Itat/79/2023 Of Commissioner Of Income Tax Exemptions Kolkata v. Armenian Church

OD - 17 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION ORIGINAL SIDE ITAT/79/2023IA NO.GA/2/2023 COMMISSIONER OF INCOME TAX (EXEMPTIONS), KOLKATA-Versus-ARMENIAN CHURCH BEFORE: The Hon’ble T.S. SIVAGNANAM, CHIEF JUSTICE -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 17[th ]May, 2023. Appearance :Mr.Amit Sharma, Adv...for the appellant. Mr.J.P. Khaitan, Sr. Adv.Mr.Pratyush Jhunjhunwala, Adv.…for the respondent. The Court : This appeal filed by the revenue under Section 260A of theIncome Tax Act, 1961 (the ‘Act’) is directed against the order dated 11[th] July,2022 passed by the Income Tax Appellate Tribunal, “B” Bench, Kolkata (Tribunal)in I.T.A No. 200/Kol/2021, for the assessment year 2016-17. The revenue has raised the following substantial questions forconsideration :i)Whether in the Learned Income Tax Appellate Tribunal has committedsubstantial error in law in quashing the order of the Commissioner of Income Tax (Exemptions), Kolkata when it is apparent from the recordsthat the assessment order was erroneous and prejudicial to the interest ofthe Revenue inasmuch as the same had been passed by the assessingofficer without making due and proper enquiry and without verification onthe aspect of unutilized amount in view of Sections 11(2) and 11(3) of thesaid Act ? ii) Whether in the light of provisions of Section 11(3) of the said Act theLearned Tribunal is correct in observing that if the assessee is not able toutilize the income set apart under Section 11(2) of the said during the fiveyears following the year in which the amount was accumulated or set apartthen whatever is unspent has to be utilized in the 6[th] year failing which itcan be brought to tax in the 7[th] year and not in 6[th] year ? iii) Whether the Learned Tribunal has substantially erred in law inmisconstruing the provisions enshrined under Section 11(2) and 11(3) ofthe said Act by coming to the conclusion that if the accumulated amount isnot utilized in the 6[th] year the same can be brought to tax in 7[th] year andnot in the 6[th] year ? We have heard Mr. Amit Sharma, learned standing counsel appearing forthe appellant and Mr. J.P. Khaitan, learned senior counsel for therespondent/assessee. The first question to be considered is whether the Commissioner of IncomeTax (Exemptions), Kolkata (CITE) could have exercised power under Section 263 of the Act. As could be seen from the assessment order dated 9[th] April, 2018passed under Section 143(3) of the Act, the Assessing Officer has made anelaborate exercise and in the computation of income the following has beenrecorded. Before the Tribunal the assessee specifically raised a plea that theassessment order is neither erroneous nor prejudicial to the interest of therevenue as it has been factually established that the unutilised amount wasspent in the 6[th] year in terms of clause C of Sub-section (3) of Section 11 of theAct. Though such a plea was raised, the learned Tribunal took note of theundisputed fact and held that the unutilised amount cannot be brought to tax inthe 6[th] year but can be brought to tax in the 7[th] year if it still remains unutilised. In our view, we need not travel that far to take a decision in the matter aswe are fully convinced that the CIT(E) has not recorded as to how the scrutinyassessment was erroneous or prejudicial to the interest of revenue. Unless anduntil the twin tests have been satisfied, the power under Section 263 could nothave been exercised. Thus, we find no grounds to interfere with the order passed by theTribunal. Accordingly, the appeal stands dismissed. The stay application IA No.GA/2/2023 is also dismissed. (T.S. SIVAGNANAM) CHIEF JUSTICE (HIRANMAY BHATTACHARYYA, J.) S.Das/SN.