2011 (8) TMI 1370 - AT - Income Tax

Summary

Issues involved: Reassessment u/s 147/143(1) for assessment years 2006-07 and 2008-09, denial of exemption u/s 11, disallowance of expenses, confirmation of interest levy u/s 234-B, 234-D, and withdrawal of interest u/s 244-A.

For Assessment Year 2006-07:
The CIT (Appeals) erred in upholding the AO's reassessment of income u/s 147/143(1) at a specific amount, jurisdiction under section 147/148, denial of exemption u/s 11 due to unavailability of books of accounts, disallowance of administrative expenses, and confirmation of interest levy u/s 234-B, 234-D, and withdrawal of interest u/s 244-A.
The assessing officer's failure to consider the impounded books of accounts by DGIT [Exemption] led to the denial of exemption u/s 11. The Tribunal directed the AO to obtain the impounded books of accounts and verify the expenses incurred by the assessee trust to determine the eligibility for deduction under section 11.

For Assessment Year 2008-09:
Similar issues as in 2006-07, including reassessment u/s 147/143(1), denial of exemption u/s 11, disallowance of administrative expenses, disallowance of expenses incurred on support of other educational institutions/colleges, confirmation of interest levy u/s 234-B, 234-D, and withdrawal of interest u/s 244-A.
The CIT (Appeals) upheld the AO's denial of exemption u/s 11 based on unavailability of books of accounts, leading to the disallowance of expenses. The Tribunal directed the AO to obtain the impounded books of accounts from DGIT [Exemption] to verify the expenses incurred by the assessee trust for the purpose of the trust and ensure compliance with section 11 requirements.

Conclusion:
The Tribunal allowed both appeals, remanding the cases to the assessing officer for proper verification of expenses and eligibility for exemption u/s 11 based on the impounded books of accounts. The assessee agreed to cooperate in the assessment process, emphasizing the importance of verifying expenses for the trust's objectives.