The assessee charitable society registered u/s 12AA of the Act accumulated the funds in observance to the provisions of Section 11(3A) for the specific purpose of construction of building, etc. on the landed properties of the trust and accordingly, declaration in Form 10 was also filed.  However, the assessee charitable society applied with the jurisdictional Deputy Commissioner demonstrating the utilization of the accumulated funds for purchase of land instead of the construction of building, etc. because of sale out of the entire landed properties of trust.  The assessee society’s case was scrutinized during the regular assessment during which, the assessee society clarified to the AO about the change of purpose of utilization of the accumulated funds and resultantly, the assessment had been completed accepting this fact of the case.  After completion of the six years from the end of the relevant assessment year, the AO issued notice u/s 148 on the ground that the assessee society utilized the accumulated funds for the purpose of the land instead of to be utilized for specific purposes in violation of  Section 11(3A) of the Act.  On Writ Petition, the Hon’ble Court held that the AO should have reason to believe that the income has escaped assessment to tax on account of the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment, that the assessee society had disclosed all these relevant facts of change of purpose of utilization of accumulated funds without withholding any information and the same has been assessed accordingly.

Held that there is no failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment and the notice for reopening be considered as a case of mere change of opinion on the part of the AO and hence, set aside.(AY. 2009-10)