The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has quashed revision under section 263 and upholds the claim of Mutuality by the Cricket Club of India.
The appellant, M/s. Cricket Club of India Pvt. Ltd. is a mutual association providing recreational & refreshment facilities exclusively to its members. The appellant claimed that to be a ‘mutual concern’ income of which is not chargeable to tax on principles of mutuality. This claim has been accepted in the past by the revenue. The Assessing Officer has accepted the applicability of the Principle of Mutuality in respect of the majority of receipts claimed by the assessee excluding catering income.
The PCIT initiated revision proceedings under section 263 alleging that the appellant is not a mutual association and set aside the assessment order being erroneous and prejudicial to the interest of revenue.
Before the ITAT the appellant submitted that the Supreme Court in CIT vs. Bankipur Club Ltd held thatthe assessee is a mutual association and that the income from property let out to members is exempt from tax on the principles of mutuality. The appellant’s counsel further submitted that based on the principles of consistency and there being no change in facts, the order of Pr. CIT is bad in law.
The Coram of Mr. M. Balaganesh, Accountant Member and Smt. Kavitha Rajagopal, Judicial Member by relying on the decision of the Supreme Court in Malabar Industrial Co Ltd has observed that once a possible view has been taken by the AO in the assessment proceedings, the same cannot be a subject matter of revision by the PCIT in the section 263 proceedings, merely because the PCIT is of a different view on the same set of facts.
The Tribunal has quashed the revision order passed u/s 263 of the act and held that the PCIT had grossly erred in invoking revisionary jurisdiction u/s 263 of the Act.
Mr. R. Murlidhar and Mr. Sunil A. Umap appeared on behalf of the appellant and respondent respectively.
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