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2024 (11) TMI 321 - HC - Income TaxValidity of Income tax assessment order - department has mechanically passed the order without considering the reply submitted by the petitioner from the proper perspective - HELD THAT - The society has specifically contended that it is not registered under Section 12AA for the year 2018-19, hence provisions of Sections 11 to 13 of the Income Tax Act are not applicable. It has also claimed exemption under Section 10 (23) (iiiad) of the Act and placed reliance on the decision of M/s. CHILDREN s EDUCATIONAL SOCIETY 2013 (7) TMI 519 - KARNATAKA HIGH COURT . However, the respondent has failed to consider the reply from the right perspective and has mechanically passed the untenable order. Hence, the matter requires a remand. The order and the notice are liable to be set aside and so they are set aside. The matter is remanded to the respondents to the stage of reply to the 142 (1) notice. The petitioner is at liberty to file an added/ additional reply
Issues:
Income tax assessment order challenged for lack of proper consideration of petitioner's reply and documents. Analysis: The petitioner, a registered educational society, filed an income tax return for the Assessment Year 2018-19 claiming exemption under Section 10 (23C) (iiiad). The return was selected for complete scrutiny due to non-filing of Form 10B/10BB on time. Despite issuing notices and receiving replies from the petitioner, the respondent passed an assessment order without considering the filed documents. The petitioner contended that the order was passed mechanically without proper perspective. Counsel for the petitioner argued for the allowance of an additional reply to the notice under Section 142 (1). On the other hand, the respondent's counsel opposed a remand, stating that sufficient opportunity was given, and the order was passed after considering the replies. After hearing both sides, the court examined the petitioner's reply dated 26.02.2021, which highlighted the society's exemption claim under Section 10 (23) (iiiad) and the non-applicability of Sections 11 to 13 of the Income Tax Act due to not being registered under Section 12AA for the relevant year. The court found that the respondent had not considered the reply properly and had passed an untenable order. Consequently, the court quashed the assessment order and demand notice. The court allowed the Writ of Certiorari, setting aside the order dated 05.05.2021 and the notice dated 20.10.2021. The matter was remanded to the respondents for reconsideration based on the petitioner's reply. The petitioner was granted the liberty to file an additional reply, which the respondent authority was directed to consider carefully before making a decision. The court clarified that it did not express any opinion on the merits of the case. Ultimately, the Writ Petition was allowed, and the case was remanded for further proceedings.
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