The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench ruled that the exemption Notifications to be interpreted strictly.
The four assessees’ appeals arise against the Pr.CIT (Central), Hyderabad’s separate orders; all dated 26-12- 2019 withdrawing their respective approvals in proceedings under section 10(23C)(vi) of the Income Tax Act, 1961.
All the appeals suffer from identical 121 days delay in filing stated to be attributable to various miscellaneous reasons of communication gap and other similar factors on account of the circumstances beyond their control.
The Pr.CIT(Central)’s initial show cause notice dated September 16, 2019 itself forming basis of the impugned entire exercise to withdraw the assessee’s approval suffers from inherent lack of jurisdiction as per his own clarification that the CBDT’s notification (supra) was issued much later i.e., on November 5, 2019 only.
The coram of Laxmi Prasad Sahu and S.S.Godara observed in this clinching backdrop that the PCIT(Central) has erred in law and on facts not only in assuming his Section 10(23C)(vi) jurisdiction on September16, 2019 (before having being confirmed the prescribed authority’s jurisdiction to this effect on November 5, 2019) but also he has wrongly withdrawn the assessee’s approval with effect from the date it had been granted the same.
“There is yet another equally significant aspect of the matter before us. There is hardly any dispute that the Pr.CIT’s order; assuming but not accepting it as correct, has withdrawn the assessee’s approval from the day which was granted the very relief i.e., from 27-03-2008 turning out to be well beyond the period of show cause notice itself. And that too, without even indicating as to how the assessee had violated the conditions of its approval granted earlier in all these intervening assessment years wherein it had also been assessed without any violation of the approval’s conditions,” the ITAT said.
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