Allowing the appeal of the Revenue the Court held  that the Assessing Officer had sufficient cogent reasons to initiate reassessment proceedings under section 147 and the Tribunal had erred in holding that the reassessment proceedings were bad in law. The assessee had not denied the factum of charging capitation fee, which was reflected in the seized documents. The Tribunal had invalidated the reassessment proceedings on the basis of difference in quantum of capitation fee collected by the assessee and had relied upon the correctness and sufficiency of the material for initiation of the reassessment proceedings. The difference in the quantum of capitation fee could not be a valid reason for setting aside the reassessment proceedings at the stage of issuance of notice under section 148. Undeniably, the material seized by the Revenue during the search under section 132 and the admission made by the managing trustee of the assessee constituted fresh tangible material which warranted reassessment for the assessment year 2007-08. The reopening of the assessment ought not to have been interdicted by the Tribunal.  That the assessee could not claim exemption under sections 11 and 12 since it had charged capitation fee which was de hors the objective of a charitable trust. The Tribunal had wrongly sustained the exemption claimed by the assessee.   The phrase  wholly  used in section 11 elates to the purposes and not to the property of the Trust.  The word wholly is different from the word mainly.  The word wholly   should be understood to be closely akin to the phrase „solely’.  There is no scope for the purposes of the trusts or institutions  being partially public or religious in nature and would not be sufficient if some of the objects are charitable    or religious in nature.  That an order of the Settlement Commission was final and conclusive for a particular assessment year for which the application had been filed. Therefore, the Tribunal had wrongly placed reliance on the decision of the Settlement Commission for subsequent assessment years. Hence the order passed by the Tribunal was set aside. (AY. 2007-08)