemption of income as correct and, thus, dropped reassessment proceedings, since view taken by him was one of possible views, impugned revisional order passed under section 263 was to be set aside

■■■

HIGH COURT OF KARNATAKA

Commissioner of Income-tax vs.

International Society For Krishna Consciousness*

ALOK ARADHE AND HEMANT CHANDANGOUDAR, JJ.

IT APPEAL NO. 36 OF 2009†

JUNE 9, 2020

Section 263, read with sections 11, 139 and 147 of the Income-tax Act, 1961 - Revision - Of order prejudicial to interest of revenue (Dropping of reassessment proceedings) - Assessment year 1997-98 - Assessee was a society registered under section 12A - During proceedings for grant of registration under section 80G, assessee filed statement of accounts showing certain income before grant of exemption under sections 11 and 12 - Assessee was thus required to file return under section 139(4A) - Assessee, however, did not submit its return under section 139(4A) stating that its accounts have been submitted to ISKON, Mumbai, for consolidation purpose - Assessing Officer thus initiated reassessment proceedings in response to which assessee submitted its return claiming exemtion of income under section 11 - Assessing Officer after making due enquiries found claim for exemption of income as correct and, thus, reassessment proceedings were dropped - Director (Exemptions) passed an order under section 263 setting aside assessment and directing Assessing Officer to pass a fresh assessment order - It was noted that Assessing Officer had allowed assessee's claim for exemption of income under section 11 after making due enquiries - Moreover, Director (Exemptions) had also recorded in his revisional order that assessee had submitted its accounts to ISKON, Mumbai, for consolidation and nothing wrong was found in same - Whether, in aforesaid circumstances, it could be concluded that view taken by Assessing Officer to drop reassessment proceedings was one of possible views and, thus, impugned revisional order was to be set aside-

Held, yes [Paras 8 and 9] [In favour of assessee]