COMMISSIONER OF INCOME TAX Vs. SAKTHI CHARITIES

JUDGEMENT

(1.) THIS is a reference at the instance of the Revenue challenging the order of the Income-tax Appellate Tribunal cancelling the order passed by the Commissioner of Income-tax in exercise of his revisional power under Section 263 of the Income-tax Act, 1961 (hereinafter referred to as "the Act").

(2.) THE facts leading to the present reference are that the assessee is a public charitable trust and during the course of its assessment proceedings for the assessment year 1975-76, it claimed exemption under Section 11 of the Act. THE Income-tax Officer accepted the claim of the assessee and in reaching the above conclusion, he departed from his earlier view arrived at: by him for the earlier assessment year 1974-75 wherein he has held that the entire business income was liable to be taxed. THE reason for his departure from his finding rendered for the earlier assessment year was that he was of the view that the ratio of the decision of the Supreme Court in the case of CIT v. Dharmodayam Co., 1977 109 ITR 527 would apply to the facts of the case and completed the assessment granting the exemption as claimed by the assessee. It is relevant to mention here that the Income-tax Officer found that the dominant purpose of the assessee-trust was charitable in nature and the assessee applied its income for charitable and religious purposes.

(3.) LEARNED counsel for the Revenue relied upon the decision of this court in the case of K. A. Ramaswamy Chettiar v. CIT, 1996 220 ITR 657, wherein this court held that if the Income-tax Officer did not make an enquiry as expected of him, that would be a sufficient ground for the Commissioner of Income-tax to revise the order under Section 263 of the Act. But, this decision has no application to the facts of the instant case, as here, the Income-tax Officer had followed the decision of the apex court and held that the assessee was entitled to exemption. Further, it is not indicated by the Commissioner in his order that the enquiry undertaken by the Income-tax Officer fell short of the requirement that is expected of him in the consideration of the question of grant of exemption. We are of the view that where the material relied upon by the Commissioner which, according to him, was omitted to be noticed by the Income-tax Officer would not have altered or varied the final conclusion arrived at by the Income-tax Officer, the Commissioner would lack the jurisdiction to revise the order of assessment and the decision of this court in K. A. Ramaswamy Chettiar's case , [1996]220ITR657(Mad) would have no application to the facts of the case.