IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ITA No. 1377/DEL/2022 Asstt. Yr: 2017-18

O R D E R

PER M. BALAGANESH, AM:

The captioned appeal, preferred the assessee, is directed against the order of learned Commissioner of Income-tax (Exemptions), Lucknow, dated 30.03.2022,passed u/s 263 of the Income-tax Act, 1961, pertaining to the assessment year 2017-18.

2. The assessee has raised the following grounds of appeal before us:-

“1. On the facts and in the circumstances of the case as well as law on the subject, the CIT has erred in making an order u/s 263 referring it to the Assessing Officer in Arbitrary manner.

2. On the facts and in the circumstances of the case as well as law on the subject, the order of CIT (Exemptions) is erroneous, arbitrary and bad in law and on facts. The order is an abuse to competence to exercise the revision powers..

3. On the facts and in the circumstances of the case as well as law on the subject, the CIT (Exemptions) is not justified in referring the case for fresh assessment on a plea that unsecured loan was raised during the year had not been shown in the receipt side. The loans are borrowings and were properly shown in Balance Sheet of the assessee .It is erroneous on the part of the department expecting the wrong placing of receipts.

4. On the facts and circumstances of the case, the loans of Rs. 13,50,000 received from the sources, which have been enquired by the assessing officer during the course of assessment and only after convinced, made the assessment order. Therefore, the allegation of not showing unsecured loan in corpus or voluntarily donation is erroneous in itself.

5. Your appellant therefore prays that looking to the facts and circumstances of the case, the notice issued by the learned CIT (

Exemptions) may please be deleted.

6. Your appellant further reserves his right to add, alter or to amend any of the aforesaid ground.”

3. We have heard the rival submissions and perused the materials available on record. The assessee is a public charitable trust and had filed its return of income for the Asst Year 2017-18 declaring total income of Rs Nil on 24.1.2018 after claiming exemption u/s 10(23C)(iiiad) of the Act as gross revenue of the assessee was less than Rs 1 crore. The assessee had not furnished the audit report in Form 10B along with the return of income. The assessee is a educational trust running a school under the name and style of D S Public School at Meerut. The trust is not registered u/s 12AA of the Act. The trust is affiliated with CBSE, New Delhi. The assessee filed the copy of audit report along with the audited balance sheet , income and expenditure account. During the year , assessee had disclosed total receipt of Rs 99.46 lacs and expenditure of Rs 92.83 lacs including depreciation of Rs 5.27 lacs. The assessee has shown excess of income over expenditure of Rs 6.63 lacs in the return of income. Since income was claimed exempt u/s 10(23C)(iiiad) of the Act, it was contended that there was no need to file audit report in Form 10B. This was the only reason for the case of the assessee to be selected for scrutiny. The explanation given by the assessee was accepted by the ld. AO and assessment was completed u/s 143(3) of the Act on 7.12.2019 accepting the returned income. This assessment was sought to be revised by the ld.

PCIT u/s 263 of the Act on the following grounds:-

a) Unsecured loans received in the sum of Rs 13,50,000/- was not examined by the ld. AO in the assessment proceedings.

b) Assessee is not eligible f