| Question And Answer | |
|---|---|
| Subject: | Reassessment proceedings U/Sec.148 |
| Category: | Income-Tax |
| Querist: | Ruchi Bhansali |
| Answered by: | Research Team |
| Tags: | charitable trust, Reassessment, school |
| Date: | October 15, 2021 |
- The assessee is a Charitable Trust engaged in running a Primary School solely for educational purposes. The only income earned is by the way of Tuition Fees from student and Interest income.
- The assessee trust had its original return on 19.08.2016. and revised return of income for A.Y. 2016-17 on 26.06.2017, where there were lots of errors and the claims which were incorrect. such as assessee trust has claimed the the trust is registered U/Sec.12AA by quoting incorrect registration number, when the trust was not having registered U/Sec.12AA of the Act.
- The AO served notice under section 148 in response to which assessee has filed fresh return on 24.10.2019, claiming deduction u/s 10(23C)(iiiad) of the Act, as the trust exists wholly for educational purposes and not for the purpose of profit.
- The AO had not appreciated the return filed u/s 148 by the appellant wherein the appellant had claimed that they are eligible for exemption u/s 10(23)(iiiac) of the Act and had proceeded to treat the cash deposit amounting to Rs. 19,78,125/- as unexplained money u/s 69A of the Act and taxed as per provisions of section 115BBE of the IT Act,1961 passing the order u/s 147 r.w.s 144B of the Act without appreciating various submissions made by the appellant from time to time.
- Whether the Action of AO of Passing an order on the basis of return filed u/s 139 of the Act and ignoring the return filed in response to notice u/s 148 of the Act is correct and legally valid. kindly guide.
The Assessing Officer is not justified in ignoring the return filed u/s 148 of the Act . The Assessing Officer has to decide the assessment as per law . The Circular No. 14 (XL-35), dt. 11/04/1955, states that a duty is cast upon the Assessing Officer to assist and aid the assessee in the matter of taxation. Assessing Officers are supposed to advise the assessee and guide them and not take advantage of any error or mistake committed by the assessee or of their ignorance. The function of the Assessing officer is to administer the statute with solicitude for public exchequer with an inbuilt idea of fairness to taxpayers. The scope of the above circular is explained in CIT v. Ahmedabad Keiser-E. Hind Mills Co. Ltd (1981) 128 ITR 486 (Guj.) (HC) (492), Parekh Bros v. CIT (1984) 150 ITR 105 (Ker) (HC) (118), Dattatraya Gopal Sathe v. CIT (1984) 150 ITR 460 (Bom.)(HC) (463-464) . The exemption cannot be denied only on the ground that the assessee does not have the Registration u/ s 12AA of the Act . The assessee may make an application to the competent Authority for grant of registration with condonation of delay . Assuming the exemption is not granted , the assessee can claim the expenditure against the income earned under normal provision of the Act . The assessee may have to file an appeal before the CIT ( A) or application under section 264 of the Income -tax Act , before the Commissioner . The assessee is advised to approach the tax consultant who can advise properly after studying the facts of the case .