Question And Answer
Subject: Trust, 143(3) and 263
Querist: Manali
Answered by:
Tags: ,
Date: March 19, 2023
Query asked by Manali

Assessee is trust registered Bombay Public trust Act and running a school and is not receiving any grant from GOVt. Filed the Return of income  for AY. 2018-19.  INTIMATION u/Sec. 143(1) is received where entire Gross receipts were considered as taxable at MMR and later on case was selected for scrutiny , where AO assessed the income as determined by the CPC U/Sec. 143(1)(a). Assessee filed an appeal against the assessment order passed U/Sec. 143(3) .

NOW PCIT has issued NOtice U/sec. 263 on the ground that no question was asked to assessee about it’s claim U/Sec. 10(23) and no adverse inference is drawn. Even though as per assessment order the gross receiots are taxable under MMR as per intimation USec. 143(1) .

1. Whether PCIT is legally correct in issuing Notice U/Sec. 263

2. Whether assessee must file an appeal against 143(1)(a) also.

3. Are there any decisions which support assessee contention that once order passed U/Sec. 143(3) is appeal by the assesee and is pending before CIT A , pCIT can not issue Notice U/sec. 263.

Pl guide .

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According to us, you must not have filed Form 10B/10BB within the prescribed timeframe. You have to file an application for condonation of delay before the CIT(E)/CBDT according to the period of delay [Refer CBDT Circular 19 of 2020 dated November 03, 2020 and Circular 6 of 2021 dated March 26, 2021]

With respect to the proceedings under section 263 of the Act, The Hon’ble ITAT Ahmedabad Bench in the case of Smt. Bhartiben M. Kelawalav. CIT [2011] 128 ITD 468/135 TTJ 455/[2010] 8 13 (Ahd.) held that the word ‘order’ mentioned in section 263 of the Act which can be the subject matter of revision by the Commissioner would mean an order determining the rights and liabilities of the assessee under the Act.

The Notice issued under section 263 of the Act would have to be perused to understand how the revenue is prejudiced.

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