| Question And Answer | |
|---|---|
| Subject: | Reassessment proceedings U/SEc.148 |
| Category: | Income-Tax |
| Querist: | deepali Shah |
| Answered by: | Research Team |
| Tags: | charitable trust, Reassessment, school |
| Date: | November 20, 2021 |
Assessee is a charitable trust running a primary school. Assessee trust do not have registration U/sec.12 AA. His consultant has filed the Return of Income by mentioning incorrect number of registration U/sec. 12AA of the Act. Also filed application for registration. His application was rejected by the CIT on the ground of various defects in the financial statement submitted along with ROI and incorrect mentioning of Registration number. Notice u/sec.147 was issued . In response to said notice the assessee trust has filed the Return of Income where in all the errors in earlier Return filed were corrected and since assessee trust is running the school, the Income of the trust is claimed as exempt U/sec. 10 . However the AO has completed the assessment ignoring the Return filed in response to.Notice U/sec.148 completed the assessment by considering the Income of the trust as taxable on the ground that trust does not have registration u/sec.12AA and incorrect Return filed by the trust original. Whether the action of AO ignoring Return filed in response to Notice u/sec. 148 of the Act and denied the legitimate claim for exemption of Income U/sec 10 is justified. Please guide.
If the assessee satisfies all the conditions of the section 10 the assessing officer cannot deny the exemption . There is no estoppel against the law the assessment has to be done as per the law . In CIT v. Shelly Products (2003) 261 ITR 367 (SC) (382 ) the Court held that ,
“If the assessee has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of Income-tax or is not income within the contemplation of law, he may like wise bring this to the notice of the assessing authority, which if satisfied, may grant him relief and refund the tax paid in excess if any“. The Circular No. 14 (XL-35), dt. 11/04/1955, also 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. Hin 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 assessee may get the relief in appellate stage as per the law .