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1991 (5) TMI 47 - HC - Income Tax

Issues involved:
The issues involved in this case are the validity of the notice issued under section 148 of the Income-tax Act, 1961, and whether income chargeable to tax has escaped assessment for the year 1964-65.

Validity of Notice u/s 148:
The petitioner, a public religious trust, challenged the notice issued under section 148 of the Income-tax Act, 1961, seeking to quash the notice and restrain further proceedings. The petitioner contended that all material facts, including the receipt of Rs. 70,000 from another trust, were disclosed to the Income-tax Officer during the assessment process for the relevant year.

Alleged Income Escaping Assessment:
The Commissioner of Income-tax reported that the trust received a voluntary contribution of Rs. 70,000 from another trust in 1964, which was not disclosed in the total income. Subsequently, a notice was issued under section 148 for the assessment year 1964-65, alleging that income chargeable to tax had escaped assessment due to the failure to disclose the said contribution.

Judgment:
The High Court, relying on a previous case involving a similar trust and contribution for a water supply scheme, held that the amount received by the petitioner-trust could not be considered taxable income. Citing the precedent, the Court concluded that the contribution was intended as capital for the specific scheme and not as income. Therefore, the notice issued under section 148 was deemed void, and the petition was allowed, quashing the notice dated March 17, 1981, issued under section 148 of the Act.

 

 

 

 

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