ORDER : Bhargav D. Karia, J. [1] This Tax Appeal is filed by the appellant - Revenue under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) arising out of the order dated 3rd August 2022 passed by the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot (for short, “the Tribunal”) in ITA No.69/RJT/2021 for the Assessment Year 2015-16. [2] The appellant – Revenue has proposed the following substantial questions of law for the consideration of this Court: “(i) Whether in the law and facts & circumstances of the case, the Hon’ble Tribunal was justified in holding that the CIT has erred in facts and in law in holding that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue? (ii) Whether in the law and facts & circumstances of the case, the Hon’ble Tribunal was justified in not appreciating the fact that the AO failed to bring on record her finding on the issue of accumulation claimed under Section 11(1)(a) on the Government grant? (iii) The appellant craves leave to add, amend or modify any grounds before or at the time of hearing of the appeal?” [3] The brief facts of the case are that the assessee Trust – M/s. Gujarat State Lion Conservation Society had filed its return of income for the Assessment Year 2015-16 declaring ‘Nil’ income. The assessment proceedings were completed under Section 143(3) of the Act on 28th March 2022 accepting the income declared in the return as ‘Nil’ income by the assessee. [4] It appears that the audit objection was raised that the assessee during the year consideration has received Rs.8,00,70,630/- from the State Government as grant and such grant receipts from the Government are only an ascertained liability of the Government and the said grant cannot be treated either as voluntary contribution or income from property held for charitable purposes under Sections 11(1) and 12 of the Act. [5] As per the audit objection, accumulation of income from the Government grant is not available to the assessee as such grants are generally given with specific direction having no scope of savings and therefore, the same cannot be treated as voluntary in nature. Accordingly, it was objected that the amount accumulation of 15% of Rs.8,14,93,645/- was only available under Section 11(1)(a) of the Act and as such there was an excess allowance of relief of Rs.1,20,09,442/-. Accordingly, it was objected that the amount accumulation of 15% of Rs.8,14,93,645/- was only available under Section 11(1)(a) of the Act and as such there was an excess allowance of relief of Rs.1,20,09,442/-. [6] However, as per letter dated 2nd March 2021, the Additional CIT (Exemption), Ahmedabad forwarded a letter to the Assessing Officer dated 22nd February 2021 submitting that the audit objection is not acceptable in light of the facts and legal position narrated by the Assessing Officer in its report. However, the then CIT (Exemption), Ahmedabad, vide letter dated 5th March 2021, conveyed his decision to initiate remedial action under Section 263 of the Act on the factual aspect of the case and the Assessing Officer was directed to submit a suitable proposal in a prescribed format to initiate proceedings under Section 263 of the Act. [7] Subsequently, vide letter dated 19th April 2022, proposal was made to initiate proceedings under Section 263 of the Act. Accordingly, notice was issued by the Principal CIT under Section 263 of the Act on the ground that the assessee has availed an excess claim of relief under Sections 11(1) and 11(2) of the Act and passed an order under Section 263 of the Act for scrutiny as the claim made by the assessee – Trust required verification on the basis of the material facts submitted and the assessment order dated 19th December 2017 passed under Section 143(3) of the Act was set aside with a direction to make de novo assessment for the Assessment Year 2015-16 after considering the claim of the assessee – Trust and after allowing an opportunity of hearing. [8] The Assessing Officer, pursuant to the order passed under Section 263 of the Act, passed an assessment order dated 28th March 2022 under Section 143(3) read with Section 263 of the Act by disallowing the exemption under Section 11(1) of the Act for the amount of grant of Rs.8,00,70,630/- received by the assessee – Trust from the Government and determined total income of Rs.1,82,33,590/-. [9] The respondent – assessee challenged the order dated 25th March 2021 passed under Section 263 of the Act by preferring an appeal before the Tribunal. [9] The respondent – assessee challenged the order dated 25th March 2021 passed under Section 263 of the Act by preferring an appeal before the Tribunal. The Tribunal, after considering the submissions made by both the sides and on perusal of record, recorded the finding that the Assessing Officer, during the course of assessment proceedings under Section 143(3) of the Act, vide show cause notice dated 7th September 2017 and another dated 23rd November 2013, raised an issue with regard to grant receipt from the Government to be considered for the purpose of exemption under Section 11(1) of the Act. The assessee also replied to such notice vide letters dated 21st November 2017 and 8th December 2017 and therefore, it was not the case where the Assessing Officer did not apply its mind to the issue. The Tribunal also reproduced the relevant extract from the query raised by the Assessing Officer in the show cause notice and the reply of the assessee and thereafter, concluded that it was not the case where the issue was not considered by the Assessing Officer during the course of assessment proceedings. The Tribunal also found that the assessee was received the Government grants in earlier years as well and the Revenue had accepted the same as income of the assessee eligible for the accumulation under Section 11 of the Act. [10] Further, the Tribunal has considered the fact that the proceedings under Section 263 of the Act were initiated by the Principal CIT only on the basis of proposal made by the Assessing Officer and as per para 2 of the order passed under Section 263 of the Act, the Principal CIT merely acted on the basis of the proposal from the Assessing Officer and therefore, it was concluded that there was no independent application of mind by the Principal CIT to initiate proceedings under Section 263 of the Act. The Tribunal, thereafter, has extracted the order passed by the CIT (Exemptions) to demonstrate that there was no independent application of mind by the Principal CIT in the proposal to initiate proceedings under Section 263 of the Act. The Principal CIT did not call for the office records to verify as to whether the order passed is erroneous and prejudicial to the interest of the Revenue or not. The Tribunal relied upon the decision in the case of Shantai Exim Ltd. vs. Ld. The Principal CIT did not call for the office records to verify as to whether the order passed is erroneous and prejudicial to the interest of the Revenue or not. The Tribunal relied upon the decision in the case of Shantai Exim Ltd. vs. Ld. CIT(Appeals) [2017] 88 taxmann.com 361 (Ahmedabad – Trib.), wherein it is held that proposal for initiation of revision proceedings under Section 263 of the Act must be initiated by the Commissioner and the revision proceedings on the basis of proposal from Assessing Officer is not valid. Reliance was also placed by the Tribunal in the case of Dharmendra Kumar Bansal [2014] 48 taxmann.com 53 (Jaipur – Trib.), wherein it is held that before taking any action the Commissioner himself shall apply his mind after examining record of any proceedings and his satisfaction is must. The Tribunal, therefore, came to the conclusion that the order passed by the Principal CIT under Section 263 of the Act reveals that he has not applied his mind by calling for the office records and independently taking a view that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue, but the Principal CIT has acted only on the proposal sent by the Assessing Officer to initiate proceedings under Section 263 of the Act. The Tribunal, considering such facts emerging from the record, was of the opinion that the order passed under Section 263 of the Act is liable to be set aside. The Tribunal, thereafter, has considered the merits of the case by observing as under: “9. Without prejudice to the above, further, we note that even for the earlier and subsequent years, the assessee was in receipt of government grant, however, no addition on this aspect has been made by the Revenue. The assessee has appended copies of the order by Income Tax Appellate Tribunal in his own case for assessment year 2012- 13 and also copy of the assessment order under section 143(3) of the Act for assessment year 2013-14, wherein no addition on the assessee has been made by the Revenue in any of the earlier years. The assessee utilises the above grants for the purpose of carrying out the fencing of the railway line to the forest. The assessee utilises the above grants for the purpose of carrying out the fencing of the railway line to the forest. Though strictly speaking, principle of res judicata does not apply to income tax proceedings, but it is also well-settled principle of law that if there is no change in the facts of the assessee from the previous years, principle of consistency demands that settled issue should not be reagitated. The counsel for the assessee has submitted that the assessee Trust is in receipt of government grant in the earlier years as well. However, it is for the first time that this issue has been raised by the Revenue with no change in facts from the earlier years. In the earlier years, the Revenue had accepted the same as income of the assessee as being eligible for accumulation under section 11 of the Act. The Gujarat High Court in the case of CIT v. SBJ VON Compounders (P.) Ltd [2013] 37 taxmann.com 353 (Gujarat) has held that claim of assessee in respect of valuation of stock which was accepted in preceding assessment year was to be accepted in current year also following doctrine of consistency.” [11] The Tribunal, therefore, on the basis of the principle of consistency and in absence of any change of facts to the effect that the assessee – Trust was in receipt of the government grant in the earlier years which has been accepted by the Revenue to be considered for being eligible for exemption under Section 11 of the Act. [12] In view of such finding of fact arrived at by the Tribunal, it cannot be said that the assessment order passed under Section 143(3) of the Act was erroneous or prejudicial to the interest of the Revenue. We are, therefore, of the opinion that no question of law much less any substantial question of law would arise from the impugned order of the Tribunal. The appeal is, accordingly, dismissed.