This document provides a comprehensive analysis of the appeal by Shugan Chandra Kothari Trust against the order of the Commissioner of Income Tax (Exemptions) for the assessment year 2014-15. The appeal was directed against the revisionary order under section 263 of the Income Tax Act, 1961, which was deemed erroneous and prejudicial to the interests of the revenue.
The trust filed a return declaring NIL income, which was processed under section 143(1) and selected for scrutiny. Despite providing detailed accounts and explanations during the scrutiny process, the Commissioner of Income Tax (Exemptions) raised concerns over unverified deposits and issued a revision under section 263, which led to this appeal.
The tribunal examined the details provided by the trust and noted discrepancies in the CIT(E)’s findings, particularly concerning the unverified cash deposits and interest income. The tribunal found that the initial assessment was comprehensive and that the additional scrutiny under section 263 was unwarranted. Consequently, the tribunal set aside the CIT(E)’s order, restoring the original assessment.
The decision underscores the importance of thorough initial assessments and cautions against arbitrary revisions without substantial evidence. It highlights the need for tax authorities to provide clear reasons when deeming an order erroneous and prejudicial to the interests of revenue.
ITA No. 4982/DEL/2019: Shugan Chandra Kothari Trust vs. CIT(E), New Delhi – Assessment Year 2014-15
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